'Energy' tax break begins on Thursday

By Michael Davis

Matt Riner isn't exactly sure what to expect this weekend when a new sales tax holiday begins, but he's ready.

Beginning Thursday, Georgians buying some home appliances will get a tax break if those products bear the Energy Star label. The holiday relieves the state sales tax burden on Energy Star ceiling fans, dishwashers, air conditioners, refrigerators, thermostats, dehumidifiers and compact fluorescent light bulbs.

Energy Star is a government designation for appliances deemed to use less energy and other resources to operate, save energy consumers money, and have less impact on the environment. The class covers about 40 types of products that use 10 to 50 percent less energy and water, according to Energy Star.

"This is the first time they've ever had this, so I guess it'll be trial and error," said Riner, the proprietor of Riner Appliances in McDonough. He's not sure whether he'll sell more appliances than typical, but he said he can get more if necessary.

Energy Star products typically cost 2 to 3 percent more than their traditional counterparts, Riner said. The state sales tax exemption removes a 4 percent tax from purchases of up to $1,500, according to the state Department of Revenue. "Whatever you're saving this weekend would about pay for itself," Riner said.

The Sears store in SouthLake Mall in Morrow, however, is expecting strong sales.

"We do carry a line of high efficiency equipment," said manager Cynthia McKee. McKee singled out the Kenmore HE4t front-load clothes washer as an example of such an efficient machine. A traditional washer uses 33 gallons of water, but the HE4t uses only 14 gallons.

The store will not have any extra hours and has not had to order more inventory.

"Right now we do have an adequate amount," McKee said.

The holiday was quietly established during the last legislative session, on the last night, by Newnan Republican, state Rep. Lynn Smith. For the last several years, Georgia has also had an exemption for school supplies and some computers and clothing during a weekend prior to the start of many of the state's school districts.

"Who would've guessed we would have had the kind of hurricane season we have had," Smith said Tuesday. She said her first intentions with the bill were to encourage water conservation through the use of Energy Star products, but energy conservation is just as important. "It's a double win-win," she said.

She plans to expand the holiday's scope next year, when the holiday is up for renewal.

Darryl Jordan, D-Riverdale, said he would be capitalizing on the holiday and buy a new energy efficient thermostat.

Given the expectation of rising gas bills this winter, he said, "it's kind of hitting at an excellent time."

But as energy costs continue to rise in the aftermath of hurricanes Katrina and Rita last month, and refineries struggle to come back on line, winter heating bills are expected to be as much as 70 percent higher or more, Georgia Public Service Commission Chairwoman Angela Speir said in a statement Tuesday.

"This increase is a substantial problem for all consumers, but it is especially difficult for low-income consumers and senior citizens on fixed incomes," Speir said.

The PSC on Tuesday approved a $6 million expenditure from its Universal Service Fund to back up state low-income energy grants, which help supplement home heating bills for the poor and elderly. Commissioner David Burgess said there would be enough money to help about 27,000 households, but up to 100,000 could qualify.

Burgess said the problem "is bigger than the PSC. We need from help from the industry and the state and national government. This is a crisis."

The hurricanes downed several of the nation's oil refineries, which supply pipelines of gasoline and natural gas to Georgia. In the aftermath of Katrina, pipelines disrupted by the storm created a run on gas that tapped out many stations, and sent prices soaring over $5 a gallon in many areas.

Over the past weekend, when Gov. Sonny Perdue's month-long gas tax moratorium ended, prices steadily rose again to hover around $3 a gallon at many stations, now higher than the national average, which AAA Auto Club reports as $2.94. Georgia's average price, the club said, was $3.07 on Tuesday.

AAA Auto Club South Division Manager Garrett Townsend said it has been three to four months since metro Atlanta prices topped the national average. That's when new fuel blend requirements spiked prices, he said.

"We're hoping that when some of the refineries are back at 100 percent capacity, prices will plateau and we will start to see a decrease, but that may be several months," he said.

The Georgia Association of Petroleum Retailers' Tom Smith was careful not to predict how far prices might slide back. "I do look for it to come down some, but I don't look for it to come down to where it was," he said.

Smith said that the diesel fuel supply has taken a particularly hard hit, as government vehicles, especially emergency vehicles, get first priority. AAA reported Georgia's average diesel fuel price Tuesday was $3.26 a gallon, while the national average was $3.15.

"We've got an awful lot of government agencies depending on diesel ... they're using a majority of the diesel fuel available to the market today," Smith said.

News Daily staff writers Ed Brock, Justin Boron and the Associated Press contributed to this story.