Newsom’s Gas Price Bill Passes Assembly, but Senate Plan Still Uncertain

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The Santa Barbara Independent republishes stories from CalMatters.org on state and local issues impacting readers in Santa Barbara County.

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The California Senate leader, who struck up a surprising public spat with Gov. Gavin Newsom over his special session on gasoline price spikes, finally agreed Tuesday to call his members back to Sacramento after the Assembly advanced the governor’s proposal.

Senate President Pro Tem Mike McGuire, a Healdsburg Democrat, announced that the Senate would convene next week to consider the measure on fuel inventory, with plans to pass it by next Friday.

“The Senate intends to work quickly and efficiently so that we can get Californians the relief they deserve at the pump,” McGuire said in a statement.

Hours earlier, the Assembly passed Assembly Bill X2-1, which would require oil refineries to maintain additional inventory that they can draw from during maintenance periods to sustain a steady supply for drivers, on a 44-17 vote. A few moderate Democrats joined Republicans in opposition over fears that the plan would instead drive up prices at the pump by restricting supply, while many others withheld their vote.

“Californians face rising costs. That is exactly the point,” Assemblymember Gregg Hart, a Santa Barbara Democrat who carried the bill, told his colleagues on the floor. “We cannot continue with the status quo.”

Newsom celebrated the Assembly vote in a statement where he slammed the oil industry for price spikes that he said cost Californians more than $2 billion last year, “forcing many families to make tough decisions like choosing between fueling up or putting food on the table. This has to end, and with the legislature’s support, we’ll get this done for California families.”

The Assembly was under tremendous pressure to act for the past month.

Newsom pushed the Legislature to take up his refinery maintenance proposal in the final days of the regular session, but Assembly Speaker Robert Rivas, a Salinas Democrat, balked — responding not just to concerns among his members that the plan could drive up prices at the pump, but also growing frustration over the governor’s frequent strategy of jamming lawmakers on major policy changes at the last minute.

With the added leverage of hundreds of bills just passed by the Legislature on his desk, Newsom immediately called a special session, eager to score a quick win on what has become a signature issue before the oil industry could regroup.

Senate Democrats had been prepared to support new inventory requirements for refineries before the end of the regular legislative session on Aug. 31, but McGuire initially refused to convene a special session, reflecting a bubbling tension with the Assembly over the earlier legislation.

After meeting with the governor, he softened his position, committing to consider any measure that made it through the Assembly. A spokesperson for McGuire declined multiple interview requests.

Rivas told reporters following the Assembly vote that he had not been in touch with McGuire about the Senate’s plans. He defended taking additional time through the special session to consider and amend Newsom’s proposal, though he acknowledged that more changes are expected in the Senate and his members would likely need to return to the Capitol in the coming weeks to vote again.

“We have a better bill today than we did at the end of session,” Rivas said.

The past few weeks appear to have soothed some of the Democratic anxieties over further regulating California’s refineries, despite a public rebuke by the governors of Arizona and Nevada and resistance from labor allies who warned that it could put workers’ safety at risk and cost them jobs.

Several economists endorsed Newsom’s plan as a reasonable approach to smoothing out price spikes during planned seasonal maintenance, albeit with reservations that it would not solve the larger problem of the stubbornly high cost of gasoline in the state.

At a committee hearing last week, Assemblymember Cottie Petrie-Norris, the Irvine Democrat leading the proceedings, scolded an oil lobbyist from the dais that the industry had failed to present a case refuting arguments that the proposal could save California drivers billions of dollars annually.

The bill still faces uniform opposition from legislative Republicans, who have warned that increasing regulations could eventually chase refiners out of the state altogether.

“The truth is the government is the one who’s gouging us,” Assembly Republican Leader James Gallagher of Chico said during the floor debate today, urging his colleagues to instead suspend the state gas tax. “You’re not looking out for the consumers.”

But the GOP is simultaneously gleeful at Newsom’s decision to pull focus on California’s high gas prices in the midst of an election. The California Republican Party on Monday issued a warning to eight lawmakers running in swing districts that if they support the measure, “California Republicans will spend the next 36 days making sure voters know who is to blame for their ever-increasing gas prices.”

Six of those Democrats — Pilar Schiavo of the Santa Clarita Valley, Sabrina Cervantes of Corona, Sharon Quirk-Silva of La Palma, Esmeralda Soria of Merced, Corey Jackson of Moreno Valley and Jacqui Irwin of Thousand Oaks — are in the Assembly.

Only Jackson voted for the bill today, while Soria opposed it. Schiavo was absent from session and the remaining members abstained.