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California Energy Commission moves forward on Big Oil inquiry

Gas prices at a gas station in San Diego on Oct. 20, 2023.
Adriana Heldiz
/
CalMatters
Gas prices at a gas station in San Diego on Oct. 20, 2023.

The commission is starting to put into effect the gas price gouging and transparency bill Gov. Gavin Newsom signed into law last spring.

The California Energy Commission isn’t necessarily an agency that the public, or even reporters, follow for its every twist and turn.

But it does have a wide-ranging purview and its decisions can affect people’s daily lives, not to mention the industries being regulated.

For example, last week, it voted to begin proceedings for two key initiatives that Gov. Gavin Newsom says could lower prices at the pump. The actions were outlined in the gas price gouging and transparency law that Newsom signed in March.

Before holding its vote, commission members and staff described the first of two initiatives — which enables the commission to begin looking into oil company profit caps and to potentially penalize those who exceed that cap — as “complicated” and a “monumental task.”

Drew Bohan, the commission’s executive director, said agreeing to move forward allows the commission to further evaluate gas prices. It will also permit stakeholders, including environmentalists and oil companies, to weigh in and authorize staff to develop recommendations.

But Sarah Taylor, an associate counsel for the trade group Western States Petroleum Association, unsuccessfully urged the commissioners during the meeting to “do its due diligence” before rushing to a “decision that will likely impact every Californian.”

Given the wider scope of data that their newly formed watchdog group can collect, the commissioners also voted to start a rulemaking process to investigate refinery maintenance. This may lead to the commission imposing time limits to lessen the impact of production losses.

The trade group also objected to the motion in vain.

  • Taylor: “Data has the potential to move markets, place our in-state refineries at a competitive disadvantage and could have a monumental impact on our economy at a time of increasing global volatility. Expediting this process does not help any of us… Data would likely provide a distorted view of how the industry operates, potentially worsening a situation the CEC is tasked with avoiding.”

The commission’s actions on Oct. 18 won’t do much to immediately lower prices at the pump (as of Sunday, AAA reports the average price per gallon in California was $5.45, higher than the national average by $1.90), but they’re key to ensuring that Newsom’s law remains effective. As for next steps, the commission is expected to host a series of workshops, public hearings and stakeholder meetings in November.

Republicans in the Legislature say there’s a much quicker fix: Cutting the state gas tax, and they’re still imploring Newsom to call a special session to do just that.

Outdoor pools: The Energy Commission also announced that it’s setting new standards for swimming pools, which use and “waste a lot of energy,” said commissioner Andrew McAllister in a video.

Starting in September 2025, owners must have pool equipment, namely internet-connected smart pool pumps, that can adjust their operations during non-peak energy hours. According to Politico, the pumps “cost about $70 more than regular ones, but users are expected to save $100 a month by buying power during the day, when it’s cheaper.”

If every pool owner in California switches to a controller that offers flexible energy use, the commission estimates that the load shift would be the “the equivalent to removing 85,000 gasoline-powered cars off the road,” and consumer savings would add up to about $1,131 over the lifetime of the pool controller.

CalMatters is a nonprofit, nonpartisan media venture explaining California policies and politics.