BILL NUMBER: S8421
SPONSOR: KRUEGER
 
TITLE OF BILL:
An act to amend the public service law, the transportation corporations
law and the labor law, in relation to enacting the "Customer Savings and
Reliability Act"
 
PURPOSE:
The purpose of the bill is to reduce costs to ratepayers associated with
the expansion and maintenance of the gas distribution system and to
ensure that state regulation and oversight of gas utilities provides for
the equitable achievement of the climate justice and emission reduction
provisions set forth in the Climate Leadership and Community Protection
Act (the "CLCPA") while maintaining reliability.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Names the bill the Customer Savings and Reliability Act.
Section 2: Amends the public service law to add a new section 66-x to
require the Public Service Commission to create Regional Affordable Gas
Transition Plans to guide an orderly, affordable, and equitable right-
sizing of the utility gas distribution system. Further amends public
service law to add a new section 66-y to create Regional Savings and
Reliability Programs to allow gas utilities to implement Neighborhood
Gas Transition Projects, in alignment with the Regional Affordable Gas
Transition Plans, for the purpose of decommissioning discrete segments
of the utility gas system to generate cost efficiencies and savings for
gas customers, reduce unnecessary and expensive gas infrastructure
investments, and provide for an orderly gas system transition, including
provisions ensuring reliability, safety, affordability, and continued
access to energy services.
Section 3: Amends section 4, subdivision 1, of the public service law.
Provides that the public service commission has "all powers necessary
and proper" to facilitate achievement of the CLCPA climate justice and
emission reduction provisions.
Section 4: Amends subdivision 1 of section 5 of the public service law.
Adds gas and electricity used for cooling to the jurisdiction of the
public service commission.
Section 5: Amends section 30 of the public service law. Directs the
commission to regulate for the continued provision of gas service to
existing residential customers unless such service is discontinued by
the customer or pursuant to a Regional Savings and Reliability Program.
Clarifies that nothing in this article shall be interpreted as preempt-
ing a municipality, from adopting building codes or other regulations
regarding on-site emissions for new and existing buildings within their
localities.
Section 6: Amends section 31, subdivisions 1,3, and 4, of the public
service law. Removes the 100 ft rule subsidy for gas, which provides
ratepayer-funded utility incentives for the expansion of utility gas
system infrastructure. Requires utilities to provide clear, timely
information on incentives and opportunities for installing energy-effi-
cient equipment and other measures that provide alternatives to gas use.
Clarifies that nothing in this subdivision shall be construed to prohib-
it existing gas customers from reconnecting to the gas distribution
system following a service interruption due to emergency repairs.
Sections 7 & 8: Amends section 12 of the transportation corporations law
and adds a new section 13. Removes the 100 ft rule subsidy for new
nonresidential gas service.
Section 9. Amends section 224-d of the labor law and adds a new subdivi-
sion 9. Adds covered neighborhood gas transition projects to the defi-
nition of covered renewable energy systems to ensure that such projects
performed by contractors directly hired by a public utility are subject
to the same labor standards as other covered renewable energy systems.
Section 10. Severability
Section 11. Establishes that the act takes effect December 31st, two
thousand twenty-five.
 
JUSTIFICATION:
New Yorkers are facing rising heating bills, spurred by utility invest-
ments in increasingly expensive gas pipelines, the costs of which are
paid by utility customers as delivery costs on their gas bills. Delivery
costs can be two or three times greater than the cost of gas itself. The
increasing heating bills contribute to an unaffordable cost of living
for too many New Yorkers, leading to high amounts of consumer debt to
utilities, increasing numbers of utility service shutoffs, and hardship
as families struggle to also afford housing, food, medicine and health-
care.
Heating our buildings through burning fossil fuels is the largest source
of greenhouse gas emissions in New York State. The climate crisis
threatens the lives and financial security of New Yorkers, as storms,
wildfires, and extreme heat threaten the health, wellbeing, and property
of residents, leading to high healthcare costs and other financial
damages.
To address these harms, New York urgently needs to align its regulation
and oversight of gas utilities with the climate and equity provisions
established by the Climate Leadership and Community Protection Act
(CLCPA). The CLCPA sets ambitious, reality-based targets to achieve
significant greenhouse gas emission reductions across New York's econo-
my, while prioritizing reductions in co-pollutant emissions in disadvan-
taged communities and requiring significant state investments to bring
the affordability and health benefits of energy efficiency and clean
energy to these communities.
Achieving New York's climate and equity objectives necessitates updating
the regulation of gas utilities. Current policies create misalignment
between gas system investments and the CLCPA's 2030 and 2050 mandates,
increasing the risk of a costly and disorderly transition. Strategic
planning and investment are needed to decarbonize buildings, right-size
the gas system, and ensure coordinated enhancements to the electric
system, enabling equitable and affordable access to clean energy
solutions for all New Yorkers. Outdated public service laws are misa-
ligned with the state's energy affordability goals and CLCPA mandates.
The gas mandate, also known as the "utility obligation to serve gas,"
compels utilities to expand gas infrastructure, making it challenging to
redirect investments toward insulating and upgrading homes and install-
ing clean energy alternatives like electrification and thermal energy
networks that align with climate goals while mitigating costs for rate-
payers. Mandated system extension allowances under the "100-foot rule"
require existing ratepayers to subsidize gas hookups for new customers,
costing ratepayers hundreds of millions of dollars annually. Utilities
are projected to spend $150 billion to replace leak-prone gas pipelines.
Through the changes implemented in this Act, a portion of these invest-
ments could be avoided by redirecting funds to neighborhood-scale decar-
bonization projects. Neighborhood-scale projects offer the most cost-ef-
fective pathway to transition gas customers to alternative heating and
cooling solutions. These projects reduce costs, minimize stranded
investments in the gas system, and enable coordinated efforts among
utilities, customers, and other stakeholders.
The Customer Savings and Reliability Act seeks to:
a. Reduce unjust and disproportionate energy cost burdens by avoiding
unnecessary, non-strategic, and expensive gas infrastructure invest-
ments.
b. Reduce the ways in which utility regulations work at cross-purposes
with the CLCPA.
c. Further align utility planning with CLCPA goals, and require the
Public Service Commission to proactively address regulatory barriers and
recommend necessary legislative changes.
d. Minimize the need for new gas infrastructure investments by encourag-
ing the PSC and gas utilities to redirect ratepayer funds to alterna-
tives including electrification, thermal energy networks, targeted ener-
gy efficiency, demand response, and market transformation measures.
e. Facilitate a planned, neighborhood-scale transition away from fossil
fuels, avoiding stranded gas infrastructure costs and supporting coordi-
nated investments that reduce emissions, increase affordability, and
create good-paying jobs, while covering transition costs of customers
moving to non-gas alternatives.
f. Ensure equitable access to affordable, clean energy for heating,
cooling, and other building needs, protecting customers from undue
burdens during the transition.
The Customer Savings and Reliability Act does not impose a ban on the
use of gas. Rather, it supports a gradual, long-term, and carefully
planned transition to cleaner alternatives, ensuring affordability,
reliability, and equity throughout the process.
 
LEGISLATIVE HISTORY:
2021-22: S.8198/A.9329 Fahy - Died in committee
2023-24: S.2016/A.4592 Fahy - Passed Senate
 
FISCAL IMPACT ON THE STATE:
Undetermined.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S8421: 4 public service law, 4(1) public service law, 5 public service law, 5(1) public service law, 30 public service law, 12 transportation corporations law, 224-d labor law, 224-d(1) labor law