Energy Committee Finalizes Grow House Tax Advice – May 22, 2012

Tuesday, May 22, 2012

Kevin L. Hoover

Eye Editor

CITY HALL – In a meeting that topped three hours Monday night, May 21, Arcata’s citizen-led Energy Committee formulated its final recommendation to the City Council on a proposed tax on excessive residential electricity consumption. The council will consider the proposal at its June 6 meeting. Arcata voters would have to approve the new tax, and the council could decide to place the measure on the November ballot.

Several citizens participated in the discussion, offering insight into possible benefits and negative consequences of the tax. Mayor Michael Winkler, a sustainable energy expert, also attended the meeting.

Environmental Services Director Mark Andre had stated at the meeting’s outset that the proposed tax is targeted at any form of non-exempt electricity use that exceeds 300 percent of baseline usage, and that it doesn’t necessarily target any specific users. But over the course of the meeting, discussion came to focus on excessive electricity use by illegal cannabis grow houses, which are believed responsible for a surge in Arcata’s residential energy use which is defeating the City’s Greenhouse Gas Reduction program.

On its website, PG&E defines baseline usage as follows:

“The Public Utilities (PU) Code establishes baseline quantities for average residential gas and electricity use within each baseline territory. The PU code specifically requires that baseline quanties fall between 50 and 60 percent of average use for basic-electric customers in both the summer and winter and for all-electric and gas customer in the summer. The PU code also requires that baseline quantities fall between 60 to 70 percent of average use for all-electric and gas customers in the winter.”

PG&E data on specific residences which exceed baseline usage would not be supplied to the City. However, residents on whom the tax is imposed could apply for an exemption, and City personnel would then conduct an energy assessment on the residence to verify that the high electricity use doesn’t result from illegal activity. “Legitimate” high-electricity uses might include large families, electric vehicle charging and legal home businesses.

The committee’s advisory to the council gave focus to some key issues – the tax’s rate, the energy use threshold at which it would kick in, exemptions, whether the tax would apply to participants in PG&E’s CARE (California Alternate Rates for Energy) program, the duration of the law and how any resulting tax revenue might be used.

The committee’s final recommendation, which will serve as a launching point for council discussion, is as follows:

To impose a 15 cent per kilowatt hour tax on all customers who exceed 300 percent of baseline, and for staff to develop an application pricess for exemption to include home businesses and large or extended families living as one household, with an eight-year sunset on the tax. CARE participants would not be automatically exempted, but could apply for an exemption.

Funds would be used on a priority basis to pay back PG&E for the estimated $800,000 cost of implementing the tax, and to develop an endowment for sustainable funding for an energy program specialist and to implement energy efficiency measures and incentivise energy efficiency. Staff would present annual recommendations to the Energy Committee and City Council for use of the the revenue.

Revenue would go to the City’s General Fund, with some sort of oversight, possibly similar to the Transactions and Use Tax Committee which monitors proceeds and use of Arcata’s voter-approved sales tax.

Concerned about unanticipated consequences, some committeemembers questioned whether the tax might discourage legal grows, or if it could compel the growers to increase production to compensate for the added expense. Members also expressed concern over possible economic impact of driving growers and their cash flow out of Arcata.

Staff will solicit input from cannabis business such as hydroponic and garden supply shops as to whether and how a tax would change behavior. Findings will be included in the report to the council.

Further background on the proposed tax was offered in a May 16 City of Arcata press release.

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13 Responses to “Energy Committee Finalizes Grow House Tax Advice – May 22, 2012”

  1. What other things might this government body find offensive? How does this group have any authority over a private business contract with a client? What if someone has a gas grill that she uses a lot, and exceeds the baseline values for gas use? Should that person not be equally punished? And where does it stop?

    In a post that seems to have evaporated, I recommended the old school strategy of arrest, humiliation, and.prison time for the adults and CPS for any children. It would only take a few harsh convictions to convince the druggies to move on. Disincentives work on most people.

  2. The Energy Committee is a citizen volunteer committee with only advisory duties and no authority over businesses.

  3. If this is going to adversely affect people with a genuine need ie. disability or a home business (other than weed) maybe there can be a home inspection program that would still allow individuals to retain ther CARE rates in cases of real need otherwise tough luck to all the growers. It's about time that someone stepped in and did something about the energy abuse that is going on, how is indoor growing much different from logging on an energy and resource consumption scale they are both extremely detrimental to the land base. It's time the indoor growers got a dose of reality, hopefully this makes ituch less profitable to be doing it and people go back to the Midwest to grow indoors and our neighborhoods become more safe

  4. Are we really talking about a "home insepection program" like it is something normal and not something millions of people have fought to free us from?????

    Maybe I live in a alternate reality where fear doesn't push people into giving up the most basic and coveted of freedoms.

    I have a home that has gas heat, but I have a detached apartment that doesn't that my parents have been living in. They run a oil electric heater, a dish heater, and a dehumidifier. Without the care program, our energy bill was pushing $800+/month at times in the winter. So now when my parents use their electric heaters in their apartment, I have to go through a home inspection by the government, to prove I my innocence???????

    I wonder if a lot of the people proposing this were to look ahead 20 years ago, if they would even believe their future selves would be proposing this for ANY reason.

    Are our elected city officials going a little crazy with their personal pet projects and bias? Do you really not see a problem with this line of thinking? Do you not have a good enough grasp on history to see where these types of things have led in the past? It seems to always start with FEAR and good intentions.

    I really hope most Arcata citizens take much more issue with this idea.

    You're proposing a whole community giving up personal privacy rights, and having to prove thier innocence before guilt because a few aren't standing up to your model of energy conservation????

    Are you really that scared?

  5. And like everything else, this only will affect the sick and poor, and probably majority voted for by the more fortunate, that would never have to be concerned with what their less fortunate neighbors are going through for your personal warm fuzzy false feelings of security.

  6. Kevin Hoover

    The good part is, the tax would be decided by a vote of the citizens.

  7. Exactly. It just worries me that our council is even thinking about putting it on a ballet. It seems they are going a little off the deep end with even thinking about something like this. I'm pretty sure the majority of the community will agree, i sure hope so. I don't doubt their intentions are good, but the pathway to hell is paved with good intentions.

  8. What is the downside of this proposal, really? And, what’s an alternative solution to the excessive energy use problem that’s wrecking the GHG reduction goals? Shall we pretend that grow houses aren’t part of that? Do we just go, “oh well, whatever,” and let ’em keep sucking energy?

  9. It's a tough question Kevin. I don't think home inspections by government representitives of people not found guilty of anything is ever the answer though. I think if there is a direct harmful effect to someone else, then it's a different story, but there are already laws in place for the majority of things that directly affects someone in a negative way.

    I keep hearing the horror story about what if my house burns down because the neighbors were idiots with the wiring on their pot factory. Well, maybe rather than try to make sure all the "what-ifs" don't happen by violating people and using the "greater good" excuse (which a whole lot of things in history were done under, and very likely the perpetrators actually believed it), we could have laws that actually have adequate punishment when something's actually been done.

    Rather than saying ok, someone might drive drunk and kill someone, so at every exit, we're going to have officers search vehicles and give breathalyzers." Taking away rights or violating innocent peoples rights and/or privacy, no matter how minimal just isn't right in my opinion, which is why we don't do that, but we have much harsher sentences for people that kill someone while driving drunk.

    There are so many things in life that are maybe's, that trying to regulate possibilities easily turns into regulation of "what offends me", and everyone has very different opinions on that.

    For instance, something that is happening, is people are causing thousands and thousands in damage to rentals. Rather than have random regular inspections for anyone that rents, how about actually create huge penalties for property damage, penatlies that excede any of the marijuana laws, because then a person is having a major direct effect on a unwilling land owner. When I say major direct effect, I don't mean "annoyance". I'm willing to bet that would be way more effective than a lot of these other ideas.

    Good discussion :).

  10. Anonymous

    It looks like PG&E is the biggest crook $800,000 to administer a tax and they get first crack at the funds? Come on people, THINK!

  11. Tyranny of the majority was one of the things most feared by the founding fathers.

  12. I mean, would YOU as a newspaper man want a compliance check to make sure that you were not printing terrorist manifesto's or bomb building plans?

  13. Poor analogy. They could find that out by reading the paper.

    During a drought, there are restrictions on water use that are also enforced by inspections. How is this different?


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