Bill Providing Consumer Transparency at the Pump Passes First Legislative Hurdle

Assemblyman Brian Jones’ (R-Santee) legislation requiring fuel dispensers in California to contain a disclosure notice to consumers of the cost per gallon of California’s greenhouse gas emission law passed the Assembly Business, Professions and Consumer Protection committee with bi-partisan support this week.

Assembly Bill 2656 will require that all wholesale fuel invoices contain a disclosure of the estimated cost of this regulation as a separate line item.  Additionally the measure would require fuel dispensers in the state to contain a similar disclosure notice.   

 

“Starting January 1, 2015, consumers will be surprised at the pump when they see a significant increase in fuel costs due to implementation of a new regulation,” said Assemblyman Jones.  “I’m pleased, however, that this measure will ensure all drivers will have information about the cost of fuel and its relationship to the state’s greenhouse gas regulation.”

 

In the 2011-12 timeframe the California Air Resources Board (CARB) implemented regulations establishing “Fuels Under the Cap” requirements.  These requirements mandate a carbon-offset for gallons of fuels sold in California.  Carbon-offsets are provided via carbon credits obtained in California’s Cap and Trade market, created by CARB.  Carbon offsets for fuels was deemed necessary since transportation carbon emissions constitute approximately 40% of state carbon creation.

 

Jay McKeeman, Vice President of Government Relations and Communications for the California Independent Oil Marketers Association (CIOMA), the sponsor of the legislation said, “The bi-partisan support of this measure exemplifies the importance of ensuring that California’s motorists are fully aware of the costs associated with AB 32 implementation.”

 

The “Fuels Under the Cap” portion of CARB’s AB 32 Cap and Trade regulation is estimated to cost fuel manufacturers and some distributors up to 15 cents/gallon for compliance.  All educated industry observers expect these costs to be passed along to the final consumer starting in early 2015.

 

Jones said, “Regardless of anyone’s position on AB 32, the basic principal of the Cap and Trade regulations is to create higher prices for carbon-intensive products – signaling consumers that they should use less.  This bill – which passed with bi-partisan support, will ensure consumers are provided the appropriate information so that they can make the choice to either pay the extra cost of fuel or buy a more fuel efficient vehicle.”

 

AB 2656 passed the Assembly Business, Professions & Consumer Protection Committee with 8 “aye” votes, 5 “no” votes and one abstention.  It now moves to the Assembly Appropriations Committee.

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