Chamber Energy Alliance Program Stills Saves Members Money
Chamber Energy Alliance Program Stills Saves Members Money
The Chamber's professional staff met with our partners at Energy Next this week to talk about how to help our members to save money on their electric and natural gas bills. Our Energy Alliance program currently has about 200 member participants from small businesses, to manufacturers, restaurants, hotels, health care facilities, municipalities, etc. These members all benefit from purchasing their energy supply at fixed rate prices that help them to save money and better manage their expenses over the long term.
With New York State having eliminated a tax exemption impacting customers of retail energy companies as part of the state budget this year, we asked Energy Next to put together a memo that would help inform and educate our members. We invite you to read through this information below and to contact Denise Romeo on the Chamber's staff if you have any questions about joining our Energy Alliance program which still saves members money on their electric and natural gas costs.
TO: Todd Shimkus, President, Saratoga County Chamber of Commerce
FROM: ANNA BALUYOT, CO-PRESIDENT, ENERGY NEXT, 63 Putnam Street, Saratoga Springs, NY, 12866
Governor Andrew Cuomo’s Executive Budget for FY 2020 eliminated a tax exemption for business customers of independent retail energy companies. The exemption was intended to encourage competition in the early 2000’s, and according to the governor’s budget proposal, it is no longer needed.
Specifically, energy service companies, or ESCOs, had been exempt from taxes charged on the delivery of electric and gas to businesses. With this ESCO sales tax exemption elimination, non-residential ESCO customers will now pay sales tax on both the supply and the delivery portion of their bill, just like utility business customers have been paying all along. Residential customers are exempt from the state sales tax on transmission and distribution from a utility or ESCO.
According to the New York State Energy Research and Development Authority (NYSERDA), from 2001 to 2015 nominal commercial and industrial energy prices have fallen considerably under energy deregulation. For commercial customers, inflation-adjusted electricity prices went down 7%, and natural gas prices decreased by 47%. Similarly, industrial customers’ prices went down 15% for electricity, and 36% for natural gas. Besides lower prices, a deregulated market provides customers with price stability and budget certainty under an ESCO fixed price. This is not currently possible while taking service from the local utility – since default utility rates are based on variable pricing. ESCOs serve roughly 90 percent of business and other large customers in the state and about 20 percent of residential customers.
This change will not have any effect on the Energy Alliance Chamber program. Consumers will continue to receive savings on the energy supply portion of their invoice, the only change will be on the sales tax piece.
Below is a link to the Governor’s FY 2020 Executive Budget Briefing. The actual text regarding the ESCO sales tax exemption is found on page 24.
