BOB CONFER: Taxation without representation in your power bill

Bob Confer

Quite often you see the name of a state agency, NYSERDA, appearing in news articles and press releases about energy-efficiency projects, whether they are commercial (windmills, warehouse lights) or residential (appliance swap outs, solar panels).

Chances are you probably didn’t concern yourself with New York State Energy Research and Development Authority. But, you should.

First, grab your most recent electric bill. Scroll down through the delivery services portion of it. You’ll notice something called "SBC". Depending on how big your household may be, as well as your seasonal needs, the SBC line item ranges from $5 to $10 a month.

That’s not chump change. You’re shelling out $60 to $120 annually, money that both you and I know would be best spent by you and not the government.

You see, the SBC is a tax; it’s not some fancy service fee thrown around by the power company.

The acronym stands for Systems Benefit Charge. According to National Grid these funds "reflect costs associated with mandated public policy programs — low income assistance, energy efficiency programs, and certain research and development programs including the advancement of renewable energy resources." The recipient of these fees is the aforementioned NYSERDA.

If you are an astute student of all things government, then the first thing that comes to mind is "why are we paying taxes to a public authority?"

Authorities are corporate instruments of the state created by the legislature to further public interests. They are basically private enterprises with a public flair that are legally and administratively autonomous from the state, meaning they are accountable to no one but themselves. They are typically funded by user fees and should never be funded by taxes.

Yet, here’s NYSERDA being funded by a tax in your power bill. That makes the systems benefit charge an absolutely classic example of taxation without representation. That’s the same kind of thing that got the colonists all fired up during the American Revolution.

And, it’s the same kind of thing that gets me fired up at the factory.

Long-time readers of this column know how I despise the competitive structure of electricity in New York. My company pays twice what our competitors in Ohio, Indiana and Utah pay for power. That’s pretty significant considering we use as much electricity as 2-1/2 villages the size of Middleport. In my ongoing analysis of what makes my power bill so high I’ve long had the SBC in my sights. Last year, we paid a whopping $83,000 for this tax.

Twelve years ago — when my company paid “only” $8,250 a year for the SBC and your average homeowner paid half what she does now for it — I put the matter to the attention of Governor Eliot Spitzer. I was hopeful that the Wall Street Watchdog would have been just as disgusted as I about the unrepresented tax. Spitzer’s director of operations was intrigued and shared my concerns with the Public Service Commission.

In her response to us, the PSC chairwoman barely addressed my concerns and instead waxed poetic about what NYSERDA supposedly does, like lowering overall electrical demand and costs for New Yorkers. She also noted that, yes, NYSERDA does collect its fees from electric users but the state has oversight over what it does with its money. Considering how ineffective that oversight is with the Thruway Authority and nearly 700 other authorities across the state, I could only laugh.

Since then, similar correspondence sharing my concerns with Governor Cuomo have gone unanswered.

That’s what we’re up against, folks: An entity that shouldn’t be taxing us but is, and is allowed to do so at the behest of the state. The state likely allows it to happen because it’s good press for Albany: “Look at everything we are doing to make homes and businesses energy efficient, greener, and cleaner.”

What they fail to tell you is that it’s homes and businesses footing the bill for all the fancy equipment and new appliances. They’ll even give you the misleading end-around that it’s power companies paying the tax (yeah, after they collect it from us).

Whether you’re a family or a company trying to make ends meet in a tough state, you should be frustrated with this tax that is, like quite a few others, hidden in your utility bills where you might just never see it and, in turn, never care. 

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. Email him at bobconfer@juno.com .