Add Art 5 Title 1-C §§1022 - 1022-z, amd §§51 & 1005, Pub Auth L; add §1413, N-PC L
Establishes the Hudson Valley power authority to own and operate electricity service and to create or acquire one or more wholly owned subsidiaries or membership interests in subsidiaries; establishes energy observatory corporations for studying and enabling effective community governance of power authorities; makes related provisions.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2127A
SPONSOR: Shrestha TITLE OF BILL:
An act to amend the public authorities law, in relation to establishing
the Hudson Valley power authority, and providing for its powers and
duties; to amend the public authorities law, in relation to the New York
power authority; and to amend the not-for-profit corporation law, in
relation to establishing energy observatory corporations
PURPOSE OR GENERAL IDEA OF BILL:
The act creates a new state power authority, the Hudson Valley Power
Authority (HVPA), that is authorized to acquire Central Hudson and run
it as a publicly-owned and democratically governed energy utility whose
primary goal is to be in the service of its ratepayers by providing low
rates, reliable service, correct and easy to understand bills, clean
energy, community benefits, and environmental justice.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 adds Title 1-C, The Hudson Valley Power Authority, to Article
5 of the Public Authorities Law, comprising Section 1022 through Section
1022-z.
Section 1022 provides a short title, which is the "Hudson Valley Power
Authority Act" or the HVPA act..
Section 1022-a provides numerous definitions.
Section 1022-b creates the HVPA. The section describes that frontline
workers will continue to be treated as private sector workers repres-
ented by the International Brotherhood of Electrical Workers (IBEW).
Labor unions that represent frontline workers must consent to third
party service contracts.
Section 1022-b-1 describes the structure of the Board of Trustees.
Section 1022-c describes the service area.
Section 1022-d details the general powers and duties of the authority,
including public meeting requirements, a public distributed renewable
energy (PDRE) program to make rooftop solar more accessible, and utility
meter choice. In addition to prevailing wage provisions, it includes
language about prioritizing hiring workers from the non-renewable energy
sector, disadvantaged communities in the service territory, and the
service territory more generally.
Section 1022-e describes the powers to provide and maintain generation
and transmission assets. This includes project labor agreement language
and domestic content requirements for generation projects.
Section1022-f describes the public rate-setting procedures.The HVPA will
use progressive green rates, which includes increasing block rates. The
first block of, energy use will be charged at below-market rates with
marginal costs increasing for future blocks.
Section 1022-g includes the HVPA's commitment to the goals of the
Climate Leadership and Community Protection Act and includes conducting
a study to potentially phase out gas infrastructure.
Section 1022-h describes the process for the acquisition of property,
including the exercise of the power of eminent domain.
Section 1022-i details the HVPA's ability to create subsidiaries and its
relationship to them.
Section 1022-j describes how the HVPA will deposit and invest its money.
Section 1022-k details the policy on conflicts of interest.
Section 1022-I discusses the sale of surplus power.
Section 1022-m lays out the policies on audits and annual reports.
Section 1022-n describes the HVPA's bonds, notes and other obligations.
Section 1022-o makes clear that the state and municipalities are not
liable on bonds or notes or other obligations.
Section 1022-p details the agreement of the state to not interfere with
the HVPA's obligations to bondholders and others.
Section 1022-q exempts the HVPA from taxation and details that it will
make payments in lieu of taxes to municipalities and school districts
equal to what would have been received.
Section 1022-r details rules around taking action against the authority.
Section 1022-s describes the HVPA's equal employment opportunity policy
and commitment to minority and women-owned businesses (MWBE).
Section 1022-t limits the liability of trustees, officers, and employees
of the HVPA.
Section 1022-u says that the public service law is generally not appli-
cable to the authority and details other acts that are superseded.
Section 1022-v details how the HVPA is subject to certain provisions
contained in the state finance law, the public service law, the social
services law and the general municipal law.
Section 1022-w describes the HVPA's website.
Section 1022-x indicates that the HVPA will be reviewed by the legisla-
ture two years after enactment and every ten years thereafter.
Section 1022-y details the creation of the Hudson Valley Power Authority
observatory, which will function as an quasi-governmental civil society
organization to improve community participation, transparency, and bene-
fit sharing. The benefit sharing will include running a participatory
budgeting process to support local projects.
Section 1022-z says that the provisions of this title are severable.
Section 2 makes a technical edit to subdivision 1 of section 51 of the
public authorities law to include the Hudson Valley Power Authority.
Section 3 updates the New York Power Authority's preference clause to
preference public power entities with access to energy and discounts.
Section 4 creates utility Observatories as a new kind of special not-
for-profit corporation in the not-for-profit corporation law.
Section 5 sets the effective date as 180 days after the bill becomes
law.
JUSTIFICATION:
The fight for public power is not new to New York. The state legislature
founded the New York Power Authority (NYPA) in 1931 as a counterweight
to the power of speculative private utilities like ConEd, owned at the
time by J.P. Morgan. At its inception, NYPA lowered rates and protected
the state's public waters from private interests. Since then, the state
has deregulated the energy system and separated the supply and delivery
sides. Outside of the rural coops and municipally-owned utilities that
stepped in to provide service to the otherwise neglected rural areas of
New York, delivery of energy is monopolized by investor-owned utilities
across the state. At a time when our energy transition to meet our
climate goals stands to put the burden primarily on ratepayers, reclaim-
ing energy as a public good with a state power authority will have the
following benefits:
Lower rates: On average, a publicly-owned utility consistently provides
lower rates to ratepayers in the absence of a profit motive, and because
public entities can finance debt and access capital at lower interest
rates. Investor-owned utilities currently pass almost all of its costs
to ratepayers, whereas a publicly-owned utility can prioritize service
and affordability over profits.
Reliable Service: Publicly-owned utilities have the highest track record
of reliable service by a wide margin. Additionally, utilities like
Central Hudson currently don't provide adequate help from the company on
treeline management, but a publicly-owned entity can significantly boost
its efforts towards this task. Serving the public interest instead of
shareholders means there's more money to invest in a stronger and more
resilient grid.
Community benefits: With no shareholders to serve, publicly-owned utili-
ties can serve as anchor institutions that invest in community benefits,
including the establishment of community funds that can fund local
projects.
Effective Coordination: Poor coordination with investor-owned utilities
have stalled the buildout of renewable energy. State-owned utilities are
much better-positioned to coordinate directly with other state entities,
such as NYPA, ORES, and NYSERDA, as well as with quasi-public entities,
such as NYISO, to overall streamline the energy system in its territory.
Labor Protections: Utility workers currently find themselves pitted
against ratepayers, and many of the benefits the workers deserve do not
materialize because of the pushback-rightfully so-against exuberant
rates. A publicly-owned utility can prioritize to treat its workers well
without always passing steep costs to its ratepayers.
Clean Energy: With the public good at the core of their mission, public
power entities can lead a just transition to renewable energy without
worrying about shareholder profits.
One of the inherent problems with investor-owned utilities is that they
make profit by convincing state regulators to approve expensive-and
sometimes unnecessary-infrastructure projects that the rest of us have
to pay for over time. Unfortunately, this financing model disincentiv-
izes deployment of low-cost climate-friendly initiatives like grid-en-
hancing technologies and reconductoring. We need the HVPA to transition
our grid at the speed and scale that the climate crisis requires.
In addition to NYPA, the state legislature created the Long Island Power
Authority (LIPA) in 1986, but because it took over a failing utility in
an area that's vulnerable to extreme weather events, the authority
entered a public-private partnership that undermines most benefits of
public ownership-even though it was still able to lower rates immediate-
ly. Since then, there has been a campaign to make LIPA fully public, and
a taskforce recommended true public ownership as the path forward for
LIPA in 2023.
There are also smaller municipal public power entities in New York with
significant track records of success. In Massena, NY, residents voted to
municipalize their investor-owned utility in the 70s, and today they pay
some of the cheapest prices for some of the cleanest energy in the
state. They pay 4 cents per kWh/hr, with all charges included, compared
to 15 cents per KWh/hr that their neighbors in National Grid territory
pay.
PRIOR LEGISLATIVE HISTORY:
A10332 of 2024: Referred to Corporations, Authorities and Commissions
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This bill is effective 180 days after being signed into law
