CEC Holds Workshops on Implementing Senate Bill X1-2: the California Gas Price Gouging and Transparency Law

For Immediate Release: November 1, 2023

Sacramento – The California Energy Commission’s (CEC) is holding workshops in November as part of implementing a law that enhances the state’s ability to understand and respond to gasoline price spikes.

In March 2023, Governor Gavin Newsom signed Senate Bill X1-2 (the California Gas Price Gouging and Transparency Law) to protect Californians from experiencing price gouging at the pump by oil companies.

The law:

• Authorizes the CEC to set a maximum gross gasoline refining margin and a penalty for refiners that exceed it.
• Increases transparency by providing new data collection authority and creates an independent division to monitor petroleum markets and flag potential market manipulation.
• Requires an assessment of transportation fuel demand and discussion of methods to ensure an adequate, affordable, and reliable fuel supply as the state transitions away from petroleum fuels.

This bill, along with SB 1322, provided new tools and expanded access to critical information.

SB X1-2 includes transparency and oversight measures that increases oversight of the petroleum industry and additional resources to support long-term planning efforts. Such oversight was established by the Petroleum Industry Information Reporting Act, which requires qualifying petroleum industry companies to submit data to the CEC.

The workshops will:

• Kick off discussions on a rulemaking focusing on refiner maintenance and SB X1-2’s directive that the CEC consider imposing requirements on the timing of refinery maintenance to minimize the impact of production losses on fuel prices. Commissioners voted to start the rulemaking at an October 18 business meeting.
• Present the draft transportation fuels assessment.
• Gather input about the approach to analyze the effects of a margin penalty before setting any penalty. At the October 18 business meeting, the commissioners voted to start a proceeding to look at whether to establish a maximum margin and penalty.  

The analysis, which is being led by the CEC’s Energy Assessments Division, will look at the impacts and benefits of assessing a civil penalty on refiners that exceed a defined margin threshold. The process would require a staff recommendation that would be presented to the commissioners for consideration at a business meeting.

The newly formed Division of Petroleum Market Oversight (DPMO), which is an independent agency within the CEC, is still in the early stages of analyzing the petroleum market in California. In response to the gasoline price spikes in September 2023, the DPMO sent a public letter to Governor Newsom and state legislative leaders identifying flaws in the California gasoline market.

What and When:

• SB X1-2 and SB 1322 Rulemaking Proceeding - 1:30 to 3:30 p.m. Friday, Nov. 3
• Draft SB X1-2 Transportation Fuels Assessment – 1 to 4 p.m. Tuesday, Nov. 14
• Analytical Approach for the Refiner Margin and Penalty - 9 a.m. to noon, Tuesday, Nov. 28

How to participate:

Details for each event will be posted at the SB X1-2 implementation webpage at: https://www.energy.ca.gov/proceeding/senate-bill-x1-2-implementation

About the California Energy Commission

The California Energy Commission is leading the state to a 100 percent clean energy future. It has seven core responsibilities: developing renewable energy, transforming transportation, increasing energy efficiency, investing in energy innovation, advancing state energy policy, certifying thermal power plants, and preparing for energy emergencies.