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Albany must act to rein in harmful energy costs
Updated: August 21, 2010, 7:15 AM
It is well known that New Yorkers pay some of the nation’s highest energy bills. According to one recent study, only the residents of Hawaii and Connecticut pay higher rates. As the governor and State Legislature finally move toward enacting a 2009-2010 budget, we ask our state representatives to act responsibly and not add any additional taxes or mandates to our utility bills. We simply cannot take any more costs during this economic recession.
Energy prices are a major factor in New York’s high cost of living and doing business, and are one reason the upstate exodus has been so massive.
The cost of producing and delivering electricity to homes or businesses is just a fraction of a ratepayer’s monthly utility bill. In 2009, electrical generators and utilities in the state paid more than $6 billion in state and local taxes, assessments and fees, most of which were passed on to residential, commercial and industrial customers. That equates to more than $500 million per month that government adds to New Yorkers’ electric bills.
Last year, a majority of the legislators in both houses passed the so-called Article 18-A assessment, adding more than $500 million per year to energy costs. These costs were passed through to consumers.
Additionally in 2009, New York’s electric industry paid $6.367 billion in state and local taxes — an increase of $853 million from what the industry paid in 2008. That’s an increase of more than 13 percent, much of which gets passed along to utility ratepayers.
In upstate, where the economy is anchored by manufacturing industries and other large energy users, the sting of increasing energy costs is especially painful. In other parts of the country, lower energy costs have been used to entice upstate companies to move, and site selectors, who might have brought new jobs and investment to our regions of the state, are similarly lured away.
New York State has long been on the cutting edge of programs to protect the environment. It is essential that we protect our communities and environment. But over the last five years, the state has imposed more than $800 million in utility bill surcharges. Before expanding any of these programs, we must ensure they are being properly implemented and that they are cost-effective.
New York State should impose a moratorium on new energy surcharges, fees and assessments, as we determine how we can best plan for our energy future and work to create an environment where businesses will invest, hire and grow.
Action by Albany is urgently needed to reduce out-of-control energy costs. The answer to this problem is simple: Our state government has to reduce taxes and other statutory and regulatory costs on energy.
We have a long way to go before upstate is competitive once again. But we have to start somewhere. And we can start by not digging the hole we find ourselves in any deeper.
Brian Sampson is executive director of Unshackle Upstate.
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