This memorandum is submitted by Energy Coalition New York in support of the subject bill which is targeted at expanding opportunities for residential, industrial and commercial customers to be able to access natural gas.

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 and 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.

Natural gas is the cleanest and cheapest fossil fuel available for heating residences and commercial spaces in New York State. There are significant economic, environmental and health benefits attributable to the use of natural gas. There is a price difference between natural gas and oil, which underlines the benefit available in conversion from oil to gas for many customers. Natural gas has a positive environmental impact by cutting the emissions of particulate matter which are linked to heart and lung conditions including asthma.

This legislation aids the objectives of both the Governor's Energy Highway Blueprint and the Public Service Commission's pending proceeding (#12-G-0297) to examine policies regarding the expansion of natural gas service. This bill is directed at expanding the availability of natural gas and providing assistance to customers seeking to convert to natural gas service.

Under current law, gas customers pay a surcharge for a systems benefit charge. This bill would reverse this disparity by initially earmarking 25% of this funding to be directed to the expansion and extension of natural gas facilities. An increased gas customer base will benefit existing gas customers who are contributing to the systems benefit charge.

Expansion of natural gas pipelines and service often results in the necessity of obtaining a number of permits to accomplish expansion. This bill provides for the PSC to work with state agencies and localities to expedite permits. This is critical because there is a limited construction season to accomplish much of this work. There is a significant potential for job creation.

This bill also provides for a real property tax exemption for gas expansion at local option. This is a positive inducement to extend gas infrastructure to broaden the availability of gas to residential consumers, commercial customers and industrial users.

This bill also permits the New York Power Authority to provide tax exempt financing in connection with extension of natural gas line infrastructure. This extension of credit or loans to investor-owned utilities is a mechanism to assist in the economics of extension of natural gas lines to provide access to new customers.

Extension of gas service will not only create economic activity but most importantly will respond to customer demand for gas service, which will result in savings and an increase in disposable income for consumers who convert.

Based on the foregoing, Energy Coalition New York respectfully requests favorable action be taken on this legislation.