Grow House Energy Tax Could Be On November Ballot – May 12, 2012
Kevin L. Hoover
ARCATA – A tax on excessive residential energy use could wind up on the November ballot. As presently conceived, the tax would be levied against homes which use more than 300 percent of the baseline usage.
The rate could be somewhere between five and 15 cents per kilowatt hour over the baseline.
Figures from 2009 indicate that some 1,200 of the more than 7,000 Arcata residences exceed the baseline rate. Had a tax been in place that year, the City could have generated $2 million in revenue.
The City’s Energy Committee will consider the matter in depth in a public meeting Monday, May 21. The committee has been discussing the matter for years out of concern that extraordinary electricity consumption, largely by illegal grow houses, is offsetting energy conservation gains and negating Arcata’s greenhouse gas reduction efforts.
Between 200 and 2006, electricity usage in Arcata increased 30 percent or more than nine million kilowatt hours, a per capita increase of 24 percent. This while conservation efforts elsewhere in California have kept electricity usage fairly constant over the last 30 years.
Along with much-needed tax revenue for strained City coffers, stated goals of the proposed tax are reduction in energy use and “development of funding strategy to implement projects which could offset the environmental effects from the increase in residential energy usage.”
Implementing the tax would incur costs. PG&E estimates a $500,000 to $800,000 cost for setting up billing based on usage instead of residential, commercial or industrial classification and to charge a different rate to a subset of customers. Placing the measure on the ballot would cost between $10,000 and $12,000.
The City is concerned about unintended consequences of the tax. Some home medical equipment, for example, can consume extraordinary amounts of electricity.
Another question is whether or not the tax would include participants in PG&E’s CARE program for low-income customers. The program is exploited by industrial cannabis growers, whose illegal income is not reported, and amounts to a subsidy for the illegal manufacturing activity.
Excluding CARE customers, many of whom use the program legitimately, would cut revenue roughly in half.
The revenue projections were based on 2009 data, which could be out of date. Updated figures were expected from PG&E this week.
The figure of 1,200 houses exceeding baseline energy use (500 of which are on the CARE program) is similar to estimates made by law enforcement in 2007. At that time, 700 to 1,000 Arcata residences were considered to harbor illegal grows – a figure hotly contested by some cannabis advocates.
The council vote to pursue the matter was 4–0, with Councilmember Susan Ornelas absent.
The City will mount a vigorous public education program to help ensure participation in whatever decision is made. “We really want public input at this stage in the process,” said Deputy Environmental Services Director Karen Diemer.
The Energy Committee is will consider the matter at its Monday, May 21 public meeting. Recommendations developed at that meting could shape the council’s final decision. Below, the Energy Committee agenda.
ENERGY COMMITTEE AGENDA
COUNCIL CHAMBER MONDAY MAY 21, 2012
736 F STREET, ARCATA 5:30 P.M.
Special accommodations for the disabled who attend City meetings can be made in
advance by contacting the City Clerk at 822-5953. Assistive listening devices are
I. ROLL CALL – Ruthanne Cecil, Melanie Faust, Mike Kowalski, Nate McKeever,
Gwelen Paliaga, James Robinson, Jim Zoellick
II. Approval of Minutes – March 19, 2012 and April 23, 2012
III. ORAL COMMUNICATIONS
This item is provided for people to address the Committee on matters not on the
agenda. At the conclusion of all oral communications, the Committee will
respond to statements. Any requests that require action will be set by the
Committee to a future agenda, or will be referred to staff.
IV. OLD BUSINESS
A. Make Recommendation to City Council on High Energy Use Tax (60 minutes)
B. Make Recommendation to City Council on Community Choice Aggregation
V. NEW BUSINESS
A. Develop Quality of Life Indicators (10 minutes)
VI. STAFF REPORTS
A. Redwood Coast Energy Authority Update (10 minutes)
B. Energy Efficiency Community Block Grants (EECBG) Project Update and New
Project Discussion (10 minutes)
VII. COMMITTEE COMMUNICATIONS (5 minutes)
VIII. FUTURE AGENDA ITEMS
Transportation Safety/Energy Committees joint sub-committee
research & blue print framework
Electric Vehicle Procurement for City Fleet
Arcata Forest Fund/Plan It Green conference planning
Biomass and Greenhouse Gas Generation
Collaboration with City of Eureka Energy Committee on items of
mutual interest (ex. CCA etc.)