One New York Energy Tax on the Way Out, Others are Still Hitting Hard

My office receives many inquiries from constituents who wonder why their energy bills are so high. These inquiries are well founded, as New Yorkers pay some of the highest residential energy costs in the nation. In fact, New York’s energy costs rank among the top 5 highest in the country. We pay on average 19.56 cents per kilowatt hour — significantly higher than what customers pay in other states.

Strict regulations on the kinds of power produced contribute to these costs, but so do onerous taxes. Not surprisingly for New York, state taxes make up a significant part of our energy bills. These taxes are used to pay for various energy programs and also help fund the state’s general-expenditure fund. For example, state ratepayers are charged $217.3 million annually to fund what is known as the “System Benefits Charge.” This is a fund administered through the New York State Energy Research and Development Authority, or NYSERDA, that is supposed to support, among other things, energy efficiency and low-income, energy assistance programs.

We also pay $178.5 million annually to support New York’s Renewable Portfolio Standard and $65.7 million annually for the Regional Greenhouse Gas Initiative. While one can argue there are good public policy reasons for these programs, no one can claim that “going green” is cheap.

One of the most troublesome taxes that ratepayers are paying is the 18-a Assessment. This tax was originally implemented in 1934 to pay for regulating the energy industry. Unfortunately, like many taxes, it took on a life of its own and the 2009-10 state budget increased this assessment in order to help fund the state’s general-expenditure fund. That year the assessment brought $520 million into the state coffers. The good news is that in this year’s budget, we implemented a phase-out of this part of the 18-a Assessment so that by 2018 it will be completely gone. While I would have preferred that this part of the 18-a Assessment be immediately repealed, I am happy there is a recognition that this is a burdensome tax that had to go.

While residential electrical rates are problematic for New York citizens, high rates also hamper business growth and costs New York jobs. Over the years, New York has had several programs to help provide relief to businesses from our high energy costs. One such programs is ReCharge NY, which is the successor to the very popular Power for Jobs program. ReCharge NY provides qualifying businesses with low-cost power allocations. To see if your business is eligible, a New York consolidated funding application must be submitted to the New York Power Authority. For more information, visit www.nypa.gov/ReChargeNY or call 1-888-jobsNYS.

While ReCharge NY is designed to primarily help manufacturers, agricultural rate payers are also eligible to take part in this program. The New York Power Authority, or NYPA, is currently accepting applications and encourages those in agriculture to apply before Sept. 1. Discounts are calculated each month and are based on the number of people participating. For more information on this program, visit www.ngrid.com/resagriculturaldiscount or call 1-800-642-4272.

William (Will) A. Barclay is the Republican representative of the 120th New York Assembly District, which encompasses most of Oswego County, including the cities of Oswego and Fulton, as well as the town of Lysander in Onondaga County and town of Ellisburg in Jefferson County. Contact him at barclaw@assembly.state.ny.us, or (315) 598-5185.