BILL NUMBER: S9691
SPONSOR: PARKER
 
TITLE OF BILL:
An act to amend the public service law and the real property tax law, in
relation to establishing an exemption from taxation for energy-related
public utility real property related to attaining state climate goals
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill will benefit ratepayers and reduce future utility bills by
providing a real property tax exemption for utility property on which
projects or improvements are built for which the only purpose is to
provide necessary grid improvements in order to meet the state's renewa-
ble energy goals, as set forth by the Climate Leadership and Community
Protection Act (CLCPA).
 
SUMMARY OF PROVISIONS:
Section one adds a new section 28 to the public service law to outline
the responsibilities of the department of public service under the
provisions of this bill. The department would be required to, in consul-
tation with taxation and finance, create definitions and guidelines for
eligibility and would be required to make a determination on adherence
to such for each application.
Section two adds a new section 489-a to the real property tax law (RPTL)
to provide a property tax exemption for utility property that is
utilized for a project or improvements that are only necessary to meet
climate goals in the CLCPA. For property that is owned by the utility
corporation prior to the addition of such qualifying project, the utili-
ty would be exempt from taxation to the extent of any increase in the
value thereof. The Department of Public Service (DPS), in consultation
with the Commissioner of the Department of Taxation and Finance would be
required to create guidelines and each application would need to be
approved by DPS as being necessary to meet CLCPA goals. Any net decrease
in a utility's real property tax liability would be required to inure to
the benefit of its ratepayers.
Section three sets forth the effective date.
 
JUSTIFICATION:
The New York Power Grid Study was undertaken in 2020-21 by the Depart-
ment of Public Service, the New York State Energy Research and Develop-
ment Authority (NYSERDA), the New York Power Authority (NYPA), the New
York Independent System Operator (NYISO), and New York's investor-owned
utilities (Utilities) to determine necessary grid upgrades in order to
meet CLCPA goals. That report highlighted the need for a multitude of
future utility projects that will be necessary to meet our ambitious
climate goals.
One such project highlighted by the report was Con Edison's renewable
energy interconnection hub in Brooklyn, NY. The Brooklyn Clean Energy
Hub is an $810 million transmission substation that will rise where
three gas combustion turbines once stood near the East River in the
Vinegar Hill neighborhood.
The Hub will serve as an interconnection point for offshore wind or
other clean energy resources that can feed directly into the grid to
provide clean energy to millions of homes and businesses. Further, this
project will allow Con Edison to retire peaker plants that until this
project would have been impossible due to reliability concerns.
This project, necessary to meet our CLCPA goals, comes with a large
price tag which is a necessary price we must pay to combat the realities
of climate change. Unfortunately, this project will also come with a
roughly $50 million per year property tax bill, which will be paid by
Con Edison ratepayers in New York City and Westchester County. This is
just one example of the many similar projects that will be necessary for
utilities to undertake to meet these goals.
This bill is necessary to keep utility bills affordable as we begin the
process of building a new grid to meet the demands that will be placed
on it in the future. The bill is not a blanket tax exemption for all
utility property and will not create holes in local government budgets.
Rather, this bill addresses specific projects, like the one highlighted
above, that would not otherwise be needed or built unless necessary to
meet the goals of the CLCPA. Each and every exemption granted would need
to be approved by the DPS as necessary to meet our goals and the result-
ing savings would be passed on to ratepayers.
 
PRIOR LEGISLATIVE HISTORY:
New Bill
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None. This bill would only provide prospective relief to utility real
property tax liabilities, which in turn would help keep utility bills
affordable for ratepayers as utilities undertake projects necessary to
meet climate goals.
 
EFFECTIVE DATE:
First of January next succeeding the date on which it shall have become
a law and shall apply to taxable years beginning on or after such date.
Effective immediately the commissioner of taxation and finance and the
department of public service are authorized to and shall promulgate any
and all rules and regulations or take any other measures necessary to
implement this act on its effective date on or before such date.