SACRAMENTO, Calif. — UPDATE: The California State Assembly voted 41-16 to pass the bill shortly after noon Monday, sending it to Newsom's desk for a signature.
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The California State Senate passed Governor Gavin Newsom’s proposal to stop rising gas prices in the state.
ABX2-1 requires oil refineries to maintain a minimum inventory level to decrease price spikes during peak driving months, and to monitor when refineries undergo either planned or unplanned maintenance.
“Californians are one step closer to getting the protections they need against Big Oil’s price spikes. I’m grateful to our partners in the Senate for helping to save Californians money at the pump. Price spikes cost consumers more than $2 billion last year, and we’re taking the action necessary to help put this to an end,” said Newsom in a statement.
Californians pay some of the highest prices at the pump. According to data from AAA, California’s average gas price is $4.66, over a dollar more than the national average.
The bill was inspired by findings from the state's Division of Petroleum Market Oversight, which demonstrated that gas price spikes are largely caused by increases in global crude oil prices and unplanned refinery outages.
“Rising gas prices impact everyone in California and nearly every facet of our lives – from how much we’re paying at the pump to the cost of what we’re buying at the store. Putting mechanisms in place to help prevent costs from spiking and sending family budgets into a tailspin benefits us all," said Senate pro tem Mike McGuire in a statement.
At the Special Senate floor session, the measure passed with a vote of 23-9, with several Democrats abstaining.
State Senator Dave Min from Irvine, was one of the Democrats who abstained from voting. He released a statement saying he has concerns about whether the proposals would accomplish the goal of lowering gas prices for Californians.
“These concerns deserve a fair and full vetting,” he said.
Gas companies like Chevron oppose Newsom’s gas bill. Chevron provided ABC10 with the following statement in response to today's vote.
"We are disappointed by California lawmakers’ approval of ABx2-1. This is another example of political decision-making that ignores the realities of the market and needs of consumers in California and neighboring states. We believe ABx2-1 will likely raise prices for drivers in California, Arizona and Nevada, and risk the safety and reliability of our refineries.
Despite California policymakers ignoring industry’s input in passing this bill, Chevron is willing to continue engaging with Sacramento to help solve California’s energy challenges. We urge California state leaders to build a sustainable framework for communication and collaboration with industry instead of continuing to attempt to impose regulations driven by political agendas."
The bill would require the California Energy Commission, in collaboration with an advisory committee, to develop the minimum requirement standards. They would also be in charge of overseeing its implementation. Refineries that do not comply with the proposed standards could have civil penalties.
Senate Republicans tried to pass another bill at the special session that would have suspended the state’s gas tax, but the measure was not brought up for a vote.
“I’m deeply disappointed in the legislature’s decision to continue ignoring real solutions for lowering gas prices. It is our legislative duty to support struggling families, and one critical step we can take is to provide immediate relief from the burdensome state excise tax,” said Rosilicie Ochoa-Bogh in a statement.
The Western States Petroleum Association said this is an effort to intentionally raise prices, so Californians drive less.
“This bill is a signal to our industry that California is closed for business. We heard bipartisan concern that we need to have more competition in our industry, but we have gone from 30 refineries to nine and that is because of the decades of policies that have been put on the industry," said Julie Berge, who is the senior director of strategic communications with Western States Petroleum Association.
Last month, governors representing Nevada and Arizona, which import gas from California, sent a letter urging Newsom to reconsider the proposal. They said at the time they were concerned it could increase prices in their states.
ABX2-1 heads back to the Assembly for a final vote on Monday, Oct. 14.