Friday, September 2, 2011

Sacramento Bee: Lobbyists fight for piece of possible utility tax extension

Lobbyists fight for a piece of potential utility tax extension

Published: Friday, Sep. 2, 2011 - 12:00 am | Page 1A
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If a cash-poor state creates a pot of money, the lobbyists will come.

That axiom of legislative politics was in full force this week as scores of lobbyists crammed a hearing room to get a piece of $400 million that would be available for energy efficiency and renewable energy projects if the Legislature reauthorizes a 1.5 percent tax on customers' power bills set to expire Jan. 1.

They asked for "carve outs," "targeted investments" and "a specific commitment of resources."
Translation: Their clients want some of the money that would be generated by the tax.

Lobbyists for solar manufacturers said the bill should allocate money for their industry. Home builders want money to build energy-efficient houses. Farmers want funds to turn farm waste into energy.
Technology companies want subsidies for energy-monitoring devices. Car manufacturers want rebates on electric cars. Environmental groups and labor unions want the tax extended, too, with each entity trying to tweak it this way or that.

"Everybody wants their subsidy," said Lenny Goldberg, a lobbyist for The Utility Reform Network, a consumer advocacy group. "We're opposed to that, essentially porking it out."

He was among a small group of advocates who came to a joint hearing of the Assembly's and Senate's utility committees Wednesday to criticize the utility charge rather than ask for a piece of the pie. His organization is also concerned that the fiscally challenged state might take the money to balance the general fund budget.
Other groups that don't like it include anti-tax organizations, the manufacturers' association and Southern California Edison, one of the state's three privately owned utility companies. They urged legislators to do away with the so-called "public goods charge."

The charge adds about 1.5 percent to customers' electricity bills – or between $1 and $2 a month for most California households, according to the Public Utilities Commission. The money collected by investor-owned utilities goes toward three areas: research to develop clean energy technologies, investments in renewable energy and encouraging energy efficiency. The Energy Star program, which gives consumers rebates for buying efficient appliances, is one example of where the money flows. It also subsidizes energy-efficient retrofits of older buildings.

Gov. Jerry Brown is pushing to extend the surcharge, and has outlined a program that would emphasize job creation, replace some grants with loans and add a component for emerging "energy storage" technology.

"The public goods charge can create jobs if properly focused," Brown said. "I think there's a way that it could be used to put people immediately to work."

Brown's plan is in two bills – Senate Bills X1 28 and 29 – and the Legislature and the lobbyists are working to hash out the details before the session ends next Friday.

Supporters say the $400 million generated each year by the surcharge, created in 1996, has helped make
California the nation's leader in the emerging "clean tech" industry. They say that's good for the state in many ways: attracting private investment, creating jobs, helping the environment and developing technology that ultimately leads to lower utility bills for consumers.

"Ratepayers get a return above what they invest in this program," John Laird, Brown's Natural Resources secretary, said in testimony to the joint committee.

Opponents say the surcharge is an unnecessary tax that is burdensome to many businesses and individuals, and leads to higher prices on gas and consumer goods.

"We believe this hurts the poor and working poor," said Eric Eisenhammer, an organizer for the anti-tax Howard Jarvis Taxpayers Association and founder of the Coalition of Energy Users.

The bills to extend the public goods charge must get two-thirds approval by the Legislature, meaning they would need the support of at least two Republicans in each house. Republicans have balked at most tax measures – but some have shown support for the public goods charge.

A previous attempt to extend the charge passed the Assembly in June with the support of seven Republicans. The bill, which is unlikely to move through the Senate, earmarked money for solar power and biomass, which turns farm waste into energy – projects that would benefit some Republican districts.

At Wednesday's hearing, Sen. Alex Padilla, D-Los Angeles, made clear that the utility charge doesn't create enough money for all the interest groups who are lobbying him to benefit.

"If we were to add up all the requests for 'We'd like this baseline item dedicated to us, or this dedicated revenue stream to us' in their totality," he said, "it's going to add up to more than we have to work with."

Translation: Expect lobbyists to keep pushing hard as the legislative session draws to a close.

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