California Gov. Gavin Newsom says he wants state regulators to decide whether to impose the nation's first penalty on oil companies for price gouging.
But last summer, the average price for a gallon of gas in California was more than $2.60 higher than the national average — a difference state regulators said could not be explained simply by taxes and fees. Meanwhile, oil companies recorded supersized profits.
Wednesday, the governor announced he was changing course and instead will ask lawmakers to empower the California Energy Commission to decide whether such a penalty is necessary and, if it is, how much it would be. The commission would be aided by a new, independent agency made up of experts, economists and lawyers that would have subpoena power to monitor the gasoline market and make recommendations.
The modified proposal means it's possible California wouldn't penalize oil companies at all. But it would give Newsom more control over what happens because he appoints all five members of the California Energy Commission, who must also be confirmed by the Democratic-controlled state Senate. State legislative leaders have not yet agreed to Newsom's proposal. But the governor's office expects lawmakers to hold public hearings on it soon, ideally before the summer months when gas prices usually increase. The Newsom administration did not view the new proposal as a concession, saying the governor made the changes after consulting with experts.
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