BILL NUMBER: S1701
SPONSOR: MAYER
 
TITLE OF BILL:
An act to amend the public service law, in relation to strengthening of
utility storm response and compliance
 
PURPOSE:
To incentivize better regulatory compliance by utilities through
increased flexibility for the Public Service Commission to assess penal-
ties on utilities for violations of the public service law, and to
expand emergency response plan requirements.
 
SUMMARY OF PROVISIONS:
Section 1 amends section 25 of the public service law to eliminate the
statutory limits on penalties for violations by public utility compa-
nies, and to institute a new process by which the public service commis-
sion sets a penalty after consideration of a number of factors relevant
to the violation in question.
Section 2 amends section 25-a of the public service law to alter the
provisions relating to imposing penalties on combination gas and elec-
tric corporations, including by eliminating the statutory limits on
penalties for violations, instituting a new process by which the public
service commission sets a penalty after consideration of a number of
factors relevant to the violation in question, removing the qualifica-
tion of "reasonable" compliance with law from the determination as to
whether a violation occurred, and providing for an evidentiary hearing
in connection with such determination.
Section 3 applies the provisions of utilities.section 25-a to other
regulated
Section 4 amends emergency response standards for communication systems
"reasonable" compliance.plan requirements to augment the and remove the
qualification of
Section 5 amends section 94 of the public service law to apply detailed
emergency response plan requirements to telephone companies.
Section 6 amends section 216 of the public service law to apply detailed
emergency response plan requirements to cable television companies.
Section 7 provides for severability.
Section 8 sets the effective date.
 
JUSTIFICATION:
Following utility service outages in several recent storms such as
Quinn, Riley, and Isaias, the Public Service Commission (PSC) conducted
inquiries into the emergency response performance of a number of utili-
ties. While the PSC found violations and assessed penalties, it cited
statutory limitations on the penalties it could impose as a factor in
its determination as to the size of those penalties.
Notwithstanding the alleged (and in some cases, admitted) violations
with respect to an inadequate emergency response plan in connection with
storms Quinn and Riley, customers experienced sustained outages and
insufficient communications following Tropical Storm Isaias just over
two years later. This suggests that penalties are insufficient to incen-
tivize a change in behavior, and that utilities appear to view current
statutory penalties as simply a cost of doing business. A pattern of
major outages, poor planning, poor communication, and poor customer
service are unacceptable at any time, but the failures of utilities in
the wake of Tropical Storm Isaias were particularly hard on customers
because the COVID-19 pandemic forced many people to work remotely and
otherwise avoid leaving home. This situation predictably magnified the
consequences of sustained outages on customers, including threats to
health and safety, yet utilities did not calibrate their emergency
response accordingly.
This bill addresses the inadequate incentives for utilities to improve
by achieving two goals: (1) enhanced capacity for the PSC to impose
penalties significant enough to be a true deterrent to future
violations; and (2) expansion of emergency response plan requirements to
ensure that utilities devote more resources to proper planning. The
penalty provisions of this bill are significant. Eliminating the statu-
tory limits on penalties will mean greatly increased liability for util-
ities in the event of violations, thereby better incentivizing compli-
ance. By requiring the PSC to assess penalties based on an enumerated
set of factors, this approach also allows for the imposition of penal-
ties that are proportionate to the violations in question. Further,
utilities have in the past argued broadly against the need to assume
responsibility for poor performance by pointing to "reasonable" compli-
ance with the law. To foreclose arguments about whether a utility
"reasonably" complied, and to hold utilities to account for poor
performance, the bill removes the "reasonably" qualifier. Finally, these
stronger penalty provisions are extended to cover utilities other than
combination gas and electric corporations.
In a similar vein, this bill extends emergency response plan require-
ments to telephone and cable television companies. Emergency response
plans (ERPs) detail, inter alia, how a utility plans to restore service,
communicate with the public and government officials regarding service
interruptions, and ensure a safe and efficient response overall.
Currently, only electric corporations are statutorily required to
prepare ERPs with a high level of detail and to make them publicly
available, thus limiting PSC oversight of other utilities. Expanding the
scope of ERP requirements to include telephone companies and cable
companies (which provide valuable communication and information dissem-
ination services during storms and other major events) will provide for
greater accountability to the public, in no small part because it allows
the PSC to assess penalties for failure to adhere to ERPs.
 
PRIOR LEGISLATIVE HISTORY:
2023-2024: S4882/ A2877, passed Senate; referred to Corporations,
Authorities, and Commissions in Assembly
2021-2022: S4960/A7065, passed Senate; referred to Corporations, Author-
ities and Commissions in Assembly
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This act shall take effect 90 days after becoming law, provided that the
department of public service or the public service commission is author-
ized to promulgate any regulations or orders necessary to implement the
act, effective immediately.

Statutes affected:
S1701: 25-a public service law, 94 public service law, 216 public service law