Aligns utility regulation with state climate justice and emission reduction targets; provides for a statewide affordable gas transition plan and utility home energy affordable transition programs; repeals provisions relating to continuation of gas service; repeals provisions relating to the sale of indigenous natural gas for generation of electricity.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4870A
SPONSOR: Simon TITLE OF BILL:
An act an act to amend the public service law, the public authorities
law, the transportation corporations law and the labor law, in relation
to enacting the NY Home Energy Affordable Transition Act; to repeal
section 66-b of the public service law relating to continuation of gas
service; and to repeal section 66-g of the public service law relating
to the sale of indigenous natural gas for generation of electricity
PURPOSE:
The purpose of the bill is to ensure that state regulation and oversight
of gas utilities provides for the equitable achievement of the climate
justice and emission reduction mandates set forth in the Climate Leader-
ship and Community Protection Act (the "CLCPA"). This bill provides the
Public Service Commission with the authority and direction to align gas
utility regulation and gas system planning with the CLCPA's mandates.
Specifically, the bill removes the legal basis and subsidies driving the
expansion of gas systems and requires the commission to adopt rules to
provide for the timely and strategic decarbonization and right-sizing of
the gas distribution system in a just and affordable manner prioritizing
low-to-moderate income customers and disadvantaged communities, and
encouraging neighborhood-scale transitions.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Names the bill the NY Home Energy Affordable Transition Act.
Section 2: Legislative findings.
Section 3: Amends section 4, subdivision 1, of the public service law.
Provides that the public service commission has "all powers necessary
and proper" to facilitate achievement of the CLCPA climate justice and
emission reduction mandates as set forth in article seventy-five of the
environmental conservation law.
Section 4: Amends section 5, subdivision 1 and 2, of the public service
law. Directs the commission to include utility sector achievement of the
CLCPA climate justice and emission reduction mandates as a core planning
objective included in its "public service responsibilities".
Section 5: Amends section 30 of the public service law. Removes a resi-
dential customer's legal entitlement to utility gas services, while
maintaining this entitlement for electric service. Directs the commis-
sion to regulate for the continued provision of gas service to existing
residential customers unless such service is discontinued purivant to a
program approved by the commission that ensures the customer has access
to safe and reliable substitutes to gas prior to cessation of service,
and necessary and appropriate financial and technical support, including
for the purchase and installation of customer-owned equipment. Codifies
a goal that all residential customers be adequately protected from bear-
ing energy burdens greater than 6% of their household income. Permits
the commission to establish a reasonable per-customer cap on the amount
of energy subject to affordability protections, as well as a cap on
collections from ratepayers to fund energy affordability programs:
Requires the commission to develop a plan for implementing the 6% cap,
evaluating all available tools.
Section 6: Amends section 1020-cc of the public authorities law to codi-
fy a goal that all residential customers of the Long Island Power
Authority are protected from bearing energy burdens greater than 6% of
their housedold income.
Section 7: Amends section 31, subdivisions 1,3, and 4, of the public
service law. Implements the policy established in section 5 with respect
to applications for electric and gas services. Acknowledges gas service
may be limited or discontinued to facilitate achievement of the CLCPA
climate justice and emission reduction mandates. Requires utilities to
provide clear, timely information on incentives and opportunities for
installing energy-efficient equipment and other measures that provide
alternatives. to gas use. Removes the 100 ft rule subsidy, which
provides ratepayer-funded utility incentives for the expansion of utili-
ty system infrastructure.
Section 8: Amends section 12 of the transportation corporations law.
Removes the entitlement of non-residential customers to utility gas
service; but maintains it for electric service. Empowers the commission
to govern extensions of gas service to non-residential customers.'
Section 9: Amends section 66, subdivision 2, of the public service law
and creates a new subdivision 12-e. Grants the commission authority to
order the curtailment or discontinuance of the use gas for any customer,
group of customers, or section of the gas distribution system, where the
commission has determined that such curtailment or discontinuance is
reasonably required to implement state energy policy. Requires the
commission to review each gas utility's capital construction plan and to
establish a process to examine feasible alternatives to construction of
new gas infrastructure, with an emphasis on encouraging neighborhood-
scale transitions. Empowers the commission to require the electric util-
ity with a service area overlapping the service area of the gas utility
to participate in the non-pipeline alterative process, including partic-
ipation in financing.
Section 10: Amends section 66-a, subdivisions 1,2, and 3 and creates new
subdivisions 4 and 5, of the public service law. Establishes that when
gas service is limited, the availability of gas service shall be allo-
cated to protect health and safety and to avoid undue hardship, prior-
itizing low to-moderate income customers, electric generation needed for
electric system reliability, and customers with hard-to-electrify indus-
trial and commercial uses. Affirms the commission's authority to limit
or discontinue availability of gas service upon the finding that contin-
ued gas service is not consistent with achievement of the CLCPA climate
justice and emission reduction mandates. Clarifies that gas conservation
measures include energy-efficient electrification of gas end uses.
Requires the commission to determine, consistent with the state energy
plan, conditions under which new or additional gas service is warranted.
Authorizes the commission to require that utilities provide coordination
assistance and financial assistance to identify and adopt alternatives
where applications for new gas service are denied, encouraging neighbor-
hood-scale transitions.
Section 11: Repeals section 66-b of the public.service law. Removes the
entitlement to continuation of gas service following the demolition and
reconstruction of any structure owned by a customer.
Section 12: Creates a new section 66-s to the public service law.
Prohibits gas utilities, after December 31st, 2024, from expanding gas
distribution infrastructure to new geographic areas where gas service
was not previously available. Case-by-case exceptions may be granted up
to December 31st, 2027.
Section 13: Repeals section 66-g of the public service law. Removes the
requirement that utilities enter long-term contracts to purchase or
wheel electricity produced from indigenous natural gas supplies when
economically reasonable.
Section 14:
1. Creates a new section 77-a to the public service law. Requires the
commission to initiate one or more proceedings to better align its regu-
lation of utility services with the timely achievement of the CLCPA
climate justice and emission reduction mandates. Such proceedings shall
include:
(a) Conduct a policy review of the public service law and commission
rules and policy guidance to identify barriers to the timely, equitable
achievement of the CLCPA climate justice and emission reduction
mandates. Report to the legislature on its findings, actions it plans•to
take, and make recommendations for further statutory amendments that may
be needed to facilitate the timely achievement of such mandates.
(b) Amend the commission rules and regulations governing allowances for
the extension of gas and electric service: Eliminate line extension
allowances for new gas service. Allows the commission to increase line
extension allowances for new electric service, including additional
allowances to buildings that are made ready for beneficial electric
loads such as those with electric vehicle charging facilities or grid
interactive buildings. The commission may also establish allowances for
buildings seeking interconnection with thermal energy networks.
(c) Minimize long-term costs to customers by requiring gas companies to
restructure plans for addressing leak-prone gas mains and service lines
to facilitate the orderly right-sizing the gas distribution system. Gas
corporations, in coordination with overlapping electric corporations,
shall be required to pursue programs that minimize the replacement of
leak-prone gas mains and service lines while ensuring that customers
have access to safe and reliable substitutes to gas prior to cessation
of service, and necessary and appropriate financial and technical
support. The commission shall establish notice requirements and consumer
and affordability protections in accordance with section 30 of the
public service law applicable to customers served by segments of the gas
distribution system targeted for decommissioning.
(d) Requires the commission to issue an order to require electric corpo-
rations to pursue electric energy efficiency and.demand flexibility
measures that are cost-effective, reliable, and feasible. Every three
years, the commission would identify energy efficiency and demand flexi-
bility targets for each electric corporation.
(e) The commission shall complete a proceeding to develop and issue a
report on rate making strategies to encourage and facilitate achievement
of the climate justice and emission reduction mandates. The report
shall explore options for developing and assessing the impacts of rates
for electric, gas, steam, and thermal energy networks On total customer
energy costs, and shall explore options for integrating cost sharing and
recovery across utilities and services. The report shall also identify
statutory barriers to the implementation of such strategies. In consid-
ering such rate making strategies, the commission shall have a goal of
ensuring that all residential customers pay no more than six percent of
their household income for electricity.
(f)The commission shall determine the greenhouse gas emission reductions
necessary to bring the statewide gas distribution system into alignment
with the statewide two thousand thirty and two thousand fifty greenhouse
gas emission reduction targets, and set interim emissions reduction
targets for each gas utility as well as developing a periodic process to
review and update such targets.
(g) The commission shall revise its rules and regulations for conducting
benefit-cost analyses so that the methodology and the base financial and
framework assumptions for the analysis support achievement of the
climate justice and emission reduction mandates.
2. Clarifies that nothing in this chapter or any other law of New York
shall be interpreted as preempting a municipality from adopting building
codes or other regulations regarding on-site emissions for new and
existing buildings within their localities.
Section 15. Creates.a new section 224-g of the labor law to ensure that
neighborhood-scale decarbonization projects performed by contractors
directly hired by a public utility are subject to prevailing wage
requirements.
Section 16. Establishes that the act takes effect immediately.
JUSTIFICATION:
New York urgently needs to align its regulation and oversight of gas
utilities with the climate and equity mandates established by the CLCPA.
New York's current public service law is not compatible with the CLCPA.
The PSL promotes gas system expansion by establishing a gas utility
obligation to serve any customer upon request while providing that
existing customers subsidize new service connections, all of which move
the state away from the important climate justice directives and binding
emissions limits in the CLCPA.
To meet the CLCPA's bold Climate and equity mandates, New York will need
to drastically reduce gas use. This poses a particular challenge for gas
utilities because their business models are currently premised on
expanding not contracting - gas infrastructure and services. Allowing
the tension between the public service law and the CLCPA to go unad-
dressed will significantly delay achievement of the CLCPA mandates while
dramatically exacerbating affordability and equity challenges. Low-in-
come New Yorkers will suffer the most if the state fails to properly
plan for the right-sizing of the gas system, as they will be among a
shrinking group of customers burdened with the cost of maintaining the
distribution network.
Aligning regulation and oversight of gas utilities with the CLCPA's
climate and equity mandates requires removing the legal basis and subsi-
dies for the expansion of gas systems, as well as adopting rules and
business practices that are consonant with decreasing gas sales and,
where appropriate, the decommissioning of sections of the gas system.
This bill gives the Public Service Commission the authority and direc-
tion to•align gas utility regulation and system planning with equitable
achievement of the CLCPA's climate justice and emission reduction
mandates.
LEGISLATIVE HISTORY:
2023-24: A4592b Fahy -corporations authorities commissions
2021-22: S.8198/A.9329 Fahy - Died in committee
FISCAL IMPACT ON THE STATE:
to be determined
EFFECTIVE DATE:
This act shall take effect immediately.
