Governor to Impose $Quarter-Billion Tax Hike on California

Governor to Impose $Quarter-Billion Tax Hike on California

Renewable energy that is forced on the California market means higher energy costs for everyone. Renewables are simply more expensive—which is why their proponents have to argue for mandates (and not coincidently, the highest levels of direct subsidy.) Ironically, the mandates—excused as ‘helping drive costs down through mass markets’ have only served to INCREASE prices due to overheated demands for equipment. Wind energy costs, for example, have increased by 50-65 percent in the last year or so.

While the Governor has stated that there will be “safeguards for low-income customers” as with the implementation of other AB32 regulations, (the law requires it) impacts on low income households are inevitably disproportionate. California’s electricity market is about $33 Billion per year with nearly 65% being commercial and industrial. Just how the Governor plans to protect low-income consumers from the inevitable pass through of costs into retail goods and services, will be an interesting experiment in market manipulation. Those on the lower end of the socioeconomic spectrum are hurt more affected by higher prices because these individuals use a larger percentage of their income to pay for energy and other necessities. This is perhaps the watershed of abuse wrought by AB 32 since passage of the legislation three years ago.

AB 32 has made Californians subject to heavy regulation by the state. In an era of 12 percent unemployment, billion dollar budget deficits, and an economy on life support, the simple fact is that we cannot afford to pay more to keep the lights on. This RPS directive is the latest state mandate to stem from AB 32, which seems to be losing its luster with the public. Economic analysis shows that AB 32 will continue to harm this once prosperous state and force California business to further cut jobs or relocate.

Some, including the Governor, will argue that this move will advance new alternative energy technologies—history is replete with facts that show this approach has most often done just the opposite. What is also clear is the direct and immediate impact on energy costs to families and small businesses throughout the state. The California Air Resources Board will become even more powerful while consumers pay the price. AB 32 is halting economic progress and the Governor’s new directive is yet another example of a failed policy that lack foresights or legislative oversight. California needs more jobs not more government.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.