September 29, 2011
California, Editorials

Electricity surcharge should go dark

The Orange County Register, 29 September 2011

Will Gov. Jerry Brown never relent in his quest for higher taxes and fees? His latest idea is a sneaky attempt to extend a 1.5 percent surcharge on electricity bills, which is set to expire Jan. 1, 2012. The surcharge, which raises $400 million a year for energy efficiency and renewable-energy research, costs the average homeowner about $1 to $2 a month. It funds the Public Interest Energy Research program at the State Energy Resources Conservation and Development Commission and has been added to monthly electric bills since 1997.

Reported the Los Angeles Times: “Gov. Jerry Brown is asking his appointed members of the California Public Utilities Commission to come up with a way to continue tacking a surcharge on residential and commercial electric bills to pay for an energy efficiency program that did not get renewed by the Legislature last month.”

Jon Coupal, president of the Howard Jarvis Taxpayers Association, told us that his group is monitoring the governor’s action. “What does it say when the Legislature rejected the surcharge, but the governor tries to bring it back another way?” Mr. Coupal asked.

One key question is whether it is a tax. Proposition 26, which voters passed in 2010, said that fees and charges should be treated as taxes, meaning they would have to be approved by a two-thirds vote of the Legislature or local governments.

“It could be argued as such,” Mr. Coupal said. “I don’t see how an administrative agency” – the PUC – “could impose that kind of fee without running into all kinds of constitutional issues.”

Gov. Brown wrote in a letter to PUC President Michael Peevey, “We cannot afford to let any of these job-creating programs lapse. … I request that you take action under the commission’s authority to ensure that programs like those supported by the Public Goods Charge are instituted – and hopefully at their current levels.”

But in January, the nonpartisan Legislative Analyst’s Office sent a letter to the Legislature, stating its findings that the Conservation and Development Commission “has not demonstrated that there has been a substantial payoff to date from the state’s investment of more than $700 million in ratepayer funds” that went to the energy-efficiency programs the surcharge funded.

“The extension failed under opposition from a broad coalition of businesses and community leaders,” Tom Tanton told us; he’s president of T2 & Associates, a technology and energy consulting firm, and a former policy adviser to the California Energy Commission. “The Brown tax would not apply to municipal utilities, as they are not under PUC regulation,” only to private utilities. So, some Californians would be taxed, but others would not. “Can he do it? Possibly,” Mr. Tanton said. “But I believe there would be trouble with Prop. 26. Is it wrong? Definitely.”

Gov. Brown should stop acting like an environmental Napoleon and drop this tax ploy.

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