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1. Who will be taxed?

The High Energy Use Tax would affect residential households whose electricity usage is over 600% of baseline or 3 times the average residential electrical usage in Arcata. There are 9,500 residential meters in Arcata. In 2011, 633 households utilized electricity that exceeded 600% of baseline. This excessive usage totaled over 6.4 million kilowatt hours of electricity. Households which continue to utilize this level of energy will be taxed at a rate of 45% or approximately $0.16 per kilowatt hour.

2. Will the City know which houses exceed baseline by 600%?

No, the City will not know which houses are paying the tax. PG&E through its State Energy Franchise Contract will bill and collect the tax to the appropriate households and forward it to the City. While PG&E does provide Arcata with aggregate data from time to time, the City never receives individual household data. It is possible for the City to be notified of accounts who enter payment default.

3. How much revenue will the tax measure generate?

The City views this as a descending tax and anticipates that as households reduce their energy consumption the tax will zero out. A tax increment of 45% on electricity usage for only those residential households that exceed 600% of the established baseline in 2011 would have netted $1,249,254.90 to the City.

4. How much will the tax measure cost?

PG&E has quoted an implementation cost estimate of $600,000 to restructure the billing system to create a “new group” or category of customers who this tax will apply to. The components of the cost estimate include:
- Gathering and documenting system requirements
- Designing the technical specifications
- Implementing programming changes
- System testing.