BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2076
                                                                  Page  1

          Date of Hearing:   May 24, 2000

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                              Carole Migden, Chairwoman

                    AB 2076 (Shelley) - As Amended:  May 18, 2000 

          Policy Committee:                               
          TransportationVote:10-7
                        Utilities & Commerce                              
          9-1

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill requires the California Energy Commission (CEC) to  
          examine the feasibility of operating a strategic gasoline  
          reserve for the state, and requires the CEC, if it finds it  
          feasible, to request the Legislature provide specific statutory  
          authority and funding for establishment of such a reserve.

           FISCAL EFFECT  

          Moderate costs, about $200,000 in FY 2000-01, to the CEC to  
          conduct the feasibility study, to report its findings, and to  
          request statutory authority and funding needed to establish the  
          reserve.  (Energy Resource Program Fund.)

           COMMENTS  

           Rationale  . The author argues that California should be exploring  
          ways to affect the supply and demand for motor vehicle fuel in  
          California.  The current refinery capacity in California is such  
          that total capacity supply just meets the ongoing demand in the  
          state.  If there is any significant interruption in this supply,  
          such as a temporary refinery shutdown, demand outpaces supply  
          and gasoline prices spike.  Within three years, even without any  
          interrupted supply, demand will start to permanently outpace  
          supply.  The author believes a strategic gasoline reserve,  
          presumably compiled during times of higher production or lower  
          demand, should be examined as an option for dealing with this  
          imbalance.









                                                                  AB 2076
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           Analysis Prepared by  :    Steve Archibald / APPR. / (916)319-2081