June 2001 View Points 2001 Banner

From the New York State Assembly  Black Square  Sheldon Silver, Speaker
Paul D. Tonko, Chair, Energy Committee

Assembly plan will lower energy costs, cut gas tax, protect consumers

To help families and businesses struggling with high energy prices, the Assembly has passed far-reaching legislation which will lower energy and gasoline costs for consumers, promote conservation, and help create jobs.

A permanent cap on the gasoline sales tax will give New York motorists a break at the gas pump, while the New York State Transitional Energy Plan (NYSTEP) will save them on energy costs. NYSTEP is a broad-based initiative that will prevent an all-out energy crisis in New York by providing consumers with rate relief, easing the transition to a competitive energy market, spurring job creation and safeguarding the environment.

Permanent cap on gasoline sales tax will save consumers $130 million

New York families are being ripped off at the gas pump, and there is no end in sight. The president and the governor have done nothing to help put an end to rising gas prices –– in fact, the president says he won’t step in even if prices reach $3 per gallon.

The Assembly’s measure permanently caps the sales tax on gasoline on the first dollar per gallon — resulting in real savings throughout the year, not just during the summer months. The bill also enables localities to lower their share of the gasoline tax, thereby reducing prices even further.

Putting consumers first and providing real rate relief

New Yorkers are looking for real relief from the disastrous effects of the governor’s deregulation of the state’s electric power industry. Administratively implemented in 1997 without public input or legislative oversight, the governor’s deregulation plan has failed to provide the competition necessary to keep consumer costs in check. As a result, New York’s residential electricity rates are over 80 percent higher than the national average.

That’s why a key component of NYSTEP is the Universal Service Rate, which will give residential consumers a price break on the essential block of electricity they need to run their appliances and turn on their lights. The Universal Service Rate will provide a 25 percent discount on the first 200 kilowatt hours per month – or about the amount of energy needed to maintain the basic necessities of a small household.

NYSTEP will also:

  • create a new emergency supplemental energy assistance program for consumers who qualify for federal Home Energy Assistance Program (HEAP) aid for heating and cooling costs; and

  • create a new Emergency Energy Assistance to Seniors Program to benefit all those 65 and older earning less than $50,000.

    These initiatives will provide the security working families and seniors on fixed incomes need to deal with the turbulent energy industry. They build on the Assembly budget proposal, passed in March, which would eliminate the gross receipts tax on electricity and natural gas, saving residential consumers $325 million annually.

    Easing the transition to a competitive market

    Because the governor’s flawed deregulation policies failed to plan for competition, New York ratepayers are being subjected to possible price gouging and wild energy price fluctuations. In contrast, the Assembly plan will protect ratepayers until competition takes hold and provides consumers with real choices to lower their energy costs.

    The Assembly’s NYSTEP proposal includes the Emergency Rate Payer Protection Act to smooth the transition to a competitive market over a three-year period. The measure directs the PSC to require utilities to take every step necessary to avoid price increases, including long-term purchase agreements. The measure also restricts utilities’ ability to pass wholesale price increases on to consumers by requiring the PSC to review automatic rate adjustments to ensure they are just and reasonable.

    Harnessing energy to create jobs

    The Assembly Majority’s groundbreaking Power for Jobs program has been responsible for the creation or retention of 300,000 new jobs since its inception four years ago. Now, the Assembly plans to tap New York’s vast power generation capacity in Western New York to expand this highly successful program.

    Scheduled upgrades at the Niagara and St. Lawrence hydro projects are expected to result in 400 megawatts of additional generating capacity. The Assembly plan will utilize this capacity for a new regionalized version of the Power for Jobs program –– centered in Empire Development Zones and in areas around the Niagara and St. Lawrence hydroelectric projects –– where it will bring more low-cost power to New York businesses that create and retain jobs. The Assembly’s program will provide a boost for the economic revitalization of those areas of the state with the greatest need.

    Keeping the lights on

    The Assembly plan has the only proposal to bring more electricity generating capacity on-line sooner. In those cases where a developer is repowering an existing site and cutting pollution from the site significantly, the licensing period is cut from 12 to six months. This legislation brings more power and environmental benefits to New Yorkers. Also, the package contains protections that keep utility companies solvent and ensure that the lights will stay on.

    Protecting the environment

    Reducing energy costs makes New York more attractive to businesses, and plays a critical role in economic development efforts throughout the state. The Assembly’s NYSTEP initiative goes even further by combining reduced costs with a $1.5 billion investment in energy efficiency projects and alternative energy sources, including solar, wind and fuel cells.

    In keeping with the Assembly Majority’s long-held view that energy policy and environmental protection must go hand-in-hand, NYSTEP uses common-sense environmental initiatives to reduce air pollution from power plants, emphasize energy conservation and efficiency and encourage new, clean energy technologies.

    Under our plan, approval time for newer, cleaner power plants to replace inefficient facilities will be cut in half. And New Yorkers will be encouraged to purchase vehicles that will save on fuel costs and protect the environment through elimination of the state sales tax on highly fuel efficient vehicles and super-ultra-low emitting vehicles (SULEV).

    In addition, NYSTEP contains a measure calling for an energy conservation plan for all state agencies to eliminate wasteful and non-essential energy use.

    The Assembly plan will help New Yorkers meet expanding energy needs without compromising our commitment to improving the state’s air quality –– ensuring healthier communities while saving working families money both at the gas pump and on home heating costs.

    Eliminating the Gross Receipts Tax

    Skyrocketing energy costs wreak havoc on family budgets. Last year the Assembly helped eliminate the Gross Receipts Tax (GRT) on industrial and commercial users. We also reduced the GRT on residential utility ratepayers –– saving residential customers $175 million a year.

    This year the Assembly’s budget resolution takes the next step and eliminates the Gross Receipts Tax altogether for residential consumers –– saving ratepayers $150 million statewide.

    Continuing the Assembly’s commitment to keeping energy available and affordable

    Competitive energy and gasoline prices are essential to revitalizing New York’s economy and giving real relief to hard-working New Yorkers.

    The Assembly’s gasoline tax cap, its NYSTEP package, and its plan to eliminate the GRT pave the way to meaningful relief by reducing the high cost of gasoline and power, continuing our commitment to keeping energy affordable for working families and businesses, creating jobs and protecting the environment. It’s just part of the Assembly Majority’s continuing efforts to make New York a better place to live, work and do business.

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