Assembly Budget Bill Provides for State Utility Consumer Advocate

On March 12, 2014, the Assembly passed its version of the State Operations budget bill, A.8555-C, Part N, which beginning at page 62 creates a new state office of the utility consumer advocate.  Critical reforms address the inadequate  structure and powers of the current  “Utility Intervention Unit (UIU) within the general consumer protection office of the Department of State.  UIU was created when the old CPB was abolished, through amendments to the Executive Law § 94-a(4) .

Structurally, the Assembly bill creates a new office and a new state consumer advocate selected, like a PSC Commissioner, for a term of six years, and confirmed by the Senate.  The advocate would be responsible for the planning, staffing, workplan, activities and budget of the office and would not be removable from office for positions taken in advocacy on behalf of residential customers.  Powers of the office would be broad enough to represent New York’s utility customers in any administrative or judicial forum where issues that substantially affect the full range of utility services are decided.

Currently the UIU represents the DOS Secretary and can advocate only on energy issues in administrative forums.  Thus, the current statutory scope of the UIU work does not mention telephone, broadband, cable, water, and other utility services, and does not allow the UIU to challenge actions of utilities or their regulators in judicial proceedings.  The UIU is where staff working on utility matters were transferred when the Consumer Protection Board was abolished.  There are no explicit budget lines for the UIU in the Governor’s budget.

Last we heard UIU has no director,  and hasn’t spent any of the $1 million appropriated in last year’s budget for UIU to advocate on behalf of customers on wholesale electric issues involving the NYISO and FERC.

In 2013, the Governor’s Moreland Commission on utilities considered testimony and written reports from consumer advocates, including Consumers Union, NYPIRG, AARP and the Utility Project .  The Commission issued a final report with significant reform recommendations that New York address the lack of an independent state utility consumer advocate office, with ability and resources to do the work.   See MORELAND COMMISSION RECOMMENDS STRONGER UTILITY CONSUMER ADVOCACY.

The Governor’s budget bill, however, does not address this recommended reform from the Moreland Commission.  It also would provide no new 2014-15 appropriation for the Public Utility Law Project, which is trying to revive after a precipitous shutdown in 2010 due to the lack of state budget  funding.  Under the Governor’s proposal, once carryover funds are exhausted, the Utility Project again would cease operations. And, as noted above, there are no express budget line allocations for UIU within the larger DOS budget in the Governor’s bill.

The Assembly budget includes appropriations for the new state office of the consumer advocate.  It also provides for continuation of the Utility Project with new 2014-15 funding, frozen at the level set in 2001.

The Governor’s  proposed budget would reappropriate for UIU the $1 Million of unspent consumer advocacy money appropriated last year from a federal settlement to address wholesale electric power issues that increasingly impact customer bills, and would appropriate another million for that purpose in 2014-15.  That special revenue money is part of a $10 million fund received from FERC by NYSERDA.  FERC approved it in October 2012, last year’s budget authorized expenditures beginning April 1 2013, but it appears that nothing has been done to use it for the benefit of consumers. There is no shortage of work on the wholesale electricity issues, as there are numerous matters of great importance that require expert advocacy on behalf of consumers, such as spiking NYISO electric prices being passed through this winter to consumers, a new NYISO capacity zone that will raise bills of Central Hudson customers by 10 – 18% in May of this year, proposals for new transmission lines and repowering of old power plants, and FERC proposals to thwart state and utility efforts to address future power needs through long term contracts or self supply instead of the flawed FERC capacity markets.

The Assembly budget also provides for a $1 million reappropriation and a new $1 million special revenue appropriation of the FERC fund for consumer advocacy on the federal electricity issues.  This funding should now go to the new office of the consumer advocate.

The AARP Memorandum of Support  urges enactment of the Assembly bills to create and fund a new state utility consumer advocate office.  See AARP, NYS Assembly on the Mark with Utility Watchdog in Budget Proposal.


Gerald Norlander

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