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2012 State Legislative Wrap-Up

The State Legislature concluded the 2012 regular legislative session June 22, 2012 with little suspense and on time. This was due in part to agreements reached between Governor Cuomo and the legislature earlier in the year on most major items including, pension reform, casino gambling, and legislative redistricting.

The Government Relations team faced significant challenges in 2012 on legislation related to Solar Renewable Energy Credits, wage mandates, special rates for certain customers and energy taxes.

As in recent years, legislation that would require utilities to enter into expensive, long-term contracts to purchase solar renewable energy credits was introduced in both houses and championed by a strong, well financed lobby that included environmentalists and renewable energy developers. Both bills were defeated this year.

An alternative solar investment program which closely mirrors the Governor’s NY-SUN Initiative (using existing Renewable Energy Portfolio Standards dollars to fund an expansion of solar through 2022) circulated in draft form toward the close of session but was never formally introduced. That solar proposal was also packaged with an expansion of net metering and a plan to use future proceeds from the Renewable Greenhouse Gas Initiative to assist municipalities that would lose tax revenue if aging fossil-fuel generating facilities were to close. The intent of the draft was to aid municipalities in upstate and western New York with aging coal plants that are struggling to remain open in the wake of deregulation and stricter emissions standards. Assisting these municipalities was a priority for Senate Energy Chairman George Maziarz (R-Niagara) and the Senate Republican Conference. However, Assembly Democrats rejected the draft proposal.

Other solar-related bills were passed by both the Senate and Assembly this session, including a proposal to grant tax credits to leased and commercial solar generating systems, and legislation meant to establish an accurate accounting of renewable generation attributes in New York. Both bills will now go to the Governor for his signature or veto.

The Government Relations team also faced off against well financed and well organized unions in the fight over prevailing wage bills. Once again, legislation was introduced in the Senate and Assembly that would force utilities to pay a prevailing wage to certain contracted workers. The bill is estimated to cost Con Edison as much as $14 million annually. Con Edison Government Relation mobilized what became an effective statewide business coalition in opposition to the legislation. That group, consisting of chambers of commerce, business advocacy organizations, individual companies, business improvement districts and other associations and not for profits, proved effective in generating memos in opposition, face-to-face meetings and phone calls to legislators that led to the defeat of the bill in both houses. Similar legislation was vetoed in 2010 by then-Governor David Paterson who stated that the bill would increase utility costs and impose expensive mandates on businesses while the state was struggling to recover from a lingering recession.

The Company also faced legislation that would require utilities or their contractors to pay a prevailing wage for certain street construction projects. Estimated to cost the Company up to $7 million annually and passed routinely by the Assembly each year, Government Relations engaged with municipal organizations in the state to successfully prevent it from passing in either house.

Con Edison supported legislation that passed in the Senate which accelerates the repeal of the onerous 18-a utility assessment. The 18-a fee was increased six-fold under the 2009 state budget agreement and is scheduled to expire in 2014. The Senate bill would restore 18-a to pre-2009 levels. Assembly Democrats did not allow the bill to the floor for a vote, however.

The Senate also confirmed several appointments in the closing days of session including, most notably, Gregg C. Sayre, Associate General Counsel, Frontier Communications, to the New York State Public Service Commission. Sayre is expected to begin at the PSC on July 9, 2012, and fill the spot of Robert E. Curry, whose term ended in February, 2012. Curry has remained on the Commission since then. Assembly Speaker Pro Tempore Peter Rivera (D-Bronx) was also confirmed as Commissioner of the Department of Labor and former-Governor David Paterson was confirmed as a member of the MTA Board.

Unfortunately, we were not successful in defeating legislation which exempts volunteer fire departments from paying demand charges incurred while responding to an emergency. This was not a new proposal, and we opposed the bill because of the precedent it would set for other entities seeking similar exemptions, as well as the increased costs utility customers would incur as a result of subsidizing one particular customer group over others. The bill will now go to the Governor for his signature or veto.

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