BILL ANALYSIS
SB 1962
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Date of Hearing: July 6, 2000
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick Wright, Chair
SB 1962 (Costa) - As Amended: June 29, 2000
SENATE VOTE: 39-0
SUBJECT : Petroleum products: reports.
SUMMARY : Requires oil refiners and marketers to report
additional specific information to the California Energy
Commission (CEC). Specifically, this bill :
1)Defines unbranded fuel as gasoline and diesel fuel sold for
wholesale or retail distribution to consumers without
proprietary additives or marketing under an independent
refiner or integrated refining and marketing company brand
name or trademark.
1)Requires refiners to report monthly to CEC on imports and
sources of finished petroleum products and blendstocks,
exports and destinations of finished petroleum products and
blendstocks, and all unbranded gasoline sold by the refiner,
blender, or importer.
1)Requires major marketers to additionally report monthly to CEC
on sources of petroleum product receipts, inventories of
finished petroleum products and blendstocks by type,
distributions through branded and unbranded distribution
networks, and exports of finished petroleum products and
blendstocks, by type, from the state.
1)Requires CEC staff to include sales to unbranded retail
markets as part of their analysis of prices of petroleum
products.
1)Extends CEC and staff prohibitions regarding use of reported
information on petroleum products and blendstocks for any
other purposes except statistical purposes, publication of
information on petroleum products and blendstocks whereby the
reporting establishment or individual can be identified, and
permitting anyone other than CEC members and staff to examine
the reports providing the information on petroleum products
and blendstocks;
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1)Makes additional findings and declarations relative to
information and data on production and supplies of branded and
unbranded gasoline, diesel fuel and other distillates,
supplies of blendstocks used in the manufacturing of gasoline,
exports of finished gasoline, diesel fuel, and other refined
products, and exports of finished gasoline, diesel fuel, and
blendstocks.
EXISTING LAW:
1)Requires petroleum product refiners to submit monthly
information to CEC, including information on feedstock inputs,
origin of petroleum receipts, refinery outputs, refinery
stocks, and finished product supply and distribution.
1)Defines major marketer as any person who sells natural gas or
oil in amounts determined by CEC as having a major effect on
energy supplies.
1)Requires major marketers of petroleum products to provide
information to CEC on petroleum and petroleum product
receipts, inventories, and distributions.
1)Requires CEC to gather, analyze, and interpret information
submitted to it concerning motor fuel prices and any
significant changes in prices charged by the petroleum
industry for petroleum or petroleum products sold in
California and the reasons for those changes.
1)Makes information provided to CEC by petroleum product
refiners and major marketers confidential and subject to
disclosure and release only under certain circumstances.
FISCAL EFFECT : Unknown.
COMMENTS :
1)The author has introduced this bill to give CEC the authority
to track the production, sale, and distribution of unbranded
fuel, along with imports and exports of all gasoline, diesel
fuel, and blended fuel stocks. This additional information
will assist CEC in monitoring the production and supplies of
these fuels, as well as developing contingency plans to ensure
sufficient supplies of fuels are available for necessary
SB 1962
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services.
1)Police and fire departments, government agencies, farmers, and
small businesses are the primary consumers of unbranded fuel.
According to the sponsor, recent shortages in the supply of
unbranded fuels have driven prices beyond those of branded
fuels (fuels sold for wholesale or retail distribution
containing proprietary additives and marketed under a
marketing company brand name or trademark). The price
increases caused financial problems for these consumers
because they cannot cut back on the amounts of fuel they use
to deliver services or readily switch to alternative sources.
1)Existing law gives CEC authority to track price and supply
information on branded gasoline and diesel fuel in California.
CEC uses the data to produce reports and analysis on market
structures, trends, demand forecasts, and makes
recommendations on policy issues. Refiners and marketers are
required to report this information to CEC on a periodic
basis. Additionally, CEC is required to use this information
to develop a contingency plan every five years in the case of
energy shortages that pose a threat to public health or
safety. This plan includes the Emergency Fuel Allocation
Program. During a prolonged and widespread shortage, the
Governor may proclaim a state of emergency and order CEC to
implement a fuel set-aside program to ensure enough fuel is
available to continue necessary public services. The sponsor
argues the additional data this bill provides will give CEC a
more complete picture of available fuel supplies in the state
and the ability to plan better for contingencies.
1)An additional measure related to fuel supplies is SB 123
(Peace), which permits a branded gasoline franchise to
purchase the branded petroleum product from any location in
the franchiser's network. The object of that bill was to
address the increase in fuel prices by requiring refiners to
charge a uniform price to dealers supplied from each of the
refiners terminals. According to the Assembly Utilities and
Commerce Committee analysis, implementation of those
provisions could actually result in higher prices caused by a
lack of predictability in the gasoline market. This bill, by
contrast, addresses the issue of high fuel prices by
increasing the universe of data available on fuel prices and
supplies.
SB 1962
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REGISTERED SUPPORT / OPPOSITION :
Support
California Independent Oil Marketers Association (sponsor)
Opposition
None on file.
Analysis Prepared by : Jonathan Buttle / U. & C. / (916)
319-2083