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Los Angeles Taxes Consumers for Energy Consumption

| Thursday March 18th, 2010 | 0 Comments

Eco-friendly LA is about to put its money where its mouth is. A proposal by LA Mayor Antonio Villaraigosa would raise electricity bills 8.8% to 28.4% to pay for an ambitious clean energy initiative.

The rate hikes would be implemented by the Los Angeles Department of Water and Power (DWP), and must be approved by its board (which is appointed by the Mayor). The increases have been expected for a while, but the specifics were only announced at a press conference Monday.

Now that a dollar figure has been put on green electricity, will Angelenos still support it?

Spreading the Eco-Pain Around

Officially called the “Carbon Reduction Surcharge,” the tax will cost the average rate payer about $2.50 more a month, according to the Mayor’s Office. Bigger increases would fall on high-usage customers, who make up about 40% of users.

Businesses are expected to be hit hardest by the new tariff, with rates rising 20-25%. The Mayor hopes this stick will spur them to conserve more, and install solar panels. The carrot? A new solar Feed-in Tariff (see below).

In the San Fernando Valley, where temperatures routinely rise above 100 degrees in the summer, customers will see an approximately $4 monthly increase by April 2011, according to the Los Angeles Times. Valley Girls (and Boys) already get a slight break in their electricity bills to account for the higher temperatures.

The Times also reported a second reason for the rate increases: the city has not collected enough money to pay for the renewable energy programs already in place.

Trust-Funded Green Doctors

Revenues from the rate hikes would pour into a Renewable Energy and Efficiency Trust Fund, which would pay for new conservation programs and a solar feed-in tariff. Altogether, the city hopes to create 18,000 jobs with the revenues.

A feed-in tariff (FiT) allows individuals and businesses who install solar panels to get paid by the utility for the electricity they generate but do not use. The Los Angeles Business Council “strongly supports” the FiT, according to Council President Mary Leslie. “A well-designed FiT program would unleash a major source of clean, locally generated energy to meet Los Angeles’ renewable goals.”

Additional monies would bankroll a corps of “Green Doctors” to roam the city, evaluating homes and businesses for energy efficiency.

Results by December 31st

The tax is needed if the city is going to meet one of several aggressive clean energy goals laid out by Villaraigosa last year: to have 20% of the city’s electricity provided by renewable energy by the end of the year.

By 2020, the Mayor has pledged the city towards 40% renewables, and cutting out coal-fired electricity altogether (currently about 40% of LA’s power comes from coal).


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