California Gov. Gavin Newsom (D) is keeping lawmakers in Sacramento beyond the legislative deadline in an attempt to ease gas price spikes after his effort to pass a broader package failed.
Newsom called a special session of the legislature to consider his proposal to require oil refiners to carry a reserve. The session officially began Saturday, according to the proclamation, when lawmakers were scheduled to conclude the year’s legislative session. But it’s unclear when it will start in earnest.
“It should be common sense for gas refineries to plan ahead and backfill supplies when they go down for maintenance to avoid price spikes,” Newsom said in a statement Saturday. “But these price spikes are actually profit spikes for Big Oil, and they’re using the same old scare tactics to maintain the status quo.”
Newsom wants to require California’s petroleum refiners to demonstrate to the California Energy Commission that their resupply plans and arrangements are adequate to address the loss in production during refinery maintenance. He wants to authorize the CEC to require petroleum refiners to maintain enough fuel inventory to stabilize fuel supply and to impose penalties on refiners who do not comply.
“We look forward to working with our Legislative partners during the special session to act on this urgently needed legislation,” Newsom said. “Calling the session now allows the Legislature to begin that work immediately so that the state can resolve this important matter to establish the necessary rules to prevent price spikes next year and beyond.”
Newsom had raised the possibility of a special session earlier this week to help push lawmakers to pass a package of bills, including his refiner proposals. Others included a measure that would speed up the permitting process for clean energy infrastructure; a bill that would require utilities to file wildfire mitigation plans once every four years; and a bill that would help localities finance more projects to address climate change.
Newsom also wants to address rising electricity bills. According to the California Public Utilities Commission’s Public Advocates Office, residential rates for Pacific Gas & Electric, the state’s largest electric utility, have increased 110% over the last decade.
To alleviate higher energy bills, Newsom backed a measure to return about $500 million to ratepayers from solar, self-generation and school energy efficiency programs. But that measure was pulled Friday by Assemblymember Cottie Petrie-Norris (D), the measure’s sponsor, before a committee vote, CalMatters reported.
Another bill to require the state public utilities commission to devise a framework for studying and tracking residential energy costs was approved Saturday.
Newsom signed legislation last year in a special session called to respond to record-high gas prices in 2022 that empowered the California Energy Commission to cap oil industry profits and created an independent watchdog within the commission to get information from the industry, including subpoena power.
The watchdog, formally known as the Division of Petroleum Market Oversight, found that higher gasoline prices were caused by refinery maintenance, which disrupted supply as well as suspicious market transactions, among other factors.
In a January letter to the governor, the watchdog outlined proposals to reform California’s gasoline spot market, which included a minimum inventory requirement to prevent price spikes due to lack of stable supply.