Update on 18-a Assessment: State budget agreement includes extension of utility surcharge followed by phase-out

Posted: March 26, 2013


As part of a preliminary state budget agreement reached late last week, New York legislators agreed to extend and then phase-out of the Section 18-a “Temporary State Energy and Utility Service Conservation Assessment.” Section 18-a of the New York Public Service Law authorizes the state to impose a fee on electric bills from public utilities to fund the operations of energy-related agencies and authorities.

According to the Business Council of New York State, the agreement reached by leaders from both houses allows for the 18-a assessment to be extended past its sunset date of March of 2014. However, rather than the originally-proposed five-year extension period, the deal calls for the surcharge to be phased out over a three year-period, with a stated expiration date of 2017.  It also requires the assessment amount be reduced over the phase-out period from 2%  in 2014 to 1.75% in 2015-16 and 1.5% in 2016-17.

The Business Council developed two visual representations of the terms of the agreement, which can be found here and here. It estimates that the proposed agreement will save about $181 M over 4 years, when compared to Executive Budget proposal.

For more on the 18-a agreement:

Crain’s Insider: “Not much for businesses to like in state budget”

The Business Council of New York State: “Let 18-A Sunset”

The New York Post: “Utility-tax shock in Andy’s new budget”