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Denver council delays decision on electricity, natural gas tax until June 2020

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Denver council delays decision on electricity, natural gas tax until June 2020

Delaying a decision on putting a price on carbon-producing energy use, the Denver City Council on Aug. 26 pushed to June 2020 consideration of an excise tax on the electricity and natural gas usage of industrial and commercial customers.

The delay came in the face of pushback from businesses opposed to the measure, after the council reached an agreement with the mayor's office.

Under the proposed measure, which would require approval by voters, Xcel Energy Inc. would charge its industrial and commercial customers in the city of Denver a tax of 0.60 cents/kWh, beginning on July 1, 2020. In addition, natural gas utilities would charge commercial customers a tax of 3 cents/thermal unit and industrial consumers 1.5 cents/thermal unit. The gas tax would be permanent; the one on electricity would end when Xcel's power supplies achieve a 70% renewables threshold. Xcel in 2018 announced it will slash its carbon emissions 80% by 2030 from 2005 levels, and the utility aims to completely eliminate carbon emissions from its supplies by 2050.

With a vote of 11-2, the council agreed to delay the measure until June 1, 2020. The council will hold stakeholder discussions following calls from Denver Mayor Michael Hancock and some business groups, including Xcel, to slow the process down.

The city council also pushed back a vote on the creation of an Office of Climate Action, Sustainability, and Resiliency. That decision will come in November, council members decided, and the office is expected to be operating by July 2020, the mayor said in a press release. It will combine personnel from the existing Office of Sustainability and the Denver Department of Public Health and Environment. Under the agreement between the mayor and the council, Hancock pledged to propose an additional $8 million next year to expand efforts to reduce greenhouse gas emissions.

As originally conceived, the climate action office would be funded by the proposed energy tax and would be responsible for doling out the tax revenues for initiatives such as electric vehicle infrastructure, climate change adaptation, workforce development programs and incentives for homeowners to adopt energy efficiency measures and invest in solar panels and battery storage.

If the council approves the proposed energy tax, it would require approval by voters in the November 2020 election.