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Thumbnail image for pereaedd.jpgDemocratic fissures over California's cap-and-trade mandates deepened on Thursday, with a key moderate Democrat introducing a bill to push back a looming rule expected to cause a spike in prices at the pump.

Assembly Bill 69 by Assemblyman Henry Perea, D-Fresno, would delay for three years a rule requiring the energy industry to purchase permits for transportation fuels. Lawmakers and critics have been warning for months about a resulting price bump.

California's landmark emissions-reducing law, AB 32, erected a first-in-the-nation carbon permitting program. The cap-and-trade program allows industry to buy allowances offsetting the climate change-fueling greenhouse gases they pour into the air.

The new system has already begun generating millions in revenue, with this year's budget dedicating the new revenue stream to a mix of affordable housing, mass transit and the high-speed rail project championed by Gov. Jerry Brown.

But the coming inclusion of transportation fuel into the program is threatening to push gas prices up, prompting alarm from pro-business Democrats. In a show of broad discontent, 16 Democrats last week sent a letter to the Air Resources Board urging the air quality regulator to delay implementing the new rule. Despite the complaint, all but one of them voted to spend the money the rule is expected to generate.

In response, 32 Democratic lawmakers signed a letter to Gov. Jerry Brown urging the governor to stay the course and bring fuel producers under the emissions regime on schedule. Environmentalists also decried Perea's bill.

"A fundamental redesign of AB 32 that allows oil companies to play by different rules than other industries would not only unacceptably delay action to reduce climate pollution, but could also disadvantage those industries that have already made investments to comply with the law," reads the letter, which bears the signature of both senators and Assembly members.

Perea said he still supports AB 32's overarching goal of reducing emissions but does not believe consumers have been adequately prepared.

"What we're really trying to do on this is create a public discussion, because I'm not sure the public is aware of cap and trade and what it's going to do to their pocketbooks," Perea said.

Editor's note: This post was updated July 3 at 3:40 p.m. to include the letter responding to Perea's bill.

PHOTO: Assemblyman Henry Perea, D-Fresno, speaks with reporters after a committee hearing at the Capitol on Nov. 6, 2013. The Sacramento Bee/David Siders


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