You see, there’s a recession going on. It’s a nasty one. It’s not a secret; it’s been in all the papers. But Villaraigosa apparently hasn’t read about it.
How else can you explain his proposal last week to assess a shocking surcharge on electricity customers of the city’s Department of Water & Power?
Hey, this is a time of deflation. Prices are going down, not up. Wages are being cut. Rents are being chopped, even before leases expire.
The only reason anyone should think – even for a moment – about raising prices now is if they absolutely, positively can’t avoid it. And the reason for raising DWP rates?
Well, it’s not because the cost of fuel has gone up. It’s not for any other good business reason. It’s mainly because Villaraigosa wants to make electric bills so painfully expensive that it’ll force customers to switch to solar panels and the like. In other words, the reason you’ll be paying more of your hard-earned money to the DWP is so the mayor can look good to the eco crowd and he can brag that he’s the country’s green mayor.
Another argument for the shocking surcharge is to raise money for the DWP to help pay for expensive alternative energy sources to meet or even exceed the mandates of AB 32, which is the state requirement to boost noncarbon energy. Here’s a better idea: The city should insist that Sacramento ratchet down the Draconian demands of AB 32. For the DWP to try to beat some arbitrary schedule from the state is a political reason – which is a terrible reason – to stick it to customers in the midst of a recession.
(By the way, don’t you just love how there’s so little outrage from mainstream media outlets when a government entity lays on some huge price increase, even for a contrived reason? What would happen if a private-sector utility company tried to do the same? Yep, they’d get the WellPoint treatment.)
Now, I know that some have argued that another reason the mayor and DWP want the increase is to help pay for salary increases that the DWP’s powerful union got at the same time police got no raises and lots of employees are looking at salary cuts, if not the loss of their jobs.
And others have said that the surcharge will help the DWP transfer money to the city to help it with its budget shortfall.
Regardless of the reason for the surcharge, the point is that it isn’t necessary to pay for rising fuel prices or to pay for some big improvement in the transmission system. In fact, it’s not necessary for any sound business reason. The surcharge is a contrivance that’s sought purely for political reasons.
That makes it not a rate that’s paid for services rendered. That makes it a tax.
And make no mistake: It is a tax that falls heavily on businesses. While many homeowners may see a surcharge of only a few dollars a month under the mayor’s plan, businesses would see surcharges of at least 20 percent and up to 26 percent.
Just think. Businesses that are struggling to survive – slashing budgets, laying off workers, delaying improvements – may soon face electricity bills that are one-fifth to one-fourth higher. Mr. Mayor, that’s a heartless tax.
This is no time to be raising taxes. In fact, this is a time to be cutting taxes.
There is, after all, a recession on. If only Villaraigosa knew about it.