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Assembly Passes Power Outage Reimbursement Bill

Electric customers may be looking at higher rates if Assemblyman Andrew Goodell’s read on recently passed legislation in the Assembly is right.

On Monday, the Assembly voted 124-26 to approve A.3360, legislation that requires electric companies to reimburse customers for power outages that last at least 48 hours. Companies would have to give customers a $25 credit for each day the power isn’t restored as well as a $250 reimbursement for spoiled food or medication. The legislation also tries to stipulate that any costs for electricity providers to comply can’t come from ratepayers.

Electric providers would be able to ask the Public Service Commission for a waiver of the credits/reimbursement requirement’s within 14 days after an outage happens, and must show how the company complied with its emergency response plan.

Goodell, R-Jamestown, said on the Assembly floor that paying such a bill will eventually come from ratepayers one way or another regardless of what the bill stipulates.

“My colleague mentioned one way that utilities might address this and that is they might buy business interruption insurance and, as my colleague, the sponsor, noted that insurance could be included in your rate case,” Goodell said. “At the end of the day, my friends, no natter what we say here, at the end of the day ratepayers always pay because there is no other choice. Let’s not be fooled.”

“When we say we want utility companies to pay all their customers $25 a day because they can’t sell them a product plus up to $250 for whatever might be in their refrigerator — and we’ll be amazed how many high-priced steaks will be in refrigerators after this event — it’s going to cost customers a lot of money.”

Versions of the bill were originally introduced last fall after Tropical Storm Isaias left behind a wake of downed trees and power lines resulting in hundreds of thousands of customers without power. A state of emergency was declared in Bronx, Duchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk and Westchester counties. More than a week later, 35,000 customers in the state were still without power. Amy Paulin, D-Scarsdale, said delayed restoration efforts caused a significant disruption to customer’s daily routines, combined with the financial loss of spoiled food and medication.

She said it was later determined that inadequate storm preparations by some utility companies and breakdowns in communication systems played a role in the delayed restoration times. Assemblyman Thomas Abinanti, D-Tarrytown, voted in favor of the legislation because he hopes it will force utility companies to employ enough local workers that they aren’t relying on mutual aid to restore power after future outages.

“I want to urge my colleagues to vote in the affirmative on this legislation,” Abinanti said. “Ms. Paulin carried the burden of putting together a series of hearings and meetings with utilities and consumer and other interested parties in Westchester County as we were reviewing what had happened as a result of the various storms over the last few years. My conclusions from all of that work is what we saw was management failures. We saw companies like Con Edison have an overreliance on what they called mutual aid because it’s too expensive to them to have the people on staff who can respond quickly. Instead they had to rely on those who were coming from various other parts oft he country and of course those workers were not on hand, especially in events which were broader than just localized in our metropolitan area. These utilities made a conscious decision that they were going to value the cost to the company over the safety of our residents. So I believe this legislation is appropriate. It is using the capitalistic system to prod these companies to make the right decision and penalize them if they make the wrong decision for the wrong reasons. So they should no longer rely on mutual aid, They should properly staff and if they don’t and our residents are injured as a result of their bad decisions then those residents will be compensated for the loss.”

Goodell painted a different picture. He said Con Edison would have paid roughly $1 billion to customers following Tropical Storm Isaias while the Long Island Power Authority would have paid roughly half a billion dollars. Goodell said he fears customers will be doubly harmed with A.3360 whether companies follow Abinanti’s preferred plan or not. Forcing utility companies to add staff to handle the worst-case scenario will lead to rate increases to pay for the increased staffing while relying on mutual aid will mean the companies pay customers for lost services, the cost of needed repairs and then find a way to have customers pay those costs.

“That means the already high rates on Long Island and in New York City and Westchester County and throughout the state are going to be even higher as those costs, one way or the other, are passed on to us,” Goodell said. “And if they can’t be passed on to us we’re going to see the results in fewer capital investments, more maintenance, and lower long-term reliability. While I appreciate the efforts, at the end of the day there is no free ride. We will pay. It will hurt our senior citizens and everyone else who is on a fixed income and our families who are struggling to pay their electric bill. It’s all going to come back and hurt them.”

The Assembly bill’s Senate counterpart (S.4824) has not yet appeared before a Senate committee.

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