By Rob Roper
This fall, a number of climate change activists proposed a new carbon tax scheme dubbed “The Essex Plan.” (ESSEX is a near acronym for “Economy Strengthening Strategic Energy eXchange.”)
This latest attempt to tax gasoline, home heating oil, etc. has now officially been translated into S.284, legislation sponsored by Sens. Chris Pearson, P/D-Chittenden, and Alison Clarkson, D-Windsor.
The idea behind the Essex Plan is to use the revenue raised by the tax to subsidize electric utilities and thereby lower electric rates. While this sounds like a simple proposition, the legal language illustrates how, in practice, this will be monumentally complicated.
The plan’s creators envision not just a simple transfer of revenue, but segregating the revenues based on three categories: industrial, commercial and residential. The residential category is further complicated by designating 50 percent of the revenues for general electric rate reduction, and the other half divided between low income rebates and “rural” rebates.
The money will be collected from distributors of affected fossil fuels by the Commissioner of Taxes and deposited into a newly formed Carbon Charge Rebate Fund. The Public Utility Commission will oversee the allocation and distribution of funds to the electric utilities, who will then have to segregate the funds into three categories: residential, commercial and industrial.
Then it really gets complicated.
For example, “The Commission shall determine which areas of the State qualify as rural for the purpose of this subdivision (3)(B) and in doing so shall consider the information set forth in “Mapping Total Energy Burden in Vermont” prepared on behalf of Efficiency Vermont.”
As for the low income rebates, “In consultation with the Department for Children and Families (DCF), the Commission shall include in the method income tiers for the rebate….” And, “The manner in which are customers are notified of the availability and eligibility requirements of these rebates and how to demonstrate eligibility.” This means that the benefit is not automatic, but has to be applied for. Which, in turn, means a lot of bureaucrats processing applications — a task complicated again by the fact that people’s incomes are constantly changing.
And finally, “The Auditor of Accounts of the State may conduct audits of the activities under this chapter to ensure that all of the monies raised by the carbon charge are returned to customers. The Auditor shall conduct two such audits.”
This is just government complexity. Additionally, “Each retail electricity provider shall furnish the Commission with the information the Commission considers necessary in implementing this subchapter.” And, “The distributor shall collect the carbon charge on completion of each sale or delivery of fuel to which the charge applies. The distributor shall identify the charge collected as a separate invoice entry on each sale of fuel. … Every distributor shall maintain, for no fewer than three years, accurate records documenting all transactions to which the carbon charge applies and all transactions for which exemption is claimed. … The Commissioner may inspect these records at all reasonable times during normal business hours.”
So, in conclusion, this is going to be an expensive nightmare to comply with and enforce.