New York State Exposed: State surcharge on utility bills

Posted at: 08/11/2014 4:16 PM
Updated at: 08/11/2014 5:25 PM
By: Brett Davidsen

You might not even notice it. Each month you're paying a state surcharge on all your utility bills and the money goes to help balance the state's budget but have customers been overcharged on that fee? That's what one Public Service Commissioner is saying and it's no small number. The commissioner says in some cases, the utility over-collections may have totaled $250-million.

“Every month I have my list of bills and I pay them off as soon as they come in and I check them." Pat Kehn is retired and watches her bills very closely but she admits she had no idea what that line on her energy bill was all about.

Called the “temporary state assessment”, it's a surcharge that was enacted by the legislature in 2009. Since then, the state has collected about $2.9-billion from the tax but at a June meeting of the Public Service Commission, one member revealed that some customers may have overpaid.

“In some cases, the collections may have been significantly over-collected to the tune of close to $250-million dollars." Commissioner Diane Burman expressed concern about the way surcharges are being collected and allowed to build up. “What I find disturbing is we're having now to re-visit just how awful the 2009 law was and the devastating effects the collections can have on New Yorkers."

Kehn said, “Two hundred fifty million? I want it back. How in the world are they getting away with that? I mean, that's absurd."

But a PSC spokesman says they aren't getting away with anything. He says Burman's comments were inaccurate and while some utilities may have a positive cash balance that needs reconciling on a total net cash basis, utilities have paid more than they have collected from customers to date."  Since making the statement though, Burman has never walked back her remarks.

“The fact that we've been over-billed is not a big surprise. The question is, what is PSC and the state of New York going to do to insure that money gets back to ratepayers." Brian Sampson is executive director of Unshackle Upstate which has been an opponent of the utility tax from the beginning which he calls a jobs killer. “The average business in the state of New York will pay about $30,000 a year on this tax. $30,000 a year is one full-time job."

The state-imposed surcharge, also known as the 18-A assessment, was supposed to sunset this year, but the governor extended it in last year's budget. Cuomo and the legislature have now agreed to phase it out in 2017.

Asked about the alleged over-charges, Assembly Minority Leader Brian Kolb said, if true, he would be very concerned. “Certainly I've been an opponent of the 18-A surcharge. It's a tax on consumers and businesses. It's going to go away. I think it should go away today."

We asked for a comment from the governor's office about the possibility that utility customers were overcharged. We were referred back to the Public Service Commission.

If you want to make your voice heard about this, you can call the PSC at 1-800-335-2120.