California bill that could raise gas prices in Arizona moves closer to passage

PHOENIX – A California bill designed to prevent spikes in gas prices in that state could end up hitting Arizona and Nevada drivers in their wallets.

Democratic Gov. Gavin Newsom called the California Legislature into a special session to work on the bill, which would give energy regulators the authority to require refiners to keep a certain amount of fuel on hand.

The goal is to try to keep prices from increasing suddenly when refiners go offline for maintenance. Proponents say it would save Californians billions of dollars at the pump.

The legislation is moving forward despite bipartisan opposition from Arizona Gov. Katie Hobbs, a Democrat, and Nevada Gov. Joe Lombardo, a Republican.

Officials worry California bill could raise gas prices in Arizona, Nevada

Last month, the two governors sent Newsom a letter expressing concerns about the bill’s potential impact on gas prices in their states, which rely on California for significant portions of their petroleum supply.

“Arizonans are struggling with the high cost of living; we can’t afford yet another price hike,” Hobbs said in a press release after the letter was sent on Sept. 10. “I urge Gov. Newsom and the California Legislature to reconsider this legislation that could slash Arizona’s gasoline supply, raise prices at the pump and threaten Arizona’s strong economic growth.”

The governors’ letter cited a California Energy Commission report that determined the bill could end up increasing gas prices in other markets.

“Despite ongoing conversations about the root causes of rising fuel costs, it is evident that increased regulatory burdens on refiners and forced supply shortages will result in higher costs for consumers in all of our states,” the letter says. “With both of our states reliant on California pipelines for significant amounts of our fuel, these looming cost increases and supply shortages are of tremendous concern to Arizona and Nevada.”

Hobbs and Lombardo also offered California their states’ assistance to find ways to lower gas prices and strengthen the economy across the region.

However, their pleas apparently didn’t convince enough California lawmakers. The state Assembly approved the measure on Oct. 1 and the Senate passed it with amendments on Friday. The Assembly needs to OK the Senate modifications before sending it to Newsom’s desk.

Others also oppose California gas bill

The Arizona and Nevada governors weren’t alone in their opposition. The bill also received intense pushback from Republican lawmakers, labor groups and the oil industry.

The Western States Petroleum Association criticized Newsom and the Democratic lawmakers supporting the bill, saying it would not benefit consumers.

Californians pay the highest rates at the pump due to taxes and environmental regulations. The average price for regular unleaded gas in the state was about $4.68 per gallon as of Monday, compared to the Arizona average of $3.35 and the national average of $3.20, according to AAA.

Republican state Sen. Brian Dahle said there shouldn’t have been a special session to weigh the proposal because the bill does not do anything urgent. The proposal fails to address the state taxes and regulations that contribute to higher gas prices, he said.

“So, who’s making the money?” Dahle said. “Who’s gouging Californians for every gallon of gas? It’s the government.”

The Associated Press contributed to this report.

Follow @kstonezone