Directs the public service commission to require electric and steam corporations to provide rate reductions or refunds for inadequate or interrupted service; requires electric corporations to reimburse ratepayers for damages to and losses of property and business caused by power outages in certain instances.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7954
SPONSOR: Carroll P TITLE OF BILL:
An act to amend the public service law, in relation to the power of the
public service commission to require refunds of or reductions in rates
for inadequate or interrupted electric or steam service
PURPOSE:
To require utility companies to meaningfully reimburse ratepayers for
damages caused by significant power outages.
SUMMARY OF PROVISIONS:
Section one of the bill amends subdivision 20 under § 66 of the public
service law to require the Public Service Commission (PSC) to impose
prompt, meaningful rate refunds or reductions in instances where elec-
tric corporations fail to meet objectively measured service quality
standards. Refunds or reductions shall, at a minimum, equal 5% of the
amount billed to a customer for at least a 12-month period, subject to
possible minimum and maximum cutoffs prescribed by the PSC.
Section one of the bill would also require electric corporations in
cities with populations of at least one million to reimburse customers
for losses suffered as a result of significant electric service inter-
ruptions. Where an outage lasts 12 hours or more within a 24-hour peri-
od, such reimbursements shall be at least:
* $500 for spoilage of food and medications,
* $1,000 for damages to electrical equipment and instruments, and
* $10,000 to commercial customers for lost business.
The PSC may also establish reasonable aggregate limits on reimburse-
ments.
Furthermore, section one of the bill provides that additional, rounds of
reimbursement consistent with the foregoing are required for each addi-
tional 48-hour period that the service interruption continues, and that
any voltage reductions that are extensive enough to damage electric
equipment or render it inoperable shall be treated as covered inter-
ruptions in service.
Section two of the bill adds a new subdivision 13 under § 80 of.the
public service law, establishing provisions for rate refunds or
reductions for substandard service quality, and reimbursement for
damages caused by service interruptions, applicable•to steam corpo-
rations.
Section three of the bill requires the PSC to report to the Governor and
Legislature by April 1, 2026, on whether additional legislation, regu-
lations or other actions are needed to ensure that all electric and
steam corporations adequately reimburse their customers for losses due
to service interruptions and other performance failures.
Section four of the bill sets the effective date.
JUSTIFICATION:
A Task Force convened in response to a massive power outage in western
Queens in 2006 found that current PSC practices fail to incentivize
utilities to meet their statutory obligations to provide safe and
adequate service. Findings that a utility has failed to meet service
reliability standards result at best in token penalties, and even these
amounts are routinely amortized or are deferred until a subsequent rate
proceeding. As a result, ignoring service quality targets may well make
economic sense for the utility.
This bill sets forth a standard - generally, 5% of annual billings -
that is substantial enough to incentivize utilities to take service
quality standards seriously. At the same time, the bill provides for
reasonable reimbursements where a utility fails to maintain the electric
grid or steam system in good working condition. In circumstances where
electric or steam service is interrupted for large swaths of a metropol-
itan area, customers should not be expected to bear the brunt of
expenses caused by unwise maintenance deferrals or other utility misman-
agement.
LEGISLATIVE HISTORY:
2023-24: 5141 (Gianaris) died in Energy and Telecommunications
2021-22: S86 (Gianaris) died in Energy and Telecommunications
2019-20: 51281 (Gianaris) died in Energy.and Telecommunications
2017-18: S2670 (Gianaris) died in Energy and Telecommunications
2015-16: S2424 (Gianaris) died in Energy and Telecommunications
2013-14: S593 (Gianaris) died in Energy and Telecommunications /
A668(Hevesi) died in corporations, authorities and commissions
2011-12: S1981 (Gianaris) died in Energy and Telecommunications /
A2228(Hevesi) died in corporations, authorities and commissions
2009-10: A1556 (Gianaris) died in corporations, authorities and commis-
sions
2007-08: A8621 (Gianaris) died in corporations, authorities and commis-
sions
FISCAL IMPLICATIONS:
None to the state.
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law. Provided, that the public service commission is
immediately authorized to take any and all actions, including but not
limited to the promulgation of any necessary rules and the review of
reimbursement and compensation policies, necessary to fully implement
the provisions of this act on its effective date.
STATE OF NEW YORK
________________________________________________________________________
7954
2025-2026 Regular Sessions
IN ASSEMBLY
April 16, 2025
___________
Introduced by M. of A. P. CARROLL -- read once and referred to the
Committee on Energy
AN ACT to amend the public service law, in relation to the power of the
public service commission to require refunds of or reductions in rates
for inadequate or interrupted electric or steam service
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 20 of section 66 of the public service law, as
2 added by chapter 394 of the laws of 1978, is amended to read as follows:
3 20. (a) Notwithstanding any general or special law, rule or regu-
4 lation, the commission shall have the power to provide for the refund of
5 any revenues received by any gas or electric corporation which cause the
6 corporation to have revenues in the aggregate in excess of its author-
7 ized rate of return for a period of twelve months. The commission may
8 initiate a proceeding with respect to such a refund after the conclusion
9 of any such twelve month period.
10 (b) Notwithstanding any general or special law, rule or regulation,
11 the commission shall impose prompt, meaningful rate refunds or
12 reductions in instances where electric corporations fail to meet objec-
13 tively measured service quality standards. Such refunds or reductions
14 shall at a minimum equal five percent of the amount billed to a customer
15 for the provision of electric service for a period of twelve months or
16 such longer period as the commission may prescribe; provided, however,
17 that the commission may prescribe a schedule setting forth both minimum
18 and maximum amounts that a customer may receive in refunds or
19 reductions.
20 (c) In addition to the provisions of paragraphs (a) and (b) of this
21 subdivision, in every instance where electric service is interrupted due
22 to a local distribution system failure lasting for twelve hours or more
23 within a twenty-four hour period, the commission shall require an elec-
24 tric corporation that distributes electricity in a city of one million
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01986-01-5
A. 7954 2
1 or more to (1) reimburse customers for damages to or losses of property
2 including, but not limited to perishable food items and medications,
3 electrical equipment, computer equipment, air conditioning equipment,
4 and other electronic equipment and instruments used by commercial estab-
5 lishments or residences; and (2) provide appropriate compensation to
6 those commercial customers who have lost business as a result of the
7 service interruption. Such compensation shall be based upon the average
8 revenues earned by the business in similar time periods, or, for a new
9 business, the average revenues earned by similar businesses in similar
10 time periods. The commission may prescribe reasonable limits on the
11 amount of reimbursement and compensation available to a customer;
12 provided that such amounts shall not be less than five hundred dollars
13 for losses of food and medications, one thousand dollars for damages to
14 electrical equipment and instruments, and ten thousand dollars for lost
15 business. Additional reimbursement and compensation in accordance with
16 the preceding requirements shall be provided to each customer who
17 remains without electricity for each additional forty-eight hour period
18 that the service interruption continues. For the purposes of this para-
19 graph, interruption of electric service shall be deemed to include
20 reductions in voltage that damage electric equipment or render it func-
21 tionally inoperable. The commission may provide for reasonable limita-
22 tions on the aggregate amount of reimbursements and compensation,
23 provided that any such limitations shall take into consideration the
24 duration of the interruption and its impact on residential and commer-
25 cial customers.
26 § 2. Section 80 of the public service law is amended by adding a new
27 subdivision 13 to read as follows:
28 13. Notwithstanding any general or special law, rule or regulation,
29 have power to impose prompt, meaningful rate refunds or reductions in
30 instances where steam corporations fail to meet objectively measured
31 service quality standards. Such refunds or reductions shall at a minimum
32 equal five percent of the amount billed to a customer for the provision
33 of service for a period of twelve months or such longer period as the
34 commission may prescribe; provided, however, that the commission may
35 prescribe a schedule setting forth both minimum and maximum amounts that
36 a customer may receive in refunds or reductions. In addition, in every
37 instance where service is interrupted for a period of forty-eight hours
38 or such lesser period as the commission may determine, the commission
39 shall require a steam corporation that provides service in a city of one
40 million or more to reimburse customers for damages to or losses of prop-
41 erty and to provide appropriate compensation to those commercial custom-
42 ers who have lost business as a result of the service interruption. Such
43 compensation shall be based upon the average revenues earned by the
44 business in similar time periods, or, for a new business, the average
45 revenues earned by similar businesses in similar time periods. The
46 commission may prescribe reasonable limits on the amount of reimburse-
47 ment and compensation available to a customer; provided that such
48 amounts shall not be less than five hundred dollars for losses of prop-
49 erty and ten thousand dollars for lost business. Additional reimburse-
50 ment and compensation in accordance with the preceding requirements
51 shall be provided to each customer who remains without service for each
52 additional forty-eight hour period, or lesser period as determined by
53 the commission, that the service interruption continues. The commission
54 may provide for reasonable limitations on the aggregate amount of
55 reimbursements and compensation, provided that any such limitations
A. 7954 3
1 shall take into consideration the duration of the interruption and its
2 impact on residential and commercial customers.
3 § 3. On or before April 1, 2026, the public service commission shall
4 review its existing policies and shall report to the governor, speaker
5 of the assembly, the temporary president of the senate, the chair of the
6 senate finance committee, the chair of the assembly ways and means
7 committee, the chair of the assembly energy committee and the chair of
8 the senate energy and telecommunications committee on whether additional
9 legislation, regulations or other actions are needed to ensure that
10 electric and steam corporations adequately reimburse and compensate
11 their customers for losses due to service interruptions and other fail-
12 ures to provide safe and adequate service as required by the public
13 service law.
14 § 4. This act shall take effect on the one hundred eightieth day after
15 it shall have become a law. Provided, that the public service commission
16 is immediately authorized to take any and all actions, including but not
17 limited to the promulgation of any necessary rules and the review of
18 reimbursement and compensation policies, necessary to fully implement
19 the provisions of this act on its effective date.
