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LA carbon surcharge to boost renewable energy

The mayor of Los Angeles has announced a carbon reduction surcharge, where the proceeds will support a renewable energy trust fund.

The carbon surcharge was announced by Mayor Antonio Villaraigosa as part of a recent rate action undertaken by the city utility, the Board of Water & Power Commissioners (LADWP). It could change the way that Los Angeles achieves its renewable energy goals, while spurring job creation in the city, he explains.

“This carbon reduction surcharge empowers every person in this city to play a role in building our green future and placing Los Angeles at the forefront of the green revolution,” says Villaraigosa.

The move could create 18,000 jobs in renewable energy and energy efficiency over the next decade and the trust fund will invest specifically in two types of programmes: a solar feed-in tariff and energy efficiency.

Incentive and investment tool

The carbon reduction surcharge serves both as a financial incentive and as an investment tool. The increase will incentivise stakeholders to use renewable energy that will reduce Los Angeles' dependence on fossil fuels.

The solar feed-in tariff will allow the owner of an in-basin solar facility to sell electricity directly to the LADWP that will feed directly into the grid. LADWP will pay for the energy through a 20-year power-purchase agreement.

The renewable energy feed-in tariff could create jobs in both the public and private sector in manufacturing solar equipment, installation and maintenance, programme administration and upgrading utility grids. At the same time it will reduce electricity use during peak hours, reduce transmission congestion and accelerate deployment of renewable energy resources.

"After carefully studying this policy for many months, the Los Angeles Business Council strongly supports an ambitious feed-in tariff programme in our region," says Council President Mary Leslie. "A well-designed FiT programme would unleash a major source of clean locally-generated energy to meet Los Angeles' renewable goals, providing incentives and cost-savings for businesses, public institutions and residences to produce solar energy and sell it back to our utility."

Entry-level workers to be trained in energy efficiency

The energy efficiency programme will train and deploy Angelenos to conduct efficiency retrofits throughout the city. Working with local community colleges, city development departments and training groups, LADWP will recruit and train entry-level workers to conduct energy audits and energy efficiency retrofits.

The carbon surcharge will add less than US$2.50 to the average monthly utility bill, the Mayor estimates. To ensure transparency, a neutral rate-payer advocate will be appointed and placed in the Office of the Controller to oversee the measure. The Carbon Reduction Surcharge will appear as an itemised charge on the customer’s bill.

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Energy efficiency  •  Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity