Support for the New York HEAT Act in part with modifications

SUMMARY

The Energy Committee issued a report on the NY HEAT Act. The Committee supports the provisions of the bill that commit to the Public Service Commission (PSC) the authority and requirement to establish a gas transition plan that will align the State’s gas industry with the Climate Leadership and Community Protection Act (CLCPA). The legislation will help the State achieve its climate goals and provides a reasonable accommodation to all stakeholders that have an interest in the future of natural gas. The Committee believes this transition is best managed by the PSC with the flexibility to make changes without legislative approval, instead of mandating that the transition occur in a particular way through prescriptive legislative mandates. The Committee does not approve of the NY HEAT Act in full because the bill also contains prescriptive language regarding energy affordability that appears to limit the PSC’s administrative flexibility.

BILL INFORMATION

A.4870-A (AM Simon) / S.4158 (Sen. Krueger) – Enacts the NY Home Energy Affordable Transition Act; and repeals certain provisions of the public service law relating to gas service and sale (NYS 2025).

REPORT

REPORT ON LEGISLATION BY THE ENERGY COMMITTEE

A.4870 -A (AM Simon)
S.4158 (Sen. Krueger)

AN ACT to amend the public service law, the public authorities law, the transportation corporations law and the labor law, in relation to enacting the NY Home Energy Affordable Transition Act (HEAT Act); to repeal section 66-b of the public service law relating to continuation of gas service; and to repeal section 66-g of the public service law relating to the sale of indigenous natural gas for generation of electricity

NY HEAT Act

THIS LEGISLATION IS APPROVED IN PART WITH MODIFICATIONS

I. EXECUTIVE SUMMARY

The New York City Bar Association, through its Energy Committee (the “Committee”), supports the provisions of A.4870-A (AM Simon) / S.4158 (Sen. Krueger) (the “Bill”) that commit to the Public Service Commission (PSC) the authority and the requirement to establish a gas transition plan that will align the State’s gas industry with the Climate Leadership and Community Protection Act (CLCPA), also known as the NY HEAT Act. The Committee believes that a transition from natural gas to cleaner energy sources, which is potentially required to meet the goals of the State’s Climate Leadership and Community Protection Act, would be a complicated endeavor. This Bill is necessary to help the State achieve its climate goals and provides a reasonable accommodation to all stakeholders that have an interest in the future of natural gas. The Committee accordingly believes that this transition is best managed by the PSC with the flexibility to make changes without legislative approval, instead of mandating the transition to occur in a particular way through prescriptive legislative mandates. While the gas regulatory regime should be aligned with the CLCPA, this does not mean that there cannot be new gas customers at this time. It is accordingly necessary to replace the current obligation to serve with a regulatory regime that provides when and how gas companies should continue to provide gas services, and the PSC should develop this regulatory regime.

The Committee does not approve of the NY HEAT Act in full because the bill also contains prescriptive language regarding energy affordability that appears to limit the PSC’s administrative flexibility. In particular, the Committee notes that the Law’s directive that the PSC should ensure that all residential customers pay less than 6% of their household income on energy bills could unduly constrain the PSC’s ability to develop cost-effective programs for low-income households, even with the exceptions that the law contains. The Committee believes that the Legislature should delete “ensure” and provide that this is a goal, not a requirement, subject to the conditions that are discussed in the legislation. This will make clear that the PSC has the discretion to determine both the achievability of the goal and how to best achieve it, consistent with the conditions in the legislation that make clear that this is not an absolute requirement.

II. SUMMARY OF PROPOSED LEGISLATION AND RECOMMENDATIONS

The primary goal of the proposed legislation is to provide the PSC “with clear authority and direction to align utility planning with CLCPA goals” while ensuring “equitable access to affordable clean energy for heating, cooling and other building needs, protecting consumers from undue burdens during the transition.” The legislation also states that it “does not impose a ban on the use of gas” but is intended to “support a gradual and carefully planned transition[] for existing gas customers to cleaner alternatives.”

With those goals in mind, the legislation charges the PSC with the obligation to create a “statewide affordable gas transition plan.” The legislation further requires each gas utility to develop “home affordable transition plans” subject to PSC approval. Importantly, the legislation requires that the PSC “shall ensure that [the] program approved will not compromise the safety and reliability of the electric distribution grid or gas distribution system.”

The legislation, however, in section 6(3(a), further provides that the Commission has one year to develop a plan to ensure that “all residential customers be adequately protected from bearing an energy burden greater than six percent of their household income.” The Committee proposes that this sentence of the bill be modified as follows: “Within one year of the effective date of this subdivision, commission shall develop a plan with the goal of having all residential customers be adequately protected from bearing an energy burden greater than six percent of their household income, subject to the conditions below.” The language in section 6(3)(b) should also be modified to conform with this change. The Committee proposes these changes because: (1) it is more consistent with the legislation’s overall intent to have the PSC determine the appropriate exceptions for 6%; and (2) there could be significant practical issues associated with the development and implementation of a program that ensured that no customer had an energy bill that exceeded 6%.

III. CONCLUSION

The Energy Committee represents diverse interests, including regarding the future use of natural gas and the CLCPA. The Energy Committee submits this memo to support the principle articulated in certain sections of A.4870-A / S.4158 that the PSC, the agency empowered to regulate the State’s utility industries, should have the discretion to determine the best methods to implement a natural gas transition that will enable achievement of CLCPA goals. The Energy Committee, however, cannot fully support this proposed Act in its current form because it contains prescriptive language that could limit the PSC’s flexibility.

Energy Committee
Richard B. Miller, Co-chair
Robert Craig, Co-chair

May 2025