CITY OF RIVERSIDE: HIDDEN TAXES ON YOUR ELECTRIC UTILITY RATE$!

Posted: May 1, 2012 in Uncategorized
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If you think the City of Bell had serious taxation problems and mis-appropriation of funds, grab your socks!

Riverside levies hidden taxes on your utility bill.  They are simply and stealthily included in the utility rates the city charges residential customers.  Your minimum tax rate on electric utility services to your property is 11.5%.   It expands upward from there depending on how much utility service you use each month that is subject to punitive tiered pricing.

Let us look at your bill for electricity and the city’s residential winter electric rate schedule.  The first tier or the base metered rate for electric service is $0.1035 per kwh (this is the metered unit of measure for electric service).   The base rate is charged to the consumption of each of the first 350 kwh of electric service each month.   On a per kwh basis $0.0119 of the first tier rate per kwh is tax revenue paid to the general fund.  That is a tax rate of 11.5%.

Should you exceed first tier usage as most homeowners do, then you are charged at the second tier price of $0.1646 per kwh from the 351th thru the 750th kwh of service.   The difference — of $0.0611 per kwh in the second tier electric rate — is an additional tax for using more electric service than the city thinks you should use.  It is a punitive tax to economically force you the consumer to conserve electricity.   You are being taxed even though you are using electricity for beneficial purposes and not wasting it.   Looking at just the $0.0611 price difference per kwh of first tier and second tier prices/kwh the effective tax rate is 37%!

Should you use more than 750 kwh of electric service per month you are billed at the 3rd tier rate of $0.1867 per kwh for those units consumed over 750 kwh.   The third tier tax is $0.0951 per kwh.  This is an effective tax rate of 51%!

Now, that’s a punitive tax!

To help put this into perspective with how our electricity is delivered to your property, please review the following facts:

  • A municipal electric utility provides property owners with the “service” of transporting the power to your property via government-owned infrastructure.  The electricity is virtually worthless at the point of generation or acquisition.  It is the city’s infrastructure of power transmission lines that imparts value to electricity.  If they could not deliver it to your property you would not buy it and they could not give it away!
  • On average it costs the city $0.0500 to generate or acquire power and transport electricity to its residential customers.
  • Some power is purchased on long-term contracts and may cost as little as $o.o4 per kwh delivered to you.  To be fair, other sources of electricity cost more.  So in the end it all averages out to a range of $0.04-$0.06.
  • What the city has done to you is this: it has stopped putting ballot measures forward for a vote to approve electric bonds.  Basically, it has improperly hidden the tremendous cost of borrowing money (and the burden to pay it back for thirty years) in your electric rates, fees and charges.
  • By law the cost of borrowed money used to build infrastructure must be approved in an election as a property assessment tax or a special tax.  In this way you would be able to see the level of debt, the cost to you, the years left on each contract to continue paying and have the voter knowledge to understand what this means to you.
  • Since 2007 the City Council has approved instruments of borrowing that were created specifically to evade state constitutional restrictions that restrict the amount of borrowing or require voter approval.  The city discloses that it knows how and why the contracts were created (specifically to avoid complying with the state constitution) but, since no one in Riverside has filed a lawsuit to stop the practice, it will continue to offer these contractual forms of debt at will.  This results in electric rate schemes that have ever increasing hidden taxes in them; however the cost of debt to build infrastructure is not an annual variable operating cost to be included in the rate calculation.  It is a fixed cost that should be collected via other means on your bill or property tax.  It should not be included in the rate structure.  The rate should always be determined from the variable costs of operating the infrastructure.
  • A vote to approve a constitutional form of municipal bond requires the city to account for the cost of debt service separately from the annual cost of operating the utility.  In this way they cannot hide the cost of debt service in the rate calculation and charge you $0.1035 and up for each kwh.
  • A municipal utility is not allowed to make money.  It is a government-owned monopoly and may not charge more than the actual cost of providing the service to you at your property.  Municipal utilities are budgeted to break even.  They have reserve funds in case of a bad year and the city can always make a loan or spend tax revenue to cover an annual loss.
  • In recent times the city has taken no steps to reduce costs of operating the utilities.  They have taken every opportunity to expand the cost to residential consumers and buried it in the utility rate structure.
  • The electric utility has a huge fixed annual cost (mostly debt payments) averaged over the calculated electric rates and total annual production.  It must sell all of its planned annual production to recoup the funds needed to pay the debt service.  If you are forced to conserve electricity via tiered pricing, the city has to automatically raise the price.  It is “Catch-22″ Math!  The more you conserve the more it will cost you.  Also,the city makes more money by transferring more utility (hidden tax) revenues to the general fund with every rate increase.  This meets the definition of a special tax in the constitution!  You have a constitutional right to vote yes or no on a special tax measure (remember the library special tax).
  • The city wants you to think it is running a business. A municipal utility provides services to the ownership of property.  It is a government-owned and operated monopoly.  You have to contract with the city for electric service to your property and pay the hidden tax rate of up to 57%!

Now that is some profit margin!  Where is your money going?  Can you live on 350 kwh of electric service per month!!

The city by approving 50% increases in electric rates over the last six years and instituting punitive tiered pricing, is forcing you to conserve electricity (remember in October 2006, city council approved electricity rate hikes to fund the “$1.5 billion Renaissance”) but,  you don’t need more electricity.  Most if not all of the $650 million dollars spent for electric infrastructure improvements has been for future growth of the city population, housing, downtown office space and re-development.  It was never planned to help you but, you will pay and pay and pay.  This burden of hidden taxation falls most harshly on fixed income (retirees) and low income families in the city.  The city would prefer you to move to Mo-Val.

Keep connected with TMC, Hidden Taxes in Water Rates coming next!

TMC ENDORSES DVONNE PITRUZZELLO FOR CITY OF RIVERSIDE MAYOR

STEVE CLUTE ASK FOR YOUR VOTE ON JUNE 5TH FOR THE OFFICE OF STATE SENATE!

BOB BUSTER ASK FOR YOUR VOTE FOR RIVERSIDE COUNTY SUPERVISOR ON JUNE 5TH

TMC, RATED RIVERSIDE’S MOST “SLANDEROUS” AND MEZZSPELLED, “MISSPELLED” AND “OPINIONATED” BLOG SITE!  TEMPORARILY BLOCKED BY THE CITY OF RIVERSIDE AT PUBLIC ACCESS SITES WITHIN THE CITY, THEN UNBLOCKED.  I GUESS YOU CANNOT DO THAT ACCORDING TO THE ACLU.  RATED ONE TWO STAR OUT OF FIVE IN TERMS OF COMMUNITY APPROVAL RATINGS..  TMC IS NOW EXCLUSIVELY ON FILE WITH THE COUNTY OF RIVERSIDE’S DISTRICT ATTORNEY’S OFFICE, AND PROSSIBLY POSSIBLY ON FILE WITH THE CITY OF RIVERSIDE’S POTENTIAL SLAPP SUIT LIST… WE WILL HAVE TO ASK GREGORY ABOUT THAT ONE ( OUR PEOPLE WILL HAVE TO CONTACT HIS PEOPLE)… AGAIN, THANK-YOU COMMUNITY OF RIVERSIDE AND THE CITY OF RIVERSIDE EMPLOYEE’S FOR YOUR SUPPORT!  WE REALIZE IT’S TOUGH, SO HANG IN THERE.. COMMENTS ALWAYS WELCOMED, ESPECIALLY SPELL CHECKERS!  EMAIL ANONYMOUSLY WITH YOUR DIRT OR FOR CONTACT!   THIRTYMILESCORRUPTION@HOTMAIL.COM 

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  1. […] CITY OF RIVERSIDE: HIDDEN TAXES ON YOUR ELECTRIC UTILITY RATES! […]

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