LAS VEGAS, Nev. (KOLO) – Nevada Governor Joe Lombardo is expressing concern over a California bill that could result in higher gas prices in Nevada.

On Tuesday, Lombardo sent a letter to California Governor Gavin Newsom sharing concern over the unintended consequences of SBX1-2. Lombardo says the bill could also raise gas prices for California and Arizona.

The legislation would:

• Authorize the California Energy Commission to set a maximum gross gasoline refining margin and impose a penalty for refiners that exceed it.
• Provide new data collection authority and create a division to monitor petroleum markets and flag potential market manipulation.
• Require an assessment of transportation fuel demand and discussion of methods to ensure a reliable fuel supply as the state transitions away from petroleum-based fuels.

You can read more about the legislation here.

Lombardo wrote the following:

“Since 88 percent of Nevada’s fuels are delivered via pipeline and truck from refineries in California, it’s no surprise that California’s fuel policies significantly impact the costs and availability of fuel for Nevada’s residents and businesses.

“As my administration has followed this issue, it seems that the new state agency the legislation created is getting closer to announcing a profits cap structure. While we have no details on what this might look like, I’m concerned that this approach could lead to refiners either constraining supplies of fuels to avoid a profit penalty or even leaving our shared fuels market entirely. Either scenario would likely lead to limited supplies and higher fuel costs for consumers in both of our states.

“Should this happen, I am sure Californians and Nevadans would share a demand for answers and relief from higher fuel costs and the impacts those costs could have across the economy.

“Before proceeding with a profits cap, I would request an assessment of potential impacts of this approach across the West, including not only California, but Nevada and Arizona too. To assist with this, my Office of Energy stands ready to immediately engage in proactive conversations with the California Energy Commission.

“Thank you for your consideration of this request. I’m hopeful that your administration will work to mitigate unintended consequences of SBX1-2, so that we can spare hard working Californians and Nevadans from further pain at the pump.”

Lombardo’s letter comes ahead of a Utilities & Energy Committee hearing Wednesday that would update the committee on the implementation of the legislation.

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