Jerry Brown calls for federal investigation into “scorched-earth” tactics of oil companies

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In an attack on the price-gouging practices of oil companies, California Governor Jerry Brown today called for a federal investigation into the California Public Utilities Commission’s “scorched-earth” tactics when confronted with gas price hikes to cover the company’s costs.

“The state Public Utilities Commission has treated gas customers like cattle –- in an effort to avoid the fact that prices are going up, they have cut gas service to the public in order to make it appear that prices are staying low,” said Brown, adding that this “scorched-earth” policy has had a devastating impact on the state’s economy.

“If it continues, we will lose thousands of good-paying jobs, and California will look like Greece at the peak of the debt crisis,” Brown said.

But in his remarks today, as he delivered a speech on the state budget, Brown also took aim at the very same government agencies, arguing their aggressive tactics have not only caused gas prices to soar but also cost California over $5.5 billion in taxes paid by the public. The impact, said Brown, has been “the worst economic impact” on the state in the past decade.

“All of this is a direct result of the PUC’s actions,” he said.

He pointed to a number of recent hearings that have played out in California.

“In June, the PUC took a look-see at the impacts on gas prices, concluding that we needed to do everything we could to avoid an even bigger increase in gas prices. That’s a reasonable recommendation, under the circumstances, but they did not carry out the investigation in a manner that would protect the public interest,” said Brown.

In July, the PUC issued a report that said gas prices had risen by 14% in the last year, and that “this price hike has been partially offset by a reduction in demand from industrial, commercial and consumer use”.

But the PUC’s report also said that “when you look at the impact on retail gas prices, we are faced with a situation where the retail gas price has doubled in the past year”.

In other words, Brown said the

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