Authorizes the public service commission to establish rules to limit a utility's ability to recover certain operating expenses

• Democratic13
• Republican1

◆ The sponsor's argument

Why Shelley Mayer says this is needed

Over the last several years, the Public Service Commission has approved multiple significant rate increases for public utilities which have stretched many ratepayers to the limit. For example, in 2023, the PSC approved a $457.5 million electric rate increase over three years, and a $187.2 million gas rate increase for Consolidated Edison. For New York- ers across the economic spectrum, these rate increases are untenable. According to the Robin Hood Foundation, 1.5 million New York City resi- dents live in households where their utilities have been shut off at some time in the past 5 years.1 Even for households that have not expe- rienced shut offs, utility costs represent a growing burden. Under the current ratesetting process, utility companies are allowed to recover 100% of their operating costs from ratepayers. These expenses include employee salaries, office rent, legal expenses, software fees, etc., and contribute to ever-increasing utility rates. According to research by the AARP in 2022, utilities in New York State spent a combined $18.9 million on expenses related to their partic- ipation in the most recent rate cases.2 Con Edison, for example, spent more than $6.5 million on lawyers, expert witnesses, and other consult- ants in their most recent rate case; NYSEG spent $2.6 million. 100% of these costs are borne by ratepayers. As AARP observed, "essentially, consumers pay for utilities to increase their own rates." Similarly, ratepayers bear the cost of excessive employee and executive salaries. Although the entire utility ratesetting process needs to be reformed, this bill ensures that ratepayers are not footing the bill for excessive operating costs, and follows the lead of other states, including Connec- ticut and Colorado, which have adopted similar legislation.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.