Gov. Gavin Newsom threatened to call a special session this fall as Democratic lawmakers dithered over a package of energy bills he wants to pass this week before the Legislature adjourns for the rest of the year, according to sources involved in the Capitol Hill negotiations.
The governor issued the last-minute ultimatum in private talks with Assembly Speaker Robert Rivas (D-Hollister) and Senate President Pro Tempore Mike McGuire (D-Healdsburg) this week as tensions rose among Democrats under a Saturday deadline to pass the legislation. The threat is intended to counter pressure oil interests are putting on lawmakers to reject Newsom’s proposal to require oil refineries to maintain a stable inventory to avoid fuel shortages and price spikes when equipment is taken out of service for maintenance.
The bill is part of a package on energy costs that the governor’s office has been negotiating with the Legislature. The governor is calling for legislation that would offer a credit to customers for electric and gas bills, speed up environmental reviews for clean energy projects and require oil refineries to maintain reserves, among other proposals. Some environmentalists criticized the plan because of the push to speed up environmental reviews.
Mary Creasman, executive director of California Environmental Voters, said the state needs to accelerate the development of clean energy and clean energy infrastructure, but it must do so in a way that protects biodiversity and provides enough time for community input.
“Year after year, trying to impose last-minute solutions is not the way to tackle the toughest problems facing our state in a powerful and effective way,” Creasman said.
A special session could force lawmakers to return to Sacramento this fall, rather than in January when the regular session begins, and cut short the time they have to spend with their families or campaign for election in their respective districts.
Sources involved in the discussions said Assembly Democrats in particular are concerned that adopting new requirements for oil refineries could ultimately increase the cost of gasoline. Rivas shared those reservations with Newsom, prompting the threat of a special session to give lawmakers more time to weigh the proposal. The Assembly is prepared to embark on a special session if necessary, the sources said.
Assemblywoman Lori D. Wilson (D-Suisun City) said she and her colleagues are concerned about gas prices, but “we haven't really had time to digest the issue.”
“The special session is a good opportunity to talk about it,” Wilson said outside the Assembly chamber. “Either we have to accept the policy as it is or work out the new policy together. I think that’s a good thing.”
Other lawmakers appeared more neutral.
“It’s a bit of a coin flip,” said Assemblyman Marc Berman (D-Menlo Park). “I have mixed feelings. I understand the argument that it should be done now and others want to delay the process a little bit.”
The threat is not necessarily harmless and comes from a governor who called a special session two years ago to penalize oil companies for excessive profits when gasoline prices soared during his war with Big Oil.
Lawmakers ultimately balked at adopting a penalty in the latest special session, and Newsom refined his request to instead require more transparency from the industry.
Instead of capping and penalizing oil refinery profits, Newsom and lawmakers gave state regulators the ability to do so in the future. Consumer advocates and the governor celebrated the resulting law as an innovative tool that could keep gasoline prices from skyrocketing.
The law created the Division of Petroleum Market Oversight within the California Energy Commission and gave it the authority to gather new industry data to investigate price spikes. Earlier this year, the division wrote a letter recommending the state impose minimum inventory and replenishment requirements for refineries based on its findings so far, arguing that oil companies were not holding enough refined gasoline to offset production shortfalls or protect against the impact of unplanned maintenance.
Newsom continued his fight against oil last week when he announced he wants lawmakers to give regulators the ability to impose new supply requirements for oil refineries.
“Price increases at the pump are profit increases for Big Oil,” Newsom said in a statement at the time. “Refineries should be required to plan ahead and replenish supplies to keep prices stable, rather than playing games to make even more profits. By forcing refineries to act responsibly and maintain a reserve of gas, Californians would save money at the pump every year.”
As Newsom takes a tougher stance on refiners, he has also sought to delay parts of an existing law to give the industry more time to submit leak detection and response plans for existing wells. The proposed changes do not affect a ban on new permits for oil wells within 3,200 feet of homes, schools, parks and hospitals, which is the main goal of the original law that took effect after oil interests agreed this year to remove a referendum on Senate Bill 1137 from the 2024 ballot.
HD Palmer, a spokesman for the California Department of Finance, said the Newsom administration asked lawmakers to delay new leak detection plans to give the state more time to implement that part of the law. Current staffing levels, he said, “are insufficient to move quickly on implementing SB 1137.”
A budget bill was released Tuesday night that could reflect a compromise between the governor, lawmakers and environmentalists on the delay.
The governor's office and the Assembly speaker's office declined to comment on the possibility of a special session. A spokesman for McGuire did not immediately respond to a request for comment.
Staff writer Anabel Sosa contributed to this report.
