SECTIONS 25720-25721

25720.  (a) By January 31, 2002, the commission shall examine thefeasibility, including possible costs and benefits to consumers andimpacts on fuel prices for the general public, of operating astrategic fuel reserve to insulate California consumers andbusinesses from substantial short-term price increases arising fromrefinery outages and other similar supply interruptions. Inevaluating the potential operation of a strategic fuel reserve, thecommission shall consult with other state agencies, including, butnot limited to, the State Air Resources Board. (b) The commission shall examine and recommend an appropriatelevel of reserves of fuel, but in no event may the reserve be lessthan the amount of refined fuel that the commission estimates couldbe produced by the largest California refiner over a two week period.In making this examination and recommendation, the commission shalltake into account all of the following: (1) Inventories of California-quality fuels or fuel componentsreasonably available to the California market. (2) Current and historic levels of inventory of fuels. (3) The availability and cost of storage of fuels. (4) The potential for future supply interruptions, price spikes,and the costs thereof to California consumers and businesses. (c) The commission shall evaluate a mechanism to release fuel fromthe reserve that permits any customer to contract at any time forthe delivery of fuel from the reserve in exchange for an equal amountof fuel that meets California specifications and is produced from asource outside of California that the customer agrees to deliver backto the reserve within a time period to be established by thecommission, but not longer than six weeks. (d) The commission shall evaluate reserve storage space fromexisting facilities. (e) The commission shall evaluate a reserve operated by anindependent operator that specializes in purchasing and storing fuel,and is selected through competitive bidding. (f) (1) Not later than January 31, 2002, the commission and theState Air Resources Board, in consultation with the other state andlocal agencies the commission deems necessary, shall develop andadopt recommendations for the Governor and Legislature on aCalifornia Strategy to Reduce Petroleum Dependence. (2) The strategy shall include a base case forecast by thecommission of gasoline, diesel, and petroleum consumption in years2010 and 2020 based on current best estimates of economic andpopulation growth, petroleum base fuel supply and availability,vehicle efficiency, and utilization of alternative fuels and advancedtransportation technologies. (3) The strategy shall include recommended statewide goals forreductions in the rate of growth of gasoline and diesel fuelconsumption and increased transportation energy efficiency andutilization of nonpetroleum based fuels and advanced transportationtechnologies, including alternative fueled vehicles, hybrid vehicles,and high fuel efficiency vehicles. (g) The studies required by this section shall be conducted inconjunction with any other studies required by acts enacted duringthe 2000 portion of the 1999-2000 Regular Session dealing withgasoline prices.25721.  The commission shall report its findings and recommendationsto the Governor, the Legislature, and the Attorney General byJanuary 31, 2002. If the commission finds that it would be feasibleto operate a strategic gas reserve to insulate California consumersand businesses from substantial, short-term price increases arisingfrom refinery outages or other similar supply interruptions, thecommission shall request specific statutory authority and funding forestablishment of a reserve.