Assembly Budget Subcommittee No 4 Climate Crisis Resources Energy And Transportation

Do roll right to start. Great. Before I read all this. Yeah.

Bennett? Here. Connelly?

Teechie-Norris? Here. Rogers? Here.

Good morning

There we go. Now we. Okay. Good morning, chair members. My name is David Evans with the Department of Finance. I will be presenting the two trailer bill language proposals in issue one. The 2026 governor's budget proposes two trailer bill language to consolidate the remaining funding for the demand-side resources to respond to grid emergencies this summer for 2026, while also transitioning the state's efforts and resources towards emergency demand response efforts to have more reliable funding streams and to provide the greatest benefit to rate payers. So the administration's intent was for the program not to rely on ongoing funding from the state. Given the general fund structural deficit and the constraints of the Greenhouse Gas Reduction Fund, it is no longer sustainable to continue to appropriate funding to support the demand-side grade support program, the DSGS program. Therefore, the administration proposes to transition the state's emergency demand response services to a rate-payer funded program that directly benefits rate payers. So for the summer of 2026, the first language proposal listed under issue one authorizes the general fund that was originally appropriated for the deeper program that distributed energy backup assets program to be used for the demand side grid support program to support any emergencies triggered demand reductions during the 2020 summer session. So this is a redirection of approximately like $26.9 million general fund. Originally at the governor's budget, we estimated that it would be $22 million. This is an update to that amount. So it's now $26.9 million at governor's budget. That's in Diva funding that will be to supplement the remaining DSGS money for a combined total about $56.9 million to respond to grid emergencies during this summer. The second language proposal authorizes the accumulated interest that's in the Cal State program, the California Healthy Schools Air Plumbing and Efficiency Program, which is about approximately $70 million to be returned to electrical rate payers for the use of demand and respond services for summers 2027, summers 2028. Or a cost equivalent program underneath the PUC. This language also directs the CDC and the PUC to work together towards transitioning, existing electrical corporation customers that participate in a DSGS program to the ELRP, the Emergency Low Reduction Program, or an equivalent program underneath the PUC. With me, my colleagues from the PUC and from the CEC that can answer specific programmatic questions regarding their respective programs, the Emergency Low Reduction Program with the PUC, the Cal State Program, and then also DSGS, DEBA, WEDC. So this concludes my presentation and we're happy to answer any questions that you may have.

They're just here for questions.

We don't have any specific concerns on the proposal. One thing I'd want to note, though, is that one part of the proposal, as you heard, reallocates some general fund from DEBA to DSGS. We wanted to highlight that absent this action, that funding would naturally revert back to the general fund. So really the tradeoff for you is would you want that as general fund savings or is DSGS kind of among your highest priorities for general funds?

Yeah. All right. Great. OK. So I want to make sure we cover the questions that we presented so that you guys are aware of these. So let's just go ahead and make sure we move through those. How much funding remains for the administrative overhead portion? Is that the $26 million that you're referring to in the Cal SHAPE program?

Okay. Next question. How many already awarded school projects, how many already awarded school projects and what dollar amount of funding do you estimate may be unable to meet the encumbrance's deadline and therefore return to the investor-owned utilities?

Great. And I have lectured everybody about being close to the mic and then I failed to do that myself, right?

Yeah, that's a hard question for staff to have insight into for the LEAs. So I would ask for the schools to be able to speak to that, but I can provide you some background.

So we've provided $789 million in grants. There's over 1,100 grants to over 6,000 schools. Grants were provided in tranches with a two-year term. The program, the last extension ends October 31st, 2026, and there's 109 grants totaling $113 million that come to the term on October 31st. Roughly we seeing about a 15 rate of unused from the schools so schools that were provided grants and won be moving forward But I can speak to the specifics of those schools

15 percent.

Of 109.

I would say that the CEC has been doing a lot of efforts to streamline communication. We have office hours to strengthen the school's ability to finish their projects on time.

I can take that question. Good morning, everyone.

Could you give me that number again?

Okay. Thank you. Before I ask my other questions, I want to point out we have staff giving us the alternative to opine about option one, which is keep the funding with DSGS and the program at CEC or move the funding per the recommendation of the administration. This is your opportunity to defend the administration side of that. And so I just want to make sure you know that at least a significant percentage of assembly members are leaning towards option one, which is keep the program with DSGS and keep it, you know, keep the DSGS and have the funding stay with CEC. I say that in the spirit of cooperation and professional dialogue that we can have, but I didn't want this to sort of come at the end and have you go, I wish we would have known that we would have said X, Y, and Z. This is your opportunity to say X, Y, and Z, because I would be remiss if I didn't let you know there's significant legislative interest in keeping it at the CEC and doing that. So as I go on, feel free to work that rationale into your program. Do you envision increasing the ratepayer-funded portion of the ELRP program to increase enrollment, or will these one-time funds be the only program increase?

Do you envision the successor program will continue to exclude residential customers?

What are the things that you think made it highly cost ineffective?

I wanted to see if the Department of Finance had anything that they wanted to contribute as well.

So I'm going to digress here for a moment. It is the situation has changed. We're less likely to be facing these emergency blackouts and brownouts that we were talking about in the summertime. But there is still a tremendous value in demand grid response and having a flexible system out there. So I think that's part of what's going on is that legislators think that's a good thing for us to have, that demand response. and it seems to be fairly efficiently administered by the CEC and fairly well-subscribed and could be better subscribed if we had more funding and went that direction. Why would we not want to – let's say we're pretty confident we're not going to have the blackouts, et cetera. This is your opportunity to say, why would we not want to keep that program that has been fairly successful and seems to have capacity to expand.

I wanted to just make sure that others had space to share their...

Start again, say that again.

Thank you. Is there, if we're not having events right now, then why would we want to fund the ELRP program?

And so this is a question for both you and for Department of Finance, and that is, is there something you don't like about the current DSGS program and the CEC's administration of it? Is it a negative or is it just the issue of, you know, you're trying to transition the program so that there's not general fund dollars? Because one option out there, get this all out on the table, one option out there is fund this for another couple of years and the program hopefully would be at the point where it could actually be able to support itself. As they get better at it, they get the economies of scale of it, et cetera.

The PUC's open rulemaking is to encourage that type of feedback, to understand the lessons learned, what are the benefits from the demand-aside-grade support program that can be incorporated into the ELRP or another alternative program.

So if I can be clear, if we're Just transferring the funds from one program to another program, it's not really a drain on the general fund at this point in time. Am I correct?

but Assemblymember Cotty Pichin-Norris has. Thank you. So it does feel like we're kind of, I think there's three questions at hand, and it seems like some of the responses are conflating those. So I think, you know, the first question is, do we think that a demand response makes sense for California and for California rate payers as we are building out our grid and as we are poised to bring on just record levels of new demand. I think that the answer to that is indubitably yes. Would be curious if you don't agree with that. But I think as a foundational point, I think the answer to that is yes. The second question is, which program should we build on? Is it ELRP or is it DSGS? And then the third question is, so how do we fund that? I guess you can start with that first question. Do you think there's any dispute that some kind of a demand response program is an important part of our strategy as we move forward?

Anyone else? Okay. I guess they all agree. So then kind of moving, I guess, to the second question around DSGS and ELRP. And I'll say I think many of us were very surprised by this budget proposal and by the proposal to effectively sunset DSGS. So as the staff report notes, the DSGS program has enrolled capacity of more than 1,100 megawatts with a program budget of roughly $109 million allocated. ELRP currently has about 190 megawatt enrollment, which has actually gone down over time. So given the stark difference in capacity, why does this proposal sunset DSGS rather than sunset ELRP? And I don't answer about how it's funded, because that's the third question.

That way, you said not to mention the funding mechanism, but that's a huge component of it.

So my question is more—

But not in the short term, you're using the interest from CalShape.

You're not?

Okay. But, again, I think sometimes we get ourselves a little bit confused when we think of California taxpayers and California ratepayers as different people. And I think one of the things that I've been very concerned about is that in times of general fund constraint, we find it really easy to just add stuff onto utility bills. Like these are all the same people paying for this. So I think that's why the conversation about how we pay for it needs to be the third part of the conversation. Because I think that the broad assessment, well, I won't speak for my colleagues. My assessment is that DSGS has been successful and has been cost effective. I mean, is there somebody from CEC here?

Sorry. Okay. Is that the, thank you. Okay. So is it the assessment of the CEC that the DSGS program has been a success and has been cost effective?

Okay And yes acknowledging that Though I will note and maybe this is unfair but I just looking So you just mentioned you got million in administrative costs in 2025 Correct That was our actual expenditures And then for the ELRP program you had I think in 2025 alone SoCal Edison and PG recorded over million in administrative costs So let me make sure I'm at least on the administrative costs comparing apples to apples. So how much does it cost to administer DSGS versus ELRP?

Okay. Remind me how much of enrolled capacity. Of 1,100 megawatts enrolled capacity. Okay. And 525 megawatts of incremental performance.

for how much of enrolled capacity?

correct the record director, just the number that I gave you, the 525, was incremental demonstrated capacity based on test events. And with program experience, you can provide the D rate. Now that DSGS has experience, we're providing that to the CAISO.

The 237 number is based on analysis from actual heat waves that have occurred and what performance occurred So not from last year The program been in place since about 2021 for ELRP Yeah I guess it does feel like to me and perhaps some of the information we have

As the chair said, as outlined in the staff report, there's kind of the there's two options. Number one, keep the funding for DSGS at CEC. Or number two, move the funding to ELRP or create a successor program. Yeah, so that April 8th ruling that went out is that that's the purpose of the ruling is to get those data points to try and do a comparison between the two programs asking about both of the programs a point blank and that ruling was issued in our demand response proceeding on April 8th. So some comments have come in when we have reply comments that are coming in too. And so hopefully we'll be able to get those two data sets and try and do this comparison.

The plan is like you're going to design the new load reduction program.

So we plan to have a proposed decision out in Q3 of 2026.

But again, like Mr. Evans said, this is really looking forward, 2027. There is this current plan in place that has DSGS for the summer and all of the details that he shared. But we plan to have a decision out in Q3, 2026, so that the market, the customers, all the stakeholders have an idea of what's going to happen in 2027.

Right.

This is the ruling that came out on April 8th. The schedule that has been provided publicly was that we're putting out a decision in Q3 of 2026. That schedule was put together because of this proposal, because of the work of our colleagues at the CEC, so that customers and stakeholders will have an idea of what's going to be happening in 2027. So we're building that record right now.

I just want to make sure everyone knows we have over a dozen demand response programs that are that exist and have funding for the next several years so I just want to make sure people don't think these two programs are the bedrock of our demand flexibility for the state of California.

Yes, all of those are. The existing programs are programs that have penalties for not showing up, are cost-effective, and have a multi-year program budget.

Yes. You're talking about trying to adjust the price to create the incentives for people to be in the program, et cetera. Yes, they do.

I defer to the Department of Finance.

Currently right now, the funding for the remaining DBA funding, the encumbrance period, it ends June 30th of this year. And so in statute, we have to make a decision. And currently right now, the proposal is to extend that encumbrance period by a year until June 30th of 2027. Transfer the money, keep it in DSGS.

is that one-fifth of cost would imply that DSGS is many times more cost effective.

So I have one question for, I think, CEC, but what year did DSGS start enrolling customers?

Okay.

Correct.

Correct.

And we are now at this, and you have four different versions of the program.

And one of those participation pathways is performance-based?

Great. So I wasn't finished with my questions, but I'm going to say sort of some of my concluding. So do we need DSGS even when we don't have these emergency crisis situations is a fundamental sort of philosophical question that's out there. It was asked by the assembly member. And the perception, I think I'm accurate in saying a significant percentage of the legislators do think we need that. And then the second half of the question is, a program that was able to be launched in five weeks that's got this kind of enrollment after three and a half years, and we're talking about trying to keep it going for another two years in hopes that it gets to the point where it actually can sustain itself. Why would we be ending that program and contrasting it with a much more complex implementation process that takes more time, more studies, and has so far lower results in terms of this? And partially there's an apples to oranges issue here because you're setting it up for when we have the crisis. But still, why in this one that strikes us as very efficient for a process that has not matched the same sort of sense of efficiency that's out there? That's the question that still remains. And so I'll let you.

But the proposal's in front of us now. Understood. But I agree with the question. And so if the response is, well, we're trying to find out why we should kill this program, that's a little bit different than sort of saying we currently have the answer as to why we would go after an efficient program. But we really appreciate this. And there's no hostility in this. This is just how professionals sort of try to sort out where we go here. Yeah, go ahead.

And that's, you know, the Assemblymember talked about, should we treat ratepayers differently than taxpayers, et cetera? If philosophically, if that's why we're doing this, for that philosophical reason, that's different than saying this program hasn't been the effective way for us to go about demand response, flexible demand response. So I'm not hearing anything that says this is not the program for flexible demand response. I'm hearing we don't want to fund it any longer with general funds, right? And if we're going to fund it with rate payers, we need to move it away from that. That's a longer-term decision because right now we're talking about transfers of funds that we already have, the interest, et cetera. Am I accurate in that? Is there anything I said in there that you think is not accurate and looks like somebody's ready to jump? All right, go ahead.

Great. Thank you. Again, I appreciate it. Just to be able to clarify. So I have just two, I have three other quick questions so that we can move on. And still, do you guys have things you want to jump in on this? Okay. So I'm going to make sure we knock these three questions out so that staff has everything that they need. Can you estimate what percentage of peak load during the declared EEA events is from residential customers?

Okay.

Okay, thanks. Roughly 35% and we would expect it to increase. Anything else along the answer to that question?

Yeah. Okay. Thank you. And when does the CPUC anticipate finalizing program rules for the successor program?

The CEC analysis which is in its draft 2024 IPER which is the Integrated Energy Resource Plan reports that in 2024 we were at 3 gigawatts of load flexibility And this is a 10% increase from 2022, largely due to customer battery storage adoption. CEC projects that under a business-as-usual scenario, the state will have 4 gigawatts of load flexibility by 2030.

But we won't hit the 7 gigawatt goal by 2030, or will we hit the 7 gigawatt goal by 2030?

So CPUC still feels like we will meet this goal?

Great. Thank you. Thank you very much.

Yeah, mostly I just wanted to chime in because there seems to be a philosophical disconnect that my colleague kind of pointed out, which is the legislature has been moving in the direction of trying to remove things from what ratepayers are paying for and making sure that we fund them through other more appropriate avenues like the general fund. This is the complete opposite. I think that's why you're getting so many questions from legislators is whether we discuss that this program is effective. Really, that's the philosophical problem that many of us are having with this. Second, and I know you can't compare directly between the two programs, the data seems to suggest to legislators that one program has been more effective at enrolling folks for a cheaper administrative burden. And so my question really, because I was on a board of directors for CCA in 2022 when we went through that event. How do you quantify or philosophically how do you account for avoided costs? Because I remember that when you had energy procurers in that moment who had excess energy or had other contracts that they could call upon, it was not as substantial to procure that energy as it was for others. and it was pretty exorbitant, which then, to the point that my colleague made about the difference between ratepayers and taxpayers, really kind of insignificant at that point when you have pushed that additional unintended cost onto the ratepayers and they have to pay for it anyway.

The question is, how are you accounting for the avoided costs that not being prepared or not having a system that is capable of addressing these events inevitably creates more rate payers.

I don't really have a question.

I think something that you really point out, you know, the state of play in 2022, because largely driven by the pandemic, but other factors as well, we were really behind on resource procurement. There were a lot of slowdowns for construction, also large challenges with supply chain. Still some challenges with supply chain, but it has been significantly improved. And so just looking at 2020 to today, we have been able to deliver on the amount of new resources that we need on the grid, right? We've brought on 31,000 megawatts of new clean resources. And then we also have over 22,000 that are under contract in development. And so the state of play about being behind on resource development has really changed significantly. In order to meet our long-term goals, we know we need to be able to build between 6,000 and 7,000 megawatts of new resources a year. And we've been able to meet that target for the last two years, maybe even the last three years. I don't have it top of my head. And so we really have seen a lot of big changes to our system to improve reliability and a lot of actions taken by all three agencies to make it happen.

Perhaps.

Thank you. Assemblymember Gallagher.

Neither program is cost effective. I do want to be clear about that. Using existing cost effectiveness metrics.

Yes, yes.

We have opened a number of new proceedings for example a new energy efficiency rulemaking a new demand flexibility rulemaking where we are including that exact question you know driven by these reports that we been able to prepare to stakeholders to be able to get to that issue

Typically around 18 months, but I do want to be clear. The commission has taken action on some very significant programs mentioned with Chair Bennett, the net energy metering program, shifting that to a program that is more cost effective. of steps have been taken. Some progress has been made, but there's certainly more work to do.

cost effective? So for this one specifically, the decision will come out in Q3 of 2026. 18 months is just in existing state code, the timeline for getting a proceeding done. And then I'd say,

David, I'm just department of finance. It not to you It not department of finances for the PC We asked the PC I happy to say I not aware of the request but we follow up right after this Okay Yeah I mean please I mean we love a response We haven gotten even a response back

I'm sorry, Mr. Gallagher, but we have agendized items that we've asked them to come prepared for. You're on a completely separate program that they haven't come prepared for. And I think it's certainly fine. Talk to me. Let me know in advance that you have something so that we can let people know and we can have the right people here, the people who do this particular program, we could have them here. We could have them answering your questions. But given that we have a limited amount of time and lots of items, and we always run all the way up until the other committee kicks us out of here,

Fair enough.

I'm just.

So could she please respond?

Yes.

I know that projects have been built. I've personally been to ribbon cuttings for projects built for the SOMA program, and we'll follow up with the requested information after the hearing.

Erin Carson, Department of Finance. Just wanted to follow up on kind of the conversation around which program is more cost effective or less cost effective. Just want to emphasize that, you know, originally with the funding that was appropriated for the DSGS program, there were several hundred million dollars appropriated out of the general fund. Subsequent GGRF appropriations were made. There were several reversions that were made. So the original intent was that this program would be a temporary program for five years. So the administration is continuing with that expectation. And then just also wanted to note that, you know, while a lot of general fund has been put into the DSGS program, the program has not always been activated to respond. Therefore, you know, not all of the rate payers have directly benefited. You know, the program hasn't always contributed to rate payer benefits. So it's a little difficult to kind of compare, like the apples to apples comparison. So just wanted to make that point that while we have put in a lot of money to the DSGS program there other funds for the ELRP program Because they not always activated the ratepayers aren always going to see those benefits So it's the same type of situation for ELRP. Last summer, we didn't have any extreme events to respond to. Therefore, you know, we're still putting money into the program, but can't always predict when the ratepayers will see that benefit because we can't predict the emergency. I appreciate that. Just so I can be clear, so when there's no events either, then the rate payers aren't benefiting from those programs also. Is that correct? When there's no event to respond to, there's no benefit necessarily to provide it. Out there with the program. I know, Mr. Chair, I know we're trying to move on. Can I ask one just quick follow-up question to that or just put a pin in something?

Right. So just I think that and maybe this warrants a longer offline conversation. I think that it sounds like the way you're doing the math around this doesn't does not make sense to me, because if I think you just said that unless there's kind of an emergency event that ratepayers don't benefit. But the concept of these demand response resources is that usually the grid is almost never utilized at 100%. The utilization is what? It's like 60, an average of like 60%. If we don't have these demand response resources, we're having to invest in enormous amounts of infrastructure for new generation, new transmission. those costs are borne by ratepayers. So the question is whether you are building out the grid to an enormous level, or if you're utilizing these resources to get more out of the existing grid. So as we are making assessments about cost effectiveness, we need to include that calculation. So anyway, maybe that's, I'm going to just put a pin in that, and I would love to have a follow-up conversation with Department of Finance on how we're evaluating ratepayer savings on these resources. That's the exact follow-up question I had, too, because it is that.

the program. So I guess that's what you're hearing us say. Let's get it to the five-year mark, and let's use these transition funds to be able to help us get it to the five-year mark is what we're saying.

But CEC, would you identify and agree that the program is not cost effective?

Sure, I understand.

I want to emphasize it is definitely okay. Okay. All right? Thank you, Jerry.

Thank you. So, you know, with the demand response programs, there are different flavors of demand response programs.

Great. Thank you. We don't ever want one of the panelists that are up here to walk away going, I wish I would have been able to say X, that it would have helped the discussion. So definitely we appreciate what you just said, and that is a good point for you to make. I do have this question.

So CEC is one of the main program administrators, but also San Diego Gas and Electric, PG&E, and Southern California Edison. Okay, but ratepayer money does go to CEC, you know, through.

That money is accounted for. I mean, I know Dina's not the director of that program, but there's a whole team at the CEC working on the EPIC program, and I wouldn't feel comfortable saying that the money should be taken from that team and given to another team.

I would say that the constraint would be more on the base, the rate pair base. And so the EPIC program is funded by the IOUs, and then it benefits like the IOUs, like the benefits of the EPIC program have to be concentrated in IOU territories. The Manified Grid Support Program, the SGS program, because it's funded with resources that are collected statewide, the program benefits the entirety of the state. And so ELRP, it's a very similar construct of the EPIC program. Those benefits have to be concentrated within the IOU territories. And so CC, there will be a conflict of taking ratepayer-funded resources from the IOUs and providing that benefit to the publicly-owned utilities and that ratepayer base. And so there's that dynamic.

Appreciate that answer. As the Assemblymember said, I'm not sure that we need to slice and dice a lot between ratepayers and taxpayers or which ratepayers in exactly which area, but I very much appreciate the answer. And with that, anybody else? Have anything else? Assemblymember Gallagher.

And with that, we really appreciate this. I'm going to end with one thing, which is we expect I expect that good government public servants are proud of the work they do. So we expect them to come and defend the work they do. And when they both work for the same administration, but they're in separate departments, there will be some tension there. that is perfectly healthy that happens in the federal government that happens between the army and the navy i mean that's just that is normal so it's normal for people to be proud of the programs that they in it normal for the cpuc to be proud of what you doing and it normal for the cec to be proud of what they doing And the issue is for us to hear all of that and for us to try to figure out how we partner with the administration to reach both the goals of the legislature and the goals of the administration. So we sincerely thank you for a sometimes not as comfortable as other times kind of conversations that we've had here today. And we'll move on to item two. Thank you very much. Appreciate your time. And item two is energy and modernization affordability, SB 254, Transmission Accelerator Program, Prop 4, Trailer Bill Language, and a recognition that Assemblymember Petrie Norris was the lead on this last year as we were doing things in terms of transmission accelerator. So after we do the original comments, we're going to go right to you, Assemblymember.

All righty. Great. And whoever would like to go first, please identify yourself.

Oh, you've got to pull that microphone a lot closer.

How's that?

Oh.

You've got to be right on top of it for them to hear you in the back.

There you go.

Thank you very much. Anybody else ready to testify?

Thank you very much. Anybody else?

Could you say that again, please?

Yes.

Correct. Perfect. Great. Thank you. Thank you. Yeah, it's great. Another question? Thank you, Mr. Chair. Could you, and then I'll catch you, Mr. Rogers, in just a second, and that is, could you summarize for us where the state's liability will stand,

So if the state provides the financing?

A part of that financing.

And Prop 4, I think the total allocation is $325, so it would be a small portion of that. So what is the ratepayer savings that would then come from that? I think it's really hard to identify the rate savings, but the idea and structure of this is that with some state financing, it would lower the overall cost of the project. and that in turn, when they go to request for the rate of return at FERC and at CAISO, that they wouldn't be able to include the state portion and the tax credits that they've been given for this project be included in that rate of return and therefore lowering costs. So hypothetically, a $10 billion project that the state somehow was able to help leverage a billion dollars of that, then when they go to ask for their rate increases, they could only do that on the $9 billion that's left.

Great.

Can you make sure you structure it so we get all the 40% ones?

Okay, great. Thank you. Assemblymember Rogers.

So the way that the transmission accelerator would work is that we're limited to just looking at the projects that have been identified for competitive solicitation in the TPP. And so how they do that study and identify projects in underserved areas and where it needs more transmission, the accelerator, we're not within that process.

Gotcha. Andrew March, Department of Finance.

Yeah, I appreciate that. And I just want to bring it back to kind of the linkage between some of the other states' priorities. Like, for instance, the staff comments call out offshore wind. There's obviously a huge economic opportunity and environmental opportunity up on the North Coast, but it needs adequate transmission to be able to move those projects forward. So it's a really key component. And I know that there is a push from myself and a number of other folks to make sure that the additional $250 million-ish is allocated from Prop 4 for the offshore wind port development. And that goes hand-in-hand with this discussion about transmission capacity.

Thank you very much.

I'll do a follow-up on that, because I was going to ask a similar question. What is the status of the $247 million toward offshore wind port development through Proposition 4? So I believe that funding is going through CEC. Well, that's half of it. Yeah. So sorry to jump in. We allocated half of it last year. That's correct. But I just I just want to point out that currently GoBiz is at the table. So they're not going to be able to answer that question. But we can get back to you sort of on the status of the funding. Not all of the funding has been been spent to date, which is why we didn't propose additional funding in the budget. So we're still working through that funding that was appropriated last fall. I think the push and to take back is there's an opportunity to do bigger grants and do bigger portions of the project if that additional $250 million, which is very limited in the Prop 4 language for these types of projects, if that is allocated in this year's budget, again, it's general fund neutral. It's allocated in Prop 4, but would open up those opportunities. So I think that's the push.

Great.

Thank you very much.

Great. My name is Alicia Gutierrez. I'm the director of the Energy Assessments Division at the California Energy Commission. And I'm joined by Barsha Sava-Schwar. She is the deputy director of policy in the division of Petroleum Market Oversight. I am here today requesting support for RBCP and good morning I did not greet all of the committee members Good morning to you Since the passage of the special legislation in 2023, the state's petroleum sector has experienced several major challenges and changes, including closure of two of the state's refineries and more recently the war on Iran that is disrupting global markets. These dynamics have resulted in a shift in the focus, scope, and complexity of CEC's work. In 2023, staff resources were focused heavily on data collection efforts and developing analytical frameworks to provide more transparency and to refinery profits. When ABX 2-1 was passed, we were focused on measures to address price volatility. With closures of the refineries, CEC was asked by Governor Newsom to develop a holistic strategic approach to the transition, and the strategic approach necessitated increased coordination with industry to ensure supply stabilization measures will have the desired impact on in-state supplies. The work being done by CEC and in coordination with DPMO, CARB, and other agencies to monitor conditions and remain in constant coordination with refiners resulted in stable prices in 2024 and 2025. The elevated delta between the California and the U.S. has been smaller in the past two years than what we saw in earlier years, 2022 and 2023. We are continuing our coordination with partner agencies to ensure prompt and coordinated action in California's, if California's supply conditions get too tight. And this BCP is requesting $1.7 million for seven positions that will be responsible for implementing the requirements of ABX 2-1. Now I'll turn to Barsha for her opening comments. Thank you, Director Gutierrez. Good morning, Chair Bennett and members. My name is Varsha Servesher, and I am the Deputy Director for Policy with the Division of Petroleum Market Oversight. The BCP before you today from DPMO is $473,000 from the Energy Resources Program account to convert one limited-term position that we have at DPMO into a permanent position, and that's a research data specialist position. As a bit of background, DPMO is an independent division of the Energy Commission established by Senate Bill X-12 in 2023. SBX-12 tasks DPMO with protecting California consumers through market oversight, investigations, economic analysis, and policy recommendations. Thanks to the governor and with the support of the legislature, DPMO was able to quickly staff up in 2023 and 2024. But by 2025, after the passage of Assembly Bill X-21, we needed additional in-house capacity to process the very large volumes of data that we analyzed for a number of our market oversight functions. And so to meet this critical need, we hired a skilled senior data scientist in a limited-term role, and this single position provides some really critical support for both our economics and our investigative teams. Making this position permanent is essential for DPMO to fulfill our independent responsibilities under the statute, protect the integrity of the market, and provide you as policymakers with the best possible information as we navigate the transportation fuel transition. Thank you, and I look forward to answering any questions.

No comments.

No.

So LAO we have seven new positions being asked for in the petroleum market supply research Have you had an opportunity to analyze whether you think they are necessary relative to the fact that our fourth question we talk about the CEC has paused the price gouging penalties for five years, didn't complete its regulations about price gouging. So couldn't those positions be used for the new positions that we have here? So as part of our review of the proposal, we did ask a variety of questions and we did meet with the department. I think in the course of that work, our view was that they provided adequate justification, that there was sufficient workload associated with the bill and their larger efforts in this space. So we're not raising specific concerns, but that is certainly, I think, a great question. And I think when additional positions are being added, particularly if other work is not occurring, that's, I think, a question that's always top of mind.

Certainly, you know, we could take different action. But we didn't identify any specific concerns that merited raising with the legislature.

So we did have a couple of individuals that were hired on to do the analysis to support the max margin and penalty and make that recommendation to pause. Those individuals are continuing to work on the analysis. we did in our business meeting where we considered and approved the pause on the max margin and penalty. We did commit to providing an analysis in January, 2027 timeframe that would include the same considerations framework and, and make another revised and updated analysis and recommendation based on the current conditions on the max margin and penalty and whether we should extend that pause for additional years. So they are continuing to do the analysis of all the supply stabilization measures that are before us and are being considered, like minimum inventory and resupply. There is the same analytical framework and rigor that is required. We have to look at impacts to supply, impacts to the economy, other costs and benefits of each measure. So we're trying to do this systematically, implement the same framework throughout all of the supply stabilization measures, and that is what our resources are doing now. These resources will help us to bolster all of those analyses and make sure that we're implementing those supply stabilization measures very well for the industry and good for California.

I hear you. So they, I would not say that the work is one for one, but they have shifted. So there is one individual that is full-time continuing work on the analysis. The other individual is somewhat splitting time between the other supply evaluation and assessment of the other supply stabilization measures. Right now, our focus is on the resupply regs and getting those in place this year. So that individual has been focused on getting the analysis to support that. And we will be doing a workshop in the next month or two on resupply regulations.

David Evans, Department of Finance. I would just like to add on to my colleagues' responses that the CC was resourced for the work of SBX 1-2, which had several different components. One was that maximum gross gasoline refining margin, which has been paused. But also, they still have to collect daily, monthly, weekly, and annual reports from major crude ore producers, petroleum transporters, importers, exporters, and businesses. That work is still ongoing. And then also, they're responsible for developing the triannual transportation fuels assessment and the transportation fuels transition plan. So that work for SBX 1-2 is still ongoing. The CEC was resourced for that work, but they were not resourced for ABX 2-1, which established the minimum supply regulations. So those regulations are still ongoing, and that's why they're requesting additional positions in order to do that additional workload that was placed on the department.

Thank you. That's all very helpful. And I just want to point out that I have a note from somebody sitting in the back that says David was the best speaker into the microphone. He held that thing right there real close to his mouth. Just show us again that technique for you. See that? Look at That is what everybody could benefit from. Assemblymember Gallagher.

Okay. And so, I mean, essentially we're trying to cover a hole, right? Will there be impact to the rate payers? I mean, is it going to be additional costs to rate payers by doing this?

And then to the folks from CEC, so during this time that you guys have had this in place, did you guys find evidence of price gouging that's been done by?

Yeah, I just mean under this system that we created with this special legislation.

Yeah but again did you find any evidence that that was a result of some bad faith on the part of the refiners or the oil and gas companies So in terms of details of particular investigations I think speaking sort of more granular than just the data I think I not able to sort of speak to that at this time We try to be really really careful in terms of disclosing details of particular oversight or investigative matters

Okay, that's great. Right. So from everything I've seen from since we started this and from what's been made available to the public, I guess what's being not disclosed, which is a problem. But from everything that's been publicly disclosed, we found zero evidence that this program has helped us stop. Well, that we even found gouging in the first place or that it stopped price gouging. So that's one question, like, why do we continue to fund a program that doesn't really seem to be getting results?

Well, here's another question for you. So on the supply side, I mean, so have we stabilized supply at the Phillips 66 refinery in Southern California?

Well, the answer is no, because they closed down, right?

Are you wanting to get into details about?

She wants her colleague to come up and try to answer the question, and yet you.

That's fine, but you've asked the question now twice. So is it rhetorical? I mean, yeah.

An answer would be great.

That's your question.

Could you speak into the microphone?

How about, is there a stable storage supply at Valero's refinery in the East Bay?

So no, right?

like simplify this like since you guys started you know your program over there we've now two refineries in the state have shut down. So 18% of our refined gas is gone. So is it safe to say that since you guys started, our gas supply has actually decreased?

So they're importing some gas. Oh, from the Middle East. Where are we importing from the Middle East?

An impressive answer. On the refined gas side, right?

Crude oil is a different story.

And now even more so, right, because we have less domestic production and refining capacity, correct?

Guess was the answer I was looking for.

I'm sorry, but that's not the tone we're going to have here. This isn't an inquisition. This isn't defense lawyers and prosecutors saying that's sufficient, right? We are going to have a healthy conversation, and whether you want the answer or not, we're going to make sure she gives the complete answer to the question in an appropriate amount of time. I like to give people— It should not be an interruption of, no, don't give me any more of your answer. Yes, but we also have to get somewhere in this hearing.

The equivocation is in the eye of the beholder, but I'll tell you one thing. No, it's actually pretty obvious, and I think it's obvious to the people in this audience and everybody watching this hearing. And I'll tell you what won't be appropriate here is that these people are coming here voluntarily. They do not have to show up at these hearings.

it doesn't meet your, uh, uh, your definition in terms of an appropriate answer. That's not how this should happen here. And so I want you to be able to finish your answer now, please.

Yeah, I mean, the bottom line here is like we have increased our amount of imports. We have become more reliant on imports for our gas since you guys have been set up. We've lost refinery and supply. We found no evidence of price gouging, which was the whole impetus behind creating this program. Why are we funding this again? I mean, this legislation was flawed from the beginning, and we're here talking.

So maybe it's voluntary to come here, but, you know, we get to make the decisions about whether or not we fund your program and whether or not it's working. And I think it's very clear it is not. And now we're going to fund your program with ratepayer money? we're paying people who are paying their electric bills are going to pay for this gas gasoline oversight program that's not working and has made us more dependent on foreign oil it's ridiculous i mean i can't even believe we're even considering it should be rejected outright thank you very much for your comments i am uh going to respond to a few things number one I think her answer was very appropriate, and the accusation that it was going to be equivocal is just not accurate. That was a great answer, and we have a real professional that understands a lot about this data here. So I think it was inappropriate to cut her off, and I think that her answer really, really demonstrated that. Number two, I know that this is an opportunity for us to state our political views about whether we should be doing things or not doing things. And we have to tolerate a certain amount of that when we're doing this. But the vast majority of this ought to be trying to get the information, the factual information that's out there. There's been an accusation that this program has been completely ineffective and that there has been no evidence that's been found. I think it's very appropriate that our staff, our professional staff, is very cautious about making claims of criminal behavior. which is what price gouging is. And they cannot come here without real strong evidence. And they probably shouldn't come here with that evidence. They should take it to the attorney general if they find it. But I think there is a very interesting relationship here. And that is the price fluctuations that we won't call price gouging, the weird price fluctuations where the price of crude or the price of the inputs went up by 10 percent and they and the retail price went up by 40 percent. That all suddenly came to an end when this department was founded and we started having the ability to be able to check this out. We've had we've not had the inventory crisis that we had before where we had prices jacked up as soon as the spot market saw inventories drop below a certain level We haven had that happening Now we still have some changes but there been a significant improvement in inventory monitoring and in a lack of spot price changes And I would offer that's pretty good circumstantial evidence that there is some real benefit for gasoline prices and for the client, for the citizens of California to be able to have this program out there. And I think it's just I think we have to have our head in the sand if we didn't recognize the tremendous improvement that's been made with this. But with that being said, I have two questions. How many staff work on the gasoline market analysis at the CEC, both directly and through the DPMO?

Okay.

And the third question that we've, and by the way, we give you all these questions in advance because this is not a game of gotcha up here. Okay. Some people like it to be a game of gotcha, but it's not a game of gotcha. It's a game of trying to get the information. That's why we want you to be prepared, and we offer these questions in advance. So the third question, why is the CEC requesting new positions for legislation that was passed two and a half years ago?

Okay. Thank you very much. I have a few other questions, and then we'll go back to my colleagues here. And that is, is ERPA in a structural deficit?

Okay, thank you. CEC data shows imports of foreign crude oil declined by 10%.

What was the question again? CEC data shows imports of crude oil declined by 10%. I mean, a foreign oil, a foreign crude oil. Is that accurate?

All right, great.

Great. Mr. Chairman, just to clarify that. Sure I agree that a point that made but that means it means we replacing it with refined gas from somewhere else Right South Korea or somewhere else right Where do you think they getting their crude oil from

I appreciate the clarification, right? So it's kind of a distinction without a difference is what I'm saying.

Great. Thank you. All right. And the unit is going to continue to monitor and report on all of these changes, correct? And as volatile as the market has become with the Iran war that we have out there now, I think it's more important than ever that we have this department out there monitoring and giving us information we never had before. Ten years ago, we were in the dark about all of this. And this is absolutely vital information, as important as gasoline is, for the market here in California. So I certainly think there's strong justification for the program going forward. With that, does anybody else have any other questions?

Thank you. Assembly member.

We're sure you will continue to point that out from your philosophical point of view. Thank you very much. And with that, we're ready to move on to issue four.

Welcome back. Would you identify yourself again please as you start? Trying to go paperless now so I have iPad. You'll need that microphone nice and

energy landscape changes dramatically over the next 20 years. In particular, we are focusing on high-billed targeted months and we understand that this not uniform across the state. We have some jurisdictions like PG&E Edison and SDG&E where they see their highest billed months in the summer versus other jurisdictions like Pacificor, Liberty, and Bear Valley seeing their highest billed months in the winter, and that's something that we're working closely to understand over that 20-year trajectory. So more specifically, focusing on our ask before this committee, it is seven positions at $2.2 million as well to support a rulemaking that reflects the reality of a program that will run between now and 2045, and as we expect to see many changes in the energy landscape, in particular with customer bill affordability. And we are up to the task of making sure that this program is able to do that. So with that, I wanted to conclude my remarks, and I'm available for any questions. Thank you. Department of Finance?

LAO, you do have some comments.

I think we have pretty strong recommendations from LAO about whether we should do the simple approach or whether we should do the more complex approach from the CPUC. I think their analysis makes a fair amount of sense to me. I'm interested in something in between these two approaches, and that is there may be some need to do something to do some analysis of implementation. But seven positions to do an ongoing analysis of how we're going to do these returns seems certainly, in terms of permanent positions, we've been expanding and expanding the CPUC's positions. And I think you find it very unlikely that legislature is going to be supportive of seven permanent positions in this kind of setup. So with that, I wanted to get that out there. I think looking at, you know, a temporary position or two to analyze the implementation of this is one thing. And I'd like to turn this over to my colleagues for any questions and stuff. Assemblymember Rogers.

You can, Assemblymember Conley, or you have something so that she can respond to all of this at the same time?

Yeah, so I can do that. So to start, you know, we actually have a voting meeting tomorrow where we are making the taking the first step of making the changes to shift the climate credit distribution, electric climate credit distribution to the highest billed month. So I just wanted to make sure that I share the progress that's coming along. But in particular, you know, as I mentioned, the high-billed months are not the same across the different service territories. So that is a complexity that we'll have to continue to track and respond to over the life of the program. In addition to that, when we're talking about being able to create a meaningful opportunity for rate payers, the legislation also required a shift from the gas climate credit funds to the electric. And as we've started some of that preliminary analysis, there is a very big complex mismatch of electric customers to gas customers. So, yes, we have many customers that are electric and gas with PG&E. We have a number of customers that electric to gas SDG&E, but we have a number of overlays that are more complex than that. So, for example, the SMUD customers that pay, SMUD customers that would receive a gas credit from PG&E, that funding has to be shifted for that customer from PG&E to SMUD, right? And then there's other overlays, in particular in Southern California, that are also more complex with that, looking at the POUs. The POUs, so LADWP being a big one with SoCal Gas Overlay, but then a number throughout Southern California. So that is a large complex matter. And right now, CARB is in their regulatory process, sorting out the framework for what that will look like. But then we'll have to come to the CPUC to sort out those extensive details. In addition to that, as you all are familiar, the state has very significant electrification and decarbonization goals. And so we have started to do some of this analysis but need the staffing to do so of the shift over from California, most of California being a summer peaking territory where we are going to be seeing a lot of winter peaking throughout the state, in particular in areas where like SDG&E, Edison and PG&E. And so as we see the uptick in electric heat pumps, for example, there's going to be a big shift. The thing is that the state doesn't control the shift to electric heat pumps. It happens through a number of initiatives and incentives and things that we're trying to do, but it's not something that we have a command control structure on. So this staffing is going to help us analyze how that happens over time and making sure that customers are seeing this bill credit when they need it the most. And so that just wanted to share a little bit of that background, as well as that response to Assemblymember Connolly about really making sure this is something that can support affordability into the future. Thank you.

Should I start with?

So I have some introductory remarks, and then I want to turn it over to my colleague, Mr. Skinner. So just as a point of introduction, thank you for the opportunity to share some of these data points and details. So the California Public Utilities Commission, at this time we have 1,738 staff positions overall proposed for this 2026-2027 fiscal year. I want to spend some of our time today talking to you about where those staff are, what they're working on, and answer any questions about our staffing levels that you may have. I know there were a number of questions also specifically on rate cases, specifically general rate cases, which is a part of the work that we do. I like to say the bread and butter of the work that we do because I started out in that work at the commission, but we have many things that are the bread and butter of what we do today. being a 115-year-old agency. So in particular, on those rate cases, we tend to have on the advisory side, so separate from the public advocate's office, about 30 staff assigned to each of those cases. So Southern California Edison, PG&E, SDG&E, and that runs the gamut of a number of roles. So of course, we have our administrative law judges, but we also have attorneys working on those cases, engineers, financial analysts as well, all working on those cases in parallel. to scrutinize all of the costs in the utility proposal, as well as being able to scrutinize and analyze all of the information that we're getting from our key stakeholders, like the Public Advocates Office, but we have many stakeholders that participate in those general rate cases. And as I said, rate cases are just a part of what we do at the Public Utilities Commission, and so I know a number of the data points that we provided in writing, you know, we're referencing this time period, January 2017 to today, and I just wanted to share, you during that time period we have processed over 30 advice letters across all of our regulated sectors and so that over 12 in energy over 14 in communications over 3 in water And over that same time period processed over 2 resolutions And so resolutions are ones that are actually voted on at the voting meeting as well, across all of those different sectors. And so that's really a big snapshot of our day-to-day. But looking at 2025 alone, just because we keep seeing this growth and escalation, in 2025, the Public Utilities Commission processed over 3,400 advice letters across those different regulated sectors and over 216 resolutions on top of all of the formal proposed decisions that are voted on as well. And so just want to be able to share beyond the rate cases the depth and the breadth of the work that we have to do at the Public Utilities Commission as an agency that has a PU code that's over 100 years old. And so with that, those are my introductory remarks. I want to turn it back to you all and also to my colleague here.

Yes. Good morning, Chair and members. Thank you for the invitation to speak with you today. My name is Nathaniel Skinner, and I'm the Deputy Director for Energy and Administration with the Public Advocates Office. Our office was established by statute to represent and advocate on behalf of ratepayers for affordable, safe, and reliable service across water, energy, and communications while advancing the state's climate goals. Although we are a part of the CPUC, we operate independently. So we set our own priorities, we develop our own policy positions, and manage our own budget and resources, including our budget requests. We participate as a party in CPUC proceedings and must follow the same rules as any other party, including when and how we communicate with CPUC decision makers. We also participate in other forums, such as before the Energy Commission, as well as the independent system operator. Given our mission, as established by the legislature and the governor, the nature of our work is largely focused on issues impacting rates and affordability, and this is where we direct most of our resources. We currently have 183 positions. For energy and water utilities, most of our staff are focused on engaging in proceedings that directly impact customers' rates and bills. We currently dedicate approximately 114 staff to energy rate making and 29 staff for water rate making. For today's purposes, as I refer to rate making, I mean general rate case proceedings, or GRCs, as well as other proceedings that can impact rates outside of the general rate cases. The GRC is a budget setting process where utilities forecast and justify their anticipated costs, and the PUC establishes how much revenue a utility may collect, which ultimately determines the rates that customers pay. Examples of other proceedings that impact rates include decisions connected with memorandum and balancing accounts, where sometimes billions of dollars are on the line. Telecommunications defers from this. Most of our staff who work on communications issues are focused on non-rate making proceedings. Approximately four staff work on communications rate making. Presently, only the small local exchange carriers, also known as Lex, are rate regulated. Other communication companies, including broadband providers, are not rate regulated at this time. In terms of growth, our office conducts annual reviews to assess our needs. In those reviews, we consider any increase in workload and where we may need more support, and in those instances, we work with you all on our budget change proposals. We primarily propose BCPs for positions when new legislation is enacted that increases the workload of our staff. We also occasionally submit BCPs when the budget CPUC initiates activities that would require increased engagement from our office. In conclusion, we appreciate the legislature's support for our request for additional resources, and I'm happy to answer any questions you may have.

David Evans, Department of Finance. Just wanted to add a point of clarification. So if you see the positions, the number of employees that are listed on page 19, I just want to caveat that those are the authorized amount of positions. So it's not like the exact number of positions that are filled. They don't incorporate any vacancies or positions that are not filled. And for the 26, 27 governor's budget proposed positions, that's the total number of positions that they're authorized plus the positions that they are requesting to be authorized to have in a BCB.

Nothing to add at this time.

I would have to get back to you on that question. We have had cases that have gone before the California Supreme Court where we disagreed with the commission, and including cases where we also agreed with the commission all the way up to the U.S. Supreme Court. But have you sued? Sued the commission itself? Yes. Not to my knowledge.

Have you engaged in lawsuits? Not to my knowledge. Great. Thank you. All right.

So pursuant to the public utilities code, general rate cases and a number of other rate setting proceedings should be done in 18 months. That being said, you know, I do want to be transparent. A number of rate cases have taken closer to 22 months, 24 months. In particular, as we have more stakeholders joining the general rate case proceedings, they want to make sure that they have enough time to analyze the proposals from the utilities, provide their own testimony, their alternate proposals. And so in those instances, when they request extra time to be able to provide that testimony in order to fulfill due process, we grant it. Thank you.

So rate cases are actually on a four-year interval. Historically, they were on three years for many years, and then a few years ago, there was a change in the rate case plan so that they are now done every four years. But then in addition to that, you are correct, utilities can file additional requests that don't fit into that four-year cycle. So I think an example that you all may be familiar with was Senate Bill 410 that passed recently related to energization. through that legislation, the utilities were allowed to come in and request additional funding for energization So for example PG put in requests for over 2 billion for energization that we had to look at But that was outside of the rate case because the timing didn line up Do you have a you have just statistics on then

Again rate cases are every four years, but then there are additional proceedings that have an impact on rates that come in on an ad hoc basis. I don't think I have a number. But no statistics on those.

Okay, that's right.

sure Mr. Skinner has a response as well. So we do not use outside consultants for the general rate cases. All of the staffing is done in-house. In terms of the types of positions I had mentioned earlier, so engineers, financial analysts, attorneys, administrative law judges, all are working on the rate cases in-house. The utilities do provide the initial application. So that is the, I would say, the basis of the rate case. They have to put forth a case that they want to support. But then in addition to that, the judges put out rulings that the staff help them to prepare to get more information for the proceeding. And then in addition to that, parties like the public advocate's office and others provide their own testimony, their own proposals that also inform the decision. Okay. And for the public advocate's office, the vast majority is in-house expertise.

frequently the approved decision is the commission's proposal, the commissioner proposal? How much of it is the PAO proposal, staff proposal, regulated utility, or other stakeholder proposal that's

So these are all hybrids, so it's hard to tell whose proposal actually is getting approved.

Okay, great. How often does a rate review end in a denial?

How does the commission and PAO handle institutional knowledge loss when experienced analyst leave, given that these cases take years?

Good. Okay. Thank you. PAO?

Great. Thank you. Does the commission have a strategic plan that prioritizes proceedings? If so, how are tradeoffs made when staff capacity is constrained?

Thank you. What's a typical level of commissioner? That's all commissioners, not just those assigned engagement in record building faith in the record building phase of the proceedings, the hearings, the workshops versus just the decision phase.

Good. When does a PAO engage?

Can any update be shared about the role of the Internal Audit Services Division and how its work has added transparency or efficiency to the CPUC process Yes So our Utility Audits Risk and Compliance Division provides an additional independent check on utilities between all of the rate cases

Great. We're trying to get this all on the record. We're getting close, right? How are the staff at CPUC and PAO encouraged or required to find cost savings for rate payers? What incentives or cultural changes could be made so that people are really looking for incentives for savings?

I would assume it should be. So how about on the CPUC side?

So this has been a concern that has been raised, and that is commissioners come in late in the process with proposed decisions. It sounds like you have one in the record building. You have two of them involved and three of them not involved. What can you identify as why we have so many commissioners coming in with proposed decisions late in the process?

Can you explain why the GRCs for small telecommunications companies were put on hold?

Absolutely. Bring them up.

Good afternoon, Chair Bennett. Ana Maria Johnson with the Deputy Executive Director for Broadband and Communications in the CPUC.

Sure. Thank you for that opportunity. So the small rural telephone companies, there are 13 of them. 10 of them participate in what is called the California High Cost Fund 8 Program that provides a subsidy for them to continue to cover their operating expense that allows for customer rates to remain just and reasonable. while the subsidy that is funded by rate payers, it makes up the difference for them to operate. The CPUC Communications Division issued a resolution that put out there for public comment looking at putting on pause general rate cases, which the 10 of them are broken into three groups, Group A, Group B, and Group C. Group A was going to be coming in in October of this year. We put a resolution to put notice to those companies that we are considering putting the general rate case on hold as we explore ways to increase efficiencies in that process. And what I mean by efficiencies is to make sure that all parties understand the type of data that needs to be submitted, looking at opportunities to be more formula-based so that there's more predictions of what the outcomes of the GRCs will be. And that requires for a rulemaking to be open to explore that. So instead of beginning the next cycles of general rate cases under one paradigm and structure of a GRC, we put it out for comment to put a pause as we explore multiple ways. I do want to share that that resolution has been withdrawn at the moment, so it's no longer under consideration at the CPUC. We have been working very closely with the small rural telephone companies to understand their concerns. They also have heard our goals and objectives and what we're trying to achieve, and we're trying to find ways to get us there. Great. Thank you. Two questions about the

intervener compensation? I don't have that dollar amount on the top of my head, so I'll have to come back. I apologize and get that detail. Just one comment I'll make about the intervener compensation program, though, is that we have seen more and more stakeholders getting involved in our proceedings, and so we've been receiving more and more requests for intervener compensation. I'm not saying that's a bad thing. These are groups that are contributing, making sure there's different perspectives than just the utilities, and so we highly value their contributions, but we have seen a growth in that.

Yeah, so I would say that the intervener contributions do not replace what staff are doing. They, as I said, it's valued feedback, but they all have their own perspective, right? We have interveners that represent small businesses, and so they come with a very small business forward perspective and testimony that they provide. The Public Advocates Office has their own perspective. We have a number of different ratepayer advocates, as well as environmental organizations, labor organizations. So, you know.

Supplementary, right.

So on the topic of the independent review, you know, earlier I gave a description of the work that our utility audits division does. And so that is what they're doing between the rate cases are checking, of course, the financial statements, but even going into the field independently between the rate cases. So I do think that internally we do have that function on the tip line. We call it whistleblower. We do actually have that in place right now. And so those items do come in and are looked at by the appropriate teams. We have a whole consumer protection enforcement division that looks at issues like that, looks for patterns. And then in addition to that, you know, we have a consumer affairs branch at the PUC who picks up the phone every day and helps customers who have an issue with their bill. They misbilled And just looking at 2025 they returned over three point seven million in redress payments to utility customers through that through that consumer affairs branch So I think we have a variety of different structures in place at the PUC to support customer affordability but always open to a conversation about improvement.

I would say that we are working very hard in those areas and have made great progress in closing the digital divide that we're very proud of at the agency and will continue to do that good work.

Thank you so much. And I did want to jump in and ask some questions and express some comments on the Public Advocates Office staffing level. In the call out from the staff on this item, I'm just going to read from here. Subtracting PAO staff from the CPUC total resulted in a CPUC growth rate of 44.4% since 2017, 2018, and 26.3% since 2021, 2022. I don't know that there's any other agency that I can think of that has seen that level of growth in that amount of time. And so setting aside that that in and of itself is concerning to me about how CPUC is utilizing resources, and I'm really glad to hear that the tip line is already in place because I would be worried we'd be asked to fund another seven positions for the tip line based on our last discussion. It is especially concerning to me that the Public Advocates Office is asked to keep up with the same proceedings that we see enormous growth from CPUC staff to keep up with without a similar level of investment. And I know that there's an argument to be made that the entire CPUC should be a public advocate. I think there's an overwhelming sense that it isn't always. So I'm hoping that the PAO can kind of respond back about, given the staffing level that is proposed for you, what are the things that you are not able to do? And where should the legislature be looking, given that I can only imagine that the utilities also have a larger staff and more available resources for these GRCs? So how do we best aim the PAO to be able to actually be that public advocate that we need them to be?

I see my colleague jumped up to the table as soon as I asked that question. So would you like to weigh in on this?

I think what I'm really trying to suss out here is how do we make the CPUC more nimble and more responsive to the public? And I think one of the criticisms that I hear frequently when I talk to constituents is that the CPUC has been much more focused on what they would consider to be policy and less on the actual administrative function of administering this GRC process or making sure that you have the safety division. And I just would like to know how you'd like to respond to that, especially given the exponential growth of staff.

Okay. Thank you.

All right. Well, thank you, Mr. Chair. So picking up somewhat on Assemblymember Rogers' line of questioning, I think we're all really trying to understand what all of these additional people are doing. And I didn't – I was watching outside on the screen while I was taking a call. So I didn't really understand your answer to Assemblyman Rogers' question. So you've seen the staff grow by more than 40%. What are all of those people doing? Okay. So I'll repeat a little bit of what I said earlier. then continue to grow on that response. So the staff that are working on the rate cases, the skill sets, I think is part of your question. So we have engineers, financial examiners, attorneys, of course, the administrative law judges all working. And it's about 30 staff approximately per rate case. So this would be for Edison's rate case, PG&E's rate case, San Diego Gas and Electric's rate case, for example. Now, thinking about the growth of the agency since about 2017. And if I can just if I can just pause there. Okay, so you've got, make sure I understand, so you've got 30, you've got approximately 30 staff working on a general rate case.

Okay, so that would be about 90 people then that are working on rate cases?

Yeah. Okay. So you've got 30 staff, and you, it's interesting. So you actually began your comments by saying that rate cases are the bread and butter at the PC. I totally agree with you, 100%. But I guess what I'm now trying to understand is that if we've got 30 people who are doing the bread and butter work of the commission, what are the other 1,700 people doing? Yeah, I'd like to speak to that.

And then can I pause? On page 19 of our handout, we've got the number of full-time employees by division. Was this from the PUC or is this from, is this our estimates?

Yeah, I want to speak to that.

And so there was a shift there.

Okay, so if I may. So then if I add up everything in 2017, 2018 that has to do with safety. I'm going to include safety and enforcement division, safety policy division. Let's go ahead and include the Office of Safety Advocates. That would be that you had 214 staff focused on safety in 2017, 2018. In 2026, 27, adding up those things, you have 161.

So again, that goes down. Excuse me, don't forget the rail safety division, which is 125. All right, let's see. Rail safety. It's a fourth one.

Okay. So were some of the safety and enforcement people not in rail safety?

All right, so then, thank you. We just need to add up all of that. Okay, so the safety has grown from 214 to 286. So what about all the other areas? So we've got the energy division in particular has grown, has nearly doubled.

And so this is these 40 people are sort of a result of the proliferation of balancing accounts and memorandum accounts. Yeah. OK, which is also driven an increase in workload for the PAO, correct?

something has to give. The more we can get back in the rate case, it isn't necessarily one for one, but it will ease some of that pressure because it'll become more efficient and we get to see all those requests in one go. Well, and I guess I have sort of just two comments then related to, I guess, this nexus between what we're doing as policymakers and what that does for your agency in terms of staff requirements. And I think particularly on balancing and memorandum accounts, Because I think you both know there is concern amongst many legislators about that proliferation in growth. And so it sounds like if we are to take policy steps to put more things into the GRC, that will actually have a beneficial impact in terms of your staffing requirements, if I understand what you just said. Okay. And then I guess my second point, just kind of coming back to item four and the conversation that we had around the implementation of the change to the climate credit in Cap and Invest and AB 1207. I think that is a little bit of a light bulb moment for me where we have policy intent that I think we envision as being a pretty straightforward change. And I think that there is an implementation path that's very straightforward. And then we hand it to the agency and you come back and tell us, but to make this simple change, it's going to cost us seven permanent positions. And I think that there's probably quite a lot of this positional growth that perhaps has happened as a result of policy changes that have been made by the legislature. But I'm not sure that we've always connected those dots in a coherent way. So I would love, again, just as a follow-up from this hearing, I think digging into some of the day-to-day functions and figuring out, okay, wait a minute, are there policy changes that we can make that will result in the same outcome that enable you to do this work more efficiently? I think there's actually a ton of opportunity for us to have that conversation because a growth rate of 40% in less than 10 years of staff and budget is simply not sustainable. And so I think we need to work together to take a really hard look at that. So I look forward to doing that. Thank you, Mr. Chair.

How did that happen? You'll see the next line is the external affairs division.

Is that right?

Makes sense.

Yeah. I mean, a lot of these are IT staff that are providing day to day support to this increased number of staff. So if you had, you know, one IT person that's supporting 100 people. OK, good. All right. Let's go on.

And the sheer amount of money that's now flowing through these balancing accounts is, you know, we look back 10, 20 years ago, the vast majority of utility money flowed through the GRC. It was the budget they lived by. They were instructed to operate safely and reliably within that forecast. And as we've, through a mix of legislative action or other things, required memorandum or balancing accounts, the utilities are smart. They're taking advantage of that opportunity, putting more money in there because it gives the illusion of rate cases becoming smaller and less impactful and shrinking bills. Instead, we've seen bills increasing, rates increasing, memo and balancing account costs increasing. So it's just kind of spilling out across the board.

That was in the utility audits risk and compliance. I mean, we do legal at the bottom. The legal division does work with all of the different staff. And then one thing that's less visible here, it's for both legal and energy division. There was support from the legislature a number of years ago to enhance our work at the Federal Energy Regulatory Commission, where we are kind of in a public advocates type role where we are advocating for rate payers at the Federal Energy Regulatory Commission. There's another set of rate cases that they do there related to the transmission level infrastructure.

Well, I was talking earlier about Senate Bill 350 and Senate Bill 100, shifting the way we did our resource planning. Also now doing resource planning, not just for the three IOUs, but 40 different load serving entities with the CCAs, et cetera.

But I do want to just comment that, you know, that might be seen as policy work, demand response, that might be policy work. That costs ratepayers money, and that is what we have to have the oversight over. So just because something is called a rate case, as Director Skinner said, not everything is just in the rate case. Demand response proceeding is rate setting because we're authorizing budget to do work. Many things that people might just think of as policy have a dollar amount attached to it. Integrated resources planning, for example, it seems like policy, but a very large amount of a customer bill is for a generation. And so they have to pay for the power purchase agreements that we scrutinize that is the clean electricity that we're talking about coming to the grid. So I just want to make sure that we don't think that the rate cases are the only places where rates are going up. All of these policy decisions also have a rate impact. And so the staff are analyzing that as well.

Thank you. And thank you to Chair Bennett for allowing me to join these hearings. A lot of important policy considerations and telecommunications happen in the budget. And I attend these hearings as the chair of communications and conveyance because telecommunications, I don't think, always gets the attention it deserves. And I appreciate your willingness to continue to put these items up for discussion so that we can have these important, I can ask these important questions. What I see, and I think I would echo the sentiments of my colleagues, is when it comes to the CPC, it's an organization that's growing in size. But the issues our constituents complain about are not getting better. And I don't think it's anybody's fault. In fact you see I have heard the chair comments on some of my bills I think it around the governance of the CPUC And I think we have to start thinking about you know more structural changes that need to happen with the CPUC. So I'll speak for telecommunications in particular. It's a rapidly changing policy area, and the state has invested heavily in five years. And the CPUC is doing important work in this area. but I wonder if the structure itself is a barrier to better outcomes and unlocking further investment in our future. I do think a more focused CPUC would better serve Californians and telecommunications policy. And my colleagues on the UNE committee agreed, since my ACA 9, to reform the CPUC passed unanimously last week. And while that policy discussion will continue in the legislature where it belongs, I am committed to working within the current structure to ensure the best outcomes in the meantime. So I have questions on item six, the Lifeline program, but also I'll start with items five, and I'll go back to my Inspector General Bill from last year. So the CPUC staff in the Communications Division has nearly doubled since 2021 from 79 to 142 staff. How many of those staff are permanent versus temporary? And I ask that because we know that some of the broadband infrastructure work will be decreasing when the FFA winds down, the bead winds up. So I don't know if you could comment initially on that. So I'll start, and I want to introduce myself. My name is Luwam Tesfai. I'm the new executive director. I took on this role in February and looking forward to engage with you on the broadband and telecommunications issues. And then I am joined today by Ana Maria Johnson, our Deputy Executive Director for Broadband and Telecommunications. And so just focusing on the question at hand, you know, the data that we provided for the communications division, as you said, you know, 70 staff, 79, and then now we're at 142, really focusing on this once in a generation, I would say, opportunity to close the digital divide. And so I wanted to give Director Johnson an opportunity to share some additional information in response to your question.

Thank you very much.

I want to thank you. My question was actually which how many of them are temporary, how many are permanent, which wasn't answered. But I would encourage you to look at just like the director was executive director was saying with the GRC, you have 30 people. They're staggered. You use them efficiently. FFA and BEAT funding are very similar. The people that you would use to allocate the awards and then check that they're doing don't need to be ongoing. That makes no business sense to me. So I would encourage you to reevaluate that because the growth in such a short amount of time that's doubling doesn't match with what the task that the communications division has been given, in my opinion. And I also I'm going to leave out the question about the high cost fund. A, it was touched upon earlier. I think the proposal and the rescinding of the proposal has created uncertainty in a core function of the communication division, which is the rate making for the high cost fund A program. And it would behoove the CPUC to focus on its bread and butter in the telecommunications area. The high cost fund A part is your core bread and butter component. So that doesn't really match up for me that you would say we don't have staffing, so we can't because we're doing these kind of nice to have things, but we're not going to do our core things. I think, again, that comes back to our constituents. They want to see the CPC look at rates, look at how we have efficient reaching of our goals, both our affordability goals and our clean energy goals and our ending the digital divide goals. They want to have that. That is the first thing. And all the other stuff comes after that. when they see an agency growing, growing, growing, growing, and they're not seeing the results, the CPC should be concerned because each one of us who go home to our districts as elected representatives are concerned. I just want to say on the internal audits, I wanted to ask, are those published? Are they accessible to the public? And I'll ask this so you can answer together? And if they are published, do you follow all the internal audit recommendations? And three, how do we know you've done that? Oh, go ahead. Assembly member, I want to go back to that question. I'm sorry to clarify. So the positions on page 19 those are all authorized permanent positions So those are the positions that the that you see is authorized to fill so those are permanent Oh thank you So the request from what was it 79 Let's see. From 79 to 142, the 142 are permanent positions. And I can take a moment. I'm sorry. To further put a nuance on that. So the 79 is like the maximum number of positions that they could fill within that division, from the comms division. The proposed positions for the 142 consist of those that they're authorized to fill plus any budget change proposals that was put out at governor's budget. I can take a moment for the other part of your question. So the utility audits and risk compliance division that I mentioned, they are doing external audits of the regulated entities. And so all of those external audits of our regulated entities are published online on our website. And there are no internal audits that exist outside of what's published online? I can share. So we have a different division that does internal audits. So they're doing the audits of the communications division, the energy division, legal division. And so those internal audits are also published. There's a report on our website. Our internal auditor did a presentation at our voting meeting. She does it every year in February, sharing the audits that are in progress, the number of recommendations that have been completed, the number that are outstanding. And so we can provide that to your office, the report to your office. I have six. I have questions on six, but we want to go to six.

So on item six that I don't think we've heard yet.

My question is the hearing. The CPUC is proposing to increase the public purpose program fee from $1.25 per service line per month from 90 cents. The fee was previously $1.11 in mid 2025. Why is there so much fluctuation and how can the legislature be better informed about future adjustments? Yeah, so I can start on this response and I'll go to Deputy Executive Director Johnson for any further details. But as you know, the California Lifeline, it's the state's primary program for ensuring that low income households have access to affordable phones, broadband services. And so, as you know, the federal affordable connectivity program has, you know, sunset in 2024. And so we did see a growth in customers coming into the California program. And that growth is really what drives the program costs. And so the legislature, of course, approves multiple budget increases to accommodate that growth of subscribers. And that's reflected in the surcharge. And so we have preliminary numbers that we share with the legislature early in the year. And then we continue to collect information about our subscribership levels. And we use that to inform the resolutions that we issue to increase that surcharge. I know there's many other details there and so I want to turn the mic over to Deputy Executive Director Johnson. Thank you and thank you for the question on the surcharge. Think of the surcharge as the cash flow that funds our six public purpose programs for which the budgets are approved by the legislature. So the CPUC has a responsibility to ensure that whatever budget is approved that we have enough cash flow coming in through those surcharges, which is an amount, a fee on access lines across the state. You are correct that we had decreased the surcharge from $1.11 to $0.90 a year ago. And now we're looking to increase. Throughout... our management of our six universal service public purpose programs, the CPUC has overseen the need to update, increase, or decrease surcharge year after year. And that may happen a couple of times in a year. Sometimes it stays constant for a few years. It just depends on the budgetary amounts. At the time we decreased the surcharge last year, we were seeing that there was sufficient funding coming in from ratepayers to fund those accounts and have sufficient reserved. And as a responsibility of stewards of ratepayer funds, it was necessary to decrease it. So the ratepayer contributions have been down for a year. Now that our assessment has seen that the fund balances are being depleted, and if we don't increase it, we are at risk of being in the red. We are now proposing to increase it to $1.25 to cover the approved budgets to date. That process is an ongoing common process that is our ordinary work that we do in assessing all the six public purpose programs. Because at the end of the day, we cannot be close to depleting the account or in the balance because keeping those balances healthy is necessary to ensure that ongoing services happen to the customer. There is lead time necessary to increase surcharges. It goes through a public comment period, so it's very transparent. And then it's voted out by the commission. Thank you. So in the draft resolution, I mean, I have so many questions, but in the interest of time, I'll probably have a separate conversation. conversation. In the draft resolution to increase the surcharge, the CPUC is estimating program expenditures of $170 million below the requested amount of the Lifeline BCP. So if this BCP is approved, can we assume the surcharge will increase beyond $1.25? Because for everybody that knows, these access lines, if you're two parents with two teenagers, you're paying four access lines. You might have a VoIP account at your home that's in fifth access line. So there are a lot of access lines that have fees. And to my knowledge, there's no cap on any of these fees. So will we assume the surcharge will increase beyond 125? Yes, you should assume that it will increase because our budget will be increasing. And while we always do a very close look of assessing where we are with the number of access lines and the revenues, it is fair to expect that the surcharge will increase. But I must say it's increasing to cover a budget that is necessary to serve the people of California. The California Lifeline Program is still only operating at a 40% take rate, 1.8 million out of an estimated 4.5 million that are eligible to participate. While we are seeing tremendous improvements in knowledge about the program, increase of the program, including our home broadband pilot, I do want to be very transparent and honest that we are not at 100% of serving everyone that's eligible in California. And in order to fund everyone that's ineligible, revenues are needed to fund the program. Thank you. Yes. And when will we see the first enrollees You talking about the Lifeline Home Broadband Pilot Program Do you already have enrollees or when are the first enrollees Yes we have 9 enrollees to date And there are eight companies that are already offering it, including Comcast and Charter. And they continue to grow weekly. So you said 9,400 of the estimated 4.5 million that are eligible? 4.5 million, is that what you said? So 4.5 million is everyone that's eligible. Right now we have 1.8 million subscribed to the California Lifeline. The home broadband pilot is just one stream of that.

I will end my comments, and I would hope we have further discussions. I really do believe policy should sit with the legislature and not other agencies. Thank you very much.

Mr. Chair and members, Ian Padilla, representing the Coalition for Adequate School Housing and the School Energy Coalition. And we're part of a coalition that is wanting to extend the deadlines and get the money out to schools.

Good morning, Mr. Chair. Michelle Gil, on behalf of California Association School Business Officials, also speaking regarding Issue 1, we request immediate action to ensure remaining Cal-SHIP funds reach the California schools that need them most to improve energy efficiency, health, and climate resilience.

Clean Power California. I wanted to speak briefly about the Transmission Accelerator Program, which targets CAISO competitive projects, often completed by independent transmission developers bringing unique resources to California and with a record of completing projects on time and at savings. So I wanted to point out that while the accelerator targets those projects, the vast majority of transmission in the state is developed by IOUs. This TPP, for example, one project is eligible for competitive solicitation. 36 are going directly to the IOUs with a work total of $5 billion. Thank you. We're very interested in making sure that the competitive transmission

Hi, good afternoon, Chair. Molly Corcoran with Axiom Advisors on behalf of LS Power. My comments are regarding item two from today's agenda, the Transmission Accelerator Program. Ellis Powers, the leading transition ambassador.

Molly Corcoran, do you want me to start over?

Okay. Molly Corcoran with Axiom Advisors. On behalf of Ellis Power, my comments are regarding item two, the transmission accelerator program. Ellis Power is a leading transmission investor, developer, operator, and owner of transmission assets. In California, we've been an active participant in CAISO's competitive solicitation process, having been selected by CAISO to build and operate more transmission projects than any other entity due to our innovative design and cost containment commitments that lower the cost for ratepayers. Our concerns are just that we want to make sure this program works and the details really matter here. So we look forward to working with stakeholders. Thank you.

Thank you, Chair. Will Abrams with the Utility Wildfire Survivor Coalition and also an intervener at the CPUC and Office of Energy Infrastructure Safety. I would just advise the committee to think about sort of pre and post AB 1054 in 2019. We moved a lot of the responsibilities out of the CPUC over to Office of Energy Infrastructure Safety. But what we've seen is still increasing costs. We've seen interveners move away from safety performance. And I would say that that's not a great thing to have. And just I know really quickly I'm getting to the end of my time.

Is it there needs to be more representation of wildfire survivors in these, and there's no budget for it?

Martin Vendiel on behalf of the California State Association of Electrical Workers, the California State Pipe Trades Council, and the Western States Council of Sheet Metal Workers in support of extending the deadline on the Cal SHAPE program so that those schools get that much funding.

Craig Scholler on behalf of AVA Community Energy in support of funding DSGS out of its existing program at CEC and possible extension of the program. Thank you.

Good afternoon, Chair Grisela Chavez. On behalf of Ceres, we urge support for the DSGS program, which has proven efficient and must receive adequate funding to maintain last year's scale. Since the CPC cannot realistically build a replacement in time, DSGS should be extended through at least 2028 while SB 913 establishes a long-term solution. Thank you.

Leah Barrows on behalf of Good Leap. Thousands of Good Leap's customers are enrolled in DSGS, so we support Issue 1. It's a successful, well-run program that allows them to earn cash rewards for supporting a cleaner, reliable grid. It's important that DSGS receives adequate funding this year and remains available, too, to prevent blackouts and price spikes. For Issue 2, we do oppose while Good Leap supports and participates in ELRP, that program only covers customers in IOU service areas. And so we really want to make sure that you guys understand that replicating a program the size of DSGS by next year is challenging, if not impossible.

On behalf of the California Efficiency Demand Management Council regarding Issue 1, we align with the committee about the success of DSGS program. DSGS should be extended at least through 2028 to ensure that we could take advantage of the program. As such, CalShape interest dollars should go to DSGS, not ELRP. and separately, Sedmec supports ongoing funding for the Tech Clean California program. Thank you Thank you Good afternoon I Robert Harlow with Indoor Environmental Services We a mechanical services provider We a contractor We been involved in the CalShape program We hire union sheet metal workers, union plumber pipe fitters. We're sole source to 42 different districts, and those are really good jobs. We encourage you to extend that program,

Adam Hattafi here on behalf of Generac Power Systems and Ecobee Smart Thermostats. I want to echo what was said about DSGS. Our customers are in DSGS, and our experience has been that it is much harder to enroll in ELRP. I want to zoom out and mention that reliability-wise, we are headed to a reliability cliff in 2027, where many of the programs that we created in 2022 to prevent another 2022 from happening are expiring, including the LTC plants, which you're very familiar with, and also DSGS is running out of money, and the CPUC's resource adequacy program really isn't sufficient to meet their statutory reliability mandate. So losing this program at this time would be catastrophic as we're heading into this rather constrained summer.

Good afternoon, Chairman. I'm Caleb Weiss with Environment California, also commenting on behalf of the Center for Biological Diversity, California Public Interest Research Group, and Rewiring America. I just wanted to voice our support for the continuation of the Demand-Side Grid Support Program through program years 2027 and 2028, and broadly just the support for environmental organizations. There are many more here just for relying more on the millions of distributed resources that we have throughout the state, and we think the DSGS program has provided an excellent model for how we should do that. So I'll send more detailed comments, but thank you.

Thank you, Chair. Kim Stone of Stone Advocacy, another one on Team Save DSGS. CALSA agrees with a staff recommendation to shift unspent DIVA funds to DSGS for use for 2026 summer. We are concerned. We like using CALSHAPE interest for DSGS as more effective than using CALSHAPE interest for ELRP and shifting those folks over. DSGS has been tremendously successful, and we urge its continued funding. Thank you. Thank you.

in support of Item 9, heat pump matching funds. We think this is a great program opportunity with zero overhead, full transparency, and shows really good use of governance, results driven. Thank you so much. Thank you, Vince.

I'm Brandon Garcia with Advanced Energy United here to speak on issue number one. I want to echo all the comments made about saving DSDS and extending it to 2028. I would want to further comment and say if the issue is about funding stability for a program like that, we're working on a bill right now to integrate DERs into the larger market and would invite the committee to have that conversation with us because we do think that is a good way to continue these resources without having to come back every year.

I will do that.

Good afternoon, Chair McKinley-Thompson-Morley on behalf of Solar Energy Industries Association and aligning my comments with all of my colleagues regarding DSGS.

Of course. McKinley-Thompson-Morley on behalf of Solar Energy Industries Association, aligning my comments with all of my colleagues just regarding DSGS and just want to emphasize that we have an existing program that's proven scalable, reliable, and cost-effective. We agree with the staff recommendations and feel it's critical that it receives adequate funding this year and is extended to 2028. Thank you.

Good afternoon, Alison Hilliard with the Climate Center also commenting on issue one in support of the comments about DSGS funding and making sure that we're shifting the details. to DSGS and also concerns about the shifting of DSGS to ELRP. I think we should keep DSGS going, and that's also on behalf of Vote Solar. I'm working with Brandon at Advanced Energy United on that bill. I'll make sure we'll follow up with you. Also, quick comments on issue number three, the Climate Center. We are supportive of the Division of Petroleum Market Oversight Budgets Requests. Smooth transition, managed transition away from fossil fuels is important. Thank you.

Chair and members, Marissa Hagerman with Tratton Price Consulting, commenting on Issue 1 for Environmental Defense Fund and California Environmental Voters, and with permission for Californians for local affordable solar and storage and Los Angeles Cleantech Incubator. In summation, we support adequately funding DSGS and support keeping the program at the CEC. I'll follow up with written comments.

Hi, Chair. Marie Lu, on behalf of the Asian Pacific Islander Environmental Network and the Union of Concerned Scientists, in strong support of DPMO on item number three, given the substantial profits that the oil and gas companies are making amidst the Iran war and the ongoing mystery gas surcharge we believe that DPMO market investigators are critical to protecting consumers On behalf of the California Environmental Justice Alliance wanted to support item number one and strong support of DSGS, mirroring other comments from others. And then finally, on behalf of the Leadership Council, on issue number nine, we're concerned that the proposal to move money out of the EBD program and are interested in working with the steelworkers and supporting alternative funding sources.

Lastly, on item four, we support the CPUC moving forward. Thank you.

Megan Murray, on behalf of NextGen California, I urge the committee to strengthen CARB's latest amendments on its cap and invest rulemaking, specifically by removing the manufactured decarbonization incentive to ensure robust GGRF. NextGen also fully supports restored funding for the DSGS program, like many of the other folks here. And they also support the proposed $200 million in the ZEV incentive program and expansion of funds to also support medium and heavy-duty zero-emission trucks.

Taisha Watts with the California Housing Partnership and also representing over 40 climate environmental justice and housing orgs advocating against funding cuts to the equitable building decarbonization program the low income weatherization program and tech clean program all which are running out of funding this year The low income weatherization program is the state's flagship program for multifamily decarbonation. On average, participants in the program save over 30 percent on the energy bill, which helps maintain affordability for low income households. And lastly, we are happy to work with the sheet metal workers on establishing their program as well.

Gabriella with Sierra Club, California. I'm here to respectfully oppose the staff recommendation to redirect $10 million from the Equitable Building Decarbonization Program administrative budget to fund the proposed sheet metal worker initiative. We're eager to explore pathways to support their goals without weakening EBD. We believe there is a collaborative solution here. We're already facing real funding shortfalls for both the low-income weatherization program, which is especially critical, and the tech clean California. EBD has already faced multiple cuts and further reductions risk setting harm for president also want to echo the comments and previous partners and urge continued funding for demand side grid support program please send us an email on that All right