California’s state gas tax has been the most popular tax in the country, but that could change under the state’s first energy-saving initiative.
The state’s new energy-efficiency law requires companies to install energy-efficient appliances, air conditioners and heating systems and to offer energy-smart upgrades for customers, including charging to homes and businesses.
The measure, signed into law by Gov.
Gavin Newsom in late December, takes aim at the statewide power bills that have been on a steep decline.
It will also help businesses reduce their energy bills, with a tax on energy-intensive fuels, such as gasoline and diesel, that will go into effect in January.
The law aims to help the state save about $1 billion a year, Newsom said in a news conference after signing the bill into law.
The new law requires a minimum of $5,000 in energy savings per customer and also offers incentives for homeowners to buy energy-conserving appliances and air conditioner replacements.
Energy efficiency also is a key target for the law, which aims to cut electricity bills by up to $2,000 a year for every household, up from $500.
The energy-savings tax is expected to bring in more than $2 billion a month.
The tax will go up to 3 cents per kilowatt-hour for the first time this year, up $2 per kilo.
And it will go to 5 cents per kWh for the second time in 2018.
California’s new tax will generate $8.5 billion over three years, according to the Legislative Analyst’s Office.
The increase in the bill will go toward a new fund to pay for the state budget, which is projected to be $15.4 billion by 2019.