Capitol Alert: Perea bill would delay California cap-and-trade for gas

07/03/2014 11:10 AM

07/19/2014 11:05 PM

Democratic fissures over California's cap-and-trade mandates deepened on Thursday, with a key moderate Democrat introducing a bill to push back a looming rule expected to cause a spike in prices at the pump.

The bill by Assemblyman Henry Perea, D-Fresno, would delay for three years a rule requiring the energy industry to purchase permits for transportation fuels. Lawmakers and critics have been warning for months about a resulting price bump.

California's landmark emissions-reducing law, AB 32, erected a first-in-the-nation carbon permitting program. The cap-and-trade program allows industry to buy allowances offsetting the climate change-fueling greenhouse gases they pour into the air.

The new system has already begun generating millions in revenue, with this year's budget dedicating the new revenue stream to a mix of affordable housing, mass transit and the high-speed rail project championed by Gov. Jerry Brown.

But the coming inclusion of transportation fuel into the program is threatening to push gas prices up, prompting alarm from moderate Democrats. In a show of broad discontent, 16 Democrats last week sent a letter to the Air Resources Board urging the air quality regulator to delay implementing the new rule. Despite the complaint, all but one of them voted to spend the money the rule is expected to generate.

Perea said he still supports AB 32's overarching goal of reducing emissions but does not believe consumers have been adequately prepared.

"What we're really trying to do on this is create a public discussion, because I'm not sure the public is aware of cap and trade and what it's going to do to their pocketbooks," Perea said.

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