With help from Blanca Begert, Dustin Gardiner, Jessie Blaeser and Jordan Wolman
FIRE SALE — There’s a new climate job in town, but it comes at a political cost.
California insurance commissioner used to be a stable bolthole for ambitious politicians waiting for a plum statewide position to open up. But catastrophic wildfires fueled in part by drought and rising temperatures have thrust the department to the front line of climate politics, writes Camille.
Insurance Commissioner Ricardo Lara, who was elected to the position in 2019 as a former state lawmaker with national ambitions, is finding himself in a no-win situation as he tries to prevent insurance companies from fleeing the state.
“I think when Commissioner Lara ran he was sort of like, ‘This is like lieutenant governor, but with more stuff to do,’” said Michael Wara, who’s consulted with the state Senate and energy regulators on wildfire and utility policy and directs Stanford University’s climate program. “I don’t think anybody thinks about it that way anymore.”
After first seeking cover from state lawmakers, who failed to reach a deal, Lara announced last week he would allow insurers to increase rates in exchange for promising they’ll stay in the state.
Whether the plan will work is an open question. The development of new rules is expected to take more than a year. A voter backlash is also possible given that Californians have benefited from some of the country’s lowest property insurance rates for decades.
Lara is likely to leave office before his pricing reforms take full effect. He’s said to be eyeing his next move after the end of his second term in 2026, including a potential run for Los Angeles County supervisor.
That leaves the next insurance commissioner to inherit a growing crisis in which nearly all the proposed solutions are likely to cost consumers.
“On its surface, it’s not a very winning message to put forward, unless you have everybody on the same page helping to explain that,” said Byron Tucker, a former longtime communications aide to insurance commissioners.
His recommendation to those considering a bid for the position: “Make friends.”
INTO THE WEEDS — In related news, the Insurance Department got an earful in a public workshop today from insurers, modelers, consumer advocates and local officials about what they want to see in the models companies use to set insurance rates.
One plea came from Colette Curtis, the recovery and economic development director for the town of Paradise, which was nearly wiped off the map by a 2018 wildfire. The community wants to see its efforts to withstand another disaster, like using fire-resistant building materials and creating neighborhood fuel breaks, recognized in insurance costs.
“Having affordable and available insurance is absolutely vital for our community,” said Curtis. “Without it, we will not recover.”
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LCFS ÜBER ALLES — California’s trading program for climate-friendly fuels is taking to the skies with a nascent proposal to start forcing airlines to account for their emissions in the state’s airspace.
The California Air Resources Board at a meeting today shared the broad strokes of its aviation fuels plan. The plan would require airlines to purchase credits to offset emissions in California’s airspace, similar to the way the state regulates interstate trucking, said Rajinder Sahota, CARB’s deputy executive officer for climate change and research.
The requirement would apply to fuel burned within California, which accounts for about 1 percent of state emissions, Sahota said.
“We’re talking about the fuel volume that is combusted within our geographic borders,” she said. “Independent of the location of where it originates or where it lands.”
Today, airlines can get LCFS credits for using lower-carbon fuels, but they’re exempt from having to pay for their fossil fuel emissions the way other sectors do.
Environmental justice advocates and unionized airport workers called on CARB to make the rules even more stringent, forcing airlines to account for the emissions of international flights that originate from or arrive in California.
“The airline industry gets a significant amount of subsidies on its fuel tax for interstate travel in California,” said David Huerta, president of SEIU California and SEIU United Service Workers West. “Not only are they getting those subsidies, but not reporting as part of the low-carbon-fuel standard, it feels like they’re getting it both ways.”
Between 50 and 100 workers represented by SEIU United Service Workers West showed up at the meeting at the California EPA building and held a lunchtime press conference outside calling on the board to clean up the air around airports.
Sen. Henry Stern (D-Sherman Oaks) participated in the meeting as a nonvoting, ex-officio member and spoke in support of more stringent aviation rules at the union press conference. “Right now, it’s all carrots,” he said of the program’s credits for sustainable aviation fuel.
The aviation proposal would be included in an update to the LCFS that CARB is working on. The agency published a preliminary assessment of financial impacts Sept. 8 and can publish a draft of the update 60 days after that.
PAIN AT THE PUMP — Gas prices in California are once again soaring, hitting a statewide average of $6.03 on Thursday. That hasn’t gone unnoticed by Democratic Gov. Gavin Newsom, who earlier this year championed a plan to allow state energy regulators to fine oil refineries over their excessive profits.
Newsom sent a letter to the California Energy Commission and CARB last night urging them to begin the regulatory process to cap gasoline profits (the CEC’s job) and also allow refineries to begin selling cheaper, winter-blend gasoline earlier in the year (CARB’s job). “Oil companies are ripping you off, and we’re going to get to the bottom of it,” he said.
CARB said this afternoon that it would allow the early switch. (The state usually saves its cheaper but more-polluting supplies for wintertime, when ozone formation is less of a problem.)
It’s unclear what the timeline will be for the CEC, which only started collecting a wider range of oil market data this summer. Tai Milder, the director of the Petroleum Market Oversight Division, said at a press conference this afternoon that the early data suggested the gasoline market is “not operating competitively” but declined to say what regulatory actions might be on the table.
“We’re early days in getting the benefit of the transparency provisions in the law,” he said. “It’s sort of hard at this early stage to say exactly what we’re going to need and how much of it we’re going to need.”
Republicans, meanwhile, are again urging Newsom and Democrats to ease prices by suspending the state’s gas tax.
BIG BUSINESSES GET READY — Some of the nation’s largest energy companies are going to have to start reporting their greenhouse gas emissions to the California Air Resources Board if Newsom signs a pair of corporate climate-disclosure bills on his desk.
Houston-based Exxon Mobil, Charlotte, N.C.-based Duke Energy and Columbus, Ohio-based American Electric Power are among the biggest emitters that would be covered by SB 253 and SB 261, Jordan Wolman and Jessie Blaeser report.
The bills would require companies with at least $1 billion in annual revenue to disclose emissions and those with at least $500 million in annual revenue to disclose financial risks related to climate change starting in 2026. Newsom has said he’ll sign them but that they may require some “clean up.”
— Sempra was the biggest contributor to statewide races for the first half of the year.
— How ag titans controlled last winter’s Central Valley floods.
— Former Gov. Jerry Brown tells “Morning Joe” he’s “generally not in the hope business” and “we’re just playing with the climate in a way that it’s going to come back to bite us.”
