The health of California’s economy depends upon reliable, affordable, and environmentally sound supplies of energy. The rising cost of energy hurts both consumers who must spend a greater percentage of their income on energy and businesses who see their profits shrink as their energy costs rise. California is exceedingly vulnerable due to its increasing dependence on natural gas and petroleum fuels, leading to supply and pricing concerns. 

A critical infrastructure issue is the state’s electricity transmission system, which has become progressively stressed in recent years, further increasing operational costs and reducing system reliability. California’s petroleum import and refinery infrastructure also faces challenges including the conflict between the need to meet transportation fuel demands and the concerns of local communities affected by these needed expansions. In the natural gas sector, California has made infrastructure improvements that will increase the reliability and operational flexibility of the natural gas system, but must still address the need for additional pipeline capacity to meet peak demand.