Bill Text: NY S02016 | 2023-2024 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Aligns utility regulation with state climate justice and emission reduction targets; repeals provisions relating to continuation of gas service; repeals provisions relating to the sale of indigenous natural gas for generation of electricity.
Spectrum: Partisan Bill (Democrat 30-0)
Status: (Engrossed) 2024-03-19 - referred to corporations, authorities and commissions [S02016 Detail]
Download: New_York-2023-S02016-Amended.html
Bill Title: Aligns utility regulation with state climate justice and emission reduction targets; repeals provisions relating to continuation of gas service; repeals provisions relating to the sale of indigenous natural gas for generation of electricity.
Spectrum: Partisan Bill (Democrat 30-0)
Status: (Engrossed) 2024-03-19 - referred to corporations, authorities and commissions [S02016 Detail]
Download: New_York-2023-S02016-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 2016--A 2023-2024 Regular Sessions IN SENATE January 18, 2023 ___________ Introduced by Sens. KRUEGER, MAY, BRESLIN, BRISPORT, BROUK, CLEARE, COONEY, FERNANDEZ, GIANARIS, GONZALEZ, GOUNARDES, HARCKHAM, HINCHEY, HOYLMAN-SIGAL, JACKSON, KAVANAGH, LIU, MYRIE, RAMOS, RIVERA, SALAZAR, SEPULVEDA, SERRANO, STAVISKY, WEBB -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Tele- communications -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the public service law, the public authorities law and the transportation corporations law, in relation to aligning utility regulation with state climate justice and emission reduction targets; to repeal section 66-b of the public service law relating to continua- tion of gas service; and to repeal section 66-g of the public service law relating to the sale of indigenous natural gas for generation of electricity The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "NY Home Energy Affordable Transition Act". 3 § 2. Legislative findings. The legislature finds and declares that: 4 1. The Climate Leadership and Community Protection Act (the "CLCPA") 5 created legal mandates for dramatic greenhouse gas emission reductions 6 from all sectors of New York's economy. The CLCPA also emphasizes equity 7 in addressing climate change by requiring all state agencies and author- 8 ities to prioritize reductions of greenhouse gas emissions and co-pollu- 9 tants in disadvantaged communities and by mandating that certain state 10 investments deliver benefits to these communities. 11 2. Buildings are New York's largest source of greenhouse gas emis- 12 sions, accounting for approximately one-third of the greenhouse gas 13 emissions in our state. New York state's buildings also produce more 14 local air pollution than any other state in the country, resulting in 15 negative health outcomes such as increased rates of asthma, particularly EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02688-06-3S. 2016--A 2 1 among children, and heart disease. Therefore, reducing greenhouse gas 2 emissions and toxic air pollution emitted from New York's buildings, 3 especially in disadvantaged communities, is necessary to meet the CLCPA 4 mandates. 5 3. To meet the state's bold climate and equity mandates, New York will 6 need to update how it regulates gas utility service. Doing so will 7 enable strategic planning and investments in neighborhood-scale building 8 decarbonization and help bring the statewide gas distribution system 9 into alignment with the two thousand thirty and two thousand fifty 10 greenhouse gas emission reduction mandates in the CLCPA through an 11 orderly and equitable process, coordinated with appropriate investments 12 in the electric system to ensure all New Yorkers have non-discriminato- 13 ry, affordable access to the energy needed for heating, cooling, and 14 powering the buildings in which they live and work. 15 4. The New York public service law not only contains barriers to 16 neighborhood-scale building decarbonization solutions such as thermal 17 energy networks, but also works at cross purposes with the state's 18 climate and affordability goals, by requiring and subsidizing the 19 continued expansion of natural gas infrastructure. 20 a. The gas utility obligation to serve codified in the public service 21 law is a major obstacle to utilities developing neighborhood-scale 22 building decarbonization projects that would facilitate bringing the gas 23 system into alignment with the two thousand thirty and two thousand 24 fifty greenhouse gas emission reduction mandates in the CLCPA in a 25 manner that can mitigate costs for all utility customers, reduces green- 26 house gas emissions and co-pollutants impacting local air quality, and 27 provides a transition for impacted workers. 28 b. Statutorily mandated utility system extension allowances require 29 existing ratepayers to subsidize gas infrastructure hookups for new 30 customers. According to a recent joint filing with the Public Service 31 Commission by the New York state gas utilities, these required allow- 32 ances cost gas utilities hundreds of millions of dollars per year. 33 These costs are passed directly to existing gas customers. 34 c. Gas utilities in New York are on track to collectively spend $150 35 billion to replace thousands of miles of leak prone pipe in the coming 36 years. These investments pose a risk of becoming stranded assets, with 37 $77 billion of the total cost coming due after 2050, but can be avoided 38 in many cases by strategically investing in neighborhood-scale decarbon- 39 ization projects. 40 5. New Yorkers are suffering from dramatic fossil fuel price spikes 41 driven by the increasingly integrated global commodity market, subject 42 to the whims of foreign dictators such as Russia's Vladimir Putin or 43 Saudi Arabia's Prince Mohammed bin Salman. Fossil fuel prices have 44 spiked to historic high levels, making both electricity and gas utility 45 service unaffordable for many New Yorkers. Decarbonizing buildings 46 through the strategic development of neighborhood-scale building decar- 47 bonization projects, along with investing in energy efficiency and 48 renewable electricity, will save New Yorkers money now and in the 49 future, protect against price volatility, and promote true energy inde- 50 pendence for New York state. 51 6. Fossil fuel price spikes are exacerbating the affordability impacts 52 of the COVID-19 Pandemic. Over a million households in New York now 53 struggle to pay their utility bills. The Public Service Commission has 54 declared, but not yet achieved, a goal that customers should not pay 55 more than 6% of their income for utility energy services, a number based 56 on a nationally accepted standard.S. 2016--A 3 1 7. Thus, it is the intent of the legislature to enact the NY Home 2 Energy Affordable Transition Act for the following purposes: 3 a. to ensure that the public service law regarding regulation and 4 oversight of gas utilities will provide for the timely and strategic 5 decarbonization and right-sizing of the gas distribution system in a 6 just and affordable manner as required to meet the climate justice and 7 emission reduction mandates of the CLCPA, appropriately balancing rate- 8 payers' needs and interests with the maintenance of financially sound 9 utilities, prioritizing low-to-moderate income customers and disadvan- 10 taged communities, and encouraging neighborhood-scale transitions; 11 b. to provide the Public Service Commission with the statutory author- 12 ity and direction to align utility regulations and planning with the 13 CLCPA climate justice and emission reduction mandates and to require the 14 Public Service Commission to take a proactive role in the timely iden- 15 tification and amendment of such regulations or rulings as may pose an 16 impediment to achieving CLCPA mandates, and to identify any laws that 17 may pose an impediment; 18 c. to end statutorily mandated, ratepayer-subsidized incentives for 19 the expansion of fossil fuel infrastructure while maintaining the equi- 20 table provision of electric service for efficient heating, cooling, 21 cooking, hot water, and other uses; 22 d. to provide affordable access to electricity for heating and cooling 23 and to protect low-income and moderate-income customers from undue 24 burdens as they decarbonize their buildings; and 25 e. to clarify that municipal building codes regulating on-site emis- 26 sions are not preempted under New York state law. 27 8. This legislation does not establish a ban on the use of gas. It is 28 neither the intent nor would it be the effect of this legislation to 29 require the immediate transition of any existing gas customer to alter- 30 native heating and cooling services. 31 § 3. Subdivision 1 of section 4 of the public service law, as amended 32 by chapter 594 of the laws of 2021, is amended to read as follows: 33 1. There shall be in the department of public service a public service 34 commission, which shall possess the powers and duties hereinafter speci- 35 fied, and also all powers necessary or proper to enable it to carry out 36 the purposes of this chapter and to enable achievement of the climate 37 justice and emission reduction mandates in chapter one hundred six of 38 the laws of two thousand nineteen, and such successors in law and func- 39 tion as may arise from time to time. The commission shall consist of 40 five members, to be appointed by the governor, by and with the advice 41 and consent of the senate. A commissioner shall be designated as [chair-42man] chairperson of the commission by the governor to serve in such 43 capacity at the pleasure of the governor or until his or her term as 44 commissioner expires whichever first occurs. At least one commissioner 45 shall have experience in utility consumer advocacy. No more than three 46 commissioners may be members of the same political party unless, pursu- 47 ant to action taken under subdivision two of this section, the number of 48 commissioners shall exceed five, and in such event no more than four 49 commissioners may be members of the same political party. 50 § 4. Subdivisions 1 and 2 of section 5 of the public service law, 51 subdivision 1 as amended and subdivision 2 as added by chapter 155 of 52 the laws of 1970, paragraph i of subdivision 1 as added by chapter 375 53 of the laws of 2022, are amended to read as follows: 54 1. The jurisdiction, supervision, powers and duties of the public 55 service commission shall extend under this chapter:S. 2016--A 4 1 [b.] a. To the manufacture, conveying, transportation, sale or 2 distribution of gas (natural or manufactured or mixture of both) and 3 electricity for light, heat, cooling, or power, to gas plants and to 4 electric plants and to the persons or corporations owning, leasing or 5 operating the same. 6 [c.] b. To the manufacture, holding, distribution, transmission, sale 7 or furnishing of steam for heat or power, to steam plants and to the 8 persons or corporations owning, leasing or operating the same. 9 [d.] c. To every telephone line which lies wholly within the state and 10 that part within the state of New York of every telephone line which 11 lies partly within and partly without the state and to the persons or 12 corporations owning, leasing or operating any such telephone line. 13 [e.] d. To every telegraph line which lies wholly within the state and 14 that part within the state of New York of every telegraph line which 15 lies partly within and partly without the state and to the persons or 16 corporations owning, leasing or operating any such telegraph line. 17 [f.] e. To the furnishing or distribution of water for domestic, 18 commercial or public uses and to water systems and to the persons or 19 corporations owning, leasing or operating the same. 20 [g.] f. To every stock yard within the state and to the stock yard 21 company owning, leasing or operating the same, to the same extent and in 22 respect to the same objects and purposes as such jurisdiction extends, 23 under this chapter, to depots, freight houses and shipping stations of a 24 common carrier, including the duty of such stock yard company to submit 25 reports and be subjected to investigation as if it were a common carri- 26 er, and the powers and duties of such commission to fix charges and make 27 and enforce orders relating to adequate service by such company. 28 [h.] g. A corporation or person owning or holding a majority of the 29 stock of a common carrier, gas corporation or electrical corporation 30 subject to the jurisdiction of the public service commission shall be 31 subject to the supervision of the public service commission in respect 32 of the relations between such common carrier, gas corporation or elec- 33 trical corporation and such owners or holders of a majority of the stock 34 thereof in so far as such relations arise from or by reason of such 35 ownership or holding of stock thereof or the receipt or holding of any 36 money or property thereof or from or by reason of any contract between 37 them; and in respect of such relations shall in like manner and to the 38 same extent as such common carrier, gas corporation or electrical corpo- 39 ration be subject to examination of accounts, records and memoranda, and 40 shall furnish such reports and information as the public service commis- 41 sion shall from time to time direct and require, and shall be subject to 42 like penalties for default therein. 43 [i.] h. To thermal energy provided by gas corporations, electric 44 corporations, or combination gas and electric corporations. 45 2. The commission shall encourage all persons and corporations subject 46 to its jurisdiction to formulate and carry out long-range programs, 47 individually or cooperatively, for the performance of their public 48 service responsibilities, including the achievement of the climate 49 justice and emission reduction mandates in chapter one hundred six of 50 the laws of two thousand nineteen, and such successors in law and func- 51 tion as may arise from time to time, with economy, efficiency, and care 52 for the public safety, the preservation of environmental values and the 53 conservation of natural resources. 54 § 5. Section 30 of the public service law, as amended by chapter 686 55 of the laws of 2002, is amended to read as follows:S. 2016--A 5 1 § 30. Residential gas, electric and steam service policy. 1. This 2 article shall apply to the provision of all or any part of the gas, 3 electric or steam service provided to any residential customer by any 4 gas, electric or steam and municipalities corporation or municipality. 5 It is hereby declared to be the policy of this state that the continued 6 provision of [all or any part of such gas,] electric and steam [service] 7 services to all residential customers without unreasonable qualifica- 8 tions or lengthy delays is necessary for the preservation of the health 9 and general welfare, is consistent with the achievement of the state's 10 climate justice and emission reduction mandates, and is in the public 11 interest. It is further the policy of this state that gas service for 12 existing residential customers must be provided in a manner that is safe 13 and adequate, not unjustly discriminatory or unduly preferential, and in 14 all respects just and reasonable, while providing for an orderly right- 15 sizing of the gas distribution system to achieve consistency with the 16 climate justice and emission reduction mandates in chapter one hundred 17 six of the laws of two thousand nineteen, and such successors in law and 18 function as may arise from time to time, prioritizing low-to-moderate 19 income customers and disadvantaged communities as defined in section 20 75-0101 of the environmental conservation law, and encouraging neighbor- 21 hood-scale transitions. 22 2. The commission shall regulate for the continued provision of gas 23 service to all existing residential customers who choose to continue 24 service, unless the discontinuance of service is part of a process of 25 orderly right-sizing of the gas distribution system to achieve consist- 26 ency with the climate justice and emission reduction mandates in chapter 27 one hundred six of the laws of two thousand nineteen, and such succes- 28 sors in law and function as may arise from time to time. As part of 29 such process, the commission shall take any such action, after notice 30 and a hearing, as is necessary to facilitate the achievement of consist- 31 ency with the climate justice and emission reduction mandates in chapter 32 one hundred six of the laws of two thousand nineteen, and such succes- 33 sors in law and function as may arise from time to time, but in doing so 34 it shall actively encourage a transition away from fuels with high life- 35 cycle greenhouse gas emissions and on-site co-pollutant emissions, 36 encourage neighborhood-scale transitions, and ensure that all residen- 37 tial customers have access to electricity for heating and cooling 38 services without unreasonable qualifications, unreasonable costs, or 39 lengthy delays, with a goal that low-to-moderate income customers, 40 defined as households with annual incomes at or below eighty percent of 41 the area median income of the county or metro area where they reside, 42 including those who are already eligible for the commission's energy 43 affordability program, are adequately protected from bearing energy 44 burdens greater than six percent of their income, including any undue 45 burdens imposed by the cost to purchase and operate electric equipment 46 needed to facilitate the achievement of the climate justice and emission 47 reduction mandates in chapter one hundred six of the laws of two thou- 48 sand nineteen, and such successors in law and function as may arise from 49 time to time. 50 § 6. Subdivision 1 of section 1020-cc of the public authorities law, 51 as amended by section 11 of part A of chapter 173 of the laws of 2013, 52 is amended to read as follows: 53 1. All contracts of the authority shall be subject to the provisions 54 of the state finance law relating to contracts made by the state. The 55 authority shall also establish rules and regulations with respect to 56 providing to its residential gas, electric and steam utility customersS. 2016--A 6 1 those rights and protections provided in article two and sections one 2 hundred seventeen and one hundred eighteen of the public service law and 3 section one hundred thirty-one-s of the social services law. The 4 authority shall also ensure low-to-moderate income customers are 5 adequately protected from bearing energy burdens greater than six 6 percent of their income pursuant to subdivision two of section thirty of 7 the public service law. The authority shall conform to any safety stand- 8 ards regarding manual lockable disconnect switches for solar electric 9 generating equipment established by the public service commission pursu- 10 ant to subparagraph (ii) of paragraph (a) of subdivision five and 11 subparagraph (ii) of paragraph (a) of subdivision five-a of section 12 sixty-six-j of the public service law. The authority shall let contracts 13 for construction or purchase of supplies, materials, or equipment pursu- 14 ant to section one hundred three and paragraph (e) of subdivision four 15 of section one hundred twenty-w of the general municipal law. 16 § 7. Subdivisions 1, 3 and 4 of section 31 of the public service law, 17 as added by chapter 713 of the laws of 1981, are amended to read as 18 follows: 19 1. Every gas corporation, electric corporation or municipality shall 20 provide residential service upon the oral or written request of an 21 applicant, provided that any residential gas service shall only be 22 provided in accordance with section thirty of this article and is 23 subject to any orders or regulations limiting or discontinuing gas 24 service that are implemented by the commission to facilitate the 25 achievement of consistency with the climate justice and emission 26 reduction mandates in chapter one hundred six of the laws of two thou- 27 sand nineteen, and such successors in law and function as may arise from 28 time to time, and provided further that the commission may require that 29 requests for service be in writing under circumstances as it deems 30 necessary and proper as set forth by regulation, and provided further 31 that the applicant: 32 (a) makes full payment for residential utility service provided to a 33 prior account in [his] the applicant's name; or 34 (b) agrees to make payments under a deferred payment plan of any 35 amounts due for service to a prior account in [his] the applicant's name 36 and makes a down payment based on criteria to be established by the 37 commission. No such down payment shall exceed one-half of any money due 38 from an applicant for residential utility service, or three months aver- 39 age billing, whichever is less; or 40 (c) is a recipient of public assistance, supplemental security income 41 or additional state payments pursuant to the social services law, or is 42 an applicant for such assistance, income or payments, and the utility 43 corporation or the municipality receives payment from, or is notified of 44 the applicant's eligibility for utility payments by the social services 45 official of the social services district in which such person resides 46 for amounts due for service to a prior account in the applicant's name, 47 together with guarantee of future payments to the extent authorized by 48 the social services law; and 49 (d) receives clear, timely information from the gas corporation, elec- 50 tric corporation, municipality, or retail energy service company, writ- 51 ten in plain language, available in the top twelve most common non-Engl- 52 ish languages spoken by limited English proficient New Yorkers, and 53 approved by the commission after stakeholder input, on incentives and 54 opportunities for installing, energy-efficient electric heating and 55 cooling technologies, weatherization, demand-side management, and 56 distributed energy resource programs.S. 2016--A 7 1 (e) nothing in this subdivision shall be construed to prohibit exist- 2 ing gas customers, in accordance with section thirty of this article and 3 subject to any other regulations implemented by the commission, from 4 reconnecting to the gas distribution system following a gas interruption 5 due to emergency repairs or remediation of leaking equipment. 6 3. Subject to the requirements of subdivisions four and five of this 7 section, and in accordance with section thirty of this article, whenever 8 a residential customer moves to a new residence within the service 9 territory of the same utility corporation or municipality, [he] the 10 applicant shall be eligible to receive service at the new residence and 11 such service shall be considered a continuation of service [in all12respects] as operationally feasible based on infrastructure and commod- 13 ity availability at the site of the new residence, with any deferred 14 payment agreement honored, and with all rights of such customer and such 15 utility corporation provided by this article unimpaired. 16 4. In the case of any application for service to a building which is 17 not supplied with electricity or gas, a utility corporation or munici- 18 pality shall be obligated to provide electric service to such a build- 19 ing, and to provide gas service for such a building in accordance with 20 commission regulation, provided however, that the commission may require 21 applicants for service to buildings [located in excess of one hundred22feet from gas or electric transmission lines] to pay or agree in writing 23 to pay material and installation costs relating to the applicant's 24 proportion of the pipe, conduit, duct or wire, or other facilities to be 25 installed. 26 § 8. Section 12 of the transportation corporations law, as separately 27 amended by chapters 713 and 895 of the laws of 1981, is amended to read 28 as follows: 29 § 12. Gas and electricity must be supplied on application in accord- 30 ance with commission rules and regulations. Except in the case of an 31 application for residential utility service pursuant to article two of 32 the public service law, upon written application of the owner or occu- 33 pant of any building [within one hundred feet of any main of a gas34corporation or gas and electric corporation, or a line of an electric35corporation or gas and electric corporation, appropriate to the service36requested,] and payment by [him] the applicant of all money due from 37 [him] the applicant to the corporation, it shall supply [gas or] elec- 38 tricity as may be required for [lighting] such building and it may 39 provide gas for such building in accordance with commission regulation, 40 notwithstanding there be rent or compensation in arrears for gas or 41 electricity supplied, or for meter, wire, pipe or fittings furnished, to 42 a former occupant thereof, unless such owner or occupant shall have 43 undertaken or agreed with the former occupant to pay or to exonerate 44 [him] them from the payment of such arrears, and shall refuse or neglect 45 to pay the same; and if for the space of ten days after such applica- 46 tion, and the deposit of a reasonable sum as provided in the next 47 section, if required, the corporation shall refuse or neglect to supply 48 gas or [electric light] electricity as required, such corporation shall 49 forfeit and pay to the applicant the sum of ten dollars, and the further 50 sum of five dollars for every day thereafter during which such refusal 51 or neglect shall continue; provided that no such corporation shall be 52 required to lay service pipes or wires for the purpose of supplying gas 53 or electric light to any applicant where the ground in which such pipe 54 or wire is required to be laid shall be frozen, or shall otherwise pres- 55 ent serious obstacles to laying the same; nor unless the applicant, if 56 required, shall deposit in advance with the corporation a sum of moneyS. 2016--A 8 1 sufficient to pay the cost of [his proportion] the applicant's portion 2 of the pipe, conduit, duct or wire required to be installed, and the 3 expense of the installation of such portion. 4 § 9. Subdivision 2 of section 66 of the public service law, as amended 5 by chapter 877 of the laws of 1953, is amended and a new subdivision 6 12-e is added to read as follows: 7 2. Investigate and ascertain, from time to time, the quality of gas 8 supplied by persons, corporations and municipalities; examine or inves- 9 tigate the methods employed by such persons, corporations and munici- 10 palities in manufacturing, distributing and supplying gas or electricity 11 for light, heat, cooling, or power and in transmitting the same, and 12 have power to order such reasonable improvements as will best promote 13 the public interest, preserve the public health and protect those using 14 such gas or electricity and those employed in the manufacture and 15 distribution thereof, and have power to order reasonable improvements 16 and extensions of the works, wires, poles, lines, conduits, ducts and 17 other reasonable devices, apparatus and property of gas corporations, 18 electric corporations and municipalities; and have power after an inves- 19 tigation and a hearing to order any corporation having authority under 20 any general or special law or under any charter or franchise, to lay 21 down, erect or maintain wires, pipes, conduits, ducts or other fixtures 22 in, over or under the streets, highways and public places of any munici- 23 pality for the purpose of supplying, selling or distributing natural 24 gas, to augment its supply of natural gas, whenever the commission deems 25 necessary and whenever artificial gas can be reasonably obtained, by 26 acquiring by purchase, manufacture or otherwise a supply thereof to be 27 mixed with such natural gas, in order to render adequate service to the 28 customers of such corporation or to maintain a proper and uniform pres- 29 sure; and have power after an investigation and a hearing to order any 30 corporation having authority under any general or special law or under 31 any charter or franchise, to lay down, erect or maintain wires, pipes, 32 conduits, ducts or other fixtures in, over or under the streets, high- 33 ways and public places of any municipality for the purpose of supplying, 34 selling or distributing artificial gas, to augment its supply of artifi- 35 cial gas, whenever the commission deems necessary and whenever natural 36 gas can be reasonably obtained, by acquiring by purchase or otherwise a 37 supply thereof to be mixed with such artificial gas, in order to render 38 adequate service to the customers of such corporation or to maintain a 39 proper and uniform pressure; and to fix such rate for the supplying of 40 mixed gas as shall secure to such corporation a fair return; and may 41 order the curtailment or discontinuance of the use of natural gas for 42 manufacturing or industrial purposes, for periods aggregating not to 43 exceed four months in any calendar year, if it is established to the 44 satisfaction of the commission that the supply of natural gas is not 45 adequate to meet the reasonable demands of domestic consumption and may 46 [prohibit the use of natural gas in wasteful devices and practices] 47 order the curtailment or discontinuance of the use of the distribution 48 system, where the commission has determined that such curtailment or 49 discontinuance is reasonably required to implement state energy policy, 50 provided that such curtailment or discontinuance shall be consistent 51 with a plan for the phase-out of the use of a gas distribution system to 52 achieve consistency with the climate justice and emission reduction 53 mandates in chapter one hundred six of the laws of two thousand nine- 54 teen, and such successors in law and function as may arise from time to 55 time, encouraging neighborhood-scale transitions for clean heating and 56 cooling, prioritizing disadvantaged communities as defined in sectionS. 2016--A 9 1 75-0101 of the environmental conservation law, and accompanied by coor- 2 dination assistance and, where reasonably required, financial assistance 3 in the identification and adoption of alternatives, and may prohibit the 4 use of natural gas in wasteful devices and practices, as defined by the 5 commission, and require conservation and efficiency in gas usage. 6 12-e. The commission shall review the capital construction plan of 7 each gas corporation and establish a process to examine feasible alter- 8 natives to such construction in order to achieve consistency with the 9 climate justice and emission reduction mandates in chapter one hundred 10 six of the laws of two thousand nineteen, and such successors in law and 11 function as may arise from time to time, encouraging neighborhood-scale 12 transitions away from fuels with high life-cycle greenhouse gas emis- 13 sions and on-site co-pollutant emissions, prioritizing low-to-moderate 14 income customers and disadvantaged communities as defined in section 15 75-0101 of the environmental conservation law. Such process shall 16 include thresholds and criteria for the types of projects subject to 17 such examination. The commission shall require participation in such 18 process by each electric corporation with a service area overlapping the 19 service area of the gas corporation; and the commission shall have the 20 power to require any such electric corporation to participate in alter- 21 natives to gas capital construction, including participation in financ- 22 ing. Any costs incurred by such electric corporation for such corpo- 23 ration's participation shall be subject to an opportunity for full 24 recovery, as determined by the commission. 25 § 10. Section 66-a of the public service law, as added by chapter 7 of 26 the laws of 1948, subdivision 1 as amended and subdivision 3 as added by 27 chapter 582 of the laws of 1975, subdivision 2 as amended by chapter 722 28 of the laws of 1977, is amended to read as follows: 29 § 66-a. Conservation of gas, declaration of policy, delegation of 30 power. 1. It is hereby declared to be the policy of this state that 31 when there develops in any area a situation under which a gas corpo- 32 ration supplying gas to such area is unable to meet the reasonable needs 33 of its consumers and of persons or corporations applying for new or 34 additional gas service, the available supply of gas shall be allocated 35 among the customers of such gas corporation, in such manner as may be 36 necessary to protect public health and safety and to avoid undue hard- 37 ship, particularly for low-to-moderate income residential customers, 38 electric generation needed for electric system reliability, and custom- 39 ers with hard-to-electrify industrial and commercial uses, pursuant to 40 rules and regulations as may be adopted by the commission, and that to 41 carry out this declared policy the jurisdiction of the public service 42 commission should be clarified. It is further declared to be the policy 43 of this state that gas service to existing customers must be provided in 44 a manner that is safe and adequate, not unjustly discriminatory or undu- 45 ly preferential, and in all respects just and reasonable. 46 2. Notwithstanding the provisions of any statute or any franchise held 47 by a gas corporation, the commission shall have power, upon the finding 48 that continued gas service is not consistent with the achievement of the 49 climate justice and emission reduction mandates in chapter one hundred 50 six of the laws of two thousand nineteen, and such successors in law and 51 function as may arise from time to time, or that there exists such a 52 shortage of gas in any area in the state, that the gas corporation 53 supplying such area is unable and will be unable to secure or produce 54 sufficient gas to meet the reasonable needs of its customers and of 55 persons or corporations applying for new or additional gas service, to 56 require such corporation to immediately discontinue the supplying of gasS. 2016--A 10 1 to additional customers or of supplying additional service to present 2 customers, for such purpose or purposes as may be designated by the 3 commission, or to customers using gas for a purpose prohibited by the 4 commission pursuant to this act, and that upon the finding that the 5 supply of gas available is and will be insufficient to supply the 6 demands of all consumers receiving service, to require such gas corpo- 7 ration to curtail or discontinue service to any or all classes of 8 customers of such gas corporation. In imposing such a direction or 9 requirement, the commission shall give consideration first to existing 10 domestic uses and uses deemed to be necessary by the commission to 11 protect public health and safety and to avoid undue hardship [and shall12be limited to the period of the emergency provided that the gas corpo-13ration affected shall make such restriction, curtailing or discontin-14uance applicable to all customers or applicants for service in a like15class. If the commission determines that good cause exists for supplying16service to additional customers or for supplying additional service to17some existing customers, notwithstanding the curtailment or discontin-18uance of service to other existing customers, it shall, to the extent19feasible, allocate gas with equal priority to new or additional domestic20uses of gas and commercial or industrial processes which require gas21because there is no practical substitute for it in such proportion as22the commission determines to be reasonable. Provided that the commis-23sion shall be permitted, after public hearing, to authorize any natural24gas produced from lands under the waters of Lake Erie to be used for25process or feedstock requirements]. The commission is authorized to 26 adopt such rules, regulations and orders as are necessary or appropriate 27 to carry out these delegated powers. 28 3. In carrying out the delegated powers provided for in this section, 29 the commission shall, to the extent practicable, determine and establish 30 gas conservation measures or standards, including energy efficient elec- 31 trification of gas end uses. The commission may require compliance with 32 such measures or standards as a condition of receiving service. 33 4. The commission shall determine conditions under which new or addi- 34 tional gas service is warranted notwithstanding the need to conserve 35 resources for service to existing gas customers. Such determination 36 shall be consistent with the achievement of the climate justice and 37 emission reduction mandates in chapter one hundred six of the laws of 38 two thousand nineteen, and such successors in law and function as may 39 arise from time to time, and may take into account factors including 40 economic development, impacts on new and existing customers including 41 low-to-moderate income customers, impacts on system safety and adequacy, 42 equity toward existing customers with limited conversion alternatives, 43 and the feasibility of neighborhood-scale alternatives to usage of fuels 44 with high life-cycle greenhouse gas emissions and on-site co-pollutant 45 emissions, including thermal energy networks. 46 5. The commission shall require gas and/or electric utilities to 47 provide coordination assistance and financial assistance, in such forms 48 as the commission deems reasonably required to implement state energy 49 policy, to identify and adopt alternatives where applications for new or 50 additional gas service are denied and encourage neighborhood-scale tran- 51 sitions. 52 § 11. Section 66-b of the public service law is REPEALED. 53 § 12. The public service law is amended by adding a new section 66-w 54 to read as follows: 55 § 66-w. Expansion of gas distribution infrastructure. Except as 56 provided in this section, and notwithstanding any other provision ofS. 2016--A 11 1 this chapter, after December thirty-first, two thousand twenty-four, no 2 gas corporation shall commence construction of new gas distribution 3 infrastructure the result of which would be to expand the availability 4 of service into geographic areas where gas service was not available 5 prior to that date as defined by the applicable utility's certificate of 6 public convenience and necessity approved by the commission. No such 7 new gas distribution infrastructure shall be put into service after 8 December thirty-first, two thousand twenty-five. The commission may 9 authorize exceptions on a case-by-case basis, provided that the commis- 10 sion finds that the project qualifying for the exception serves a 11 compelling state interest, alternatives to gas service are either not 12 technically feasible or prohibitively expensive, and that the project 13 will be completed and put into service not later than December thirty- 14 first, two thousand twenty-seven. For the purposes of this section, gas 15 distribution infrastructure shall include all real estate, fixtures and 16 personal property operated, owned, used or to be used for or in 17 connection with or to facilitate the manufacture, conveying, transporta- 18 tion, distribution, sale or furnishing of gas (natural or manufactured 19 or a mixture of both) for light, heat or power, but does not include 20 property used solely for or in connection with the business of selling, 21 distributing or furnishing of gas in enclosed containers. 22 § 13. Section 66-g of the public service law is REPEALED. 23 § 14. The public service law is amended by adding a new section 77-a 24 to read as follows: 25 § 77-a. Aligning utility regulation with climate justice and emission 26 reduction mandates. 1. Within three months of the effective date of 27 this section, the commission shall initiate a proceeding, or multiple 28 proceedings, as it deems appropriate, to consider and act on the matters 29 identified in this section in order to better align its regulation of 30 utility services with the timely achievement, of consistency with the 31 climate justice and emission reduction mandates in chapter one hundred 32 six of the laws of two thousand nineteen, and such successors in law and 33 function as may arise from time to time. If the commission is already 34 engaged in a proceeding addressing one or more of the matters identi- 35 fied in this section, it shall not be required to open a new proceeding 36 on that matter. Following completion of all proceedings initiated 37 pursuant to this section, the commission shall initiate regular subse- 38 quent proceedings, as it deems necessary, to ensure the achieve- 39 ment of the goals outlined in this section. The proceeding or 40 proceedings shall include: 41 (a) Within one year of the effective date of this section, a review of 42 the public service law and its current rules and policy guidance to 43 identify any law, rule, guidance, or lack thereof, that may inhibit 44 timely, equitable achievement of consistency with the climate 45 justice and emission reduction mandates in chapter one hundred six of 46 the laws of two thousand nineteen, and such successors in law and func- 47 tion as may arise from time to time. The commission shall report to the 48 legislature its progress and findings, identify subsequent actions it 49 will take, and make recommendations for any statutory amendments or 50 other actions that may be needed to facilitate the timely achievement 51 of such mandates. 52 (b) Within one year of the effective date of this section, a revision 53 of the commission's rules and regulations for determining appropriate 54 allowances for the extension of gas and electric utility services to 55 ensure that utility service is provided in a manner consistent with the 56 achievement of the climate justice and emission reduction mandates inS. 2016--A 12 1 chapter one hundred six of the laws of two thousand nineteen, and such 2 successors in law and function as may arise from time to time. In estab- 3 lishing rules governing the allowance for the extension of gas service, 4 the commission shall eliminate all main and service line extension 5 allowances for gas service and may increase allowances for electric 6 service. The commission may establish rules that provide for distinct 7 electric allowances for all-electric customers and for dual-fuel custom- 8 ers and may provide additional electric allowances to buildings that are 9 made ready for beneficial electric loads such as those with electric 10 vehicle charging facilities and grid interactive buildings. The commis- 11 sion may also establish allowances for buildings seeking interconnection 12 with thermal energy networks. 13 (c) In order to minimize long-term costs and stranded assets, and 14 maximize savings and benefits for customers, within one year of the 15 effective date of this section the commission shall issue an order 16 requiring each gas corporation, within one hundred eighty days of the 17 issuance of the order, to restructure its plan for addressing the leak- 18 prone gas mains and service lines on its system to facilitate the order- 19 ly right-sizing of the gas distribution system to achieve consistency 20 with the climate justice and emission reduction mandates in chapter one 21 hundred six of the laws of two thousand nineteen, and such successors in 22 law and function as may arise from time to time, while maintaining safe- 23 ty and reliability of the gas system, subject to all relevant federal 24 laws and regulations. To accomplish this, the commission shall require 25 each gas corporation, in coordination with any and all electric corpo- 26 rations with overlapping service areas, to pursue a geographically 27 targeted approach to implementing alternative solutions that minimize 28 the replacement of leak-prone gas mains and service lines while encour- 29 aging neighborhood-scale full building electrification, including 30 through the installation of thermal energy networks, resulting in the 31 decommissioning of the maximum feasible segment of gas main or service 32 line. The commission shall require each gas corporation, after notice 33 and comment, to establish criteria for evaluating whether specific 34 segments of leak-prone mains and service lines are candidates for such a 35 geographically targeted approach and to evaluate their entire inventory 36 of leak-prone pipes to create a strategic decommissioning ranking in 37 which it ranks the segments in terms of the ability to electrify all 38 customers served by the segment and retire the gas distribution infras- 39 tructure. The commission shall require each gas corporation to file an 40 annual report that provides a qualitative and quantitative assessment of 41 the reduction of leak-prone pipe inventory and that updates the strate- 42 gic decommissioning ranking from the prior year. The commission shall 43 establish notice requirements and consumer and affordability protections 44 in accordance with section thirty of the public service law applicable 45 to customers served by segments of the gas distribution system targeted 46 for decommissioning. 47 (d) In order to maximize the cost savings and benefits of the transi- 48 tion of the electric system for the equitable, orderly, and affordable 49 achievement of consistency with the climate justice and emission 50 reduction mandates in chapter one hundred six of the laws of two thou- 51 sand nineteen, and such successors in law and function as may arise from 52 time to time, within one year of the effective date of this section the 53 commission shall issue an order requiring all electric corporations to 54 pursue all available electric energy efficiency and demand flexibility 55 measures that are cost-effective, reliable, and feasible. No less 56 frequently than every three years, the commission shall identify theS. 2016--A 13 1 statewide achievable potential for energy efficiency and demand flexi- 2 bility measures for the subsequent ten-year period and establish annual 3 energy efficiency and demand flexibility targets for each electric 4 corporation that are no lower than its proportional share of the state- 5 wide achievable potential. 6 (e) Within one year of the effective date of this section, the commis- 7 sion shall complete a proceeding to develop and issue a report evaluat- 8 ing and considering rate making strategies to encourage and facilitate 9 achievement of the climate justice and emission reduction mandates in 10 chapter one hundred six of the laws of two thousand nineteen, and such 11 successors in law and function as may arise from time to time. The 12 report shall explore options for developing and assessing the impacts of 13 rates for electric, gas, steam, and thermal energy networks on total 14 customer energy costs, and shall explore options for integrating cost 15 sharing and recovery across utilities and services. The report shall 16 also identify statutory barriers to the implementation of such strate- 17 gies. In considering such rate making strategies, the commission shall 18 have a goal of ensuring that all low-to-moderate income residential 19 customers pay no more than six percent of their income for electricity. 20 (f) Within one year of the effective date of this section, the commis- 21 sion shall determine, based on the best available information, the 22 greenhouse gas emission reductions necessary to bring the statewide gas 23 distribution system into alignment with the statewide two thousand thir- 24 ty and two thousand fifty greenhouse gas emission reduction targets in 25 chapter one hundred six of the laws of two thousand nineteen, and such 26 successors in law and function as may arise from time to time, and set 27 interim emission reduction targets for each gas utility as well as 28 developing a periodic process to review and update such targets; 29 (g) Within one year of the effective date of this section, the commis- 30 sion shall revise its rules and regulations for conducting benefit-cost 31 analyses so that the methodology and the base financial and framework 32 assumptions for the analysis support achievement of the climate justice 33 and emission reduction mandates in chapter one hundred six of the laws 34 of two thousand nineteen, and such successors in law and function as may 35 arise from time to time. Such revisions shall include, but not be 36 limited to: 37 (1) Greenhouse gas emission reduction mandates shall be used as a 38 constraint in designing the scenarios to be analyzed such that all the 39 scenarios shall comply with the statutory greenhouse gas emission 40 requirements and any interim targets set by the department of environ- 41 mental conservation or the commission in order to internalize the cost 42 of achieving such targets in the benefit-cost analysis. 43 (2) Quantification of public health impacts from improvements in ambi- 44 ent and indoor air quality. When quantitative metrics are not possible, 45 qualitative analysis shall be included. 46 (3) Consideration of the significant uncertainties and risks associ- 47 ated with different scenarios, including the environmental impact of 48 leaked gas, the prolonged reliance on the gas system that results from 49 long-lived investments in gas infrastructure and gas-consuming equip- 50 ment, the positive option value associated with measures that can elimi- 51 nate or defer the need for investments in gas infrastructure and gas- 52 consuming equipment, and potential challenges associated with full 53 electrification. 54 (4) In instances where an alternative fuel has an environmental attri- 55 bute, only attribute alternative fuels with emission reduction benefits 56 under the benefit-cost analysis if the environmental attributes areS. 2016--A 14 1 retained by the utility for the benefit of the utility's customers or by 2 the end-use customer. 3 (5) Use accurate depreciation schedules that assume the full value of 4 any new gas asset is fully depreciated no later than two thousand fifty, 5 absent demonstration that the specific asset will remain in service 6 beyond two thousand fifty, and earlier if it is likely that such asset 7 will need to be phased out or retired before two thousand fifty given 8 any interim greenhouse gas emission reduction targets or geographically 9 targeted strategic asset retirement. 10 (6) Assess demographic impacts by measuring with as much geographic 11 granularity as possible and considering different levels of exposure and 12 risk factors for impacts on disadvantaged communities and other popu- 13 lations with vulnerability to changes induced by regulation. 14 2. Nothing in this chapter or any other law of New York state shall be 15 interpreted or otherwise construed as preempting a municipality from 16 adopting building codes or other regulations regarding on-site emissions 17 for new and existing buildings within their localities. 18 § 15. This act shall take effect immediately.
