Climate Action Plan Tax – Boulder, CO

The passage (60 percent in favor) of a city-wide referendum in November 2006, establishes a charge on electricity users based on how much energy they use. The money will go to support Boulder’s Climate Action Plan to reduce global warming pollution. The passage marked the first time in the nation that a municipal government will impose an energy tax on its residents to directly combat climate change. The tax took effect on April 1, 2007 and expires on March 31, 2013.

Officialsin Boulder estimate that the climate tax would add $2 a month to the average household’s bill and between $5 and $35 for businesses. The revenues are earmarked for public-education campaigns to make people aware of energy-efficiency rebates, incentives and to fund energy audits for businesses and homeowners. The money will also be used to provide residents with easier access to energy-efficient products, such as compact fluorescent light bulbs.

The local electric utility, lXcel Energy, will collect the tax as part of its normal billing process. The city will pay Xcel a one-time fee of $40,000 to cover the cost of updating billing systems to charge, collect and remit the tax. Xcel customers who subscribe to their green pricing program, Windsource, will be exempt from the tax for the portion of their electricity that is supplied through wind power.

The text of the Boulder ballot question read, in part:

Shall city of Boulder taxes be increased $860,265 annually (in the first year), and up to $1,342,000 each year thereafter for the period of April 1, 2007 to March 31, 2013, by authorizing the city council to levy and collect a climate action plan tax as an excise tax upon persons consuming electricity as residential, commercial, or industrial customers, and providing an exemption for voluntary purchases of utility provided wind power. The tax shall be established with a first year rate of $0.0022 per kilowatt hour (kWh) for residential customers, $0.0004 per kWh for commercial customers, and $0.0002 per kWh for industrial customers. The tax shall take effect on April 1, 2007 and expire on March 31, 2013, and shall be for the purpose of funding a climate action plan to reduce greenhouse gas emissions. The measure would establish city council authority to increase the tax after the first year up to a maximum permitted tax rate of $0.0049 per kWh for residential customers; $0.0009 per kWh for commercial customers; an $0.0003 per kWh for industrial customers.