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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--California Governor Gavin Newsom (D), who leads the world's fourth-largest economy, on September 19 signed a far-reaching package of five energy, environmental and wildfire protection bills into law that seeks to burnish the state's reputation as a clean energy leader while also recognizing the reality that fossil fuels will continue to be a foundation of the state's energy system for some period of time.
In a comment issued days before the bills were signed into law, Newsom said, "After months of hard work with the Legislature, we have agreed to historic reforms that will save money on your electric bills, stabilize gas supply, and slash toxic air pollution--all while fast-tracking California's transition to a clean, green job-creating economy."
The bills Newsom signed into law include:
At the bill-signing ceremony, Senate President Pro Tempore Mike McGuire said California's Cap-and-Trade program has created more than 30,000 jobs, building 20,000 housing units and reducing emissions 20%.
California Assembly Speaker Tobert Rivas said the measures will result in "bigger refunds on electricity bills, more reliable gas supplies, improved wildfire protections for homeowners and a smarter power grid that will save families billions."
Though broadly supported, the package of measures was not universally welcomed. Environmental justice groups panned the bills, claiming the balancing act they sought shortchanged people living near industrial sites. Also, the state's Chamber of Commerce opposed extending and renaming the Cap-and-Trade law.
In an editorial, The Wall Street Journal commented, "California's war on fossil fuels is backfiring in spectacular fashion, as gasoline prices, imports of foreign oil and CO2 emissions all increase. The response in Sacramento? Allow more oil drilling and dirtier blends of gasoline in the state. Whatever happened to the climate emergency?"
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
In a comment issued days before the bills were signed into law, Newsom said, "After months of hard work with the Legislature, we have agreed to historic reforms that will save money on your electric bills, stabilize gas supply, and slash toxic air pollution--all while fast-tracking California's transition to a clean, green job-creating economy."
The bills Newsom signed into law include:
- AB 825, which moves California forward in creating an independent system operator (ISO) for wholesale electric transactions. The Western U.S. has been the only electric market in the country not served by a regional grid manager, either an ISO or regional transmission organization (RTO). This law builds on the framework of the existing Western Energy Imbalance Market and the operation of the state's grid manager, the California Independent System Operator (CAISO) (Folsom, California). The bill would open the door for California to participate in a regional Western ISO. It is not yet clear when that organization, which would have to be blessed by the Federal Energy Regulatory Commission (FERC), would begin operating. Creation of these regional marketplaces has tended to increase intraregional sales and purchases of wholesale electricity, as one utility's surplus can more readily be purchased by another utility in the grid that needs electricity. The increased liquidity should reduce the amount of renewable energy that is curtailed, thus lowering prices. A report prepared by the Brattle Group for the California Energy Commission estimated these measured could save Californians more than $1 billion a year and reduce in-state greenhouse gas emissions by about 58%.
- SB 237 seeks to limit future gasoline price spikes by streamlining oil and gas permits in Kern County, potentially adding up to 2,000 new wells per year starting in 2026. This could expand in-state oil production by up to 25%, which should stabilize fuel prices for consumers. The measure also empowers the governor to temporarily suspend gasoline vapor pressure regulations during periods of high prices, which should ease production constraints and costs. California is poised to lose about 20% of its in-state refining capacity, as Phillips 66 (Houston, Texas) and Valero (San Antonio, Texas) have announced plans to close refineries in the state. SB 237 also requires the California Energy Commission (Sacramento, California) to work with other western states to explore a regional gasoline specification that could eventually replace California's unique and expensive fuel blend, potentially lowering production costs.
- A third bill, AB 1207, extends the state's program currently known as Cap-and-Trade to 2045 and renames it Cap-and-Invest. The new law increases clean-energy investments, with particular emphasis on aiding communities most affected by industrial pollution of the air or water, and makes polluters pay more for projects that impact communities. Companies face stricter pollution limits each year until 2045. This law lays out a pathway for the state to achieve its zero carbon emissions from the electric sector by 2045. Currently, about 67% of the state's electricity comes from non-emitting generating resources, the governor's office said. This law also provides a first-ever stable source of funding for high-speed rail.
- A fourth bill, SB 254, aims to address rising utility costs and accelerate the clean energy transition by reforming how utilities finance infrastructure projects and adding $18 billion to the state's wildfire litigation fund. This funding is primarily financed through a 10-year extension of a non-bypassable charge on customer bills, along with additional contributions from investor-owned utilities.
- The fifth measure, SB 352, concerned environmental justice and community air monitoring.
At the bill-signing ceremony, Senate President Pro Tempore Mike McGuire said California's Cap-and-Trade program has created more than 30,000 jobs, building 20,000 housing units and reducing emissions 20%.
California Assembly Speaker Tobert Rivas said the measures will result in "bigger refunds on electricity bills, more reliable gas supplies, improved wildfire protections for homeowners and a smarter power grid that will save families billions."
Though broadly supported, the package of measures was not universally welcomed. Environmental justice groups panned the bills, claiming the balancing act they sought shortchanged people living near industrial sites. Also, the state's Chamber of Commerce opposed extending and renaming the Cap-and-Trade law.
In an editorial, The Wall Street Journal commented, "California's war on fossil fuels is backfiring in spectacular fashion, as gasoline prices, imports of foreign oil and CO2 emissions all increase. The response in Sacramento? Allow more oil drilling and dirtier blends of gasoline in the state. Whatever happened to the climate emergency?"
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
