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NYS Legislature Concludes 2014 Legislative Session

The New York State Legislature concluded its 2014 legislative session on June 20th, 2014 after passing a number of energy-related measures, approving a last minute agreement to legalize medical marijuana, and advancing a component of Mayor de Blasio’s “Vision Zero” plan that would reduce the New York City speed limit to 25 miles per hour. Legislators now turn their attention to the campaign season as all seats in both houses of the legislature are up for election.  Governor Cuomo and state Attorney General, Eric Schneiderman are both seeking second terms. State Comptroller Thomas DiNapoli, who has been in office since 2007, is also up for re-election this year.

Con Edison had several successes this session, including an expansion of joint bidding. Joint bidding allows the City’s public works projects and related utility interference work to be bid together. This practice streamlines the contracting process, reduces project delays, cuts costs, and minimizes disruption to New York City’s businesses and residents. Joint bidding is currently restricted to projects in lower Manhattan. However, legislation passed both Houses to expand joint bidding to all public works projects in all five boroughs. Con Edison has been seeking this authorization since 1998.

In addition to joint bidding, we were successful in convincing legislators to take action on a bill that directs the Public Service Commission (PSC) to conduct a cost-benefit analysis of the state’s net metering program. The intent is to provide policymakers with a review of net metering’s cost shifting inequities so they can make informed decisions about further expansions of the program.

A key part of Mayor Bill de Blasio’s plan to eliminate traffic deaths on New York City streets passed a major hurdle in Albany when the state legislature approved legislation that would allow the city’s Department of Transportation to reduce the current 30-mph limit on streets where no speed restrictions are posted. 

Bills that passed both Houses will be delivered to the Governor for approval or a veto.

Other bills of interest that passed both Houses include:
   • Crediting net metered fuel cells at the retail rate
   • Requiring utilities to create and maintain an ESCO do not call registry
   • Requiring the PSC to hold hearings after major outages
   • Municipal aggregation pilot program in Westchester
   • Two-year extension of the state’s Brownfield Cleanup Program
   • Repeal of the Wage Theft Prevention Act’s annual notice requirement

The following bills of interest did not advance this year:
   • Office of Utility Advocate
   • Gas leak classification and reporting
   • Consumer cost mitigation
   • Radon mitigation
   • ESCO on-bill financing
   • Attorney General’s utility storm hardening
   • Prevailing wage for service workers and excavations

Additional information on the above items can be found below.

Joint Bidding
  (Passed Both Houses)
This bill authorizes the practice of joint bidding for all public works projects in all five boroughs. Obtaining city-wide authorization has been a priority for Con Edison since 1998.

When the City of New York undertakes a public works project, energy and telecommunications facilities almost invariably must be moved or protected for the municipal work to proceed on schedule.  The municipal work can be delayed or stopped if the utility is required to separately negotiate the price of protecting or moving the utility facilities. Such delays result in additional costs to municipal projects in both money and disruption for the City.

Joint bidding requires bidders to provide, within a single bid, separate prices for the municipal and private utility work. The contract is awarded to the lowest responsible bidder for the combined work.

Joint bidding enables the City and utilities to better coordinate the planning and execution of construction projects to the advantage of City-based businesses and local residents who experience substantially less disruption to pedestrian access and utility services.

Joint bidding was authorized for Lower Manhattan in the wake of 9/11 and for the City’s third water tunnel.

Con Edison worked closely with the Mayor’s office on this issue and formed a coalition of business entities that signed onto a letter of support and/or issued individual memos in support. These entities include the Real Estate Board of New York (REBNY), the Partnership for New York City, the New York City Business Improvement Districts (BIDs), Association for a Better New York (ABNY), New York State Association for Affordable Housing (NYSAFAH), Verizon, Time Warner Cable, National Grid, Manhattan Chamber of Commerce, Queens Chamber of Commerce, Brooklyn Chamber of Commerce, Bronx Chamber of Commerce, and the NY Women’s Chamber of Commerce.

Net Metering Study (Passed Both Houses)
After several years of hard work, legislation that directs the PSC to conduct a cost-benefit analysis of New York’s net metering program passed the Assembly and the Senate. This legislation is part of Con Edison’s proactive agenda and is intended to provide insight regarding the socialized costs imposed on energy consumers to support net metering programs, as well as the avoided costs realized by customer generators.

Since the net metering law enactment, there has been a proliferation of legislation aimed at expanding the program. This study will enable policymakers to make more informed choices when considering expansions of the net metering program.

Fuel Cells (Passed Both Houses)
This bill credits net metered fuel cells and CHP at the retail rate, similar to renewable energy technologies. Fuels cells and CHP are currently credited at the lower wholesale rate.

Fuel cells have received a lot of attention from lawmakers because they are considered to be a cleaner energy source. Last year, legislation was enacted to permit remote net metering for fuel cells and CHP. 

Con Edison vigorously advocated against this legislation, arguing that fuel cells should not be afforded the same treatment as renewable energy technologies because they are a fossil fuel and not intermittent. Crediting net metered fuel cells at the higher rate would likely result in significant cost shifting to the remaining customer base.

ESCO Telemarketing (Passed Both Houses)
This bill requires each distribution utility to establish an ESCO marketing opt-out registry. Each utility would be required to send an annual notice to its residential and small non-residential customers regarding how customers may enroll. ESCOs would be fined for any violations.

Con Edison and the Energy Coalition of New York (ECNY) made several attempts to amend the bill and convince legislators that utilities are not the appropriate entities to maintain the opt-out registry. Despite opposition from us and Senate Energy Chair George Maziarz, leadership decided to pass the bill.

We will work with the other utilities to pursue a veto for this legislation.

PSC Hearings (Passed Both Houses)
This bill would require the PSC to convene public hearings in areas affected by major power outages pursuant to a local resolution requesting such hearing. A “major outage” is defined as any outage within a utility service territory that leaves at least 5% of customers without power for at least 72 consecutive hours following the event that caused the outage.

Municipal Aggregation (Passed Both Houses)
This bill authorizes the creation of a municipal aggregation program in Westchester County. The aggregation program would allow municipalities in Westchester to procure electric and/or gas supply services from an ESCO on behalf of its residents.

Con Edison was heavily engaged in the drafting of this legislation.  Part of our goal was to keep the program consistent with our current ESCO procedures.  The Governor’s office has expressed concerns over certain provisions of the bill and may issue a veto once it is delivered. 

Brownfield Extender (Passed Both Houses)
The Brownfield Cleanup Program (BCP) is scheduled to expire at the end of 2015.  As part of the 2014-2015 budget negotiations, both houses and Governor Cuomo attempted to reform the program but were ultimately unable to reach an agreement. In lieu of reform, the Legislature extended the current BCP through March 31, 2017, and appropriated $100 million for the State Superfund program. 

During negotiations, Con Edison supported one of the Governor’s proposals – a new BCP-EZ program which would streamline the process and provide liability relief without tax credits. However, the language restricted participation in BCP-EZ to “volunteers,” which are persons/entities that acquired the site after it was contaminated. Con Edison lobbied for the BCP-EZ program to include “participants,” who are the parties responsible for the site’s original contamination. Doing so would encourage remediation of the greatest number of contaminated sites throughout the state without adding to the tax burden on New Yorkers. These amendments were very well received by all parties.

The Legislature is expected to address this issue again next session. We will continue to push for inclusion in any streamlined program that may be on the table.

Wage Theft Prevention Act – Repeal of Annual Notice Requirement (Passed Both Houses)
Enacted in 2011, the Wage Theft Prevention Act is intended to protect employees from unscrupulous employers stealing their earnings. Among other things, the law requires employers to provide written notice of wage rates to new employees upon hiring, and then annually to all employees. The employer must obtain a written acknowledgement from each employee that the notice was received. The acknowledgement and notice must be kept for six years.

The private sector has actively lobbied to repeal the annual notice requirement arguing that the notices are virtually identical to the information employers already include on weekly or bi-weekly employee pay stubs. As a result, employers bear the additional administrative costs of providing and maintaining the same information that employees have already received at least 26 times during the prior year.

This bill represents a compromise on the issue. It repeals the annual notice requirement if the information is provided in another manner. However, it also increases penalties for violations, creates the Wage Theft Prevention Enforcement Account, and imposes personal liability on certain members of an LLC for all debts, wages, or salaries due to any of its employees.

Con Edison strongly supported a repeal of the annual notice requirement and worked closely with the Business Council of New York to reach an agreement with the bill’s sponsors.

Office of Utility Advocate (Passed Assembly)
The American Association of Retired Persons (AARP), an influential lobbying group in Albany and Washington, DC, strongly advocated for legislation that would create a new Office of the Utility Consumer Advocate to represent residential utility consumer interests in proceedings before entities such as the PSC and FERC. AARP was very aggressive in its pursuit of this legislation, actively lobbying legislators and launching a media campaign.

The creation of a new Office of the Utility Consumer Advocate was also the subject of intense budget negotiations earlier this year. Numerous entities, including the Executive and Senate, opposed the creation of a new office arguing that it would essentially have the same powers as several existing state-funded entities. Other proposals, such as creating an intervenor process for utility rate case proceedings, were touted as alternatives. Ultimately, none of the proposals made it into the final budget agreement.

The Assembly passed a version of this legislation which did not specify a funding source. Previous proposals sought to use 18-a to fund the office. The Senate did not take action this session.

Gas Leak Classification and Reporting (Did Not Advance)
Last month, Con Edison’s Craig Ivey, along with the state’s other investor-owned utilities and the PSC, testified at a hearing held by the New York State Assembly regarding gas safety procedures and practices.  As a follow-up, the Legislature introduced this bill to address some of the issues raised.

The bill does the following:
1. Classifies types of leaks and establishes time frames for which the leaks must be repaired. These provisions essentially codify existing regulations;
2. Requires gas utilities to report to the PSC the location and status of leaks on an annual basis; and
3. Directs the PSC to commence a proceeding to determine the need for regulating winter surveillance practices.

Neither House passed this legislation.

Consumer Cost Mitigation (Did Not Advance)
This legislation requires utility companies to offer customer credits when the supply portion of the bill for the previous month increases by at least 15%. The bill was introduced in response to this winter’s abnormally high utility bills and is intended to codify a similar program created by National Grid.

Con Edison and ECNY opposed this legislation as it would do nothing to address the cause of recent spikes in energy costs, nor would it do anything to prevent similar price spikes in the future. The bill also does not remove the need for customers to pay their supply costs - it simply delays payment of what they owe while possibly incurring “carrying costs”.

The utilities argued that a better option for energy customers is to take advantage of their utility’s no-fee budget payment plan, in which the utility estimates the customer’s yearly energy costs and spreads the payments evenly throughout the year. Delaying customer payments and creating a “credit mechanism” may also put some customers into deep arrears and create further challenges to pay against a growing utility bill.

Neither House passed this legislation.

Radon Mitigation (Did Not Advance)
This bill would require gas distribution utilities to monitor radon levels at City gates and implement mitigation measures if the levels reach certain thresholds. The bill also authorizes the Commissioner of the Department of Health to shut down the gas supply.

The New York State Assembly held a hearing last month to review the health impacts of radon in New York’s gas supply, and the mitigation protocols set forth in this legislation. Con Edison submitted comments arguing that this legislation is unnecessary in light of the Federal Energy Regulatory Commission’s (FERC) findings that the radon in the natural gas delivered to New York is low and not likely to pose concerns for customers.  The comments also suggested that monitoring should be conducted upstream at the well head and should be regulated by federal entities that have jurisdiction over all aspects of natural gas production, transmission, and distribution.

Neither House passed this bill. However, the bill’s sponsor, Assemblymember Linda Rosenthal (D-UWS) remains committed to the issue and it will likely resurface next session.

ESCO On-bill Financing (Did Not Advance)
This bill would enable customers to utilize on-bill financing for energy efficiency projects offered by ESCOs. The ESCO would be responsible for providing financing to customers, unlike the current NYSERDA program which created a revolving loan fund. Utilities would be entitled to certain payments from the ESCOs to offset any costs associated with implementation and administration.

Con Edison worked extensively with the bill’s sponsors to closely align the proposed program with the current NYSERDA program. Doing so will help ensure implementation is as easy as possible.

Neither House passed this legislation.

Storm Hardening (Did Not Advance)
At the request of Attorney General Eric Schneiderman, the Legislature introduced a bill which directs utilities to periodically prepare a climate change impact statement for the PSC. The PSC could waive this requirement if it believes a utility’s responses to climate change issues during a rate case settled after 2011 was sufficient.

Schneiderman was critical of Con Edison’s storm preparedness at a New York League of Conservation Voters event in May where he announced his intention to introduce this legislation.

Con Edison opposed the bill as unnecessary in light of this year’s rate case settlement which clearly addresses all of these issues.

Neither House passed this legislation.

Prevailing Wage (Did Not Advance)
Each year the Legislature considers two similar bills that would mandate a prevailing wage be paid to certain utility contractors and subcontractors. 

The first bill requires electric and gas utilities to pay prevailing wages to all sub-contracted office cleaners and security personnel.  Similar legislation was vetoed in 2010 by then-Governor David Paterson who declared that the bill would increase utility costs and impose expensive mandates on small businesses while the state was struggling to recover from a lingering recession.

The second bill would require utilities or their contractors to pay prevailing wages to workers involved in street excavations.

Both proposals would result in higher energy prices by eliminating a utility’s ability to use reasonable cost savings techniques like hiring the lowest and most responsible bidder for certain types of work. Con Edison strongly opposes these bills and participates in a coalition of businesses created to defeat anti-business legislation such as this.

Neither House passed either bill.

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