Prohibits the public service commission from approving a rate increase that entails a return on equity for capital projects that is above the prevailing ten-year treasury rate plus one percent.
Impact
The enactment of A09215 would significantly influence how utility rates are set in New York state. By introducing a ceiling for returns on equity directly tied to the federal government's ten-year treasury rate, the bill aims to provide more stability for consumers. This could help prevent sudden increases in utility costs that result from utility companies seeking higher profits. Furthermore, it is expected to align profit-making strategies of utilities with broader economic indicators, potentially fostering a more transparent rate-setting process.
Summary
Bill A09215 seeks to amend the public service law by placing restrictions on the ability of the public service commission to approve certain rate increases. Specifically, it proposes that rate hikes related to capital projects cannot entail a return on equity exceeding the prevailing ten-year treasury rate plus one percent. This regulatory change is intended to moderate the financial burden on consumers by limiting excessive rate increases that might be authorized for utility services.
Contention
Despite its intent to protect consumers, A09215 may raise concerns among utility providers regarding profitability and financial viability. Critics of the bill might argue that capping returns on equity could deter investment in vital infrastructure improvements, as utilities could become reliant on regulated profits that are insufficient for long-term capital projects. Additionally, discussions around the bill could surface contrasting views on the balance of consumer protection and the need for utility companies to maintain profitable operations for sustainability.
Notable points
The bill was introduced to the assembly by Assembly Member Jacobson and has been referred to the Committee on Corporations, Authorities and Commissions. One of the notable points of contention surrounding the bill will likely revolve around whether the proposed restrictions are too stringent and could adversely affect the operational capacities of public utilities. This bill reflects ongoing discussions regarding the balance between regulation and market dynamics within the utility sector.
Same As
Prohibits the public service commission from approving a rate increase that entails a return on equity for capital projects that is above the prevailing ten-year treasury rate plus one percent.
Prohibits the public service commission from approving a rate increase that entails a return on equity for capital projects that is above the prevailing ten-year treasury rate plus one percent.
Provides that gas, electric, or combination gas and electric corporations shall not be permitted to retain revenues derived from their actual return on equity in excess of authorized rates of return on equity.
Provides that gas, electric, or combination gas and electric corporations shall not be permitted to retain revenues derived from their actual return on equity in excess of authorized rates of return on equity.
Enacts the "fair authorized investment returns act"; sets a default authorized return on equity equal to the ten year US Treasury rate plus two hundred basis points; provides such default authorized return shall reset annually; establishes a competitive equity auction through which the cost of equity for a covered utility may be determined on a market basis, whether initiated by the utility or ordered by the commission.
Relates to the members of the public service commission; prohibits commissioners from having been employed within the last two years by an electric, gas, steam, telecommunications, or water utility that is regulated by the commission; requires that new appointments ensure that commissioners represent certain areas of education and training.
Requires that any sanction or civil penalty imposed by the public service commission be returned to the rate payers by means of a direct bill credit, as soon as practically feasible or no later than ninety days.
Requires that any sanction or civil penalty imposed by the public service commission be returned to the rate payers by means of a direct bill credit, as soon as practically feasible or no later than ninety days.
Requires certain investor-owned gas or electric corporations to refund ratepayers when their achieved return on equity exceeds authorized rates of return by fifty percent.
Ensures that construction and fabrication done off of a public work site for specific use only in a public work project be compensated at the prevailing wage rate.