Memorandum in Opposition - A.5234/S.1075

This memorandum is submitted by Energy Coalition New York, in strong opposition to the subject bill which would mandate utility companies as a condition of issuance by the state or a municipality of a permit to use or open a street to pay prevailing wages on such project.

Energy Coalition New York consists of New York State's major gas and electric utility companies: Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York Inc., National Fuel Gas Distribution Corporation, National Grid, New York State Electric & Gas Corporation, Orange and Rockland Utilities, Inc., 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.

Labor Law Section 220 subdivision 3-a(e) currently provides that when required by a local law or ordinance to pay prevailing wage as a condition of issuance of a permit to use or open a street, a utility must keep records as required for prevailing wage projects. This bill would mandate that utilities pay prevailing wages as a condition of street opening permits irrespective of whether a local law requires the same. There is no necessity for this legislation, as municipalities currently may enact such a local ordinance. This bill creates a double mandate on municipalities and utilities. Municipalities would be subjected to increased costs when interference work is required. In the case of utilities, customers will be subjected to the increased costs resulting from this mandate. Utilities would also be forced to undertake fewer projects because of the increased costs.

There are no compelling public policy reasons for extension of prevailing wage to street opening projects. There is no allegation that any employees involved in these projects are not appropriately compensated. These projects also fail to meet the conditions for prevailing wage to apply, in that there is no public agency which is a party to the contract and it does not concern a public works project.

This bill imposes wage costs on the utilities negotiated by other parties. It effectively mandates wages in contracts between private parties. This represents an expansion of prevailing wage beyond the constitutional requirement in N.Y. Constitution Article I, Section 17.

Based on the foregoing, Energy Coalition New York respectfully requests that this legislation not receive favorable consideration.