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More New York state bureaucracy will not lower your utility bills (Commentary)

By: Heather C. Briccetti and Brian Sampson |

Heather C. Briccetti is president and CEO of The Business Council of New York State. Brian Sampson is executive director of Unshackle Upstate.

This year at the state Capitol, there has been a well-organized effort to create a state office of the Utility Consumer Advocate.

To some, this appears to be a worthwhile way to address the high costs of energy in New York, but this new office will not be allowed to speak out on the real problems that we all face as energy ratepayers – the state-imposed taxes, fees and assessments on every single utility bill that we pay each month. Further, there is no plan on how to cover the cost of the Consumer Advocate. If history repeats itself, ratepayers will bear the burden via another tax or fee. Finally, there is simply no guarantee that creating this new entity will actually reduce our utility rates

The first action to protect energy ratepayers in New York state must be to reduce the taxes, fees and surcharges on our utility bills, which currently account for 25 percent to 30 percent of a typical bill. A 2010 report by the Public Policy Institute (PPI), the research affiliate of The Business Council of New York State, found that state and local gross receipt taxes, sales taxes, assessments, income taxes, taxes on capital and, above all, property taxes have made New York’s electricity prices the third-highest in the United States.

Currently, energy customers have a number of existing state government units and bureaus, as well as private organizations, which advocate for consumers before state regulatory agencies. It does not make sense for the state to add yet another new office to an already large state bureaucracy, particularly considering it will not even address a main factor in our affordability crisis.

The idea that utilities seek rate increases solely to increase their bottom lines is simply wrong. Like other businesses, utilities have to pay for increasing costs — including labor, health insurance and property taxes, among many others. Moreover, the price spike felt by many consumers this past winter was caused by commodity prices, not utility charges — impacts beyond the scope of utility regulation and this new Consumer Advocate.

Rather than creating a new and duplicative state office, we call on the state Legislature to pursue legislation that will deal with the part of our energy bills that they control. For example, Senate Energy Chairman George Maziarz and Assemblyman Michael Kearns have sponsored commonsense legislation, The Energy Assessment Cap and Consumer Cost Relief Act of 2014 [S.5484-A/A.8515] which places a limit on the surcharge increases by the Public Service Commission (PSC) for the system benefit charge (SBC), the renewable portfolio standard (RPS), or the energy efficiency portfolio standard (EEPS).

We cannot have an earnest discussion about New York’s energy costs while ignoring a major component of the situation. Ignoring energy taxes will not move New York in the right direction on energy policy. Creating the Consumer Advocate will do nothing to assure that taxes, fees and assessments on energy will ever be addressed.

There are only a few days remaining in this year’s legislative session and we urge legislators to reject the false assumptions behind the Office of the Utility Consumer Advocate. Instead, they should focus on methods that will actually lower our energy bills.