Posts Tagged carbon reduction surcharge

Carbon Reduction Surcharge

Posted by on Thursday, 25 March, 2010

Los Angeles is raising rates on water and power. According to the LA Times, the rates are going up 37% over the next four years. This rate increase has several objectives. The City of Los Angeles is operating in the red and water and energy bills are one way to make up the shortfall. Mayor Antonio Villaraigosa has an additional plan in this rate hike. During the 2008 presidential campaign, the candidates debated over green jobs. Green jobs include new work building windmills and solar plants, designing new ways to construct the power grids to transport renewable energy, and even low tech jobs such as painting rooftops. The mayor’s plan is to add new jobs to revitalize the Los Angeles economy, as many as 18,000 according to the Los Angeles Times.

Not all of the rate hike is going toward green jobs. According to EGP News, three quarters of the rate hike pays for current water and power systems provided by the Los Angeles Department of Water and Power, and one quarter of the rate hike pays for new clean energy systems. The bill also implements a larger rate hike on users that consume more water and power, as well as businesses. The quarter of the rate used to provide green jobs and new power sources is called a carbon reduction surcharge.

The carbon reduction surcharge is required by California law. State law penalizes utilities that do not switch over to renewable energy. Failure of this bill costs the City of Los Angeles as much as $300 million in fines, according to the mayor, as reported by NBC Los Angeles. Carbon reduction surcharges are promoted by the former Vice President and green energy advocate Al Gore. Al Gore is pleased with Mayor Villagairosa’s plan, according to LAist.