N.Y. Gen. Mun. Law § 94

§ 94. Earnings of municipal corporations from certain municipally\noperated public utility services. Any municipal corporation operating a\ngas, electric or water public utility service may earn from and out of\nsuch operation an amount equivalent to taxes which the said service, if\nprivately owned, would pay to such municipal corporation; and, in\naddition, such municipal corporation may earn from and out of such\noperation a fair return on the value of the property used and useful in\nsuch public utility service, over and above costs of operation and\nnecessary and proper reserves. Profits resulting from the operation of\nsuch a public utility service may be used for the payment of expenses or\nobligations incurred by such municipal corporation for municipal\npurposes or for the payment of refunds to consumers. The provisions of\nthis section shall not apply to any gas, electric or water public\nutility service operated by the city of New York or any agency thereof.\n