The City Council decided on Tuesday that Long Beach voters will vote on three local measures this November regarding utility taxes, City departments and commissions.
The items have gone through months of public meetings and modifications, though the City Council hearing proved residents remain divided on the issues. City councilmembers unanimously approved each measure to be entered into the ballot for the general election on Nov. 5.
California residents have until Oct. 21 to register to vote, and can do so online.
The council added three local measures:
- Whether Long Beach will remove a 5% tax exemption for two local power plants
- Whether the City will combine the Civic Service and Human Resources Departments into one hiring department
- To shorten terms for the Harbor Commission and Utility Commission to a maximum of three terms of four years each
This article breaks down the ballot measure on taxing two local power plants.
Utility Taxes on Local Energy Companies
Long Beach voters can decide whether to remove a 5% tax exemption for two local electrical power plants, which City staff predict would increase the City’s general fund by millions each year.
Long Beach’s Municipal Code sets a 5% Utility Users Tax (UUT) on every person in the city who uses its gas, electricity, water and telecommunications.
The City has four local power plants which burn gas to produce electrical energy. Two of these power plants have been exempt from the 5% Utility Users Tax for the last 30 years: the Alamitos Energy Center owned by the Applied Energy Services Corporation (AES) and Southern California Edison, and the Haynes Plant owned by the Los Angeles Department of Water and Power (LADWP).
If the measure passes, AES can absorb this loss in revenue — caused by the loss of the tax exemption — by passing it onto its customers. The question is whether it will divide the cost among all its customers throughout Southern California, or only Long Beach residents.
The AES has received permission from the California Energy Commission to split the cost among all its customers, which would result in a 50 cent bill increase for everyone. But Southern California Edison has asked the California Public Utilities Commission for permission to split the cost only among Long Beach residents, which would result in a $50 annual bill increase for only residents of the city.
According to documents from the City of Long Beach, the LADWP plant only services Los Angeles County residents and no homes in Long Beach.
Why Was This Item Introduced?
If voters pass this measure, it will repeal the UUT exemption. City staff predict it will result in the following revenue increases for the City’s General Fund, though City Manager Tom Modica said the exact annual revenue will depend on utility prices and usage:
- $7.5 million for the second half of 2025
- $15 million in 2026
- $15.8 million in 2027
- $16.5 million in 2028
- $17.4 million in 2029
- $18.2 million in 2030
This measure was introduced in hopes of decreasing a large deficit in Long Beach’s budget, projected to be $61.5 million by 2030. City staff sought out ways to shrink this deficit “without increasing taxes” and decided this would have the “least impact on Long Beach residents.”
City Auditor Laura Doud voiced her support for the item at Tuesday’s meeting, claiming that Long Beach residents receive only a “marginal benefit” from the AES plant and “little to no benefit” from the LADWP plant.
The Back and Forth
Both AES and LADWP have voiced their opposition to this item. AES predicts that this will cause Long Beach consumers to be double-taxed, and Southern California Edison has stated it will seek permission from the California Public Utilities Commission (CPUC) to pass these taxes onto Long Beach customers only, according to a City report.
The City of Huntington Beach failed to pass a similar item in 2002 after receiving the same response from AES. Long Beach staff reports state that the City will appeal to the CPUC if Edison tries to only tax Long Beach customers.
If Southern California Edison is successful in only taxing Long Beach, residents can expect a $50 annual increase in their electric bill, City staff predict.
John Gregory with the Los Angeles Water Department spoke against the item Tuesday night, claiming it goes against a “longstanding tradition” of Long Beach and LA governments not taxing each other. He added that the rate increase would be passed onto LA residents, many of whom are “living in underserved communities.”
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