STATE OF NEW YORK ________________________________________________________________________ 3804 2019-2020 Regular Sessions IN ASSEMBLY January 31, 2019 ___________ 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. Article 5 of the public authorities law is amended by 2 adding a new title 13 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 § 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. LBD07762-01-9A. 3804 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 § 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 § 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 twelve, 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. 3804 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 § 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 twenty. 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 twenty, 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-two. 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 § 1349-e. Economic incentives. 1. By April first, two thousand twenty, 32 the commission shall establish rules to ensure that electrical corpo- 33 rations with more than ten thousand service connections have adequate 34 economic incentives to deploy smart grid systems. The rules shall 35 encourage electrical corporations to deploy smart grid systems that have 36 sufficient capacity and capabilities to meet anticipated future demands 37 for management and control of the electrical distribution system until 38 at least December thirty-first, two thousand thirty-four. The economic 39 incentives shall, for smart grid systems deployed on or after December 40 thirty-first, two thousand twelve, include one or more of the following: 41 (a) an enhanced return on its reasonable capital expenditures and on a 42 portion of its reasonable operations and maintenance costs for a smart 43 grid system; or 44 (b) retention of a portion of any cost savings attributable to the use 45 of a smart grid system. 46 2. The governing board of an electric utility that is not an elec- 47 trical corporation may establish incentives to deploy smart grid systems 48 consistent with subdivision one of this section. 49 3. An electrical corporation with ten thousand or fewer service 50 connections may file an application with the commission seeking authori- 51 zation to establish incentives to deploy smart grid systems consistent 52 with subdivision one of this section. 53 § 1349-f. Installation. 1. An electric utility or its contractors 54 installing a smart grid system shall be permitted access to any poles, 55 ducts, conduits, and rights-of-way on terms and conditions at least asA. 3804 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 § 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 § 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 § 2. This act shall take effect on the one hundred twentieth day after 29 it shall have become a law. Effective immediately, the addition, amend- 30 ment and/or repeal of any rule or regulation necessary for the implemen- 31 tation of this act on its effective date are authorized and directed to 32 be made and completed on or before such effective date.