Assembly Advances Comprehensive Energy Strategy
Aimed At Giving New Yorkers Real Reform

Silver: Initiatives Aimed at Providing Long-term Relief From Continued Rising Fuel Prices and Anticipated High Home Heating Costs

Assembly Speaker Sheldon Silver and Energy Committee Chairman Kevin Cahill today announced the Assembly will act on a series of comprehensive, innovative initiatives aimed at implementing meaningful, long-term solutions to New York's rising energy costs.

The package includes measures to:

• recapture lost tax revenue currently withheld by big oil companies and redirect it toward the low- and moderate-income Home Energy Assistance Program (HEAP);
• implement consumer protections by improving the accuracy and efficiency of pumps that dispense fuel and labeling the energy efficiency of tires;
• increase competition among service station dealers by allowing the sale of unbranded motor fuel and making information about prices readily available to consumers.

"The measures the Assembly is acting on this week continue the Assembly Majority's long-standing commitment to working families. The Assembly Majority is putting forth comprehensive, effective energy legislation aimed not only at providing more relief, but at ensuring that the steps taken translate into direct savings for consumers and are not simply yet another windfall to fatten already bloated oil company profit margins," said Silver.

"Big oil is raking in record profits while New Yorkers are struggling," said Cahill (D-Kingston). "Today's high prices at the pump are forcing us to make some difficult decisions. If fuel prices continue on this trajectory, as they are projected to, we are going to be facing a crisis this winter as people struggle to figure out how they are going to heat their homes. We cannot wait until this issue becomes life-threatening; we need to get a plan in place immediately."

Joining Silver, Cahill and members of the Assembly in support of the measures were representatives from AARP New York, NYPIRG, Public Utility Law Project, Fiscal Policy Institute, League of Women Voters and New York StateWide Senior Action Council.

Other provisions of the package would require state agencies to use clean fuel vehicles. In addition, the Assembly is expected to act on two legislative resolutions calling on Congress to increase HEAP funding, take action against gasoline price gouging, and create an excess profits tax on companies guilty of gouging consumers. The revenue generated would be dedicated to the creation of innovative, renewable energy technologies.

Forcing big oil companies to pay up
Highlighting the 2006 enactment of a state law capping the sales tax on gasoline at $2 per gallon, the lawmakers noted that consumers never saw any savings while big oil companies continued raising prices and posting record-high profits in 2007, raking in billions of dollars while draining the pockets of average Americans.

"The two things clear in this gasoline crisis are that, yet again the American people are suffering while oil company profits continue to grow astronomically, and that our federal government, yet again, is failing to provide any viable solutions," said Silver.

"Two years ago we capped gas taxes and the oil companies pocketed the difference, costing the State hundreds of millions in revenue while providing no relief to consumers," said Cahill. "Today we are proposing that we take that money back from big oil and invest it in energy efficiency and home heating grants, programs that will have an immediate and direct benefit to New Yorkers."

The Assembly package includes legislation instituting a recapture and windfall profit tax provision on big oil companies with a prohibition on passing the tax on to consumers (A.11590). The revenues will go to a fund that supports energy savings measures for consumers as well as helping pay home heating bills this winter through the Home Energy Assistance Program. In addition, under the Assembly plan, the first $550 million generated from the windfall profit tax will be used to double the existing HEAP and enhance eligibility. Any additional funds will be redirected toward the newly-created New York Energy Reinvestment Account which fund energy efficiency and weatherization initiatives.

The legislation will:

• require gasoline importers to pay a surcharge equal to 4 percent of the difference between the price of a gallon of gasoline and $2 per gallon; and

• prohibit the pass-through of this surcharge to consumers and provide for a civil penalty of up to $35,000 per day for any violation of this prohibition.

Based on the forecasted price for gasoline by the Energy Information Association, the recapture provision on big oil would be expected to generate $406 million. The windfall profit tax will:

• impose a two percent gross-receipts tax on very large oil companies that sell their products in New York State, similar to the windfall-profits tax imposed on oil companies in the 1980s; and

• prohibit big oil companies from passing along the additional costs to customers through increases in the price of gasoline.

• ensure gasoline pumps dispense the accurate amount of fuel that a consumer is charged for by retailers, ending the phenomenon known as "pump jump" (A.11588);

• establish a Web site to inform consumers of current retail prices for all grades of gasoline and diesel fuel sold at retail outlets throughout New York State (A.11588);

• create a database, rating system and test procedures of replacement tires, helping consumers purchase the most energy-efficient tires for their cars (A.10262-B);

• allow gasoline retailers and distributors to purchase and sell unbranded motor fuel, giving consumers the option to purchase less expensive fuel (A.9073-B); and

• provide fleet maintenance, fueling and driving regulations in order to reduce fuel consumed by New York State Office of General Services vehicles; require that all new light-duty vehicles purchased by state agencies - except for police and emergency vehicles - be alternative fuel vehicles; and require state agencies to make cost-effective purchases of zero-emission or low-emission medium-duty vehicles (A.11589).

"Skyrocketing prices for home heating fuels combined with the weakening economy pose a serious threat for the most financially vulnerable households in New York. This proposed increase in LIHEAP benefits to the lowest income households constitutes an important first step in protecting low income families from these price spikes. The addition of a new tier of benefits to provide assistance to families with incomes between 60 and 80 percent of the median will address a group of families that also struggle to pay heating bills but have not historically been eligible for the program. The investment in energy conservation and efficiency funds will help both groups of households reduce their energy consumption in the face of permanent increases in heating fuel costs." Trudi Renwick, senior economist, Fiscal Policy Institute.

"This bill comes to grips with the reality that rising costs of gasoline, heating oil, natural gas, and electricity are placing heavy energy burdens on low and moderate income households. Those burdens may increase next winter. It also addresses the need for a major initiative to increase the energy efficiency of New York's housing stock with cost effective investment in energy efficiency measures." - Gerald Norlander, executive director, Public Utility Law Project.

"No New Yorker should have to face the possibility of freezing in their homes this winter. The enormous increase in heating costs could lead to terrible suffering for hundreds of thousands of New York families. It's a huge problem. And it's government's job to solve it," said. Blair Horner, NYPIRG's legislative director. "The Assembly deserves praise for advancing these bills that, if enacted, offer a real solution. Now the Governor and State Senate must act."

"This legislation would give New Yorkers the funds they need to ensure that their homes are energy efficient in order to reduce their energy costs and perhaps stay in their home," said Barbara Bartoletti, Legislative Director, New York League of Women Voters.

"New York StateWide Senior Action Council applauds Assembly Member Cahill for his important initiative to increase HEAP funds for 2008. Without this legislation, the extraordinary escalation of home heating fuel prices will force many of New York's seniors to turn off their heat or turn it down to unsafe levels. It is appropriate to pay for the increase in HEAP funds by assessing those who are making gargantuan profits from the price increases."

Silver and Cahill emphasized that a comprehensive national strategy to reduce our dependence on foreign oil - investments in alternative fuels and a renewed emphasis on energy efficiency - would provide meaningful long-term relief for consumers.

"Although there are limited steps we can take here in New York, the Assembly is committed to bringing relief to consumers and putting additional pressure on gasoline companies and retailers to hold down prices. Oil companies and their shareholders have been unjustly enriched by record profits under the Bush-Cheney administration," said Silver. "Energy consumers deserve a coordinated effort to solve this crisis quickly and to develop a comprehensive, long-range plan to eliminate the foreign oil stranglehold on our national economy and security."