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Public Service, Department of
Functions
The Department of Public Service is the staff arm for the Public Service Commission. The commission is responsible for regulating the rates and services of public utility companies in order to ensure safe, adequate service for the public at reasonable rates and with the least adverse effect upon the environment. These regulatory responsibilities apply to electric, steam, telephone, gas, and water companies, as well as the cable industry. Although its most publicized activity is determining utility rates, the commission has a number of other specific responsibilities such as establishing service standards and monitoring the operation of utilities; reviewing and resolving customer complaints; supervising utilities' accounting and financial practices; exercising jurisdiction over the citing of major utility facilities and electrical and gas transmission lines; and ensuring the safety of natural gas facilities and petroleum pipelines.
History
State regulation of public utilities dates from the early nineteenth century, when the legislature began including financial and service requirements in incorporation statutes. More systematic oversight began with an 1843 assembly resolution requiring railroads to submit reports to the secretary of state. Five years later (Laws of 1848, Chapter 140), the railroads were required to report instead to the state engineer and surveyor on financial affairs, equipment, and passengers and freight carried. A Railroad Commission was established in 1855 (Chapter 526) to receive reports and investigate railroad operation, but this commission was abolished two years later, and the railroads resumed reporting to the state engineer and surveyor.
In 1882 (Chapter 353), a Board of Railroad Commissioners was created with power to require reports, investigate complaints, and recommend service improvements and rate adjustments, but without any enforcement power. Nine years later (Laws of 1891, Chapter 4), the State recognized New York City's special transportation needs by establishing a Board of Rapid Transit Commissioners to oversee the expansion of surface rapid transit facilities and plan the construction of subways. Turning to other utilities, the legislature established the office of inspector of gas meters in 1859 (Chapter 311) to inspect and seal meters and a Commission of Gas and Electricity in 1905 (Chapter 737) to regulate utility rates.
In 1907 (Chapter 429), Governor Charles Evans Hughes proposed systematic, comprehensive, statewide public utility regulation and convinced the legislature to pass the Public Service Commissions Law. This statute replaced existing state regulatory authorities with two district public service commissions (one for New York City and the other for the remainder of the state) with sweeping powers to investigate complaints, order improved service, establish rates, and supervise the issue of securities. The first district (New York City) commission also inherited the powers of the Rapid Transit Commission to plan and construct subways.
During the following decade, PSC supervisory responsibilities were expanded to include telephone and telegraph lines, steam companies, water carriers, and bus lines. A series of 1930 statutes increased the commissions' regulatory powers over utility holding companies and financial transactions. Organizational changes were also made over the years. In 1919 (Chapter 263 and Chapter 520), the first district commission was replaced by a single public service commissioner to carry out regulatory functions and a transit construction commissioner to carry out subway construction. Two years later (Laws of 1921, Chapter 134), the two public service districts were abolished and replaced by a single Public Service Commission with statewide authority over all public utilities except rapid transit in New York City, which was placed under a new Transit Commission. In 1924 (Chapter 573), a Board of Transportation was established to continue subway construction and to operate existing city subways and surface rapid transit lines, leaving the Transit Commission with supervisory authority over only private transit facilities.
When the constitutional reorganization of state government was implemented in 1926 (Chapter 350), the Department of Public Service was created, incorporating within it the Transit Commission and the Public Service Commission. Later (Laws of 1943, Chapter 170), the Transit Commission was abolished and the Public Service Commission assumed its duties. All Department of Public Service transportation-related regulatory functions were transferred to the Department of Transportation in 1970 (Chapter 267). As part of a 1970 reorganization (Chapter 272), the Department of Public Service assumed responsibility for considering environmental impacts of utility facilities. In 1977, the legislature expanded the role of the Department of Public Service concerning demand side aspects of utility regulation with enactment of the Home Insulation and Energy Conservation Act (Laws of 1977, Chapter 858). In 1981, the department expanded its consumer-related activities through creation of a Consumer Services Division. The division provides information and advice to utility customers, monitors utility compliance with commission directives, and settles disputes between utilities and their customers.
