Gov. Andrew Cuomo has been calling, for months, for new accountability measures over utility companies that operate in New York, but finally unveiled details Wednesday on legislation that would claw back their power and place harsher penalties on those operators.
Cuomo said he expects significant pushback over the legislation from the state’s utility companies, which have come under fire for their storm response in recent years.
“Taking on the utilities is no small feat. They’re very powerful,” Cuomo said. “This is going to greatly disrupt the utilities, and they are going to push back very hard.”
The idea isn’t new; Cuomo first announced a handful of proposed changes this summer after Tropical Storm Isaias wiped out power for thousands of residents on Long Island, the Hudson Valley and beyond. But now, Cuomo says legislation will be introduced that includes those ideas and expands beyond what he’s previously proposed.
The text of the legislation wasn’t immediately available Wednesday, but Cuomo spoke about some of its major provisions on a conference call with reporters and state lawmakers representing parts of Long Island.
The legislation would, for one, remove a cap on penalties levied against utility companies when they don’t effectively respond to widespread power outages, like what happened with Isaias early this year. State law currently limits those fines.
Cuomo spoke about how utility companies, as a matter of business, currently factor those penalties into their expected costs because there’s a cap on how much they can be fined.
“It’s cheaper for these companies to just pay these limited, capped penalties than to actually change their behavior,” Cuomo said.
A second part of the legislation would transfer ownership of the infrastructure used by utility companies to the ratepayers, Cuomo said. He argued that, since ratepayers funded that infrastructure, they should retain the rights.
That would make it easier to revoke a franchise from a utility company if the state decided to go that route, Cuomo said.
“If the ratepayers paid for the infrastructure, then it should be owned by the ratepayers and the utility should not have the right to profit from it,” Cuomo said. “To the extent their shareholders paid or invested, fine, five them back their shareholder money.’
A third provision of the legislation would set a cap on how much ratepayers would contribute to pay the salaries of utility company leaders. Under current law, ratepayers could be on the hook for their entire salary.
Cuomo said the proposal wouldn’t cap the actual salaries of those officials, it would just change the structure to limit how much ratepayers can contribute. The company’s private funds can make up the difference, he said.
“If the utility wants to pay someone multiple millions of dollars, let the shareholders pay the CEO,” Cuomo said. “But the ratepayers shouldn’t do that.”
Cuomo has previously proposed streamlining the process of revoking a utility company’s franchise and requiring those companies to effectively communicate to consumers during a mass power outage as well.
Several members of the Legislature from Long Island also joined Cuomo on the call, including Sens. Jim Gaughran, Kevin Thomas, Anna Kaplan, Todd Kaminsky and John Brooks, some of which are facing a tough reelection heading into next week.
"Utilities do not have a mandate,” Gaughran said. “They are legally required to provide adequate and reliable service that's in the public interest ... and they have dropped the fall far too long.”
A spokesperson for Con Edison, a utility company that serves New York City and Westchester County, said the operator is constantly looking for ways to improve its service to customers amid a shifting climate, which has changed the weather.
"We also know that the climate is changing, and New York is experiencing more frequent, damaging storms," the spokesperson said.
"We are implementing a climate change resilience plan and, as North America’s second largest solar producer and a leader of electric vehicle infrastructure and battery storage, we are committed to providing a clean energy future for all.”
A spokesperson for PSEG Long Island, a utility company that came under fire following the aftermath of Isaias, said they'll review the legislation from Cuomo once it's been made public.
“PSEG Long Island is committed to providing our customers the best experience possible and we have been hard at work making improvements based on lessons learned during Tropical Storm Isaias," the spokesperson said.
"We are aware of the legislation proposed by Governor Cuomo today and we will review it once presented.”
The Long Island Power Authority, which contracts with PSEG, released a statement in support of the legislation, while slamming PSEG's response to Isaias over the summer.
“This proposed legislation is another mechanism to hold PSEG Long Island, and any future service provider, accountable for repeated failures to fulfill their obligations to LIPA’s customers," LIPA said in a statement.
"PSEG Long Island’s response to Tropical Storm Isaias was unacceptable. LIPA will be issuing a 90-day report in November with more of our findings on PSEG Long Island’s preparedness and response to the storm.”
