S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         8446
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                    October 9, 2015
                                      ___________
       Introduced by M. of A. ORTIZ, COLTON, ABINANTI -- read once and referred
         to the Committee on Corporations, Authorities and Commissions
       AN  ACT  to  amend the public authorities law, in relation to smart grid
         systems
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. The public authorities law is amended by adding a new title
    2  13 to article 5 to read as follows:
    3                                  TITLE 13
    4                      NEW YORK STATE SMART GRID SYSTEMS
    5  SECTION 1349-A. LEGISLATIVE INTENT.
    6          1349-B. DEFINITIONS.
    7          1349-C. RECOVERING COSTS.
    8          1349-D. DEPLOYMENT PLAN.
    9          1349-E. ECONOMIC INCENTIVES.
   10          1349-F. INSTALLATION.
   11          1349-G. ELECTRICAL CORPORATION.
   12          1349-H. PROHIBITED REGULATION.
   13    S  1349-A.  LEGISLATIVE INTENT. THE LEGISLATURE FINDS AND DECLARES ALL
   14  OF THE FOLLOWING:
   15    1. SMART GRID SYSTEMS THAT ALLOW REAL-TIME, TWO-WAY  DIGITAL  COMMUNI-
   16  CATIONS  BETWEEN ELECTRIC UTILITIES AND THEIR DISTRIBUTION GRID AND WITH
   17  THEIR CUSTOMERS CAN GREATLY IMPROVE THE EFFICIENCY  AND  RELIABILITY  OF
   18  ELECTRICAL  DISTRIBUTION SYSTEMS AND FACILITATE CONSERVATION BY ENABLING
   19  REAL-TIME DEMAND RESPONSE PRICING.
   20    2. SMART GRID SYSTEMS  CONSTITUTE  CRITICAL  INFRASTRUCTURE  THAT  CAN
   21  SUPPORT  IMPORTANT  HOMELAND  SECURITY NEEDS, BOTH BY PROVIDING DISASTER
   22  PREVENTION AND RECOVERY CAPABILITIES TO  PROTECT  THE  STATE'S  ELECTRIC
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD03583-01-5
       A. 8446                             2
    1  GRID  AND BY ENABLING REMOTE MONITORING OF OTHER CRITICAL INFRASTRUCTURE
    2  AND KEY ASSETS.
    3    3.  SMART GRID SYSTEMS WILL PERMIT THE STATE TO TAKE FULL ADVANTAGE OF
    4  DISTRIBUTED GENERATION RESOURCES THAT WILL INCREASE  DISTRIBUTION  EFFI-
    5  CIENCY,   LOWER  CUSTOMER  PRICES,  STIMULATE  INNOVATION  AND  NEW  JOB
    6  CREATION, AND  ULTIMATELY  REDUCE  EMISSIONS  OF  GREENHOUSE  GASES  AND
    7  DECREASE DEPENDENCE ON FOREIGN OIL.
    8    S 1349-B. DEFINITIONS. FOR PURPOSES OF THIS TITLE, THE FOLLOWING TERMS
    9  HAVE THE FOLLOWING MEANINGS:
   10    1. "ELECTRIC UTILITY" SHALL MEAN AN ELECTRICAL CORPORATION, ELECTRICAL
   11  COOPERATIVE, OR LOCAL PUBLICLY OWNED ELECTRIC UTILITY.
   12    2.  "ELECTRICAL  DELIVERY SYSTEM" SHALL MEAN THOSE FACILITIES THAT ARE
   13  USED BY AN ELECTRICAL  CORPORATION,  ELECTRICAL  COOPERATIVE,  OR  LOCAL
   14  PUBLICLY  OWNED  ELECTRIC UTILITY TO TRANSMIT, DELIVER, OR FURNISH ELEC-
   15  TRICITY TO RETAIL END-USE CUSTOMERS.
   16    3. "SMART GRID SYSTEM" SHALL MEAN A TWO-WAY COMMUNICATIONS SYSTEM  AND
   17  ASSOCIATED  EQUIPMENT AND SOFTWARE, INCLUDING EQUIPMENT INSTALLED ON THE
   18  ELECTRICAL DELIVERY SYSTEM AND ON THE PREMISES OF RETAIL END-USE CUSTOM-
   19  ERS, THAT UTILIZES THE ELECTRICAL DELIVERY SYSTEM TO  PROVIDE  REAL-TIME
   20  MONITORING,  DIAGNOSTIC,  AND  CONTROL  INFORMATION  AND  SERVICES  THAT
   21  IMPROVE THE EFFICIENCY AND RELIABILITY OF THE DISTRIBUTION  AND  USE  OF
   22  ELECTRICITY,  INCLUDING AUTOMATED LOAD CONTROL OR DEMAND RESPONSE, POWER
   23  LOSS DETECTION AND PREVENTION, REMOTE OUTAGE AND RESTORATION  DETECTION,
   24  CONTINUOUS  REPORTING OF UTILITY AND CUSTOMER DEMAND, DYNAMIC PRICING OF
   25  ELECTRICAL SERVICE, PERFORMANCE MONITORING  OF  ELECTRICAL  DISTRIBUTION
   26  NETWORK  EQUIPMENT, AND PREDICTIVE MAINTENANCE AND DIAGNOSTICS. AN ELEC-
   27  TRIC UTILITY MAY TREAT AN ELECTRICAL METER INSTALLED TO ENABLE THE ELEC-
   28  TRICAL DELIVERY SYSTEM TO FUNCTION PROPERLY AS BEING PART OF  THE  SMART
   29  GRID  SYSTEM  IF THE METER HAS THE CAPABILITY OF MEASURING AND RECORDING
   30  ELECTRICITY USAGE DATA  ON  A  TIME-DIFFERENTIATED  BASIS  OF  AT  LEAST
   31  FIFTEEN  MINUTE  INTERVALS  FOR AT LEAST FOUR SEPARATE TIME SEGMENTS PER
   32  DAY.
   33    S 1349-C. RECOVERING COSTS. 1. IT  IS  THE  POLICY  OF  THE  STATE  TO
   34  ENCOURAGE  AND, WHERE APPROPRIATE, MANDATE THE UTILIZATION OF SMART GRID
   35  SYSTEMS BY ELECTRIC UTILITIES.
   36    2. AN ELECTRIC UTILITY SHALL RECOVER ITS REASONABLE  COSTS  FOR  PLAN-
   37  NING,  BUILDING,  AND  OPERATING  A  SMART  GRID SYSTEM FROM RATEPAYERS,
   38  INCLUDING ADMINISTRATIVE  AND  OPERATIONAL  COSTS,  COSTS  FOR  SERVICES
   39  RENDERED  BY UTILITY EMPLOYEES, CONTRACTORS, AND SUBCONTRACTORS, CAPITAL
   40  INVESTMENT AND DEPRECIATION, TAXES, FINANCING, FINANCIAL INCENTIVES PAID
   41  TO CUSTOMERS FOR PARTICIPATION IN DEMAND  RESPONSE,  LOAD  CONTROL,  AND
   42  OTHER  CONSERVATION  PROGRAMS,  AND  MARKETING AND ADVERTISING COSTS FOR
   43  SUCH PROGRAMS.
   44    3. AN ELECTRIC UTILITY SHALL RECOVER THE REASONABLE COSTS OF EQUIPMENT
   45  RENDERED OBSOLETE BY DEPLOYMENT OF A SMART GRID  SYSTEM,  BASED  ON  THE
   46  REMAINING DEPRECIABLE LIFE OF THE OBSOLETE EQUIPMENT.
   47    4.  AN  ELECTRIC  UTILITY  SHALL NOT RECOVER THE COSTS OF EQUIPMENT OR
   48  SOFTWARE FROM RATEPAYERS UNLESS THE EQUIPMENT AND SOFTWARE IS COMPATIBLE
   49  WITH, AND CAPABLE OF INTEROPERATING WITH, A SMART GRID SYSTEM.
   50    5. SUBDIVISION FOUR OF THIS SECTION DOES NOT APPLY  IN  THE  FOLLOWING
   51  SITUATIONS:  (A) THE ELECTRIC UTILITY HAS, PRIOR TO FEBRUARY TWENTY-SEC-
   52  OND, TWO THOUSAND TEN, ENTERED INTO A BINDING  FINANCIAL  COMMITMENT  TO
   53  MAKE  A  PURCHASE OF, OR EXPENDITURE FOR, THE EQUIPMENT OR SOFTWARE THAT
   54  IS NOT COMPATIBLE WITH, OR CAPABLE OF INTEROPERATING WITH, A SMART  GRID
   55  SYSTEM.
       A. 8446                             3
    1    (B)  THE EQUIPMENT OR SOFTWARE IS FOR PROVIDING SERVICE IN A GEOGRAPH-
    2  ICAL AREA WHERE THE DEMONSTRATED COST OF DEPLOYING A SMART  GRID  SYSTEM
    3  EXCEEDS  THE  REASONABLY  ANTICIPATED  BENEFITS OF DEPLOYMENT, INCLUDING
    4  BENEFITS TO THE UTILITY, RATEPAYERS, THE ENVIRONMENT, AND HOMELAND SECU-
    5  RITY.
    6    S 1349-D. DEPLOYMENT PLAN. 1. EACH ELECTRIC UTILITY WITH MORE THAN TEN
    7  THOUSAND SERVICE CONNECTIONS SHALL DEVELOP AND ADOPT A SMART GRID SYSTEM
    8  DEPLOYMENT  PLAN  BY  JUNE  THIRTIETH, TWO THOUSAND SIXTEEN. AN ELECTRIC
    9  UTILITY WITH TEN THOUSAND OR FEWER  SERVICE  CONNECTIONS  MAY  ELECT  TO
   10  DEVELOP AND ADOPT A SMART GRID SYSTEM DEPLOYMENT PLAN.
   11    2.  EACH  ELECTRIC UTILITY SHALL, BY SEPTEMBER THIRTIETH, TWO THOUSAND
   12  SIXTEEN, ISSUE A SMART GRID SYSTEM REQUEST FOR PROPOSALS CONSISTENT WITH
   13  THE DEPLOYMENT PLAN. RESPONDENTS TO A REQUEST FOR PROPOSAL  SHALL  OFFER
   14  TO SERVE AT LEAST A MAJORITY OF THE ELECTRIC UTILITY'S RESIDENTIAL ELEC-
   15  TRIC SUBSCRIBERS.
   16    3.  UNLESS SUBDIVISION FOUR OF THIS SECTION IS APPLICABLE, AN ELECTRIC
   17  UTILITY SHALL MAKE A FINAL SELECTION OF A WINNING RESPONSE TO ITS  SMART
   18  GRID  SYSTEM REQUEST FOR PROPOSALS NO LATER THAN ONE HUNDRED TWENTY DAYS
   19  AFTER THE DATE THE REQUEST FOR PROPOSALS IS ISSUED. ANY WINNING RESPONSE
   20  SELECTED SHALL PROPOSE TO CONSTRUCT A SMART GRID  SYSTEM  THAT  PROVIDES
   21  SUFFICIENT  CAPACITY  AND  CAPABILITIES  TO MEET ANTICIPATED DEMANDS FOR
   22  MANAGEMENT AND CONTROL OF THE  ELECTRIC  UTILITY'S  ELECTRICAL  DELIVERY
   23  SYSTEM UNTIL AT LEAST DECEMBER THIRTY-FIRST, TWO THOUSAND THIRTY.
   24    4.  AN  ELECTRIC UTILITY MAY DECLINE TO SELECT A WINNING PROPOSAL ONLY
   25  IF THERE ARE NO PROPOSALS MEETING THE REQUIREMENTS OF THE REQUEST OR THE
   26  ELECTRIC UTILITY MAKES WRITTEN FINDINGS THAT THE COSTS TO IMPLEMENT  ANY
   27  BIDS MEETING THE REQUIREMENTS OF THE PROPOSAL WOULD CLEARLY OUTWEIGH THE
   28  POTENTIAL  BENEFITS OF DEPLOYING A SMART GRID SYSTEM, INCLUDING ENVIRON-
   29  MENTAL BENEFITS AND DIRECT AND INDIRECT BENEFITS TO THE UTILITY'S  RATE-
   30  PAYERS.
   31    S  1349-E.  ECONOMIC  INCENTIVES.  1.  BY  APRIL  FIRST,  TWO THOUSAND
   32  SIXTEEN, THE COMMISSION SHALL ESTABLISH RULES TO ENSURE THAT  ELECTRICAL
   33  CORPORATIONS  WITH  MORE  THAN  TEN  THOUSAND  SERVICE  CONNECTIONS HAVE
   34  ADEQUATE ECONOMIC INCENTIVES TO DEPLOY SMART  GRID  SYSTEMS.  THE  RULES
   35  SHALL  ENCOURAGE  ELECTRICAL  CORPORATIONS  TO DEPLOY SMART GRID SYSTEMS
   36  THAT HAVE SUFFICIENT  CAPACITY  AND  CAPABILITIES  TO  MEET  ANTICIPATED
   37  FUTURE DEMANDS FOR MANAGEMENT AND CONTROL OF THE ELECTRICAL DISTRIBUTION
   38  SYSTEM  UNTIL  AT LEAST DECEMBER THIRTY-FIRST, TWO THOUSAND THIRTY.  THE
   39  ECONOMIC INCENTIVES SHALL, FOR SMART GRID SYSTEMS DEPLOYED ON  OR  AFTER
   40  DECEMBER  THIRTY-FIRST,  TWO  THOUSAND  TEN,  INCLUDE ONE OR MORE OF THE
   41  FOLLOWING:
   42    (A) AN ENHANCED RETURN ON ITS REASONABLE CAPITAL EXPENDITURES AND ON A
   43  PORTION OF ITS REASONABLE OPERATIONS AND MAINTENANCE COSTS FOR  A  SMART
   44  GRID SYSTEM; OR
   45    (B) RETENTION OF A PORTION OF ANY COST SAVINGS ATTRIBUTABLE TO THE USE
   46  OF A SMART GRID SYSTEM.
   47    2.  THE  GOVERNING  BOARD  OF AN ELECTRIC UTILITY THAT IS NOT AN ELEC-
   48  TRICAL CORPORATION MAY ESTABLISH INCENTIVES TO DEPLOY SMART GRID SYSTEMS
   49  CONSISTENT WITH SUBDIVISION ONE OF THIS SECTION.
   50    3. AN ELECTRICAL  CORPORATION  WITH  TEN  THOUSAND  OR  FEWER  SERVICE
   51  CONNECTIONS MAY FILE AN APPLICATION WITH THE COMMISSION SEEKING AUTHORI-
   52  ZATION  TO  ESTABLISH INCENTIVES TO DEPLOY SMART GRID SYSTEMS CONSISTENT
   53  WITH SUBDIVISION ONE OF THIS SECTION.
   54    S 1349-F. INSTALLATION. 1. AN  ELECTRIC  UTILITY  OR  ITS  CONTRACTORS
   55  INSTALLING  A  SMART GRID SYSTEM SHALL BE PERMITTED ACCESS TO ANY POLES,
   56  DUCTS, CONDUITS, AND RIGHTS-OF-WAY ON TERMS AND CONDITIONS AT  LEAST  AS
       A. 8446                             4
    1  FAVORABLE  AS THOSE GRANTED TO A HOLDER OF A STATE FRANCHISE. THE RIGHTS
    2  GRANTED BY THIS SECTION DO NOT LIMIT EITHER OF THE FOLLOWING:
    3    (A)  ANY  RIGHT  THAT A UTILITY OR THIRD PARTY INSTALLING A SMART GRID
    4  SYSTEM MAY HAVE TO ACCESS  POLES,  DUCTS,  CONDUITS,  AND  RIGHTS-OF-WAY
    5  PURSUANT TO CONTRACT OR UNDER ANY OTHER LAW; OR
    6    (B) THE SERVICES THAT MAY BE OFFERED OVER A SMART GRID SYSTEM.
    7    2.  A  SMART  GRID  SYSTEM  IS AN INTEGRAL COMPONENT OF THE ELECTRICAL
    8  DELIVERY SYSTEM AND THE INSTALLATION OF A SMART GRID  SYSTEM  SHALL  NOT
    9  REQUIRE  AN ELECTRIC UTILITY OR ITS CONTRACTOR TO OBTAIN OR EXPAND EASE-
   10  MENTS OR OTHER RIGHTS-OF-WAY OR TO PROVIDE ADDITIONAL CONSIDERATION AS A
   11  RESULT OF THE INSTALLATION  OR  OPERATION  OF  THE  SMART  GRID  SYSTEM.
   12  INSTALLATION OF A SMART GRID SYSTEM IS CONSISTENT WITH, AND PART OF, THE
   13  INSTALLATION OF THE ELECTRICAL DISTRIBUTION SYSTEM.
   14    S  1349-G. ELECTRICAL CORPORATION. AN ELECTRICAL CORPORATION MAY ELECT
   15  TO OWN AND OPERATE A SMART GRID SYSTEM ON ITS  OWN  ELECTRICAL  DELIVERY
   16  SYSTEM,  OR  MAY  PERMIT  AN AFFILIATED OR UNAFFILIATED ENTITY TO OWN OR
   17  OPERATE THE SMART GRID SYSTEM.
   18    S 1349-H.  PROHIBITED  REGULATION.  A  LOCAL  MUNICIPALITY  SHALL  NOT
   19  PROHIBIT OR REGULATE EITHER OF THE FOLLOWING:
   20    (A)  THE  INSTALLATION OR OPERATION OF A SMART GRID SYSTEM BY AN ELEC-
   21  TRICAL CORPORATION OR ELECTRICAL COOPERATIVE, OR A CONTRACTOR OR  AFFIL-
   22  IATE,  WITHIN  THE  SERVICE  AREA OF THE ELECTRICAL CORPORATION OR ELEC-
   23  TRICAL COOPERATIVE; OR
   24    (B) THE INSTALLATION OR OPERATION OF A SMART GRID SYSTEM  BY  A  LOCAL
   25  PUBLICLY  OWNED  ELECTRIC  UTILITY,  OR A CONTRACTOR, WITHIN THE SERVICE
   26  AREA OF THE UTILITY, WHEN APPROVED BY THE GOVERNING BOARD OF THE  UTILI-
   27  TY.
   28    S 2. This act shall take effect on the one hundred twentieth day after
   29  it shall have become a law; provided, however, that effective immediate-
   30  ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
   31  necessary for the implementation of this act on its effective  date  are
   32  authorized  and  directed  to  be  made  and completed on or before such
   33  effective date.