Energy policy in California, 2002-2017

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Fracking in the U.S.
Energy policy in the U.S.
State fracking policy
State energy policy
Glossary of energy terms

Energy policy involves governmental actions affecting the production, distribution, and consumption of energy in a state. Energy policies are enacted and enforced at the local, state, and federal levels and may change over time. These policies include legislation, regulation, taxes, incentives for energy production or use, standards for energy efficiency, and more. Stakeholders include citizens, politicians, environmental groups, industry groups, and think tanks. A variety of factors can affect the feasibility of federal and state-level energy policies, such as available natural resources, geography, and consumer needs.

This article outlines state-level oil and gas regulations, renewable energy programs, oil and gas production, energy usage, energy and electricity prices, fuel taxes, and utilities in California.

See the tabs below for further information:

1. Policy: This tab provides information about state regulations on energy production and policies related to oil and gas production, fracking, renewable energy generation, energy efficiency, and net metering.
2. Production: This tab provides information about total energy production by energy source in California.
3. Usage: This tab presents information about electricity consumption by energy source.
4. Prices and taxes: This tab presents information about average energy and electricity prices, per capita spending on energy, and fuel taxes.
5. Utilities: This tab presents information about public and private utilities, electricity markets, the types of utilities in California, and the electric reliability organizations in California.
6. Background: This tab provides information about the types of nonrenewable and renewable energy sources produced and used in the United States, an energy profile of California, a state profile of California from the Almanac of American Politics (2016), and economic indicators in the state, such as median income.

## Contents

* 1 Policy
* 1.1 State regulations
* 1.1.1 Fracking
* 1.2 Renewable energy policies
* 1.2.1 Renewable Portfolio Standard
* 1.2.2 Grant programs
* 1.2.3 Loan programs
* 1.3 Energy efficiency regulations
* 1.4 Net metering
* 1.5 Recent legislation
* 1.6 Ballot measures
* 1.6.1 Energy policy ballot measures
* 1.6.2 Utility policy ballot measures
* 2 Production
* 2.1 Total energy production
* 2.2 Nonrenewable energy production
* 2.3 Oil and gas production (2004-2014)
* 2.4 Oil and gas production on federal land
* 2.4.1 Land leased
* 3 Energy usage
* 3.1 Consumption
* 4 Prices and taxes
* 4.1 Energy prices
* 4.2 Energy spending
* 4.3 Fuel taxes
* 4.4 Federal tax
* 5 Utilities
* 5.1 Background
* 5.2 Electricity markets
* 5.3 Electric reliability organizations
* 5.3.1 California EROs
* 6 Background
* 6.1 Background on energy resources
* 6.2 California energy profile
* 6.3 State profile
* 6.3.1 Presidential voting pattern
* 6.3.2 Economic indicators
* 6.4 See also
* 6.5 Recent news
* 6.6 Footnotes

# Policy[edit]

### State regulations[edit]

The California Division of Oil, Gas, and Geothermal Resources oversees the drilling, operation, maintenance, plugging, and completion of crude oil, natural gas, and geothermal wells. The division is response for developing and administering requirements and procedures for all oil and gas wells, water disposal wells, wells used to store natural gas, onshore and offshore production, all drilling operations, and well remediation. In addition, the division operates programs for well permitting and testing, safety inspections, production oversight activities, environmental lease inspections, and oil tank and pipeline inspections.[1][2]

Oil and gas operators must receive approval from the division's supervisor prior to drilling a well, using injection wells, producing wells, plugging a well, and other related activities. The state's rules and regulations require minimum spacing for all wells, casing and blowout prevention equipment to seal liquids from oil and gas reserves and freshwater resources, cement plugs used in specific intervals to ensure surface level conditions and water quality, and mud fluid to prevent outside fluids from moving into a well. Division staff are required to witness and approve plugging and abandonment operations at a well.[3]

Before they receive approval to develop an oil or gas well, operators must file a cash bond or other financial resource under the company's name. Oil and gas operators must develop spill contingency plans outlining the procedures and equipments used to prevent and/or respond to any uncontrolled release of fluids. In addition, oil and gas companies must provide notice to the division about the location of all wells and a schedule for state inspections and tests.[3]

#### Fracking[edit]

See also: Fracking in California

In September 2013, Gov. Jerry Brown (D) signed Senate Bill 4, which requires the state government to adopt formal rules and regulations on hydraulic fracturing (also known as fracking). The state's fracking regulations are found in Title 14, Division 2, Chapter 4 of the California Code of Regulations. The regulations require oil and gas operators to monitor and report water use and water quality, analyze any potential engineering and seismic impacts resulting from fracking operations, and disclose chemicals and fluids used during fracking.[4][5]

As of February 2017, California regulations required oil and gas operators to disclose the chemical ingredients and fluids used during fracking operations to the website FracFocus.org, an industry-affiliated chemical registry. California regulations allowed oil and gas operators to withhold certain information related to chemical ingredients or fluids that are considered trade secrets.[6]

### Renewable energy policies[edit]

States have implemented funding and financial incentive programs to subsidize or otherwise increase investment in renewable energy resources such as wind, solar, and hydroelectric power. These programs include renewable portfolio standards, grants, rebate programs, tax incentives, loans, performance-based incentives, and more. The aim of the policies generally involves reducing the cost of renewable energy production for consumers, reducing regulatory compliance costs, reducing investment risks involving renewable energy, and/or increasing the adoption of renewable energy sources by individuals and businesses.[7]

#### Renewable Portfolio Standard[edit]

See also: Renewable Portfolio Standard

A Renewable Portfolio Standard (RPS), also known as a renewable electricity standard, is a mandate intended to increase the amount of renewable energy production and use. Under these standards, a utility company can be required by a state to have a certain percentage of its electricity come from certain renewable energy resources. In addition, states may give tax credits to utility companies to fulfill these requirements.[8][9]

As of February 2017, California was one of 30 states with a Renewable Portfolio Standard.[10][11][12]

In 2002, the California State Legislature enacted the state's Renewable Portfolio Standard. The law was subsequently amended to require electric utilities in California to procure 50 percent of their retail sales from eligible renewable energy resources by the year 2030 and maintain this standard afterward. The California Energy Commission is required to certify eligible renewable resources and implement tracking and verification systems to measure renewable energy output. The California Public Utilities Commission is required to determine procurement targets, enforce compliance, review utility contracts for eligible energy resources, and review and approve each investor-owned utility's procurement plan. Investor-owned utilities, electric service providers, and community choice aggregators must follow interim targets leading up to 2030. Publicly owned municipal utilities, which are not regulated by the California Public Utilities Commission, must establish procurement requirements based on the interim targets. The interim targets are listed below:[11][12]

* 20 percent of retail sales by December 31, 2013
* 25 percent of retail sales by December 31, 2016
* 33 percent of retail sales by December 31, 2020
* 40 percent of retail sales by December 31, 2024
* 45 percent of retail sales by December 31, 2027
* 50 percent of retail sales by December 31, 2030

Renewable energy resources eligible under the standard include solar energy, wind energy, specific biomass resources, geothermal energy, specific hydroelectric power facilities, wave and tidal power, fuel cells that use renewable fuels, and fuel converted from municipal solid waste.[11][12]

#### Grant programs[edit]

States, nonprofit organizations, and/or private utilities may operate grant programs for renewable energy. These programs may include state or private funding for energy installation costs, research and development, infrastructure and business development, system testing, and renewable energy feasibility studies (studies that look into the potential for renewable energy use in specific areas). Grants can be provided with or without requiring a recipient to match the grant. Additional incentives, such as lower interest loans, may be included with a grant.[7]

As of March 2015, California was one of 26 states that did not have state-run, utility-run, or locally run grant programs for renewable energy. See the map below for grant programs by state.[7]

States with grant programs for renewable energy as of March 2015 (Source: Environmental Protection Agency (EPA)

#### Loan programs[edit]

Loan programs may be used to offer lower interest loans or other financing options to individuals and businesses to reduce the upfront costs of purchasing and installing renewable energy technologies. Loan programs may include programs that use payments from earlier borrowers to provide loans for new borrowers, programs in which building owners reduce their energy consumption to pay their upfront costs for renewable energy technologies, and programs that allow individuals with a higher debt-to-income ratio to purchase homes that use less energy, among others.[7]

As of March 2015, California was one of 24 states with a state-run loan program and locally run, utility-run, and/or privately run loan programs for renewable energy technologies.[7]

In 2008, the California State Legislature enacted Assembly Bill 811, which allows all California cities and counties to designate areas in which property owners may receive loans for renewable energy installations or energy efficiency measures. These loans are repaid as part of a property owner's tax bill. Cities and counties are authorized to list the kinds of renewable energy sources and energy efficiency measures eligible for loans.[13][14]

A complete list of state, local, and private incentive, loan, grant, and assistance programs for renewable energy and energy efficiency in California can be found here.

See the map below for renewable energy loan programs by state.

States with loan programs for renewable energy as of March 2015 (Source: Environmental Protection Agency (EPA)

### Energy efficiency regulations[edit]

As of February 2017, California required new residential and commercial buildings to meet energy efficiency standards. Title 24 of the California Code of Regulations outlines the state's building requirements. On January 1, 2017, the state's 2016 standards went into effect and can be found here. The standards include energy efficiency, water efficiency, and indoor air quality requirements for newly constructed buildings, existing buildings, and alterations to existing buildings. The California Building Standards Commission oversees the standards' implementation.[10][15][16]

### Net metering[edit]

Net metering is a billing system in which customers who generate their own electricity, usually using renewable sources (such as solar panels) are able to sell their excess electricity back to the electric grid, which is an interconnected network that is used to deliver electricity. This requires electricity to be able to flow both to and from a consumer.[17][18][19]

As of October 2016, California was one of 41 states with a statewide net metering policy. In 1996, the California State Legislature enacted a statewide net metering policy for all utilities (excluding publicly owned utilities that provide both electricity and water to more than 750,000 customers). The 1996 law applied to electricity generated from solar energy, wind energy, and solar/wind hybrid energy systems. In 2009, biomass and other technologies eligible under the state's Renewable Portfolio Standard, such as geothermal energy, specific hydroelectric power facilities, and wave and tidal power, were eligible for net metering. The aggregate capacity limit for net-metered systems within a utility's service area is equal to 5 percent of the utility's aggregate customer peak demand, which is defined for investor-owned utilities as the sum of the non-coincident peak demands of all utility customers. For more information about California's net metering policy, click here.[10][20][21]

For a complete list of net metering programs by state, click here.[10][22]

### Recent legislation[edit]

The following is a list of recent energy policy bills that have been introduced in or passed by the California State Legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.

Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, no legislation pertaining to this topic has been introduced in the legislature recently.

### Ballot measures[edit]

#### Energy policy ballot measures[edit]

See also: Energy on the ballot and List of California ballot measures

Ballotpedia has covered 17 ballot measures relating to state and local energy policy in California.

1. California Proposition 80, Regulation of Electric Service Providers Initiative (2005)
2. California Proposition 87, Severance Tax on Oil Producers to Fund Alternative Energy Programs Initiative (2006)
3. California Proposition 9, Energy, Fuel, and Air Pollution Regulations Initiative (June 1972)
4. California Proposition 39, Out-of-State Business Tax Liability Calculations and Energy Funding Initiative (2012)
5. California Nuclear Power Initiative (2016)
6. California Proposition 19, Water and Energy Board Initiative (1922)
7. California Proposition 18, Water and Energy Board Initiative (1926)
8. California Proposition 7, Renewable Energy Standards and Market Regulations Initiative (2008)
9. California Proposition 18, Water and Energy Use, Acquisition, and Development Amendment (1934)
10. California Proposition 12, Loans for Energy Product Installations Amendment (1976)
11. California Proposition 8, Bonds for Alternative Energy Sources Amendment (June 1980)
12. California Proposition 3, Alternative Energy Systems Tax Exemption Amendment (June 1978)
13. California Proposition 7, Property Valuation with Solar Energy Systems Amendment (1980)
14. California Proposition 10, Bonds for Alternative Fuels Initiative (2008)
15. California Proposition 16, Require Supermajority Voter Approval to Expand Utility Services Initiative (June 2010)
16. California Proposition 16, Water and Electricity Board Initiative (1924)
17. California Proposition 70, Vote Requirement to Use Cap-and-Trade Revenue Amendment (June 2018)

#### Utility policy ballot measures[edit]

See also: Local utility tax and fees on the ballot

Ballotpedia has not covered any ballot measures relating to local utility tax and fees in California.

# Production[edit]

The sections below include statistics on total energy production in California, oil and natural gas production in California, oil and gas production in California over time (2004-2014), and oil and gas production on federal land, including the amount of federal land leased in California for production.

### Total energy production[edit]

The table below provides information regarding energy production in California in British thermal units (Btu). A British thermal unit is used to measure the heat contained in different fuels. The U.S. Department of Energy defines a Btu as "the quantity of heat required to raise the temperature of 1 pound of liquid water by 1 degree Fahrenheit." Fuels are discussed in terms of Btu to compare fuels with different energy content and prices. For example, one gallon of gasoline equals 120,524 Btu.[23]

Energy production, 2014 (in billion Btu)

State | Biomass | Coal | Crude oil | Nuclear energy | Natural gas | Renewable | Total*
California | 25,373 | 0 | 1,184,760 | 177,656 | 284,953 | 766,125 | 2,438,867
Arizona | 5,939 | 173,337 | 325 | 338,044 | 109 | 123,235 | 640,989
Nevada | 0 | 0 | 1,833 | 0 | 3 | 69,304 | 71,140
Oregon | 5,844 | 0 | 0 | 0 | 974 | 478,961 | 485,779
U.S. average | 38,759 | 404,181 | 307,301 | 160,980 | 585,731 | 187,132 | 1,684,085
*Total figures were computed by Ballotpedia.
Source: U.S. Energy Information Administration, "Google Sheets API"

### Nonrenewable energy production[edit]

The table below provides information regarding nonrenewable energy production in California. For coal data, the phrase productive capacity refers to the maximum amount of coal that could be expected to be produced in 2014. The natural gas and crude oil production data refer to the amounts of natural gas and crude oil produced in December 2014 and April 2016, respectively.[24][25]

Nonrenewable energy production

State | Coal, productive capacity
(short tons)  | Natural gas
(million cubic feet)  | Crude oil
(thousand barrels)
Date  | 2014  | December 2014  | April 2016
California | 0 | 21,085 | 15,676
Arizona | 8,500,000 | 12 | 0
Nevada | 0 | 0 | 26
Oregon | 0 | 80 | 0
U.S. average | 24,874,314 | 43,350 | 4,388
Source: U.S. Energy Information Administration, "Google Sheets API"

### Oil and gas production (2004-2014)[edit]

Note: This section provides information about oil and gas production on private and state-owned lands. Information on oil and gas production on federal lands is accessible here.

The graph and table below provide information about crude oil production in California. Information from select surrounding states is provided for comparative purposes.[26]

Crude oil production in California and select surrounding states,
in thousand barrels

State | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | Percent of total 2014 production | 2014 Rank
California | 240,138 | 229,291 | 223,378 | 218,456 | 214,465 | 206,976 | 201,241 | 194,194 | 197,211 | 198,928 | 204,269 | 6.42% | 3
New Mexico | 64,517 | 60,964 | 59,454 | 59,180 | 60,143 | 61,143 | 65,377 | 71,286 | 85,218 | 101,373 | 123,623 | 3.89% | 6
Nevada | 463 | 447 | 426 | 408 | 436 | 438 | 426 | 408 | 368 | 334 | 316 | 0.01% | 28
Oregon | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0.0% | N/A
United States | 1,991,394 | 1,891,227 | 1,857,044 | 1,853,166 | 1,830,002 | 1,952,670 | 2,000,861 | 2,060,398 | 2,377,806 | 2,722,171 | 3,180,813 | \-- | \--
Source: U.S. Energy Information Administration, "Crude Oil Production"
Note: The data above are field production data.

The graph and table below provide information about natural gas production in California. Information from select surrounding states is provided for comparative purposes.[27]

Natural gas production in California and select surrounding states,
in million cubic feet (MMCF)

State | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | Percent of total 2013 production | 2013 rank
California | 375,306 | 355,793 | 358,729 | 355,946 | 346,678 | 340,048 | 312,315 | 325,445 | 284,293 | 251,873 | 257,780 | 0.86% | 16
New Mexico | 1,616,179 | 1,644,738 | 1,656,850 | 1,619,528 | 1,555,450 | 1,487,123 | 1,425,222 | 1,341,475 | 1,287,682 | 1,276,296 | 1,271,185 | 4.24% | 8
Nevada | 6 | 5 | 5 | 5 | 5 | 4 | 4 | 4 | 3 | 4 | 3 | 0.0% | 32
Oregon | 731 | 467 | 454 | 621 | 409 | 778 | 821 | 1,407 | 1,344 | 770 | 770 | 0.0% | 29
United States | 24,118,978 | 23,969,678 | 23,456,822 | 23,535,018 | 24,663,656 | 25,636,257 | 26,056,893 | 26,816,085 | 28,479,026 | 29,542,313 | 30,005,254 | \-- | \--
Source: U.S. Energy Information Administration, "Natural Gas Gross Withdrawals and Production"
The data presented above are gross withdrawals in million cubic feet (MMCF). Production data for 2014 were estimated for some, but not all, states; "--" indicates data were not available.

### Oil and gas production on federal land[edit]

See also: Oil and natural gas extraction on federal land

The federal government leases federally managed land to private individuals and companies for energy development, including crude oil and natural gas drilling, solar energy development, and geothermal energy development. Approximately 166 million acres of federal land were available to be leased for energy development as of December 2014. The U.S. Bureau of Land Management (BLM) is responsible for regulating oil and gas drilling on federal lands in the United States.[28][29]

The table below provides information about oil and natural gas production on federal lands in California in 2014. Information from select surrounding states is provided for comparison.[30][31]

Oil and natural gas production on federal land, 2014

State  | Oil production (in thousands of barrels)  | Natural gas production (in million cubic feet)
California | 14,967 | 7,077
Arizona | 0 | 0
Nevada | 314 | 0
Oregon | 0 | 0
U.S. average | 2,976.06 | 49,996.92
Source: Office of Natural Resource Revenue, "Statistical Information"

#### Land leased[edit]

Private oil and natural gas companies apply for leases from the U.S. Bureau of Land Management (BLM) to develop energy resources on federal lands. After a lease is approved, the company must submit information to the BLM about how it will conduct its drilling and production operations. The BLM also inspects a company’s operations during production.[32]

The table below provides information about oil and gas producing leases and acres on federal lands in California from 2013 to 2015. Information from select surrounding states is provided for comparison.

Oil and gas producing leases and acres on federal land by state, 2013-2015

State  | FY 2015  | FY 2014  | FY 2013
Producing leases  | Producing acres  | Producing leases  | Producing acres  | Producing leases  | Producing acres
California | 320 | 80,921 | 323 | 82,697 | 325 | 82,736
Arizona | 0 | 0 | 0 | 0 | 0 | 0
Nevada | 36 | 26,201 | 32 | 22,077 | 31 | 21,637
Oregon | 0 | 0 | 0 | 0 | 0 | 0
U.S. average | 485 | 257,505 | 483 | 258,996 | 480 | 262,870
Source: U.S. Bureau of Land Management, "Oil and Gas Statistics"

# Energy usage[edit]

The section below includes statistics on electricity consumption in the state by energy type (in 2014).

### Consumption[edit]

The table below provides information about energy consumption by source in California in 2014. Information from select surrounding states is provided for comparison.[24]

Energy consumption in California, 2014 (in billion Btu)

State | Coal | Crude oil and petroleum products | Natural gas | Nuclear energy | Solar | Wind | Geothermal | Hydropower | Wood and wood waste | Biomass
California | 39,486 | 3,371,579 | 2,417,476 | 177,656 | 180,287 | 123,559 | 117,226 | 157,213 | 162,466 | 298,473
Arizona | 447,849 | 515,002 | 315,448 | 338,044 | 46,869 | 4,452 | 345 | 58,185 | 7,445 | 31,481
Nevada | 79,230 | 237,511 | 259,438 | 0 | 13,557 | 2,854 | 27,499 | 22,719 | 2,675 | 10,681
Oregon | 34,238 | 339,434 | 225,576 | 0 | 3,585 | 71,852 | 2,977 | 335,341 | 59,361 | 72,449
U.S. average | 359,931 | 716,746 | 544,353 | 172,585 | 20,739 | 531,323 | 16,555 | 61,397 | 65,345 | 101,581
Source: U.S. Energy Information Administration, "Google Sheets API"

# Prices and taxes[edit]

The sections below include information on energy prices and spending in California, fuel taxes and state taxes in California and in neighboring states, and an overview of the federal tax on gasoline.

### Energy prices[edit]

The price of electricity is affected by supply and demand. The supply of electricity is affected by fuel prices, environmental and energy regulations, power plant capacity, weather, and other factors. Demand for electricity also affects the price. Because electricity cannot be stored for long periods of time, it must be produced and used when it is needed. As demand for electricity increases, the price also generally increases.[33][34]

The table below provides information about energy prices in California as of April 2016. Information from select surrounding states is provided for comparison.[24]

Note: In comparing dollar amounts across the states, it is important to note that the cost of living can from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis.

Energy prices in California

State | Natural gas
Dollars per thousand cubic foot  | Electricity
Cents per kilowatthour
Date  | April 2016  | April 2016
California | $10.50 | 12.7
Arizona | $16.53 | 9.9
Nevada | $11.25 | 7.7
Oregon | $13.70 | 8.7
U.S. average | $11.20 | 10.41
Source: U.S. Energy Information Administration, "Google Sheets API"

Electricity prices can vary depending on the type of consumer; consumer categories include residential, commercial, industrial, and in some cases, transportation. The rate-making process is both political and economic. The table below presents information about electricity prices by consumer type in California in April 2016. Information from select surrounding states is provided for comparison.

Electricity prices in California by sector (in cents per kilowatthour)

State | Commercial | Industrial | Residential | Transportation | Average (all sectors)
Date  | April 2016  | April 2016  | April 2016  | April 2016  | April 2016
California | 13.8 | 10.7 | 12.4 | 8.8 | 11.4
Arizona | 10.1 | 5.6 | 12.4 | 9.4 | 9.4
Nevada | 8.0 | 5.0 | 11.9 | 9.1 | 8.5
Oregon | 8.9 | 5.8 | 10.5 | 9.1 | 8.6
U.S. average | 10.48 | 7.45 | 13.05 | 10.47 | 10.36
Source: U.S. Energy Information Administration, "Google Sheets API"

### Energy spending[edit]

The table below provides information about energy spending in California as of 2014. Information from select surrounding states is provided for comparison.

Energy spending in California, 2014 (in millions of dollar except per capita spending)

State | Petroleum | Coal | Natural gas | Nuclear | Per capita spending
California | $86,002 | $135 | $16,128 | $115 | $3,550
Arizona | $13,753 | $945 | $2,156 | $277 | $3,360
Nevada | $6,307 | $203 | $1,639 | $0 | $3,704
Oregon | $9,426 | $87 | $1,498 | $0 | $3,744
U.S. average | $17,267 | $1,322 | $3,786 | $574 | $5,304
Source: U.S. Energy Information Administration, "Google Sheets API"

### Fuel taxes[edit]

Click to enlarge.

Revenue collected by federal, state, and local governments from fuel taxes is usually used to fund transportation infrastructure such as roads and bridges. Some states may charge an excise tax based on how much gas or diesel is purchased. Some states may charge retail tax based on the average price of gas over a certain period. Additionally, some states may charge an environmental tax to be used for environmental projects. The Tax Foundation, which created the map to the right, used data from the American Petroleum Institute, which converted each state's different tax structure into cents per gallon to compare each state's gas taxes. In 2016, gas taxes accounted for 23 percent of the price of gasoline. Crude oil accounted for 40 percent of the price of gasoline, refining accounted for 24 percent of the price, and distribution and marketing accounted for 13 percent of the remainder.[35][36]

The table below provides information about state fuel taxes by type (excluding the federal gas taxes) in California as of January 2016. As of January 2016, California levied a 40.6 cent state gasoline tax and a 34.3 cent state diesel tax. California ranked fifth in total gasoline taxes (federal and state) and 10th in total diesel fuel taxes as of January 2016.[37][38]

State motor fuel taxes in cents per gallon, January 2016

State | State gasoline tax | Total gasoline tax | Rank | State diesel tax | Total diesel tax | Rank
California | 40.6 | 59.0 | 5 | 34.3 | 58.7 | 10
Arizona | 19.0 | 37.4 | 43 | 27.0 | 51.4 | 29
Nevada | 33.9 | 52.3 | 11 | 28.6 | 53.0 | 24
Oregon | 31.1 | 49.5 | 16 | 30.4 | 54.8 | 20
U.S. average | 30.29 | 48.69 | N/A | 30.01 | 54.41 | N/A
Source: American Petroleum Institute, "Motor Fuel Taxes"

### Federal tax[edit]

The first federal tax on gasoline was proposed by Secretary of the Treasury Ogden L. Mills under President Herbert Hoover (R) as a revenue generating measure to balance the budget during the Great Depression. A 1-cent tax per gallon of imported gasoline and fuel oil was passed as part of the Revenue Act of 1932 and signed by President Franklin D. Roosevelt (D). The 1-cent tax continued until 1951 when the tax was increased to 2 cents in part to raise revenue during the Korean War. In 1956, the tax was raised to 3 cents to fund the Interstate Highway System. During this time, the Highway Trust Fund was created as a means to fund highway construction. Since 1956, there have been increases to the tax. As of April 2016, the gas tax was last raised by President Bill Clinton (D) in 1993 to 18.4 cents per gallon.[39]

# Utilities[edit]

The sections below include general information on utilities, an overview of utilities and electricity markets, information on the types of utilities in California, an overview of electricity reliability organizations (EROs), and the EROs that oversee electricity in California.

### Background[edit]

Utilities are firms that own and/or operate facilities to generate, transmit, and/or distribute electricity, gas, and/or water to the public. Electric utilities are commercial entities that own and operate facilities to generate, transmit, and distribute electricity to the public and/or the industrial sector. State and local regulators oversee transmission and distribution charges. Local utilities read electric meters and bill individuals or businesses, generally on a monthly basis.[40][41]

Utilities are defined differently in each state and in federal legislation. Two general types of utilities are private and public utilities. Private utilities, commonly known as investor-owned utilities, provide stocks to investors and sell bonds. These utilities are regulated by state regulatory agencies. State agencies are also responsible for setting retail rates charged by investor-owned utilities, overseeing utility infrastructure, and ensuring that investor-owned utilities respond to customer service demands. Public utilities include government or municipally owned utilities. Another type of utility is an electric cooperative. Cooperatives are nonprofit businesses voluntarily owned and managed by the individuals and businesses that use their services. They are commonly used in rural areas that do not have access to a larger state or region-wide electric grid.[41]

### Electricity markets[edit]

Electricity markets in each state are defined as regulated or deregulated. A regulated market includes utilities that own and manage the power plants that generate the electricity, the electricity transmission lines, and the distribution equipment (such as wires and electric poles). In addition, the utilities rates are approved and regulated by local and state agencies. A deregulated market requires utilities to divest ownership in the generation and transmission of electricity. In this market, utilities oversee the interconnection from a meter at a household or business to the power grid and is responsible for billing ratepayers.[42][43]

Depending on the state and/or area, public utilities may provide most or all energy services to homes and businesses, or a state may allow other private electricity providers to transmit and distribute electricity in addition to other utilities. For example, one type of private provider is a retail energy provider, which sells electricity in areas with retail competition. The provider purchases wholesale electricity and the delivery services (such as transmission lines) and can price electricity to particular consumers.[42][43]

As of February 2017, California was one of 17 states with a deregulated electricity market. The California Independent System Operator (ISO), a nonprofit corporation created in 1998, oversees the state's electric market, bulk electric power system, and transmission lines. California ISO oversees the transportation of wholesale electricity to the power grid. Its stated mission is to "attract, develop and retain a highly skilled workforce, operate the grid reliably and efficiently, provide fair and open transmission access, promote environmental stewardship, facilitate effective markets and promote infrastructure development, and provide timely and accurate information."[44][45][46]

The California Public Utilities Commission oversees all privately owned electric utilities in the state. The governor of California is responsible for appointing the commission's five members. The commission oversees electric system safety, electric grid reliability, state-level renewable energy requirements, energy efficiency requirements, electricity rates, and power plant and utility infrastructure inspections and audits.[47]

As of February 2015, California had six investor-owned utilities, 46 publicly owned utilities, four rural electric cooperatives, three community choice aggregators (a city, county, or special district that aggregates the buying power of individual consumers to procure alternative energy supply contracts), and 22 electric service providers (a non-utility that offers electric service to customers within the territory of an investor-owned utility).[48]

A complete list of California electric utilities can be found here.

### Electric reliability organizations[edit]

The Energy Policy Act of 2005 required the Federal Energy Regulatory Commission (FERC) to designate an electric reliability organization (ERO) for the United States. An ERO oversees the reliability of a nation's electric grid. In 2006, FERC granted authority to the North American Electric Reliability Corporation (NERC) to develop and enforce grid reliability standards for the United States. NERC, a self-regulated nonprofit corporation, is authorized to enforce grid reliability standards for all users, owners, and operators of the U.S. electrical system.[49]

NERC works with eight regional reliability organizations to oversee the U.S. electrical system. These organizations, known as regional entities, are composed of officials from investor-owned utilities, federal power agencies, electric cooperatives, and state and municipal utilities. Regional entities enforce NERC and regional reliability standards. Further, they forecast electricity demand and coordinate operations with other regional entities.[50]

#### California EROs[edit]

As of February 2017, the Western Electricity Coordinating Council (WECC) was the NERC-affiliated corporation that oversees electricity in California. The WECC conducts studies and assessments of the electricity grid, conducts long-term planning, and develops regional standards for electricity reliability.[51]

# Background[edit]

The sections below include an overview of the types of renewable and nonrenewable energy produced and consumed in the United States, an energy profile of California (from the U.S. Energy Information Administration), a general profile of California (from the 2016 edition of the Almanac of American Politics), and various economic indicators in California.

### Background on energy resources[edit]

Nonrenewable energy sources, such as coal, oil, and natural gas (sometimes known as fossil fuels), and renewable sources, such as hydropower, wind, biofuels, and solar energy, are produced in each state, though at different levels depending on a state's geography, energy consumption, and the raw materials available in a particular state. For example, several states do not have coal, oil, and/or natural gas resources. States that lack these resources import these fuels.[52]

According to the U.S. Department of Energy, oil, coal, and natural gas comprise the majority of the resources used to generate power in the United States. In 2014, the top five energy-producing states were the top five fossil fuel-producing states—Texas, Wyoming, Pennsylvania, Louisiana, and West Virginia. These states' fossil fuel production accounted for approximately 42 percent of U.S. energy production in 2014. States with fewer coal, oil, and natural gas resources generally consume less energy. In 2014, the bottom five energy-producing states—Rhode Island, Delaware, Hawaii, Nevada, and New Hampshire—produced 0.2 percent of U.S. energy and consumed approximately 2 percent of total U.S. energy.[52]

The production of biofuels (liquid fuels created from plant or plant-derived materials) is generally concentrated in the Midwest—states such as Illinois, Iowa, Nebraska, and South Dakota) given the region's agricultural production of crops such as corn, which is used to make ethanol, a biofuel that can be blended with gasoline and used as a transportation fuel.[52]

Other renewable sources are used to generate power in the states include hydroelectric power, which accounted for about half of all renewable energy production in the United States in 2014.[52]

### California energy profile[edit]

As of 2015, California's energy demand was second to Texas. California's transportation sector accounted for the majority of the state's energy consumption. In 2015, California accounted for approximately 6 percent of total crude oil production in the United States. Petroleum reserves are found along the Pacific Coast and the Central Valley. In 2014, California ranked third among the 50 states in petroleum refining capacity. Crude oil pipelines transport oil to refineries in the Central Valley, the San Francisco Bay area, and Los Angeles.[24]

California's natural gas reserves and production are concentrated in the Central Valley, coastal basins onshore in northern California, and along the southern California coast. As of 2014, natural gas production in California accounted for less than 1 percent of total U.S. production. Natural gas is delivered to California from the Southwest, the Rocky Mountain region, and western Canada through interstate pipelines. As of 2014, approximately 67 percent of California households used natural gas for home heating; around 60 percent of California's in-state net electricity generation came from natural gas.[24]

California was ranked first in net electricity generation from solar energy, geothermal energy, and biomass as of 2014. The state ranked fourth in electricity production from hydroelectric power and wind energy. In 2014, California received at least 5 percent of its electricity generation from solar energy.[24]

## State profile[edit]

Demographic data for California

| California| U.S.
Total population:| 38,993,940| 316,515,021
Land area (sq mi):| 155,779| 3,531,905
Race and ethnicity**
White:| 61.8%| 73.6%
Black/African American:| 5.9%| 12.6%
Asian:| 13.7%| 5.1%
Native American:| 0.7%| 0.8%
Pacific Islander:| 0.4%| 0.2%
Two or more:| 4.5%| 3%
Hispanic/Latino:| 38.4%| 17.1%
Education
High school graduation rate:| 81.8%| 86.7%
College graduation rate:| 31.4%| 29.8%
Income
Median household income:| $61,818| $53,889
Persons below poverty level:| 18.2%| 11.3%
Source: U.S. Census Bureau, "American Community Survey" (5-year estimates 2010-2015)
Click here for more information on the 2020 census and here for more on its impact on the redistricting process in California.

* * *

**Note: Percentages for race and ethnicity may add up to more than 100 percent because respondents may report more than one race and the Hispanic/Latino ethnicity may be selected in conjunction with any race. Read more about race and ethnicity in the census here.

### Presidential voting pattern[edit]

See also: Presidential voting trends in California

California voted for the Democratic candidate in all seven presidential elections between 2000 and 2024.

More California coverage on Ballotpedia

* Elections in California
* United States congressional delegations from California
* Public policy in California
* Endorsers in California
* California fact checks
* More...

### Economic indicators[edit]

See also: Economic indicators by state

California's GDP increased by 2.8 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.[53][54][55]

California's median annual household income for years 2011 through 2013 was $57,161, highest among neighboring states. The state also had the largest percentage of residents that earned incomes of at least 400 percent above the federal poverty level.[56][57][58][59]

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

Various economic indicators by state

State  | Distribution of population by FPL* (2013)  | Median annual income (2011-2013)  | Unemployment rate  | Total GSP (2013)†
Under 100%  | 100-199%  | 200-399%  | 400%+  | Sept. 2013  | Sept. 2014
California | 15% | 21% | 28% | 36% | $57,161 | 8.8% | 7.3% | $2,202,678
Arizona | 20% | 23% | 25% | 31% | $49,698 | 8% | 6.9% | $279,024
Nevada | 17% | 26% | 28% | 29% | $49,204 | 9.6% | 7.3% | $132,024
Oregon | 15% | 19% | 31% | 35% | $54,066 | 7.6% | 7.1% | $219,590
United States | 15% | 19% | 30% | 36% | $52,047 | 7.2% | 5.9% | $16,701,415
* Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government."
† In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state."
Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

## See also[edit]

* Energy policy in the U.S.
* Fracking in California
* Net metering
* Renewable Portfolio Standard
* Environmental policy in California

## Recent news[edit]

The link below is to the most recent stories in a Google news search for the terms California energy policy. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Energy policy in California, 2002-2017 - Google News

## Footnotes[edit]

1. ↑ California Division of Oil, Gas, and Geothermal Resources, "Division of Oil, Gas, & Geothermal Resources," accessed March 20, 2017
2. ↑ California Division of Oil, Gas, and Geothermal Resources, "Oil, Gas, and Geothermal - Publications - Laws and Regulations," accessed March 20, 2017
3. ↑ 3.0 3.1 California Code of Regulations, "Title 14, Chapter 4," accessed March 20, 2017
4. ↑ WestLaw, "California Code of Regulations - Chapter 4. Development, Regulation, and Conservation of Oil and Gas Resources," accessed March 20, 2017
5. ↑ California Department of Conservation, "Well Stimulation Treatment Statutes and Regulations," accessed March 20, 2017
6. ↑ California Department of Conservation, "SB 4 Well Stimulation Treatment Regulations - Final Text of Regulations," accessed March 21, 2017
7. ↑ 7.0 7.1 7.2 7.3 7.4 U.S. Environmental Protection Agency, "Chapter 3. Funding and Financial Incentive Policies," accessed March 1, 2017
8. ↑ National Renewable Energy Laboratory, “State & Local Activities,” accessed January 30, 2014
9. ↑ National Conference of State Legislatures, "State Renewable Portfolio Standards and Goals," accessed March 14, 2017
10. ↑ 10.0 10.1 10.2 10.3 Institute for Energy Research, "California Energy Facts," accessed March 15, 2017
11. ↑ 11.0 11.1 11.2 DSIRE, "California - Renewable Portfolio Standards," accessed March 21, 2017
12. ↑ 12.0 12.1 12.2 California Energy Commission, "Renewables Portfolio Standard (RPS)," accessed March 21, 2017
13. ↑ Institute for Local Government, "Assembly Bill No. 811," accessed March 21, 2017
14. ↑ Go Solar California, "Solar and Energy Efficiency Finance Programs," accessed March 21, 2017
15. ↑ DSIRE, "California - Building Energy Code," accessed March 21, 2017
16. ↑ California Energy Commission, "2016 Building Energy Efficiency Standards for Residential and Nonresidential Buildings," accessed March 21, 2017
17. ↑ Database of State Incentives for Renewables and Efficiency, "Glossary," accessed October 22, 2014
18. ↑ Edison Electric Institute, "Straight Talk About Net Metering," September 2013
19. ↑ Call Me Power, "What is the difference between wholesale and retail electricity?" March 12, 2015
20. ↑ DSIRE, "California - Net Metering," accessed March 21, 2017
21. ↑ California Public Utilities Commission, "Net Energy Metering (NEM)," accessed March 21, 2017
22. ↑ DSIRE, "Net metering programs," accessed February 28, 2017
23. ↑ U.S. Energy Information Administration, "British Thermal Units (Btu)," December 15, 2014
24. ↑ 24.0 24.1 24.2 24.3 24.4 24.5 U.S. Energy Information Administration, "California State Energy Profile," May 19, 2016
25. ↑ U.S. Energy Information Administration, "Table 13. Productive Capacity and Capacity Utilization of Underground Coal Mines by State and Mining Method, 2014," accessed July 19, 2016
26. ↑ U.S. Energy Information Administration, "Crude Oil Production," July 31, 2015
27. ↑ U.S. Energy Information Administration, "Natural Gas Gross Withdrawals and Production," July 31, 2015
28. ↑ Congressional Research Service, "Federal Land Ownership: Overview and Data," December 29, 2014
29. ↑ U.S. Bureau of Land Management, "Public Land Statistics 2014," May 2015
30. ↑ Western Energy Alliance, "Production," accessed November 25, 2015
31. ↑ James M. Inhofe - U.S. Senator, Oklahoma, "Inhofe Introduces Bill to Achieve Domestic Energy Independence Through State Control of Federal Energy Resources," June 26, 2013
32. ↑ U.S. Bureau of Land Management, "Oil and Gas Lease Sales," accessed October 20, 2014
33. ↑ RWE, "How the electricity price is determined," accessed April 21, 2015
34. ↑ Forbes, "How The Price For Power Is Set," December 26, 2012
35. ↑ U.S. Energy Information Administration, "Gasoline and Diesel Fuel Update," accessed April 25, 2016
36. ↑ Tax Foundation, "How High Are Gas Taxes in Your State?" July 23, 2016
37. ↑ The Washington Post, "A (very) brief history of the state gas tax on its 95th birthday," February 25, 2014
38. ↑ American Petroleum Institute, "Motor Fuel Taxes," accessed April 27, 2016
39. ↑ U.S. Department of Transportation, "When did the Federal Government begin collecting the gas tax?" November 18, 2015
40. ↑ Business Dictionary, "Electric utility," accessed February 28, 2017
41. ↑ 41.0 41.1 U.S. Department of Energy, "A Primer on Electric Utilities, Deregulation, and Restructuring of U.S. Energy Markets," May 2002
42. ↑ 42.0 42.1 Electric Choice, "Map of Deregulated Energy States and Markets (Updated 2017)," accessed February 28, 2017
43. ↑ 43.0 43.1 Allied Power Services, "Deregulated States," accessed February 28, 2017
44. ↑ California Independent System Operator, "Our Committment," accessed March 21, 2017
45. ↑ Federal Electric Regulatory Commission, "Electric Power Markets: California (CAISO)," accessed March 21, 2017
46. ↑ California Independent System Operator, "The role of the California ISO," accessed March 21, 2017
47. ↑ California Public Utilities Commission, "The California Public Utilities Commission - Regulating Essential Services," accessed March 21, 2017
48. ↑ California Energy Commission, "Electric Load-Serving Entities (LSEs) in California," accessed March 21, 2017
49. ↑ WhatIs.com, "North American Electric Reliability Corporation (NERC)," accessed February 28, 2017
50. ↑ North American Electric Reliability Corporation, "Frequently asked questions," August 2013
51. ↑ Western Electricity Coordinating Council, "Standards," accessed March 16, 2017
52. ↑ 52.0 52.1 52.2 52.3 U.S. Department of Energy, "How Much Energy Does Your State Produce?" November 10, 2014
53. ↑ Academy Health, "Impact of the Economy on Health Care," August 2009
54. ↑ The Conversation, "Budget explainer: What do key economic indicators tell us about the state of the economy?" May 6, 2015
55. ↑ Health Affairs, "Socioeconomic Disparities In Health: Pathways And Policies," accessed July 13, 2015
56. ↑ The Henry J. Kaiser Family Foundation, "Distribution of Total Population by Federal Poverty Level," accessed July 17, 2015
57. ↑ The Henry J. Kaiser Family Foundation, "Median Annual Household Income," accessed July 17, 2015
58. ↑ The Henry J. Kaiser Family Foundation, "Unemployment Rate (Seasonally Adjusted)," accessed July 17, 2015
59. ↑ The Henry J. Kaiser Family Foundation, "Total Gross State Product (GSP) (millions of current dollars)," accessed July 17, 2015

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