Memo in Opposition - Article 18-a Assessment
The Energy Coalition New York opposes the extension for five additional years of the Temporary State Energy and Utility Service Conservation Assessment, as contained in Part N of S.2608/ A.3008, the Transportation, Economic Development and Environmental Conservation (“TED”) Article VII bill, which is part of the Governor’s 2013-14 Executive Budget submission.
Energy Coalition New York consists of New York State’s major gas and electric utility companies – Central Hudson Gas & Electric Corporation, Consolidated Edison Inc., National Fuel Gas Distribution Corporation, National Grid, New York State Electric & Gas Corporation, and Rochester Gas & Electric Corporation. Coalition companies collectively employ more than 32,000 people, service more than 8.5 million customers, and pay more than $3 billion in state and local taxes, assessments and fees. The member companies annually invest billions of dollars to make capital improvements to the electric and natural gas infrastructure located in New York State.
This legislation increases customer energy bills. The Section 18-A assessment is a regressive tax which is applied to a necessary service. As energy costs increase, the revenue produced by this assessment increases.
Chapter 59 of the Laws of 2009 increased the Section 18-A assessment on energy utilities from 0.3% of gross intra-state revenues to 2 %. This assessment should be limited to funding the costs and expenses incurred by the Public Service Commission. No monies should be directed to the general fund or other uses. The Section 18-A assessment is scheduled to expire on March 31, 2014 and this legislation extends it for five years until March 31, 2019. Not only should the Section 18-a assessment not be extended, as provided in this budget bill, but the base assessment should be returned to 0.3%.
The Section 18-A assessment not only hurts residential customers, it is also a significant cost for commercial and industrial consumers that are economic engines for New York State.
The Public Policy Institute of New York State produced a report entitled “Short-Circuiting New York’s Recovery” which found that 26.68% of electric bills support state and local taxes and fees. The Section 18-A assessment is one of a growing number of mandated charges including the System Benefit Charge, the Renewable Portfolio Charge, and the RGGI CO2 cost allowances.
The Section 18-A assessment is particularly burdensome when it is applied in future years because of the investment required to harden and improve the utility infrastructure. Customers should not have to layer the consequences of Superstorm Sandy onto an assessment directed to the general fund.
Based on the foregoing, Energy Coalition New York respectfully requests that repeal of this provision be deleted from the subject legislation.
Energy Coalition New York consists of New York State’s major gas and electric utility companies – Central Hudson Gas & Electric Corporation, Consolidated Edison Inc., National Fuel Gas Distribution Corporation, National Grid, New York State Electric & Gas Corporation, and Rochester Gas & Electric Corporation. Coalition companies collectively employ more than 32,000 people, service more than 8.5 million customers, and pay more than $3 billion in state and local taxes, assessments and fees. The member companies annually invest billions of dollars to make capital improvements to the electric and natural gas infrastructure located in New York State.
This legislation increases customer energy bills. The Section 18-A assessment is a regressive tax which is applied to a necessary service. As energy costs increase, the revenue produced by this assessment increases.
Chapter 59 of the Laws of 2009 increased the Section 18-A assessment on energy utilities from 0.3% of gross intra-state revenues to 2 %. This assessment should be limited to funding the costs and expenses incurred by the Public Service Commission. No monies should be directed to the general fund or other uses. The Section 18-A assessment is scheduled to expire on March 31, 2014 and this legislation extends it for five years until March 31, 2019. Not only should the Section 18-a assessment not be extended, as provided in this budget bill, but the base assessment should be returned to 0.3%.
The Section 18-A assessment not only hurts residential customers, it is also a significant cost for commercial and industrial consumers that are economic engines for New York State.
The Public Policy Institute of New York State produced a report entitled “Short-Circuiting New York’s Recovery” which found that 26.68% of electric bills support state and local taxes and fees. The Section 18-A assessment is one of a growing number of mandated charges including the System Benefit Charge, the Renewable Portfolio Charge, and the RGGI CO2 cost allowances.
The Section 18-A assessment is particularly burdensome when it is applied in future years because of the investment required to harden and improve the utility infrastructure. Customers should not have to layer the consequences of Superstorm Sandy onto an assessment directed to the general fund.
Based on the foregoing, Energy Coalition New York respectfully requests that repeal of this provision be deleted from the subject legislation.