New York Legislators Want Close Look at 'Tax'
Supporting State Renewable Standard
By Corina Rivera, SNLi (12/8/05)

Two New York legislators closely involved in energy issues, while not opposed to the state's renewable portfolio standard, said in a meeting on Dec. 7 that they want greater public oversight of what they described as a little-recognized "compulsory tax" on ratepayers.

New York Assemblymen Paul Tonko and Ryan Karben held a public meeting on Dec. 7 to shed light on issues such as the RPS's implementation process and to hear testimony from New York Public Service Commission and New York State Energy Research and Development Authority (NYSERDA) officials.

Tonko chairs the Assembly Committee on Energy and Karben chairs the Assembly's Subcommittee on Renewable Energy.

Karben's chief of staff, Aaron Troodler, said Dec. 8: "Essentially, the surcharge being imposed to fund the RPS and further the development of renewable energy in New York State is a compulsory tax on New Yorkers. Assemblyman Karben wants to make certain the dollars generated are going to achieve the objective this program is intended to achieve."

Karben said in a Dec. 5 statement promoting the public meeting: "The only way to reduce energy bills over the long haul is to reduce our reliance on traditional forms of energy. But we need to know that the millions of dollars that will be spent on these to-be-determined projects will actually benefit consumers, particularly when energy costs are rising beyond the ability of our citizens to pay."

In his opening statement at the meeting, Tonko said: "With rising prices for energy commodities of all types impacting consumers, few people outside of this room have even noticed that a new tax has been levied on their electricity consumption. While the PSC had an extensive administrative process where stakeholders - mostly lawyers, lobbyists and interest group representatives - debated the development of a 10 year, $750 million energy policy, most New Yorkers know very little about this important program."

Tom Lynch, legislative director for Tonko, said Dec. 8 that the surcharge was levied early in the fall by the PSC; according to the statement from Karben's office, it is a 2% utility bill surcharge.

In testimony given during the meeting, James Gallagher, director of the Office of Electricity and the Environment of the New York Department of Public Service, said collections from the six regulated utilities in New York will garner a total collection of about $741 million through 2013. The RPS sets a goal of utilities obtaining 25% of their electricity needs from renewable sources by 2013.

Expected savings in fossil fuel costs that will offset these costs, based on market prices from early 2003, were projected to be more than $360 million; the result is an expected addition of almost 3,600 MW of renewable resources by the end of 2013. "Overall net bill impacts to customers, again, based on 2003 market prices for energy, were projected to range from a reduction of 0.9% to a 2.2% increase, depending on customer class and utility service territory," Gallagher said.

While recognizing that fuel diversity is key to the state's economic viability, Tonko expressed concern over the process being done not by legislation but by administrative measures. The RPS, created by a PSC order in 2004, is administered by NYSERDA.

Lynch said: "The elected officials that represent the people sort of were bypassed in this process. In other states, the RPS and the system benefits charge have been debated through the legislative process."

Tonko stated: "As we have seen with this state's deregulation of the electric industry, an administrative process does not ensure success. We should have a public discourse - through the people's representatives in the Legislature - with regard to energy policy."


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