S-4554.1
SUBSTITUTE SENATE BILL 6052
State of Washington 68th Legislature 2024 Regular Session
By Senate Environment, Energy & Technology (originally sponsored by
Senators Nguyen, Conway, Hasegawa, Keiser, Kuderer, Liias, Pedersen,
Saldaña, Stanford, and Valdez; by request of Office of the Governor)
READ FIRST TIME 01/31/24.
1 AN ACT Relating to petroleum products supply and pricing;
2 amending RCW 19.86.140 and 42.56.330; adding a new chapter to Title
3 19 RCW; creating a new section; prescribing penalties; and declaring
4 an emergency.
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
6 NEW SECTION. Sec. 1. (1) The state of Washington finds and
7 declares that during an energy transition away from reliance on
8 fossil fuels, but until that transition is complete, petroleum-based
9 transportation fuels are of critical importance to the people and
10 businesses of the state. The legislature further finds and declares
11 that the Washington state government requires: A complete and
12 thorough understanding of the transportation fuels market, to enable
13 it to respond to possible shortages, price shocks, oversupplies, or
14 other disruptions. The legislature also finds that access to timely
15 data collection, analysis, evaluation, and reporting to serve
16 information and policy development needs of the governor, the
17 legislature, public agencies, market participants, and the public is
18 essential.
19 (2) Washington consumers, state and local agencies, businesses,
20 and policymakers, planners, and enforcement agencies lack access to
21 sufficient pricing and operational information held by refinery
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 1 operators, fuel suppliers, and others in the supply chain for
2 transportation fuels. Such pricing and operational information is
3 critical to understanding the relationship between the price and the
4 cost of production, identifying price and market manipulation, and
5 protecting Washington state consumers, government entities, and
6 businesses. Similar information is already available for other
7 critical fuels, such as electricity.
8 (3) To protect consumers, Washington state must collect detailed
9 pricing and operational information from refineries, fuel suppliers,
10 and others in the transportation fuels supply chain, analyze the
11 data, and provide summarized reports to the public and lawmakers to
12 expose relevant cost and pricing practices in the industry, and to
13 identify market manipulation, unfair or deceptive practices, and any
14 other manner by which market participants act to harm competition or
15 act contrary to the best interests of consumers in the state.
16 (4) Furthermore, to ensure that the market for transportation
17 fuels is free of anticompetitive and predatory conduct, the
18 legislature finds that additional legal consequences are needed to
19 ensure that transportation fuels industry practices do not harm
20 consumers.
21 NEW SECTION. Sec. 2. The definitions in this section apply
22 throughout this chapter unless the context clearly requires
23 otherwise.
24 (1) "Commission" means the utilities and transportation
25 commission.
26 (2) "Division" means the division of petroleum market oversight
27 established in section 3 of this act.
28 (3) "Export" means the sale or distribution of transportation
29 fuels outside of this state by a means of conveyance other than the
30 fuel supply tank of a motor vehicle.
31 (4) "Import" means to bring transportation fuels into this state
32 by a means of conveyance other than the fuel supply tank of a motor
33 vehicle.
34 (5) "Major marketer" means any person who sells transportation
35 fuels or crude oil intended in amounts determined by the commission
36 as having a major effect on transportation fuel supplies in
37 Washington.
38 (6) "Oil terminal operator" means a person who owns, operates, or
39 otherwise controls a terminal in this state.
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 1 (7) "Person" means any individual, partnership, association,
2 public or private corporation, limited liability company, or any
3 other type of legal or commercial entity, including their members,
4 managers, partners, directors, or officers.
5 (8) "Planned maintenance" means regular, periodic maintenance or
6 repair of one or more pieces of equipment within a refinery that
7 reduces output of transportation fuels at a level that may affect
8 market supply.
9 (9) "Refinery" means any industrial plant, regardless of
10 capacity, processing crude oil feedstock and manufacturing
11 transportation fuels in Washington.
12 (10) "Spot market transaction" means a single, bulk transaction
13 of at least 5,000 barrels, involving a maximum of one product and one
14 delivery, with title transfer occurring within one year.
15 (11) "Terminal" means a fuel storage and distribution facility
16 that has been assigned a terminal control number by the internal
17 revenue service.
18 (12)(a) "Transportation fuels" means gasoline, gasoline blending
19 components, and diesel.
20 (b) "Transportation fuels" does not include jet fuels and
21 maritime fuels.
22 (13)(a) "Turnaround" means a planned, periodic shutdown, total or
23 partial, of a refinery process unit or plant to perform maintenance,
24 overhaul, and repair operations and to inspect, test, and replace
25 process materials and equipment.
26 (b) "Turnaround" does not include:
27 (i) Unplanned maintenance; or
28 (ii) Planned maintenance.
29 (14) "Unbranded," as applied to fuel, means gasoline and diesel
30 fuel sold for wholesale or retail distribution to consumers without
31 proprietary additives or marketing under a brand name or trademark
32 owned or controlled by an independent refiner or an integrated
33 refining and marketing company.
34 (15) "Unplanned maintenance" means any maintenance or repair that
35 requires the shutdown of any part of the refinery that exceeds 72
36 hours oil out, oil in and was not scheduled as turnaround or planned
37 maintenance.
38 NEW SECTION. Sec. 3. (1)(a) The division of petroleum market
39 oversight is established within the commission.
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 1 (b) The division must operate with authority independent of the
2 commission's authority.
3 (c) The division must be led by a director, who is appointed by
4 the governor and holds office at the pleasure of the governor.
5 (d) The director of the division must employ and prescribe the
6 duties of other staff members as necessary to carry out the
7 provisions of this chapter. The staff must include, without
8 limitation, economists, individuals with expertise in transportation
9 fuels markets, and investigative staff with legal training.
10 (2) The division has the powers and duties to:
11 (a) Provide independent analysis and evaluation of the
12 transportation fuels markets for the protection of consumers by
13 identifying price manipulation, market manipulation, monopolistic
14 behaviors, and any other manner by which market participants act to
15 unfairly constrain the supply of transportation fuels or otherwise
16 harm competition;
17 (b) Provide guidance and recommendations to the commission
18 relating to the development of the assessment required by section 14
19 of this act and the transportation fuels transition plan described in
20 section 15 of this act;
21 (c) Provide guidance and recommendations to the governor, members
22 of the commission, and other divisions of the commission on issues
23 related to transportation fuels pricing and supply in Washington;
24 (d) Report its findings and recommendations to improve market
25 performance at least annually to the legislature, the governor, the
26 commission, the attorney general, the department of ecology, the
27 energy resilience and emergency management office of the department
28 of commerce, and the department of licensing;
29 (e) Subpoena witnesses, compel their attendance and testimony,
30 administer oaths and affirmations, take evidence and require by
31 subpoena the production of any books, papers, records, or other items
32 material to the performance of the division's duties or exercise of
33 its powers including, but not limited to, current and historical
34 pricing and sales data and contracts with other petroleum industry
35 participants; and
36 (f) Refer potential violations of this chapter to the attorney
37 general confidentially at any time.
38 NEW SECTION. Sec. 4. (1) Beginning January 1, 2026, a refinery
39 must submit the following information to the division monthly:
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 1 (a) The refinery's acquisition cost of crude oil, by volume and
2 country of origin;
3 (b) Imports of transportation fuels and ethanol, by acquisition
4 cost and volume;
5 (c) Exports of transportation fuels and ethanol, by volume and
6 sale price;
7 (d) Refinery outputs of transportation fuels, by volume,
8 including all gasoline sold unbranded;
9 (e) Refinery capacity, and utilization and method of
10 transportation of refinery receipts and distributions; and
11 (f) Washington weighted average prices and sales volumes of
12 transportation fuels sold through company-operated retail outlets, to
13 wholesale customers, and to other end-users.
14 (2) Beginning January 1, 2026, an oil terminal operator must
15 submit the following information to the division monthly:
16 (a) The acquisition cost of transportation fuels by volume, sales
17 by volume, including fees, surcharges, and taxes on transportation
18 fuels;
19 (b) The volume and sale price of transportation fuels;
20 (c) Imports of transportation fuels, by volume and acquisition
21 cost; and
22 (d) Exports of transportation fuels, by volume and sale price.
23 (3) Beginning January 1, 2026, a major marketer must submit the
24 following information to the division monthly:
25 (a) The acquisition cost of transportation fuels by volume, sales
26 by volume, including fees, surcharges, and taxes on transportation
27 fuels;
28 (b) Facility capacity, methods of transportation and
29 distribution, and sale of transportation fuels by volume and price;
30 (c) Imports of transportation fuels, by volume and acquisition
31 cost; and
32 (d) Exports of transportation fuels, by volume and sale price.
33 (4) A refinery, oil terminal operator, or major marketer
34 submitting information under this section must include the full names
35 of all persons or entities that directly or indirectly own 10 percent
36 or more of the refiner, oil terminal operator, or major marketer
37 submitting the information.
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 1 NEW SECTION. Sec. 5. (1) Beginning January 1, 2026, a refinery,
2 major marketer, or oil terminal operator must retain for division
3 review, for at least three years:
4 (a) Copies of all contracts or agreements entered into and any
5 amendments to such contracts or agreements, with another refinery,
6 oil terminal operator, major marketer, or other entity that trades in
7 transportation fuels; and
8 (b) Records of each transaction made under the contracts or
9 agreements in (a) of this subsection and the prices charged for those
10 transactions.
11 (2) Other entities, including, without limitation, proprietary
12 storage companies, that commercially trade in transportation fuels
13 must retain for division review, for at least three years:
14 (a) Copies of monthly transportation fuels inventory volume
15 records by type for each position holder by name of company; and
16 (b) Copies of all contracts or agreements entered into with any
17 refinery, oil terminal operator, major marketer, or other entity that
18 trades in transportation fuels.
19 (3) The requirements of this section apply regardless of whether
20 the entity takes possession of the transportation fuels, as
21 designated by the commission by rule.
22 NEW SECTION. Sec. 6. Beginning January 1, 2026, a refinery, oil
23 terminal operator, major marketer, or other entity that trades in
24 transportation fuels, completing a spot market transaction for
25 transportation fuels must submit the following information, for each
26 transaction, to the division monthly:
27 (1) The identity of the spot market;
28 (2) Whether the transaction was reported to the oil price
29 information service, or any other price reporting service, and the
30 time of the reporting;
31 (3) The date;
32 (4) The contract identification number;
33 (5) The position sequence number;
34 (6) The contract position identification number;
35 (7) The name, or nonanonymized identification, of the executing
36 trader;
37 (8) The counterparty, including company name and name or
38 nonanonymized identification of the executing trader;
39 (9) Whether the reporting entity is the seller or buyer;
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 1 (10) The broker, including company name and name or nonanonymized
2 identification of the executing broker;
3 (11) The type of transportation fuel bought or sold;
4 (l2) The product name for each type of transportation fuel;
5 (13) The volume in thousands of barrels, or other specified unit
6 of measurement if unable to be indicated in thousands of barrels;
7 (14) The invoiced volume in thousands of barrels, or other
8 specified unit of measurement if unable to be indicated in thousands
9 of barrels;
10 (15) The date and time the transportation fuels are scheduled to
11 be delivered or were delivered;
12 (16) The delivery location specified in the contract and the
13 actual delivery location;
14 (17) The method of transportation for the delivery, such as
15 pipeline, marine vessel, or truck, and the name of the transport;
16 (18) The actual title transfer date;
17 (19) The contract subcycle, including descriptors such as "any,"
18 "L3," "FH," "BH," "C1," "C2," "C3," or "C4";
19 (20) The type of pricing method, including exchange of futures
20 for physical, fixed price, fixed date range, floating date range,
21 reference formula, oil price information service close, event-related
22 date range, such as seven days on and around delivery or discharge,
23 or any other utilized method of pricing;
24 (21) The contract price formula, including the differential from
25 any contract formula and the unit of measurement for any price
26 differential;
27 (22) The pricing start and end dates for each contract;
28 (23) The price value of the contract; and
29 (24) For exchange of futures for physical contracts, the name of
30 the futures product, the contract month of the futures product
31 expressed as the two-digit month and the two-digit year (MM-YY), and
32 the price value of the futures product.
33 NEW SECTION. Sec. 7. (1) Beginning January 1, 2026, a refinery
34 must report quarterly all the following information, at a minimum,
35 regarding planned maintenance, unplanned maintenance, or turnaround
36 completed during the previous quarter:
37 (a) A brief description of the completed work;
38 (b) The start and return-to-service dates;
39 (c) The individual process units involved;
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 1 (d) The name and operational capacity of each process unit
2 involved;
3 (e) The daily decrease in output of transportation fuels;
4 (f) The quantity of contractual supply obligations for
5 transportation fuels due during the planned maintenance or
6 turnaround;
7 (g) The drawdown of inventory levels of transportation fuels
8 produced by the process unit that are controlled by the refinery on-
9 site and at other storage locations in this state during the planned
10 maintenance event or turnaround, and the levels of such inventories
11 immediately before the planned maintenance or turnaround began; and
12 (h) Imports of transportation fuels produced by the process unit
13 in preparation for or during the planned maintenance or turnaround.
14 (2) For unplanned maintenance, a refinery must submit the
15 following additional information:
16 (a) The name and operational capacity of each process unit
17 involved in the unplanned outage;
18 (b) The daily decrease in output of transportation fuels from
19 each process unit affected by the unplanned outage;
20 (c) The inventory levels of transportation fuels produced by the
21 process unit affected by the unplanned maintenance that is controlled
22 by the refinery on-site and at other storage locations in this state
23 during the unplanned maintenance;
24 (d) A description of the reason for the unplanned maintenance;
25 (e) The duration of production reduction;
26 (f) The return-to-service date;
27 (g) The total decreased output of transportation fuels from each
28 affected process unit;
29 (h) The total increased output of transportation fuels from other
30 process units, by type of product, to partially