Dan Morain: ‘Green’ jobs and the public goods charge
Gov. Jerry Brown is trying to pivot from the focus of his first eight months in office – the budget and his failed attempt to win legislative passage of an $11 billion tax package.
Now he is pushing a jobs agenda, part of which includes “green” jobs. It’s a fine concept, one worthy of support, though it is a long time coming, given California’s miserable unemployment numbers. As the legislative session heads into its final week, however, it’s far from certain that the governor will prevail.
First, some context:
A mere 10 months ago, voters overwhelmingly rejected an initiative funded by Texas oil companies and promoted by conservatives to eviscerate the California law, AB 32, aimed at reducing greenhouse gases. Environmentalists hailed the demise of Proposition 23 as evidence of California’s commitment to a clean energy future.
That did not end matters. Brown’s green jobs idea has become the latest front in the fight over California’s environmental laws. Brown, a proponent of AB 32, has dispatched some of his top aides to push for the package.
“This is a job creator,” Resources Secretary John Laird told me. “On every level, it is an incredible return on investment.”
Brown cannot use general tax money to pay for the program. There’s none of that to spare. Instead, the governor is eying money forked over by customers of PG&E and other privately owned utilities each month when they pay their bills.
The fee, called a “public goods charge,” amounts to about $1 or $1.50 a month for most residential customers, far more for industrial users.
First authorized by the Legislature in 1996, the public goods charge is set to expire at the end of this year unless lawmakers agree to reauthorize it. Brown proposes to extend it for eight years, at $406 million a year, for a cost of $3.2 billion.
The bulk of the money, $256 million a year, would be earmarked for loans to promote energy efficiency. The other $150 million would be divided equally among renewable energy projects, and research and development.
Seeing the potential for jobs, organized labor is among the biggest backers of the idea. Environmentalists also are pushing for it.
Opposition is significant. The Utility Reform Network, an influential consumer group, opposes it, as does Southern California Edison, a lobby heavyweight.
Conservatives, who backed Proposition 23, also oppose it. They include Howard Jarvis Taxpayers Association, anti-tax advocate Grover Norquist and Americans for Prosperity, a creation of Kansas oil billionaires David and Charles Koch.
Because it would authorize what amounts to a fee increase, the legislation requires a two-thirds vote, meaning Republicans must sign on.
Norquist’s Washington-based organization, which promotes the no-tax pledge signed by nearly all California Republican legislators, describes the public goods charge as a “tax.”
As a result, GOP legislators could be accused of violating their pledge to oppose tax increases by voting to continue the public goods charge.
However, a prominent anti-tax Republican, Sen. Tony Strickland of Ventura County, made a point of calling it a “rate” increase, and not a tax. Perhaps that distinction will turn out to be significant for some fellow Republicans, though Strickland says he almost certainly will vote against it.
Not all Democrats are enthusiastic about extending the public goods charge.
At a legislative hearing last week, Mark J. Ferron, a Brown appointee to the California Public Utilities Commission, defended the past use of money generated by the public goods charge. For every dollar the state has spent, it has received a return of $1.35, he claimed.
Sen. Roderick Wright, a Los Angeles Democrat with his own peculiar ways of analyzing issues, interrupted Ferron:
“Do you smoke crack?”
“No, I don’t,” Ferron answered, without hesitation.
“Just checking,” Wright said.
Wright apparently was satisfied about Ferron’s lucidity, though not the wisdom of the program.
Indeed, many promises about a new energy future have been rather grand. Take Solyndra, a bright and shiny solar energy company based in Fremont touted by President Barack Obama and then-Gov. Arnold Schwarzenegger as part of the future.
Solyndra turned out to be fool’s gold. The company laid off 1,100 workers with no notice last week, shuttered its factory and announced it was headed into bankruptcy.
In Washington, Republicans are attacking Obama, whose administration had showered Solyndra with $535 million in loan guarantees. California is on the hook, too.
Although not a beneficiary of public goods money, Solyndra was able to avoid paying $24.3 million in state sales taxes on the purchase equipment for its factory, thanks to Senate Bill 71, approved in 2010 specifically to stimulate green energy jobs. The bill cleared both houses of the Legislature without a single no vote.
“SB 71 will expand our clean tech industry and bring the green jobs and businesses we need to rebuild California’s economy,” Schwarzenegger declared at the time.
There could be other Solyndras. Money generated by the public goods charge would end up going to other new businesses. They, too, might fail.
That said, the billions spent by California over the years on energy research, technology and conservation have set this state apart. Successes and advances made here have helped set standards for the nation.
Brown isn’t the only one who has a lot riding on the outcome of the fight in the coming days. Voters who rejected the oil industry’s roll-back of California’s climate change law 10 months ago have a stake in this, too. No one should mind paying a buck a month for the future, so long as it’s not wasted.