Oakland City Council Approves 500% Tax Increase on Pacific Gas and Electric
(June 12, 1996)

The Oakland City Council approved a 500 percent tax increase on PG&E by creating a new business license category in Oakland for power providers, the first in the state.

Under the plan, PG&E and other electric companies that may enter the Oakland market with deregulation would be charged $6 per $100 of gross recepits. PG&E now pays $1 per $1000 of gross receipts.

City budget analysts say that PG&E has long paid less in Oakland than in bother Bay Area cities for its franchise tax, which allows the company to do business here. They explained that because Oakland cannot increase PG&E's franchise tax, they have resorted to the business licence tax.

The plan got preliminary approval in a 5-4 vote, who disagreed on whether Oakland whould pursue a tax that may be strck down in the courts. Public hearings on the tax will be scheduled during the summer before a final vote is taken.

PG&E spokesman Ron Sharpe threatened that PG&E "will institute whatever steps it takes to pass this along to ratepayers in Oakland." The California Public Utilities Commission would have to approve any surcharge on Oakland ratepayers, which city officials believe is unlikely.

The ordinance to create a new tax category will be considered in July.

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