If you're a customer of an investor-owned utility such as Southern California Edison, among the line items on your monthly power bill is a 1.5% fee called the public goods charge. It will go away if it's not renewed by the Legislature this week — but that would be a mistake, because it is a vital tool to help the state achieve its ambitious goals to clean up its power supply and reduce its carbon emissions.
The charge raises about $400 million yearly, of which about $250 million is allocated to utility customers who improve energy efficiency by buying power-sipping appliances or retrofitting their homes or businesses. Another $75 million is awarded to renewable power projects, and the remaining $75 million funds research and development of new energy technologies. The fee has been around since 1996, when the state moved to deregulate its power market and lawmakers feared that utilities would cut their investments in efficiency and research.
Since then, some of the spending has been controversial. The state Legislative Analyst's Office found that not all of the money allocated under the research-and-development program has been spent on projects that meet its mandate to directly benefit ratepayers, and some have only a tenuous connection to energy. For example, research funds have been spent to examine the impact of climate change on birds. Meanwhile, ratepayer advocates and manufacturers complain about higher power bills and a lack of accountability on spending.
But these are reasons to reform funding priorities, not to eliminate the public goods charge. Since its creation it has funded billions of dollars worth of projects that have reduced air pollution, boosted efficiency and cut greenhouse gases. There are three bills in the Legislature aimed at renewing the fee while overhauling the programs it funds, and Gov. Jerry Brown has weighed in with his own proposal to create new spending oversight panels.
Because the charge, which amounts to $1 to $2 a month on the typical residential customer's bill, is considered a tax, it will require a two-thirds vote of the Legislature to reauthorize it. That means some Republicans must get on board. Sen. Tony Strickland (R-Moorpark) told the Ventura County Star that he wouldn't consider a vote to extend the fee to be a violation of his pledge not to raise taxes, but he still hadn't made up his mind whether to go along. Strickland is correct that an extension of an existing tax isn't the same thing as a tax hike. The program's investments have broad benefits for ratepayers across the state, including in Republican districts, and without them it will be far harder to clean up the state's energy picture. Lawmakers should renew it.