BILL NUMBER: S2026
SPONSOR: HINCHEY
 
TITLE OF BILL:
An act to amend the public authorities law, in relation to establishing
the Hudson Valley power authority, and providing for its powers and
duties; to amend the public authorities law, in relation to the New York
power authority; and to amend the not-for-profit corporation law, in
relation to establishing energy observatory corporations
 
PURPOSE:
The act creates a new state power authority, the Hudson Valley Power
Authority (HVPA), that is authorized to acquire Central Hudson and run
it as a publicly-owned and democratically governed energy utility whose
primary goal is to be in the service of its ratepayers by providing low
rates, reliable service, correct and easy to understand bills, dean
energy, community benefits, and environmental justice.
 
SUMMARY OF PROVISIONS:
Section 1 adds Tide 1-C, The Hudson Valley Power Authority, to Article 5
of the Public Authorities Law, comprising Section 1022 through Section
1022-z.
Section 1022-f provides a short title, which is the "Hudson Valley Power
Authority Act" or the HVPA act.
Section 1022-a provides numerous definitions.
Section 1022-b creates the HVPA and describes the structure of the Board
of Trustees. The section describes that frontline workers will continue
to be treated as private sector workers represented by the International
Brotherhood of Electrical Workers (IBEW). Labor unions that represent
frontline workers must consent to third party service contracts.
Section 1022-c describes the service area.
Section 1022-d details the general powers and duties of the authority,
including public meeting requirements, a public distributed renewable
energy (PDRE) program to make rooftop solar more accessible, and utility
meter choice. In addition to prevailing we provisions, it includes
language about prioritizing hiring workers from the non-renewable energy
sector, disadvantaged communities in the service territory, and the
service territory more generally.
Section 1022-e describes the powers to provide and maintain generating,
transmission and resource recovery waste to energy facilities. This
includes project labor agreement language and domestic content require-
ments for generation projects.
Section 1022-f describes the public rate-setting procedures. The HVPA
will use progressive green electric rates, which includes increasing
block rates. The first block of electric use will be charged at below-
market rates with marginal costs increasing for future blocks, and elec-
tric costs will be capped at 6 percent.
Section 1022-g includes the HVPA's commitment to the goals of the
Climate Leadership and Community Protection Act and includes conducting
a study to phase out gas infrastructure.
Section 1022-h describes the process for the acquisition of property,
including the exercise of the power of eminent domain.
Section 1022-i details the HVPA's ability to create subsidiaries and its
relationship to them. Section 1022-j describes how the HVPA will deposit
and invest its money.
Section 1022-k details the policy on conflicts of interest.
Section 1022-1 discusses the sale of surplus power.
Section 1022-m lays out the policies on audits and "annual reports.
Section 1022-n describes the HVPA's bonds, notes and other obligations.
Section 1022-o makes clear that the state and municipalities are not
liable on bonds or notes or other obligations.
Section 1022-p details the agreement of the state to not interfere with
the HVPA's obligations to bondholders and others.
Section 1022-q exempts the HVPA from taxation and details that it will
make payments in lieu of taxes to municipalities and school districts
equal to what would have been received.
Section 1022-r details rules around taking action against the authority.
Section 1022-s describes the HVPA's equal employment opportunity policy
and commitment to minority and women-owned businesses (MWBE).
Section 10224-t limits the liability of trustees, officers, and employ-
ees of the HVPA.
Section 1022-u says that the public service law is generally not appli-
cable to the authority and details other acts that are superseded.
Section 1022-v details how the HVPA is subject to certain provisions
contained in the state finance law, the public service law, the social
services law and the general municipal law.
Section 1022-w describes the HVPA's website.
Section 1022-x indicates that the HVPA will be reviewed by the legisla-
ture two years after enactment and every ten years thereafter.
Section 1022-y details the creation of the Hudson Valley Power Authority
observatory, which will function as a quasi-governmental civil society
organization to improve community participation, transparency, and bene-
fit sharing. The benefit sharing will include running a participatory
budgeting process to support local projects.
Section 1022-z says that the provisions of this title are severable.
Section 2 makes a technical edit to subdivision 1 of section 51 of the
public authorities law to include the Hudson Valley Power Authority.
Section 3 updates the New York Power Authority's preference clause to
preference public power eatities with access to energy and discounts.
Section 4 creates utility Observatories as a new kind of special not-
for-profit corporation in the not-for-profit corporation law.
Section 5 sets the effective date as 180 days after the bill becomes
law.
 
JUSTIFICATION:
The fight for public power is not new to New York. The state legislature
founded the New York Power Authority (NYPA) in 1931 as a counterweight
to the power of speculative private utilities like ConEd, owned at the
time by J.P. Morgan. At its inception, NYPA lowered rates and protected
the state's public waters from private interests. Since then, the state
has deregulated the energy system and separated the supply and delivery
sides. Outside of the rural coops and municipally-owned utilities that
stepped in to provide service to the otherwise neglected rural are of
New York, delivery of energy is monopolized by investor-owned utilities
across the state. At a time when our energy transition to meet our
climate goals stands to put the burden primarily on ratepayers, reclaim-
ing energy as a public good with a state power authority will have the
following benefits:
Lower rates: On average, a publicly-owned utility consistently provides
lower rates to ratepayers in the absence of a profit motive, and because
public entities can finance debt and access capital at lower interest
rates. Investor-owned utilities currently pass almost all of its costs
to ratepayers, whereas a publicly-owned utility can prioritize service
and affordability over profits.
Reliable Service: Publicly-owned utilities have the highest track record
of reliable Service by a wide margin. Additionally, utilities like
Central Hudson currently don't provide adequate help from the company on
treeline management, but a publicly-owned entity can significantly boost
its efforts towards this task. Serving the public interest instead of
shareholders means there's more money to invest in a stronger and more
resilient grid.
Community benefits: With no shareholders to serve, publicly-owned utili-
ties can serve as anchor institutions that invest in community benefits,
including the establishment of community funds that can fund local
projects.
Effective Coordination: Poor coordination with investor-owned utilities
have stalled the buildout of renewable energy. State-owned utilities are
much better-positioned to coordinate directly with other state entities,
such as NYPA, ORES, and NYSERDA, as well as with quasi-public entities,
such as NYISO, to overall streamline the energy system in its territory.
Labor Protections: Utility workers currently find themselves pitted
against ratepayers, and many of the benefits the workers deserve do not
materialize because of the pushback-rightfully so-against exuberant
rates. A publicly-owned utility can prioritize to treat its workers well
without always passing steep costs to its ratepayers.
Clean Energy: With the public good at the core of their mission, public
power entities can lead a just transition to renewable energy without
worrying about shareholder profits.
One of the inherent problems with investor-owned utilities is that they
make profit by convincing state regulators to approve expensive-and
sometimes unnecessary-infrastructure projects that the rest of us have
to pay for over time. Unfortunately, this financing model disincentiv-
izes deployment of low-cost climate-friendly initiatives like grid-en-
hancing technologies and reconductoring. We need the HVPA to transition
our, grid at the speed and scale that the climate crisis requires.
In addition to NYPA, the state legislature created the Long Island Power
Authority (LIPA) in 1986, but because it took over a failing utility in
an area that's vulnerable to extreme weather events, the authority
entered a public-private partnership that undermines most benefits of
public ownership-even though it was still able to lower rates immediate-
ly. Since then, there has been a campaign to make LIPA fully public, and
a taskforcc recommended true public ownership as the path forward for
LIPA in 2023.
There are also smaller municipal public power entities in New York with
significant track records of success. In Massena, NY, residents voted to
municipalize their investor-owned utility in the 70& and today they pay
some of the cheapest prices for some of the cleanest energy in the
state. They pay 4 cents per kWh/hr, with all charges included, compared
to 15 cents per KWh/hr that their neighbors in National Grid territory
pay.
 
LEGISLATIVE HISTORY:
2024: S.9534/A.10332 - REFERRED TO CORPORATIONS, AUTHORITIES AND
COMMISSIONS/Referred to Corporations, Authorities and Commissions
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This bill is effective 180 days after being signed into law.

Statutes affected:
S2026: 51 public authorities law, 51(1) public authorities law