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California's plan to take on big oil? A watchdog group for gas prices

The new proposal will hand the power over to state regulators that are appointed by the governor.

SACRAMENTO, Calif. — Governor Gavin Newsom says he’s struck a deal with lawmakers after months of promising to take on big oil. The plan is to create a watchdog group to monitor gas prices, a deal very different from what he originally promised.

The new proposal gives the power to the California Energy Commission to create a cap on how much oil companies are allowed to profit. The commission would also have the ability to fine the companies when they go over that cap.

In October, gas prices in California reached a record average of $6.42. That was $2.60 above the national average. 

"They're taking advantage of you, every single one of you," Newsom said in October.

Newsom called for a special session to penalize oil companies. The plan took several forms, but Newsom says he’s struck a deal with top Democratic lawmakers on the latest one.

“I'm actually very hopeful. I think this was the right result,” said Consumer Watchdog President Jamie Court. 

Court advocated for a price gouging penalty since the onset. He says handing control over to the California Energy Commission to determine a fine is better than lawmakers because the commissioners are appointed, not elected. 

“Elected officials fear the oil industry much more than non-elected officials," said Court. "The appointees are going to be people who take a close look at the numbers, judge in a reasonable way, how much oil refiners should make.”

Those commissioners are appointed by Governor Gavin Newsom.

“The idea of giving it over to faceless bureaucrats is pretty asinine," said Republican Assemblymember Devon Mathis

Mathis sits on the special session committee. He says either way- lawmaker control or commission control- the plan won't work. 

“Anytime you increase taxes, you're increasing costs," said Mathis. "That's just an economical fact.”

Mathis points to inflation and the environmental policies in place that make refining gas in California more expensive. 

The bill would require refiners to provide information on their profits, and would give the commission power to subpoena the refiners to provide more data that could reveal patterns of misconduct. 

“The oil industry is very powerful, and they are going to do everything they can to stop this and giving them less time to stop. It is a good thing for us,” said Court.

Court says lawmakers are going to try to speed through this bill and get it on the governor’s desk by next week before lawmakers go on break in April. Because it’s a special session bill, it would go into effect just 90 days after the governor signs it.


California Gas Prices | Gas prices trending up in Sacramento

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