(July 7, 2015) Fuel costs for California businesses may increase if a job killer bill passed yesterday by the Assembly Utilities and Commerce Committee is signed into law.
SB 350 (de León; D-Los Angeles) potentially increases costs and burdens on all Californians by mandating an arbitrary and unrealistic reduction of petroleum use by 50%, increasing the current Renewable Portfolio Standard to 50% and increasing energy efficiency in buildings by 50% — all by 2030 without regard to the impact on individuals, jobs and the economy.
Increased Fuel/Energy Costs
SB 350 provides broad and undefined authority to the California Air Resources Board (CARB) to adopt regulations, standards and specifications “in furtherance of achieving a reduction of petroleum use in motor vehicles by 50% by January 1, 2030….” This bill does not specify whether CARB should adopt and implement policies that have an impact on the demand for petroleum fuels, or whether it should adopt and implement policies that affect the supply of transportation fuels. SB 350 provides a blank check delegation of authority to CARB, and in doing so, gives no consideration to the cost or job loss associated with this to-be-determined regulation.
Most of California’s businesses and families rely on petroleum for their day-to-day transportation needs and SB 350 may compromise the availability of transportation fuels. The California Energy Commission reported in its 2014 Integrated Energy Policy Report that 92% of all transportation fuels in California are made up of petroleum. Businesses rely on petroleum to transport goods and people, and it is unclear how this arbitrary goal will be met. Will there be a 50% straight reduction in the production of petroleum in the state? Will we have to ration petroleum to achieve the 50% reduction? At what cost?
In addition to the 50% reduction in petroleum, SB 350 also seeks to increase the current Renewable Portfolio standard from 33% to 50% as well as increase energy efficiency in buildings to 50%. Both policies will significantly increase costs to ratepayers. California’s energy price per kilowatt hour is among the highest in the nation and our energy efficiency standards are among the strongest. Upgrading current energy efficiency standards while increasing the cost of energy makes California’s businesses less competitive.
SB 350 passed Assembly Utilities and Commerce 9-5.
Ayes: Bonilla (D-Concord), Burke (D-Inglewood), Eggman (D-Stockton), Garcia (D-Coachella), Quirk (D-Hayward), Rendon (D-Lakewood), Santiago (D-Los Angeles), Ting (D-San Francisco), Williams (D-Carpinteria).
Noes: Achadjian (R-San Luis Obispo), Hadley (R-Torrance), Hernández (D-West Covina), Obernolte (R-Big Bear Valley), Patterson (R-Fresno).
Absent, Abstaining, or Not Voting: Dahle (R-Bieber),
The bill now goes to the Assembly Natural Resources Committee, where it is likely be considered on July 13.