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Massena Electric officials urge state lawmakers to support temporary surcharge elimination

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MASSENA — Massena Electric Department officials are urging state lawmakers to support a proposal in Gov. Andrew M. Cuomo’s budget message calling for the elimination of a Temporary State Energy and Utility Service Conservation Assessment for municipal electric customers, a move utility officials say would save their customers $1 million over the next four years.

Gov. Cuomo’s budget proposal for 2014-15 recommends the state immediately eliminate the 2 percent assessment on commercial electric, gas, water and steam utility bills — as well as for all municipal electric users — and accelerate the phase-out for remaining customers.

Massena Electric Department Superintendent Andrew J. McMahon said legislation had previously placed a 0.33 percent assessment on electric bills from public utilities to help fund the Public Service Commission operations under language that allowed that assessment to be as high as 1 percent.

With the state facing fiscal challenges in 2009, state officials increased the assessment to 1 percent and added another 1 percent temporary surcharge on utility bills. Those additional revenues flowed into the state’s general fund, Mr. McMahon said.

The temporary surcharge was scheduled to expire in 2014, but last year state officials agreed to a plan to phase out the temporary surcharge over the next 3 years. That plan calls for the surcharge to drop to 1.89 percent in April 2014, 1.13 percent in April 2015, 0.83 percent in April 2016 and 0.415 percent in April 2017.

State Senate Republicans had called for the elimination of the surcharge in the 2013 budget discussions, and the state’s Tax Relief Commission had made a similar recommendation in November.

National Grid officials estimated last year the extension of the surcharge would cost the typical large business $30,000 for the year and have an annual impact of $540 on small businesses and $55 for their residential customers.

Mr. McMahon said rolling back the surcharge to the 2009 level would save Massena Electric’s residential customers approximately $15 per year. “It’s a straight pass-through for us. That assessment goes to the state,” he noted.

Massena Electric Utility Board Chairman James M. Shaw, in a letter sent to state Sens. Joseph A. Griffo and Patricia A. Ritchie, pointed out the “temporary assessment” had resulted in significant additional costs for the residents and businesses of Massena.

“Gov. Cuomo’s most recent budget proposal to rescind this energy tax for municipal utilities will save Massena Electric ratepayers almost $1 million over the next four years. We believe that the elimination of this tax is an appropriate policy response after the past few years of excessive fees that have resulted in overly inflated electricity costs. These taxes have negatively impacted our ability to promote sustainable economic development in our community,” he said.

“On behalf of the town of Massena Electric Department and the community that we serve, I urge you to support the elimination of part the Public Service Commission 18-a fee ‘temporary assessment’ for the customers of the municipal electric utilities in New York state in the final version of the budget language,” Mr. Shaw added in his letter.

Mr. Griffo said he strongly supports the effort to eliminate the temporary assessment, noting Republicans in the state Senate have opposed the measure since it was first proposed by then Gov. David A. Paterson.

“This is something that was never there before 2009. As long as we know it is being eliminated, we strongly support the ending of this tax,” he said.

He said since the GOP regained control of the state Senate several bills had been introduced to eliminate the temporary assessment, but they had run into opposition from the state Assembly and the executive office.

“I think we have finally prevailed,” Mr. Griffo said.

The state senator said taxes, utility costs, regulations and mandates are the major challenges to growing the economy in New York state.

“We need to address these areas to change the complexion of our economy,” Mr. Griffo said.

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