Amended in Senate April 23, 2013

Amended in Senate April 1, 2013

Senate Bill No. 448

Introduced by Senator Leno

February 21, 2013

An act to add Section begin delete 25367 end delete begin insert 25356.5 end insert to the Public Resources Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

SB 448, as amended, Leno. Energy: petroleum supply and pricing.

Existing law establishes the State Energy Resources Conservation and Development Commission in the Natural Resources Agency, and specifies the powers and duties of the commission with respect to energy resources in the state. Under existing law, various provisions regulate petroleum supply and pricing. Existing law requires the commission to obtain and analyze monthly production reports prepared by the State Oil and Gas Supervisor under a specific provision. Existing law authorizes the State Lands Commission to enter into oil and gas leases for the extraction and removal of oil and gas deposits on state lands. Existing law requires the leases to include a royalty provision.

This bill would begin insert require the State Energy Resources Conservation and Development Commission end insert , upon appropriation by the Legislature from moneys generated by the collection of royalty payments from the oil and gas leases, begin delete establish the Office of Price Investigation and Manipulation Prevention in the State Energy Resources Conservation and Development Commission and would require the office end delete to identify begin delete fuel end delete begin insert motor vehicle fuel end insert price manipulation, establish a methodology to determine whether begin insert motor vehicle end insert begin insert end insert fuel price manipulation is occurring, and analyze data and investigate for suspected begin insert motor vehicle end insert begin insert end insert fuel price manipulation. The bill would require the begin delete office end delete begin insert commission end insert , in consultation with the State Air Resources Board and other relevant state agencies, to prepare and submit to the Legislature a report on further legislative recommendations to limit the amount of price volatility and comparative price increase in the California begin delete transportation end delete begin insert motor vehicle end insert fuel market.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 25367 is added to the Public Resources
Code, to read:

25367.  

(a) The Office of Price Investigation and Manipulation
Prevention is hereby established in the commission.

(b) The office shall do all of the following:

end delete

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 25356.5 is added to the end insert begin insert Public Resources
Code end insert begin insert , to read: end insert

begin insert

begin insert 25356.5. end insert   

end insert

begin insert (a) end insert begin insert   end insert begin insert In addition to the requirements of section 25356,
the commission end insert

(1) Establish a definition for begin delete transportation end delete begin insert motor vehicle end insert fuel
market manipulation.

(2) Identify data necessary to determine whether begin insert motor vehicle end insert
fuel pricing manipulation is occurring that includes all of the
following:

(A) Individual begin insert motor vehicle end insert fuel producer data, including all
of the following:

(i) Production or throughput data.

(ii) Emission data or operational data.

(iii) Sales volumes.

(iv) Price.

(B) Marketwide pricing data.

(3) Establish an analytical methodology necessary to evaluate
whether begin insert motor vehicle end insert fuel price manipulation is occurring that
includes both of the following:

(A) Producer level analysis.

(B) Marketwide analysis, comparing real time prices to expected
prices based on modeling output.

(4) Analyze the data and investigate for suspected begin insert end insert begin insert motor vehicle end insert
fuel price manipulation using both of the following:

(A) Producer level analysis.

(B) Marketwide analysis.

begin delete

(c)

end delete

begin insert (b) end insert  The begin delete office end delete begin insert commission end insert , in consultation with the State Air
Resources Board and other relevant state agencies, shall begin delete prepare
and submit to the Legislature, pursuant to Section 9795 of the
Government Code, end delete begin insert include in the biennial assessment specified in
subdivision (b) of Section 25358 end insert a report on further legislative
recommendations to limit the amount of price volatility and
comparative price increase in the California begin delete transportation end delete begin insert motor
vehicle end insert fuel market. The report shall include an evaluation of
strategies doing all of the following:

begin delete

(1) Increasing fuel diversification.

end delete begin delete

(2) Reducing overall demand of gasoline and diesel.

end delete begin delete

(3)

end delete

begin insert (1) end insert  Increasing begin insert end insert begin insert motor vehicle end insert fuel storage.

begin delete

(4)

end delete

begin insert (2) end insert  Leveraging the state’s purchasing power related to the state’s
fleet.

begin delete

(5)

end delete

begin insert (3) end insert  Increasing timely imports of begin insert end insert begin insert motor vehicle end insert fuels during price
swings.

begin delete

(d) Upon

end delete

begin insert (c) end insert begin insert   end insert begin insert The commission shall implement this section upon end insert
appropriation by the Legislature begin delete from end delete begin insert of end insert moneys generated by the
collection of royalty payments from oil and gas leases entered into
pursuant to Article 2 (commencing with Section 6826) of Chapter
3 of Part 2 of Division begin delete 6, the commission shall implement this
section. end delete begin insert 6. end insert