BILL NUMBER: SB 448 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 5, 2013
AMENDED IN SENATE MAY 24, 2013
AMENDED IN SENATE MAY 6, 2013
AMENDED IN SENATE APRIL 23, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senator Leno
( Coauthor: Assembly Member
Nazarian )
FEBRUARY 21, 2013
An act to add Sections 25351 and 25356.5 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 require the State Energy Resources Conservation
and Development Commission, or the commission, upon appropriation by
the Legislature of moneys generated by the collection of royalty
payments from the oil and gas leases, to identify data currently
collected or developed by the commission and to establish a
methodology to analyze whether fuel price manipulation has occurred
or is occurring. The bill would require the commission to notify the
appropriate state or federal agencies if a probable market
manipulation has occurred or is occurring. The bill would require the
commission, in consultation with the State Air Resources Board and
other relevant state agencies, to prepare and submit to the
Legislature include in its integrated energy policy
report a report on further legislative recommendations to limit
the amount of price volatility and comparative price increase in the
California 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:
SECTION 1. Section 25351 is added to the Public Resources Code, to
read:
25351. The Legislature finds and declares all of the following:
(a) California is in the process of creating investments in, and
deployment of, lower carbon and more sustainable fuel options for
consumers.
(b) California's transition to a lower carbon and lower cost
transportation fuel mix can be threatened by illegal actions that
manipulate prices and make it difficult to understand the real impact
of new standards and regulations.
(c) It is the intent of the Legislature to implement policies that
protect consumers against market manipulation in the wholesale
markets for finished gas and diesel fuel and their refining
feedstocks.
(d) It is the intent of the Legislature to use existing resources
at the State Energy Resources Conservation and Development Commission
and develop additional expertise to prevent market manipulation.
(e) It is the intent of the Legislature that the authority under
this act be complementary to the authority of other state and federal
agencies.
(f) It is the intent of the Legislature that the State Energy
Resources Conservation and Development Commission work with other
state and federal agencies to identify activities that may indicate
market manipulation and investigate those activities.
SEC. 2. Section 25356.5 is added to the Public Resources Code, to
read:
25356.5. (a) In addition to the requirements of Section 25356,
and in consultation with relevant state and federal agencies, the
commission shall do all of the following:
(1) Identify data currently collected or developed by the
commission that is important to determine whether improper fuel price
manipulation has occurred or is occurring. The data may include all
of the following:
(A) Individual fuel producer data and importer and bulk trader
data, including all of the following:
(i) Production or throughput data.
(ii) Emission data or operational data.
(iii) Sales, storage, and transfer volumes.
(iv) Price.
(B) Observed and forecasted wholesale market prices.
(2) Establish an analytical methodology for use in evaluating data
collected by the commission to inform whether fuel price
manipulation has occurred or is occurring. The methodology may, at
the discretion of the commission, be targeted to analyzing data on
transactions and market conditions most likely connected with fuel
pricing manipulation, and may include, but shall not be limited to,
both of the following:
(A) Producer, importer, and bulk trader level analysis.
(B) Marketwide analysis, comparing real time prices to expected
prices based on published forecasts or modeling output.
(3) Analyze the data under paragraph (1) that is in the possession
of the commission and investigate for suspected fuel price
manipulation in both of the following:
(A) Individual business level.
(B) Marketwide producer level, taking into account the actions of
multiple producers.
(4) Identify data that is not in possession of the commission and
is considered important to determine whether fuel pricing
manipulation has occurred or is occurring. The commission shall
furnish a list of the data to the Legislature upon request.
(b) The commission, in consultation with the State Air Resources
Board and other relevant state agencies, shall include in the
first biennial assessment specified in subdivision (b) of
integrated energy policy report pursuant to
Section 25358 following enactment of this section
25302, a report on further legislative
recommendations to limit the amount of price volatility and
comparative price increase in the California fuel market. The report
shall include an evaluation of strategies for doing all of the
following:
(1) Increasing storage of fuels produced in the state.
(2) Leveraging the state's purchasing power related to the state's
fleet.
(3) Increasing timely imports of fuels during emergency conditions
and rapid price volatility.
(4) Coordinating the timing of maintenance and shutdown activities
at in-state fuel production facilities.
(c) For purposes of this section, "fuel" means finished gasoline
and diesel and their refining feedstocks derived from petroleum.
(d) The commission shall implement this section upon appropriation
by the Legislature of 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 6.
(e) (1) Upon collection of the data and completion of the analyses
required under this section, if the data indicates that a probable
market manipulation has occurred or is occurring, the commission
shall notify the appropriate state or federal agencies of the
probable market manipulation.
(2) Nothing in this section shall require the commission to make
final findings or determinations that market manipulation has
occurred or is occurring.