Fifty-Five Organizations Call on Gov. Newsom to Veto Bill Weakening His Landmark Refinery Price Gouging Bill, says Consumer Watchdog

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Sep 21, 2023, 06:00 ET

LOS ANGELES, Sept. 21, 2023 /PRNewswire/ -- Fifty-five organizations have sent a letter to Governor Newsom urging him to veto SB 842 (Bradford), legislation that would make it more cumbersome to assess and control price spikes consumers face at the pump during oil refinery maintenance periods. This bill undermines SBX 1-2, legislation championed by Governor Gavin Newsom to create regulatory oversight for the state's refiners, after California drivers faced record prices at the pump in 2022.

Maintenance periods have strategically been used by refiners as moments to spike prices for drivers, providing the rationale behind adding more robust regulatory oversight during those periods within SBX 1-2. SB 842 limits the ability of the state to prevent unnecessary refinery maintenance.

Letter co-signers include Consumer Watchdog, Elected Officials to Protect America (EOPA), Greenpeace USA, the Center for Biological Diversity, Climate First: Replacing Oil & Gas (CFROG), Climate Hawks Vote, Environmental Working Group, San Francisco Bay Physicians for Social Responsibility, Stand.earth, Sunflower Alliance, and many others.

SB 842, as it stands, weakens a key provision within SBX 1-2, which after being passed and signed into law in March created a Division of Petroleum Market Oversight within the California Energy Commision. A "gut and amend" effort subject to no substantive public oversight or legislative debate, SB 842 now goes to the Governor's desk for consideration, having until October 14 to either veto or sign the bill, or do nothing and then the bill becomes law.

"At the beginning of 2023, you and the California Legislature made history by passing the Price Gouging Penalty (SBX 1-2), a landmark bill to hold the oil industry accountable for raising gasoline prices for Californians amid record profits," the letter reads. "Thanks to your leadership, the bill was passed and signed, marking a historic victory for everyday Californians over corporate greed."

"SB 842 would prevent the California Energy Commission from stopping unnecessary refinery maintenance without consulting with industry stakeholders and the Department of Industrial Relations," the letter continues. "The bill, which was initially a homelessness initiative, was gutted and amended at the last minute, and as a result was able to slip by under that radar with only the Western States Petroleum Association (WSPA) listed in support."

That additional layer of review would be overseen by the California Department of Industrial Relations, potentially serving as a way to slow down or stave off consumer protections in a proverbial regulatory oversight death by 1,000 cuts. What the groups signing onto the letter called an "11th hour attack from Big Oil to upend California's Price Gouging Penalty" passed unanimously in the Assembly and on a 26-6 count (with 8 abstaining from voting) in the Senate.

Having passed in both chambers, the legislation now awaits Newsom's signature.

"With gasoline prices rising past $6 in LA County, this is no time for the state to take its foot off the gas in the fight to stop price spikes," said Jamie Court, president of Consumer Watchdog. "Governor Newsom should veto this outrageous power grab by Big Oil."

SB 842's passage comes as prices at the pump are back on the rise in 2023, starting the year at an average price of $4.32 per gallon and now sitting at $5.55 per gallon. Further, gasoline prices in California are currently $1.67 per gallon more than U.S. gasoline prices at-large, with new state reporting showing that refinery margins have doubled since the beginning of the year, sitting at $1.20 per gallon.

A full copy of the letter is linked here.

SOURCE Consumer Watchdog