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A05258 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5258
 
SPONSOR: Brennan (MS)
  TITLE OF BILL: An act to amend the public authorities law, in relation to the creation of the downstate New York power authority   PURPOSE OR GENERAL IDEA OF BILL: To authorize the creation of a public utility in NYC and Westchester County to own and operate elec- tricity service and acquire the electric generating facilities formerly owned by Consolidated Edison Company by purchase or condemnation.   SUMMARY OF SPECIFIC PROVISIONS: Creates a public utility to be known as the New York City and Westchester County Power Authority, embracing the service territory of the Consolidated Edison Company. Establishes a public authority with the normal corporate powers of any public benefit corporation. Creates a 11-member board, seven appointed by the Mayor of New York City and confirmed by the City Council, two appointed by the executive of Westchester County and confirmed by the County Legislature, one each appointed by the respective county executives of Rockland and Orange Counties and confirmed by their respective county legislatures. The terms are four years, except that the first appointed members will serve shorter terms. Establishes the powers and duties of the authority. 1, 2. The authority shall own and operate gas and electric service for the benefit of the people and businesses of New York City, Westchester Rockland and Orange Counties and shall acquire the properties formerly owned by the ConEd Company by purchase, condemnation or otherwise. 3. The authority shall determine the location, type, size, construction, lease, purchase, ownership, acquisition, use and operation of any plant or plants or other structure or property, within or without the territo- rial limits of the authority. 4. The authority shall appoint and discharge a secretary and a profes- sional staff. 5. The authority shall appoint and discharge employees, except that all collective bargaining agreements shall remain in force and employees of the authority shall not be subject to article 14 of the civil service law. 6, 7, 8. The authority shall have the power to carry out investigations, to compel by subpoena books, witnesses, records, etc., execute contracts, borrow money, including borrowing money from the Power Authority of the State of New York and to contract with the Power Authority to provide administrative, legal, or engineering services to effectuate an orderly transition from operation by ConEd to the authori- ty. 9. The authority shall have the power to hold public hearings and to adopt a capital budget. The authority may make a deposit for temporary possession of property during any condemnation proceeding not to exceed 20% of the assessed value of that property. The Public Service Law shall continue to apply to the authority, except for the following provisions: 1. The securities issued and the amount paid for the ConEd Company shall not require the approval of the commission. 2. The amount paid shall be deemed the original cost of the facilities for purpose of determining the rate base of the authority. 3. Rate increases or decreases related to the creation of the authority shall be uniform among all classes of customers, for at least two years. 4. The board of directors shall annually make the report required by subdivision 7 of section 66 of the public service law to the public service commission. Provides that it shall be the obligation of the authority to provide safe and reliable service to the people and businesses of the city of New York and the counties of Westchester, Rockland and Orange. The authority shall have the power to construct or acquire new facilities and buy or sell surplus energy and power. Permits the authority to issue its negotiable bonds and notes, bond anticipation notes, refund any bonds or notes. Provides that the authority, the state of NY, the city of NY, the coun- ties of Westchester, Rockland and Orange and the Power Authority of the state of NY shall have the right to redeem the bonds. Permits the bonds and notes to be legal investments of fiduciaries if so certified by the State Comptroller. Provides that the authority shall make payments in lieu of taxes to all units of state and local governments in the amounts paid or owing by the ConEd Company in the fiscal year prior to the acquisition, and the authority may agree to increase payments in lieu of taxes to the city of NY and the counties of Westchester, Rockland and Orange. Provides that the city of NY and the county of Westchester may levy special property tax assessments in the provisions of the Internal Revenue Code to enable property owners in the authority to deduct the assessments from their Federal income taxes. Provides that the authority shall issue bonds and details the procedure for the issuance of these bonds. Requires that the authority shall report annually to the Governor, the legislature, the city of New York, the county of Westchester, the Public Service Commission and the Comptroller on its activities and operations.   EFFECTS OF PRESENT LAW THIS BILL WOULD ALTER: Would add a new title six-E to Article five of the Public Authorities Law which would create the New York City and Westchester Power Authority.   JUSTIFICATION: By creating a public authority in the area serviced currently by ConEd, the people of that authority would be a part of a publicly-owned, not-for-profit system that would not pay dividends to stockholders, or federal income taxes and could use tax-exempt bonds to finance their plant. The consumers could expect lower utility rates than ConEd has charged -- notoriously among the highest in the nation. Today there are about 3100 public power systems In this country, which serves about 25% of the population. These people pay about 40% less for their electricity than do those who are served by an investor-owned utility. There is no reason why NYC and Westchester residents should not be able to benefit in the same way as those people who are currently served by publicly owned utilities.   PRIOR LEGISLATIVE HISTORY: A.4093 of 2001-02 - In Corporations. A4366 of 2003-04; in Corps. A3675 of 2005-06 in Corporations. A3739 of 2007-08 - referred to corporations, authorities and commissions A5413 of 2009-10 - referred to corporations, authorities and commissions   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None. Payments in lieu of taxes would be paid to state and local governments.   EFFECTIVE DATE: Immediately.
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