California lawmakers on Monday approved Gov. Gavin Newsom's legislation to increase transparency in the oil industry, in the final hours of a special session he called last year to penalize excessive profits.

After months of deliberation, the final bill does not cap oil refinery profits or penalize the industry as Newsom had intended when he accused companies of intentionally driving up gas prices to boost revenue. Instead, the bill, SBX1-2, gives the California Energy Commission the power to set a cap and impose penalties through a regulatory process if it decides that oil companies are making excessive profits and that a penalty will not result in higher prices for consumers.

The legislation focuses on transparency, including requiring the industry to provide more information about maintenance and pricing decisions in order to allow state officials to better understand the market and deter companies from gouging consumers.

"Even when we are not experiencing a spike, we pay higher prices than in other states, even when we account for our taxes and environmental policies," said Assemblymember Jacqui Irwin, D-Thousand Oaks, who noted that Californians paid as much as $2.60 more per gallon than residents of other states at one point last year. "This is unacceptable."

The Democratic majority handed Newsom his bill, but support wasn't overwhelming within his own party. The proposal passed 52-19 in the Assembly, with several Democrats declining to vote, and with a stronger 30-8 vote last week in the Senate.

Democratic lawmakers hailed the bill as an improvement from the prior version. Several were careful to point out that the legislation prohibits regulators from imposing any limit on profits that could drive up gas prices, underscoring concerns about potential unintended consequences of capping the industry's earnings.

Republicans criticized Newsom and Democrats, arguing that the legislation will hurt Californians.

"This bill is a senseless attack on domestic energy production that will only harm hardworking Californians in the field by creating a hostile business climate," said Assemblymember Vince Fong, R-Bakersfield.

Will the legislation result in lower gas prices?

Supporters argue that requiring refiners to disclose more information about pricing decisions and setting up an independent watchdog agency will deter price gouging and prevent the kinds of spikes California experienced over the summer and fall.

...continued

©2023 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.