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Home My WebLink AboutAgenda Report - April 21, 1993 (63)CITY COUNCIL MEETING April 21, 1993 RESOLUTION APPROVED OPPOSING PRESIDENT CLINTON-S PROPOSED ENERGY TASK PLAN RESOLUTION NO. 93-54 CC -51(d) In February of this year, President Clinton outlined as CC -109 part of his proposed budget an energy tax or "BTU" tax on CC -300 various energy sources. As described, the tax would apply (among other things) to gas, coal, oil, and nuclear,energy. generation, as well as hydro facilities... Solar, geothermal, and biomass generation would be exempt.` The• proceeds would be earmarked for earned income tax credits,. food stamps, lox income home energy assistance programs,: and to reduce the deficit. Because of the speed. with which the proposal is being handled, and the continual changes that have occurred, the most current information the City Attorney could obtain is now approximately 6 weeks old. While the accuracy cannot be guaranteed, presented to Council was an estimate prepared by thR American Public Pourer Association on the measure and its likely impacts on retail price .of electricity. Some of the estimates (nuclear,hydro) have not been completed as yet, but Mr. McNatt was informed that there will be regional adjustments included to even out the effect of the tax on various parts of the United States. For example, a higher tax on hydroelectric generation would be imposed in the Northwest where it is most coam►on, and coal-fired plants in the East and Midwest would be subject to a higher tax. In addition, the measure would also impose various taxes on gasoline, home heating oil, etc., but the City Attorney was unable to obtain further information on those points. It has been proposed that the City Council adopt a Resolution in opposition to this measure. On motion of Council Member Mann, Snider second, the City Council unanimously adopted Resolution No. 93-54 entitled, "A Resolution of the Lodi City Council In opposition to President Clinton's Proposed Energy Tax Plan". os CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: Proposed Federal Energy Tax MEETING DATE: April 21, 1993 PREPARED 3Y: City Attorney RECOMMENDED ACTION: Council discussion and staff direction (possible adoption of attached Resolution). BACKGROUND: In February of this year, President Clinton outlined as part of his proposed budget an energy tax or "BTU" tax on various energy sources. As described, the tax would apply (among other t:lings) to gas, coal, oil, and nuclear energy generation, as well as hydro facilities. Solar, geothermal, and biomass generation would be exempt. The proceeds would be earmarked for earned income tax credits, food stamps, low income home energy assistance programs, and to reduce the deficit. Because of the speed with which the proposal is being handled, and the continual changes that have occurred, the most current information I could obtain is now approximately 6 weeks old. While the accuracy cannot be guaranteed, att ched is an estimate prepared by the American Public Power Association on the measure and its likely impacts on retail price of electricity. Some of the estimates (nuclear,hydro) have not been completed as yet, but I am informed that there will be regional adjustments included to even out the eff.ct of the tax on various parts of the United States. For example, a higher tax on hydroelectric generation would be imposed in the Northwest where it is most common, and coal-fired plants in the East and Midwest would be subject to a higher tax. In addition, the measure would also impose various taxes on gasoline, hone heating oil, etc., but I was unable to obtain further information on those points. I hope to have more current information via APPA prior to the April 21 Council meeting. 00 APPROVED. ° THCSMA ETERSON sG,uOO yr Ar City Manager — J BTUTAX/TXTA.01V CC -1 Proposed Federal Energy lax April 21, 1993 Page Two It has been proposed that the City Council adopt a Resolution in oppositio:i to this measure. That Resolution is attached for Council consideration. FWDZNG: None. Respectfully submitted, JO?M yU Bob McNatt City Attorney attachments cc: Henry Rice Dixon Flynn BTUTAX/TXTA.01V CLINTON ADMINISTRATION'S PROPOSED ENERGY TAX AND ITS ESTIMATED IMPACT ON THE RETAIL PRICE OF ELECTRICITY phased introduction over three years. fully phased in 7/l/96 Ave. Price Proposed Tax Tax As x Energy Source Per Million Per Million of Aye.Price as of 170,21 BTUS BTUs (collection Electric point) Utility Use S M EIlLR6Y SOURCE Oil 2.50 0.599 23.9 4 (refinery) Gas 2.00 0.257 12.9 10 (pipeline) Coal :•1.50 0.257 17.1 55 (minemouth) Nuclear imputed* 0.257 -- 22 (utility) Hydro imputed* 0.257 -- 10• (utility) Solar/Wind/ S X E M P T Geothermal/Biomass Imported' -Electricity imputed* 0.257** -- (point of importation) Imported Petroleum -- 0.599** ' -- (point of importation) NOTES: 1. Numbers in'this table are current estimates based on incomplete information, and are subject to revision. Calculations assume fully phased in tax. 2. Based on this preliminary information, the average tax per million BTUs -used in electric utility generation would be 27.1 cents. 3. Based on this preliminary information, upon full implementation of the proposed tax (following a three-year phase in) electric rates will increase by 3.7%. DOE estimates electric rates in year 2000 will be 3% higher than they would have been without tax. * Assumes nuclear generat.in at 10,600 BTU per kWh, and hydro generation at 10,300 BTU per kWh. •' Methodology not disclosed in preliminary DOE documents. This rate is APPA estimate of what is intended. -2- I ABSOLUTION NO. 93-54 azasxaaaaaaazzzzzzxz A RESOLUTION OF THE LODI CITY COUNCIL IN OPPOSITION TO PRESIDENT CLINTON'S PROPOSED BNSR(;Y TAX ssxccosssxoasaaasasxaaasas:sssaasaxxs�xssssaasassssasasssaaas:ssasss:as wHzRBAS, the City of Lodi, as owner and operator of a municipal electric utility, is committed to provide electric power to its citizens at a reasonable price; and NHBRBAS, it has been estimated that the proposed energy tax could add to the bills of Lodi ratepayers up to $1 million per year, and i(HBRSAS, there are presently no guarantees that the money raised by this tax would actually be used for deficit reduction, but rather could be channelled into additional spending programs; Now, THEREFORE, BE IT RESOLVED, by the Lodi City Council that the City of Lodi strongly opposes the Clinton Administration's energy tax. Dated: April 21, 1993 sa a e.......... rias a aa........ s .... s a saa as a aaf a a a. s: aaa a as a........ ===a. I hereby certify that Resolution No. 93-54 was passed and adopted by the Lodi City Council in a regular meeting held April 21, 1993 by the following vote: Ayes: Council Members - Davenport, Mann, Sieglock, Snider, and Pennino (Mayor) Noes: Council Members - None Absent: Council Members - None fifer errin ity Clerk 93-54 RES9354/TXTA.02J li A. CITY COUNCIL PhILLIP A. PENNINO, Mayor IAG' A. SIEGLOCK Mrvor Pro Tempore RAY C DAVENPORT STEPM N ) MANN JOHN R. (Randy) SNIDER CITY OF LODI CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 (209)334.5634 FAX JX") 313-679% April 27, 1993 THOMAS A. PE TERSON City Manager IENNIFER M. PERRIN City Owl; TIOB McNATT City Attorney The President The white House 1600 Pennsylvania Avenue Washington, D. C. Dear Mr. President: Enclosed herewith please find Resolution No. 93-54 entitled, "A Resolution of the Lodi City Council in Opposition to President Clintons Proposed Energy Tax•, which was adopted by the Lodi City Council at its meeting of April 21, 1993. The City of Lodi strongly urges you to cons:der our position on this matter before you take steps to implement this plan. Thank you in advance for your cooperation in this matter. Attachment Very truly yours, ifer . Perrin ity Cler