Back and forth on 'Fuels under the Cap'

By CMTA Staff

Capitol Update, Aug. 28, 2014 Share this on FacebookTweet thisEmail this to a friend

Senate Pro Tempore Darrell Steinberg (D-Sacramento) wrote a letter to Assemblyman Henry Perea (D-Fresno) informing him that the Senate would not hear AB 69 (Perea) to delay putting “fuels under the cap” (FUTC) in the cap-and-trade program. The Legislative Analyst’s Office projected fuel prices would increase between 13 and 50 cents or more between now and 2020. FUTC is scheduled to begin January 1, 2015 and AB 69 would have delayed the program until January 2018. Perea issued a press release expressing his disappointment with Steinberg’s decision. 

Steinberg argues that the devastation of climate change and the public health impact from localized pollution justifies keeping FUTC on the current schedule because the alternative is “doing nothing”. This is not persuasive. Far from doing “nothing”, the California Air Resources Board (CARB) has adopted dozens of regulations and utility consumers are paying billions of dollars to lower greenhouse gas emissions. 

Steinberg also said AB 69 should not be considered in the final weeks of a two-year session. But AB 69 was amended before the July break along with a letter from 16 Assembly Democrats to CARB Chairman Mary Nichols in support of delaying fuels under the cap.

Perea said “It is disappointing the California State Senate could not find time to discuss an issue that will increase the cost of gas to consumers. The legislative process should not be an excuse to table a subject that will hit consumers’ wallets….Last year, Senator Steinberg gutted and amended SB 743 – his Kings CEQA exemption bill – and in the course of two days it was considered in three policy committees and both floors of the Legislature.”

In fact, Steinberg’s lengthy message about the importance of FUTC actually adds weight to the argument that the issue should get a hearing. Only the unelected CARB Board has voted in favor of this regulation. Proposition 23, the ballot measure to delay AB 32 regulations until the economy improved, failed on the ballot in 2010 when the public was not aware of FUTC. A legislative hearing on AB 69 would give elected officials a chance to vote for this policy and educate the public about its benefits. 

However, there are political reasons to avoid a vote on AB 69. Many legislators are becoming more concerned about the looming costs of FUTC and other climate change policies. Gasoline price increases are unpopular and will hurt jobs. Legislators may be reluctant to be on record supporting FUTC.

Despite the failure of his bill, Perea added, “Looking forward, it’s important the [CARB] Board do what the Legislature couldn’t – engage the public and all stakeholders, hold hearings, and look at what can be done to minimize impacts to hardworking Californians.”

CMTA supported AB 69 to delay FUTC until January 1, 2018.  

Read more Energy articles

Capitol updates archive 989898989