Assembly Utilities And Energy Committee

so I think we're going to jump to file item number 11, Assemblymember Irwin.

Can you tell me which?

2182.

I thought I was going last. So, all right. Is it on?

Can you? Yeah. Okay. Well, good afternoon, colleagues. As you may know, reducing greenhouse gas emissions from industrial facilities is one of the greatest challenges we face in reaching our climate goals. One of the tools that we have available is to deploy industrial upgrades to cleaner technologies for industrial upgrades to cleaner technologies is the energy efficiency program overseen by the CPUC. However, the current program excludes many promising industrial upgrade projects. As a result, large industrial facilities are struggling to effectively invest in cleaner technologies despite their potential to deliver significant emission reductions. I will be accepting the committee's amendments to AB 2182, which will restructure the industrial energy efficiency program in the following ways. Number one, shift the program administration from the CPUC to GO-Biz, which has a strong record of efficiently implementing the energy-focused incentive programs. Number two, assess project benefits based on the performance of existing equipment rather than a hypothetical baseline. Then only use funds paid in the program by industrial facilities themselves, ensuring that no incentives for the facilities are subsidized by other customers. AB 2182 will realign the Industrial Energy Efficiency Program with the realities of the industrial decision-making, reduce administration costs, encourage timely investments in decarbonization projects, and support industrial emissions reductions in California. With me today to testify is Bill Girald, Director of Energy and Sustainability for Cal Portland.

Yeah.

Hi Madam Chair members Thank you for allowing me to testify today I really appreciate it Energy efficiency is a big core component I the director of energy and sustainability for Cal Portland We a cement and concrete company here in California We been in California 135 years and we operate cement and concrete plants here And we're part of an energy-intense, trade-exposed group called CLECA. I'm sure everybody knows California Large Energy Consumers. And we're 500 megawatts of load with energy-intense, trade-exposed load that can really utilize energy efficiency. Cal Portland, we have a culture of energy efficiency. We reinvest in ourselves. We're an Energy Star partner. We've won the Energy Star Partner of the Year Award 20 years in a row. I just kind of want to share that to show that we really do focus on energy efficiency, and we really believe in it. The existing energy efficiency program, we've utilized it through the utilities. And in the early 2000s, pretty successful, and it basically dried up. The process doesn't work anymore, and we've attempted, and then just kind of our leadership is just the effort isn't sustainable anymore. And so we want to work on energy efficiency. You need sometimes a little extra funding. This is a capital-intensive industry, and we're competing. Energy efficiency competes against other capital-intensive investments, And sometimes you need some additional funding to make an energy efficiency project meet those high hurdle standards. So, you know, and we're not this bill. What I really like about it is it's not asking for other more money from somewhere else. We're already supplying the money, the financing. This is already going into our rates from the industrial program itself. So we only want to utilize what's existing and find a path forward that actually it works. Right. You know, we were ready. We're ready to invest money in California, in projects in California. We're a Western Coast company, Washington through Arizona. And so I want to thank you very much for allowing me time and ask for an eye on this.

Thank you. At this point, we will open it up for additional testimony in support. So if you would like to testify in support of AB 2182, you can approach the microphone at this time. I'm chair and members of Emela representing the Energy Efficiency and Demand Management Council. We have a support if amended position. Really appreciate the authors' work on this and the importance of our business customers and actually providing this energy efficiency for the grid. So we'll continue working on that. Thank you. All right. Let's turn to opposition. Is there a primary witness in opposition to AB 2182? All right. Going once. All right. Seeing none, any Me Too testimony in opposition to 2182? If so, please approach the microphone at this time. Seeing none, bringing it back to committee. Questions, comments? When we get a quorum, I'd like to move the bill. I think it's a win-win-win for everybody, and I'm delighted to see it. I'll second. All right. Excellent. You've got a preemptive motion and second. Assemblymember Irwin, would you like to close?

Okay. I think we'll move to file item number 12, which is your AB 2396.

Good afternoon, Chair and members of the committee, and thank you, Assemblymember Owen, for authoring this important legislation. My name is Ted Bardicke. I'm CEO of Clean Power Alliance, and I'm joined by David McNeil, who's our chief financial officer. We are California's largest community choice aggregator and the bill's sponsor, which focuses on a key challenge. How can we tackle rising electricity bills while building out the infrastructure necessary to sustain a reliable and clean energy system? This isn't a theoretical concern for us. We are a JPA made up of 38 communities across L.A. and Ventura counties and are governed by a board of local elected officials whose constituents feel the affordability crunch every day. We've lowered our rates three times in the past 14 months and are poised to lower them again this coming July. But because we only control the smallest portion of a customer's bill, those bills keep going up. So at our board's urging, we've been seeking to lower transmission costs, which would benefit not just our customers, but all Californians served by IOUs. As the committee analysis noted, transmission investments are expected to double over the next 20 years. And just yesterday, the CAISO issued its draft 25-26 transmission planning, calling for another $7 billion in transmission construction, which ratepayers will have to pay for. Transmission is a natural fit for CCAs, particularly for the competitive projects that the accelerator is targeting, because, one, the public sector has a long track record of developing transmission lines. It's already a competitive market via well-established FERC 1000 projects, and it is well set up for public-private partnerships and the financing tools that enable them, similar to what we do with private sector generators. California is looking for partners in building new transmission lines at lower costs. Well, here we are putting our hands up. So to offer some additional insights on how we would partner, I'll turn it over to David, who is responsible for our relationships with the capital markets and would be a key person in putting together our projects.

Thank you. Okay, now we will move to additional witnesses in support. If you'd like to testify in support of AB 2396, you can approach the microphone at this time. Hello, Dr. Adria Tinnin, Director of Race, Equity, and Legislative Policy on behalf of TURN, the Utility Reform Network, in support. Sean McNeil with the California Community Choice Association, in support. All right, moving to witnesses in opposition. Madam Chair, member Scott Wesch on behalf of the California Coalition of Utility Employees and the State Association of Electrical Workers, regretfully in the position of oppose unless amended. While we appreciate the committee amendment, it does not fix the fatal flaws in this proposal. First off, the sponsors have stated that this is all about doing partnerships with private corporations or utilities. That's not required in the bill. Under the bill, CCA alone could go and build and own and operate a transmission line. What's the problem? No requirement in last year's law or this year's law to require that they file a fire mitigation plan. There's also no requirement that they obtain any sort or accept the financial liability of creating a wildfire. They would be subject to strict liability like any other transmission owner. But a JPA is a CCA is an empty shell of a JPA without any assets. And the cities that make up this JPA do not put the full credit of those cities or their general funds up to support the CCA If that was in the bill we wouldn have a problem with the bill But for representatives here from Los Angeles where the hue and cry has been that Edison has not done enough for the victims of the Eden fire to suggest that they should be able to own transmission without any backstop or safety net for potential fire victims, what happens if they burn down Burbank. LADWP owns transmission. You know what? The city of Los Angeles, the full general fund of the city of Los Angeles, as well as the credit of the city of Los Angeles backs up the transmission owned by LADWP. There's nothing in this bill to do that. It's reckless to pass this bill in its current form. We're not opposed to CCAs owning transmission. But for God's sakes, let's step back and take a look at this from the perspective of what happens. We've gone through enough of these fires. We know what happens. Thank you. Good afternoon. Brandon Ebeck, on behalf of Pacific Gas and Electric, very much aligned with my colleague in labor, Mr. Scott. We do think that this bill lacks some very serious safeguards. It's pretty high level, and it doesn't really go into how these projects would ever get built, how they get financed, how the liability is shared. Ultimately, this bill should probably go through the local government committee because the JPAs are not legally set up to take on this type of liability. Ultimately, the IOU, as a provider last resort, is liable for whatever happens should a CCA engage in an activity that causes it to go bankrupt. If that happens, the utility and all of our bundled customers are suddenly on the hook for not just potentially picking up their infrastructure that they might own and continue to operate that. we also would have to pick up all the generation costs that we were not preparing to suddenly take on. So we think that there's a lot of unintended consequences here. We don't think that the CCAs are probably in the best position to get the cheapest financing. According to the accelerator, the state is probably going to have much better borrowing rates and better credit. Ultimately, your cost of debt relates to the project you're investing in. And if you're going to build a greenfield project across high fire threat districts, whoever's loaning you the money is going to look at that and give you cost of your debt. That's not going to vary whether or not it's an IOU or the state or a CCA going out to seat that money. So even with the amendments, we are still opposed to this bill. All right. Opening it up for additional witnesses in opposition, if you'd like to testify in opposition to AB 2396. Thank you, Madam Chair. Hunter Stern with IBW 1245, also in an opposed and less amended position. Good afternoon. Joe Zainzi with San Diego Gas and Electric in opposition. Thank you. Good afternoon. Lynn Trujillo with Southern California Edison in opposition. Thank you. All right. Turning it back to committee questions or comments. Assemblymember Hart. Well, the obvious question of the day is the liability one. So what does the proponents of the bill, author and witnesses have to say about it? And, you know, I do want to make clear, this is just allowing the CCAs the ability to be eligible for the transmission accelerator. And obviously, the liability issue would have to be dealt with. They wouldn't, the projects wouldn't be picked if they don't have the appropriate liability coverage. And so I would would you address that Yeah I would point out that there is plenty of private insurance capacity available in the market at affordable rates for certain new build transmission projects

Mr. Wetschy, look ready to ask another question. The first thing is when FERC does a competitive bid on a transmission project, that's not their job. They have a list of requirements that FERC mandates be the bidding components, and liability coverage is not one of them. It's the job of this institution. Secondly, the merchant transmission developers like the next eras of the world, LS powers of the world that do projects in California, they have a market cap of like almost $200 billion, right? If, in fact, insurance would be so easy to be obtained by the LACCA, why is that requirement not in the bill? If they're convinced that insurance will be available in that market, let's put an amendment in the bill that they accept liability and that there will be insurance. And if the insurance doesn't cover it, then the cities that make up the CCA will back it up in case it's your constituents that are damaged by this. The owners of the CCA, just like you should have to put up and cover any liability. And that's the cities that make up this. So let's put it in the bill. If it's not a problem, we should be able to hammer out some language.

So that's to clarify. Assembly members of Burt. So I want to thank you for bringing the bill. I'll be supporting it today, but I do think the liability issues are important, and I'm hoping that you'll work with the opposition to try to address those explicitly in the bill. And with that, I make that request and will be supporting the bill today. Thank you. All right. Thank you. Any other questions or comments from committee members? Okay. Assembly member Irwin, would you like to close?

All right. Thank you. I think we're still waiting for a quorum. So we will pause that until we have one. And then we've got Assemblymember Irwin. Third time's the charm. Okay. 80, 25, 89. All right. So under current California law, if the federal tax liability of an IOU is reduced in the middle of a general rate case, the IOU is not required to return the savings to the taxpayers. For instance, under H.R. 1, Trump's tax bill, if IOUs benefit from the tax cuts, they may be collecting more money than needed. AB 2589 would require the CPUC to evaluate how changes to federal law affect the federal tax liabilities for IOUs. If the CPUC finds that changes in federal law result in the IOUs overcharging ratepayers, AB 2589 requires the CPUC to adjust rates so that the difference is returned to taxpayers. This bill builds on the success of SB 1028, authored by Senator Hill in 2018, which returned more than $1 billion from IOU federal tax liability to California ratepayers after the Trump-1 tax cut. This bill fits into this committee's continued focus on affordability. And with that, I respectfully ask for an aye vote.

They're in the opposition. Do you have a primary one? No I have no All right We go ahead and open it up for any testimony in the room In support If you like to testify in support of AB 2589 you can approach the microphone All right seeing none we got our opposition witness coming on up Good afternoon, members and committee members and chair. I'm going to keep it short. We've been talking with the author and the staff regarding the TAMA account that applies to Southern California Edison through our GRC where it was approved. And we want to make sure that it's not duplicative of the work that we're currently doing. So we're going to keep those conversation going to ensure that the intent of the bill and the current process that we currently are following is what the author is trying to do. So we'll keep that going. In the meantime, we do have an opposition on the bill. Thank you. Okay. Additional witnesses in opposition. If you'd like to testify in opposition to AB 2589, now is your time. Seeing none. Committee, bringing it back to committee. Questions or comments? Seeing none. Assemblymember, would you like to close?

All right. We will move to file item number 10, AB 2508, Assemblymember Hoover. Welcome. Hello, everyone. Thank you, Madam Chair, members. Appreciate the opportunity to present AB 2508. First, I want to thank the chair and committee staff for working so closely with our office on this bill. Californians face the highest cost of living in the nation, and rising energy bills have become a major affordability concern among families across our state. According to the Public Policy Institute of California, our electricity rates are the highest in the contiguous United States. And second only to Hawaii, as of late 2025, California's rates are over 100 percent higher than the national average. These high electricity costs are driven partly by public purpose programs paid for by customers of the state's investor-owned utilities, which include low-income assistance and energy efficiency programs that provide broad public benefit. It's neither equitable nor sustainable for these programs to be funded by the customers of electric IOUs. If we're serious about affordability and bringing down rising costs, then we need to take action and find ways to save Californians money. This bill seeks to do just that. These program costs are regressive and hurt middle and low-income Californians the most. And if they are important to this legislature, I think it's important that we fund them using other pots of money. Furthermore, if full electrification is the goal of the state, then it's important that we bring electricity costs down to reach our climate targets. AB 2508 does not eliminate these programs. I want to be clear about that but instead will help reduce customers energy bills by providing funding for these programs to more appropriate sources With that with me today is Laura Desai with San Diego Gas and Electric and Scott Wetsch with the Coalition of California Utility Employees to share their thoughts as well. Madam Chair, member Scott Wetsch on behalf of the California Coalition of Utility Employees is proudly in support of this bill. Our position is simple. Everybody's about affordability. Everyone's talking about reducing rates. there can't be any more sacred cows. I mean, net metering is, I guess, a sacred cow now, so we can't touch that. But there's certain programs that just their time has come and gone. And many of these energy efficiency programs are not even means tested. I mean, a few years ago, I'm sure you'll be glad to hear, I built a very large swimming pool. And that pool took four four motors. And when I had the contractor hand me the keys to the new pool, he also handed me the paperwork for rebates, 200 bucks on each one of those four high efficiency motors. And I didn't really need the subsidy. It didn't incentivize my use of those high efficiency pieces of equipment. These programs are inefficient, and many of them, perhaps not all of them, but many of them should not be borne by the rate payers. And so we would urge an aye vote. Thank you. Thank you. Thank you. Chair members, Lourdes Allon with San Diego Gas and Electric. I really agonized about how to speak to this bill, just because public purpose programs serve a very important place within rates or within California for Californians. But because they are public purpose, I do feel like they need to be paid through public funds and not hidden and being kind of, we don't really know exactly what's in the public purpose programs, and at least it's not listed in the bills. And I think that, as Scott had mentioned, there's some energy efficiency programs that are important and that are valuable and we need to keep. However, they're very expensive. I also built a small ADU in my backyard that required me to put solar on it. And the solar system was a lot more than I could afford and that I wanted to afford. It made me get a smaller unit in order to get under or out from under the requirement of the net energy metering system to put on my home. Long story short, the cost of it was, you know, it's a worthy cause. I would have done it if I could have had the money to do it. I think $20,000 for a system was a lot more than I could afford at the moment. But also at the time, by the time I was done paying for it and getting my money back for it, then I would have had to redo it and set it up and do it all over again. So there's no real savings. At least I didn't see that. There would be a real savings for me. It wasn't cost efficient for me. And I think it's probably the same for a lot of Californians. That said, 37% of costs in energy bills are due to public purpose programs. There's a lot of bills that want the cost to reduce the cost of bills by 25%, that I think that if we can do that, looking at the public purpose programs more closely will be really helpful. Oh, perfect. Thank you. Thank you. Okay we open it up for additional testimony and support If you like to testify in support of AB 2508 please approach the microphone at this time Good afternoon Hunter Stern with IBW 1245 also in support and I would note that if we put these items on people bills there would be no sacred cows Thank you. Thank you. Hello, Valerie Torello-Valajo, Pacific Gas and Electric Company in support. Thank you. Good afternoon, Madam Chair and members. Rod Brewer for Southern California Edison here in support. Thank you. Okay, turning to testimony in opposition. You can approach the dais this time. So we have three people wanting to speak in opposition. We can only hear from two. So I'm going to ask my consultant how we do this. Rochambeau? I'm not sure. Okay. So we're going to hear from whoever had the straight opposition position first. And then one of you guys need to decide between the two of you who, which of the opposed unless amended witnesses is going to speak. Okay. So turn in the wildfire survivor network. You need to figure that out. Well, in the meantime, we'll hear from. We have two straight opposition. Oh, you have two straight opposition. Oh, okay. So then I think the policy is that we will hear from the opposed position. If you can just, when we turn to the testimony in the room, you can give us like the 10 second version of what amendment you're looking for. Okay. Thank you. All right. So we are hearing now from turn in opposition and I don't know. Anyway. Good afternoon, chair and members. Thanks for your time today. I'm Stephanie Chen with MCE, California's first community choice aggregator. At MCE, we are acutely aware of the affordability crisis, and we are committed to mitigating its impact. Unfortunately, members, this bill will have unintended consequences. Several of the programs in it function as energy safety nets, including for local governments and food banks that are also impacted by the affordability crisis. Our focus today, however, is on energy efficiency. MCE is a portfolio administrator offering programs for every customer class across our four-county footprint. Cutting these cost-effective programs will cost more than it will save. Every dollar invested in energy efficiency generates more than $4 in grid benefits, including energy savings, reliability support, and emissions reductions. The PUC noted in its AB 3264 report last year that energy efficiency's, quote, low impact on rates provides a low cost path to equitably achieve cost savings for customers and reduce total energy consumption and peak demand, which in turn reduces retail rates through lower energy prices and avoided capacity, transmission, and distribution costs. Energy efficiency portfolios are rigorously analyzed by independent evaluators and the PUC in public proceedings and continuously found to be cost effective statewide. What this means is that it would cost more to replace the power that California is currently through energy efficiency programs than it would cost to fund them. And, you know, we heard from witnesses in support that there may be some question about what is the best use of these funds? Should they be going to pool pumps? Should they be going to different kinds of customers? Those are all challenges that can be addressed in the existing program structure. If the PUC and the legislature would like it to be focused more on means-tested programs, if they would like it to be focused more on different kinds of measures or delivering different kinds of benefits as a priority over others, those changes can certainly be made. Respectfully, we must ask for your no vote. Good afternoon, Chair and members. I'm Ryan Wilson. I'm here on behalf of the California Energy Efficiency and Demand Management Council. We're an industry association of businesses involved in the design and delivery of energy efficiency and demand response technologies and programs throughout the state. The council respectfully opposes AB 2508. Energy efficiency provides more jobs than any other energy-related sector in California, with over 300,000 jobs and 53,000 businesses across California in every county of the state. These businesses work with energy efficiency programs to provide customers around the state with energy efficient technologies that integrate with the grid. They provide real value, not just to the customer, but to California as a whole. But these energy efficiency and demand response programs, in order to work, they need to be stable and reliable. And that's why E-programs are run on at least three-year cycles. Manufacturers, distributors, contractors that are essential to helping these programs run. They wouldn't invest in changing their business practices and supporting these technologies if they can't rely on consistent program funding. Funding stability is absolutely foundational to the success of these programs, and shifting energy efficiency funding to the Greenhouse Gas Reduction Fund puts these programs and all of the benefits that we gain from these investments in these programs at risk. The GGRF is already sort of overextended and unpredictable, and relying on it undermines long-term planning. It disrupts the energy efficiency market, and it ultimately drives higher costs for power in California. The GGR just simply can't provide the stability it takes to run well-designed, cost-effective programs. To execute these energy efficiency programs well requires reliable multi-year funding, and without it, we lose our fastest and often our cheapest way to match energy demand with supply, which is precisely what California needs right now. It needs these programs to work at scale to mitigate the current energy affordability crisis. So on behalf of the California Efficiency and Demand Management Council, we respectfully urge your no vote on AB 2501. Thank you. All right. We will. Perfect timing. We will turn to additional testimony in the room. And we first you can just give us the 22nd version of the amendment. Absolutely. Thank you, chair and committee members. Will Abrams, on behalf of the Utility Wildfire Survivor Coalition, we are taking a position, opposed unless amended on this bill, specifically want a pre-allocation determination whether fire victims have been paid by that utility. And if they have not been paid by that utility, these funds need to be directed first and foremost to their victims. We cannot be bypassing the victims and putting these funds in other places. We need to be looking as a committee, as a legislature as every opportunity to right those wrongs and make sure we're driving full payment to fire victims. This is an opportunity to do that. We appreciate the intent of the legislation but we also have to remember taxpayers rate payers that us right And so we need to I know there other legislation to tie this to utility incentives and hold them responsible for these types of payments and we should go there as well But again, we can put in a simple language where we've had discussions with the author, which is a pre-allocation determination. And first and foremost, make sure victims of these utilities are paid in full. Thank you. Thank you. Okay. We will turn to additional testimony in opposition. If you'd like to testify in opposition to AB 2508, you can approach the microphone. And as a reminder, just name, position, and affiliation. Thank you very much, Madam Chair, members of the committee. Casey Daly, I serve as the Director of Energy and Environmental Programs for the Western Riverside Council of Governments, or WRCOG. And we are a straight oppose. Thank you. Thank you. Hello, Dr. Adria Tinnin, Director of Race Equity and Legislative Policy at Tern. Opposed unless amended. We laid out our amendments in the letter. Thank you. Thank you. All right. Bringing it back to committee questions, comments. Assemblymember Rogers. Thank you, Chair. First of all, I want to thank the assembly member for our back and forth yesterday on this. shared with you, I support the overall intent of this. My biggest concern with the bill is the lack of prioritization in how these public purpose programs are going to be pushed onto GGRF. And specifically, last year when the legislature redid our GGRF plan, we actually bumped vegetation management and fire programs from a tier one to a tier three. We were in budget earlier this morning discussing this very thing that by 2030, 2031, you'll have both one-time allocations from the legislature that have expired for that vegetation management work. You'll have Prop 4 that will have been expended for that same work. And so when we talk about wildfire projects, the one remaining source of funding is that GGRF. But as a Tier 3, with additional things being pushed on in no clear direction. I'm concerned that it'll push that off. I personally think the legislature should be funding the wildfire work through the general fund, not GGRF to begin with. But your bill, from my perspective, would exacerbate an existing problem that the legislature already needs to fix. But happy to hear your response. No, I appreciate that. I appreciate the comments and the back and forth. To be honest with you, first and foremost, obviously, we're trying to solve a lot of different challenges here, right? And the biggest one right now is affordability for rate payers specifically. And so that's why we believe in the policy. That being said, I think on the details, we would absolutely be willing to continue to work with you as well as the opposition on where that money comes from. I think the important part is, you know, we obviously are not eliminating any of these programs with this legislation, but if there's a more appropriate source of funding for these programs that are not rate payers and are not GGRF, I'm more than happy to have that conversation. But I do think that that's something we need to work on in appropriations. In the meantime, though, you definitely have my commitment that we'll continue to look at other options. And, you know, if we obviously would love to earn your support on the bill. But I think right now, I think the fundamental urgent need is to get these off of the rate payers. And a number of studies, and I'll go over some of those in my close too, that the analysis cites that this can be a savings for rate payers and actually will help us further reaching our climate goals and further our electrification by reducing burdens on those ratepayers as we do that And I think that that an important priority Absolutely. And I'm happy to keep working with you on it. I think just in general, having a program with no identified funding source on it means that you end up not having a program. And so that's my biggest concern, not just for what we're pushing off of the bill. Again, I agree with that intent, but also with the other existing things within GGRF. I would like us to have a clear understanding of what gets supplanted, what doesn't, especially as I mentioned that wildfire work that's being done around the state that I think is pretty critical. Thank you. Mr. Hart. Yeah, I share my colleagues concerns about, you know, just putting this off on the GGRF and having there so much competition in that program that the public purpose programs that are valuable and provide efficiency benefits and save rate payers monies will be lost in that process, too. So I prefer a more surgical approach that had made choices about those programs and then, you know, made those kind of decisions rather than just lumping them all into that fund and expecting them just the good ones to survive. So I'm having a hard time voting for this bill in that form today. All right. I have a couple of sort of more comments than questions. Oh, Assemblymember Gonzalez. I got here late to everything. But Mr. Hoover, I just want to thank you so much for this bill. You and I have had extensive conversations on this. I just want to make sure I did. I was told that my predecessor had a bill very similar to this in the past. We just want to make sure I represent the fifth poorest district in the state. We just want to make sure that these programs are going to continue to be maintained for low-income individuals who depend on this as a lifeline to be able to pay their utilities and so forth. And so I know that you and I have had quick conversations about this, and you've committed to that. So I'll continue engaging with you in that conversation as we continue this dialogue on this bill. And thank you, Madam Chair. I appreciate that. And if I may just briefly respond, I think 100% agree with that. And we certainly do not want to eliminate any assistance for low-income Californians. In fact, what we're trying to do here is lower the cost for low-income Californians and all Californians, right, with this bill. The LAO, you know, one of the reasons we picked GGRF in this legislation is because the LAO has recommended that. A number of other studies have recommended that. But at the end of the day, I think the key is, you know, moving those out of the rates. So that's, yeah, happy to continue those conversations. Ms. Limber-Win. Oh, thank you. I agree with the comments of my colleagues, Rogers and Hart. I would like to see a surgical approach to which program should be removed from the utility bills. But I think relying on GGRF, there's no money in there. And we are already seeing a billion dollars come out of GGRF to pay for Cal Fire, which is something that should definitely be paid for with the general fund. So my concern is that if you move these programs over to GGRF, they are all going to disappear. And there's a lot of very important programs there. So I won't be able to support today, but I look forward to seeing the work that you do with the opposition. Thank you. So I have a couple of, oh, I'm going to, assembly member, our vice chair has arrived. Mr. Patterson, welcome. I haven't arrived yet. Presumptuous. Well, thank you, Madam Chair. Appreciate it. And I was listening to this in the in my in my office during a meeting And you know this is an issue I think I actually didn know you were doing this bill until it started coming up for committee But this is an issue we been talking about for a long time I mean, and I've introduced bills that are much more extreme than this. But I think the intent, which is great, which is like customer, you know, the number one reason why people reach out to my office is because of the cost of utility bills. That is the number one thing. And, you know, right now there's, you know, those costs are being put onto the, onto the utility bills. And, you know, a lot of them, and we've had these debates too, but like, you know, there, there could be important programs. Some of them we need to look at. I think we all mentioned that, but, but we have to help our customers or sorry, our constituents pay, pay for these programs. And I think this is a way to do it. I actually understand what Assemblymember Irwin was saying, you know, and I get that. I understand that concern, but we do need an avenue to help the customers pay for the bills. And so I really appreciate you bringing this bill forward. I think it's a very small step for a much broader conversation. I'm sure our chair – I'm not going to commit her to anything because, you know, nobody listens to me around this place anyways. But it's legitimately like a hearing we should have on this topic about what kind of charges, where they go, and what programs should we maintain as a state, and bring all the stakeholders together for that in a very public way. So thank you very much for being here. I look forward to supporting it. Thank you. All right. Well, building on that, I think there are, you know, there's really kind of two questions related to public purpose programs. It's actually the first, Mr. Hoover, you're not contemplating, but I do think we need to contemplate it. The first is, which of these programs are indeed good value for money, period? Which of these programs are indeed worthwhile? You know, one of the opposition witnesses said that for every dollar invested in these programs delivers $4 in savings. We've had many hearings on this topic. And time and again, the public advocate's office has said to us, of the 300 programs that we are all paying for, each and every one of us on our bill every month, a little bit of our bill is paying for these programs. The public advocate has come before this committee time and again and said of those 300 programs, one of them is cost effective. One of them is a good deal for rate payers. So that's the are these worthwhile conversation that I think is very important. That is, of course, not the conversation that Mr. Hoover is asking us to have today. But the other question is, even if these things are the best things since life spread, should they be embedded in our electricity bill? Should they be embedded in rates? And I am supporting this bill because I believe definitively that the answer is no. And I believe that for a number of reasons. One, because we are doing everything in our power to take a hard look at people's bills and pull things off the bills in the short and the long term. And that is important both because of the affordability crisis that Californians are facing today. It's also important because putting stuff on utility bills is an incredibly regressive way to raise funds for programs. And thirdly, we are in a race here in California to electrify our economy. Electrification is the centerpiece of our climate strategy. every single thing that we layer on a utility bill that makes electricity more expensive is a disincentive to electrification and is actually sabotaging our climate goals in the name of efficiency. So that is why I believe that the time is now for us to take these things off of bills and for us to have a very honest conversation and interrogate. It is 2026. Which of these programs are a good deal for California ratepayers? which of these programs are a good deal for California taxpayers, and move forward with that spirit. So with that, Mr. Hoover, would you like to close? Yes, thank you for those comments, Madam Chair. I'll just close by highlighting a couple of things in the analysis where this bill really comes from. Energy Institute at UC Berkeley saying this would increase equity and improve efficiency. As I mentioned, the LAO has identified reducing retail electricity rates as an appropriate use of GGRF discretionary spending. The Little Hoover Commission has highlighted the importance of moving these out of rates. And as was mentioned by the chair, the public advocate's office stated that relying solely on funding through surcharges on utility bills would be both regressive and inequitable. I think a larger conversation does need to be had. And while we're not having it in this bill specifically, I do think it would be important to look at the programs more specifically and identify which ones are actually helping Californians and helping us move towards our goals and which ones are not. That's a conversation I think that's outside of this legislation. But I do think that's important. But on the points that have been raised by the opposition, I am fully committed to looking at this as we move to appropriations on is GGRF the most appropriate funding source for this. you know, Tern has some interesting suggestions as well in their letter that they presented to the committee. And so we're going to be looking at all those options because I do want to make sure we're addressing some of the concerns that have been raised here by committee members and the opposition. So with that, we respectfully ask for an aye vote. Thank you. I think we're still waiting for one more to get to a quorum, but we will take up measure at the appropriate time. Thank you, Mr. Hoover. Thank you. All right. Thank you, Assemblymember. All right. We are going to now turn to file item number one, which is AB 1577 by Assemblymember Bauer-Cahan, presented today by Mr. Zipper. Good afternoon, Madam Chair, members. Today I'm proud to present AB 1577, the Data Center Energy Accountability Act on behalf of Assemblymember Bauer-Cahan. AB 1577 requires data centers to report various energy usage, water usage, and noise statistics to the Energy Commission on a monthly basis and to report estimates of the same information to local planning agencies before beginning construction. The Assemblymember will be accepting the Committee's amendments, which updates the definition of data center, makes various technical changes throughout the bill, and ensures that information sent to the Energy Commission and local planning agencies is scoped appropriately for their modeling and permitting work The Assembly member asked me to thank the committee staff for their hard work on this bill Energy data centers are being built at an unprecedented rate The Public Utilities Commission Public Advocates Office recently wrote quote, interconnecting data centers to the grid poses risk for ratepayers because of the enormous infrastructure costs required to serve them. These costs may ultimately be passed on to all ratepayers, especially if the facilities use less energy than projected or shut down before the utility has recovered its associated interconnection costs. We in the legislature are no strangers to the promise and potential of AI. We know that we need to build low-latency data centers here in California to support the AI revolution. But we need to be able to account for this new load, and when we're planning for the future of our grid, powering data centers can't come at the cost of powering homes. Furthermore, recent reporting from states with more advanced data center development has revealed that the effects of data centers on communities can sometimes be hyper-local. California's cities and counties should be empowered to make informed decisions when approving permits for new data centers. AB 1577 gives the Energy Commission and local planning agencies critical information for protecting communities and strengthening California's grid. With me today in support of this bill is Ethan Rarick, Executive Director of the Little Hoover Commission. Thank you, Madam Chair and members. The Commission is an independent bipartisan oversight agency charged in statute with investigating state operations and making recommendations that foster economy efficiency and improve service in state government. As part of our work and in recognition of the growth of data centers that the Assemblymember mentioned, we began a study of the growth of data centers and their potential impact on electricity rates several months ago. Earlier this month, we released a report that examined how the rapid growth of data centers may impact electricity rates and the electricity grid. Our report identified four key principles. First of all, that any financial burden that data centers impose on the system be covered by the data centers, not by ratepayers. Second, that data centers are integrated into the grid in a way that ensures the reliability of the system and does not add needless costs. Third, maintain the state's commitment to clean energy goals. And finally, ensure that California regulators have access to relevant information, such as how much power is used. This bill addresses the fourth of these principles, transparency and data access. Regulators currently rely largely on aggregated electricity consumption data, which can make it difficult to understand how individual facilities interact with the grid or may impact communities. Better data, more data would allow the state to plan responsibly for the rapid expansion of data centers, would allow local governments to do the same as the Assemblymember mentioned. Our report recommended that California allow regulators to confidentially access facility-level electricity use data from large data centers. AB 1577 implements this recommendation, and accordingly, we would respectfully request your aye vote. All right. We are going to take one minute to establish quorum before we hear from additional witnesses. Madam Secretary, please call the roll. Petrie Norris? Here. Petrie Norris here. Patterson? Here. Patterson here. Berner? Here. Berner here. Calderon? Here. Calderon here. Chen? Davies? Gonzalez? Here. Gonzalez here. Herbidion? Hart? Here. Hart here. Irwin? Here. Irwin here. Calra? Pappin? Here. Pappin here. Rogers? Here. Rogers here. Shiava, Schultz, Ta, Wallace, Zipper. Here Zipper here All right We will now move to additional testimony in support If you like to testify in support of AB 1577 please approach the microphone at this time Jack Wurston on behalf of the Santa Clara Valley Water District in support. Will Brieger for Climate Action California support. Melissa Sparks Kranz with the League of California Cities in support. Mariela Racho with Leadership Council for Justice and Accountability, supportive amended. Thank you. Michael Chen on behalf of Audubon, California in support. Jacob Evans with Sierra California in support if amended. Thank you. Thank you. Okay, turning to opposition witnesses. Is there a witness in opposition? Okay, come on up. Good afternoon, Madam Chair and members of the committee. My name is Kara Boonder, and I serve as a director of state policy at the Data Center Coalition. Here today in respectful opposition to AB 1577. DCC is a national trade association serving as the voice of the data center industry and our members are leading data center owners and operators and companies that lease large amounts of data center capacity. We appreciate the committee's work on this bill and look forward to seeing the amendments in print and also appreciate our communication that we've had with Assemblymember Barra-Cahan's office. This bill requires the disclosure of granular operational data, which would create a thermal fingerprint of data center facilities. centers aren't just about AI. They are the underlying facilities that support the cloud, streaming, e-commerce, e-banking, telehealth, and emergency and government services. In an era of increasing cyber physical threats, such a roadmap for bad actors endangers the sensitive government medical and financial data housed within these facilities. Furthermore, disclosing energy fluctuations during tasks like AI training can reveal proprietary trade secrets, putting California companies at a competitive disadvantage. This bill singles out data centers for monthly reporting, a frequency that is administratively burdensome and with unclear benefits. We are part of a larger portfolio of increased electric load drivers, including EV adoption and manufacturing reshoring. Singling out one industry fails to provide a holistic view of California's energy needs and load coming online. Data centers are the backbone of California's digital economy, supporting millions of jobs nationwide and driving billions in tax revenue. Adding a heavy-handed burdensome reporting mandate will stifle innovation and discourage the very infrastructure that EV charging and advanced manufacturing depend on from locating here in the state. We are committed to being a partner in California's energy future, and the data center industry is committed to paying for its full cost of service for the electricity it uses. We believe responsible planning is best achieved through collaboration with utilities and regulators, not the reporting regime that compromises security and creates regulatory uncertainty. Thank you for your consideration. Thank you. Thank you, Chair and members. Dan Kastenbauer here on behalf of the Silicon Valley Leadership Group, representing the region's most innovative employers, and we are in respectful opposition to AB 1577. We share the author's interest in making sure California has the data it needs to plan for growing energy demand. Our concern is that this bill creates a reporting regime that is disproportionate to that goal, replicative of work already underway, and uniquely punitive to a single industry SB57 signed into law last year directs the CPUC to assess the extent to which data center loads result in cost shifts to other rate payers That assessment is due January 1 2027 AB 1577 layers an entirely separate reporting framework on top of that pending work before we have the results of SB 57. The scope of what this bill requires is extraordinary. Data center operators would be required to report monthly across dozens of categories. No other energy-intensive industry in California faces anything comparable. The requirement to submit duplicative data to local agencies at the permitting stage based on estimates before a facility is even built adds delay to an already lengthy entitlement process without a clear planning benefit. California is already a high-cost environment for data center development. Our member companies are investing billions of dollars in this state in capital and construction jobs, in clean energy procurement, and in grid reliability. This bill, stacked on top of numerous others proposing similar provisions, sends a signal that California tends to single out this industry for regulation that exists nowhere else in the country. Thank you, and we respectfully urge a no vote. Thank you. All right, additional witnesses in opposition, if you'd like to testify in opposition, AB 1577, come on up. Good afternoon, Chair Petrie-Norris and members, John Kendrick on behalf of the California Chamber of Commerce, opposition. Good afternoon, Chair and members, Kathleen Charles on behalf of the Bay Area Council and respectful opposition. Thank you. Good afternoon, Chair members. Jose Torres with TechNet in opposition. Thank you. Okay, bringing it back to committee. Questions, comments? Assemblymember Papin. More of a comment, Madam Chair. Thank you so much. I don't see this bill or bills requiring reporting as something that is an inhibition to data centers or their abilities. I think we have a shared goal of making sure that local agencies give you what you need to succeed. And so I just want to say that as a broad, there are different bills out here, but I just want to say from a broad perspective, we all have buy-in and I would welcome the data center buy-in to this because it's extremely important. You may not be the only big user out there, but you are certainly a big one and getting bigger every day on the horizon. And it is not, these bills are not an attempt to squash your business model. They really are allowing, whether it's a big utility or a small water agency, the ability to provide for you to succeed. So I hope that at some point we can get on the same page that the reporting gets you what you need and ultimately the public what it needs. And that's a lot of what we do. I don't want to be too holier than thou, but that's a lot of what government and local government in particular is trying to do. And I think that's that's all we're trying to do. So hopefully we can get on the same page as it relates either to the grid demands. And I thank the chair for the hearing that you conducted just on this very topic and also the water demands and the finite resource that is out there as it relates to water. So thank you. Assemblymember Rogers. Thank you, chair. I actually wanted to ask about one of the letters of opposition, unless amended, did bring up with respect to the concern about only regulating data centers, that the definition of data centers in the bill might be so broad that it takes in some telecom facilities that otherwise traditionally are not considered data centers. And I know it's hard when you're presenting another member's bill. But just wondering if there has been any further discussion about refining that to make it clear that unintended consequences don't result from this. The one thing I do know that was in the notes that the Assemblymember gave me is that they are focused on the definition of what constitutes a data center, and that's something they're going to continue working with the opposition on. Great. Thank you. And if I can also add, somewhat building on Assemblymember Pappin's comments, because one of the concerns raised by the opposition is that we are targeting the data center industry. And I would reiterate Assemblymember Pappin's sentiment that that is certainly not the goal of this committee. I can't speak for the author, but I don't think that's the goal of the author either. I think that we are really grappling as a state of California with some very big challenges. So even without data centers, in order to achieve our electrification goals, we need to, I said this earlier, like in the next 20 years, we need to increase generation in the state by 300%. We need to increase transmission by 350%. we are trying to get our arms around what is the real demand of this data center load growth added on top of those so that we can adequately forecast and plan for that. And so while, you know, and we had some conversations with the author about this, like, should it just be data centers? Like, that's the place where it feels like right now we have the most uncertainty and the least visibility. And so I think that's why it was tailored for that industry. It is not, the desire certainly is not to position California as antagonistic, but rather to position us in a position that we can actually plan for this growth, welcome this growth, and ensure that our economy is able to continue to grow and thrive. Assemblymember Hart. Madam Chair, you said that perfectly. I couldn't agree more. And I want to thank the Little Hoover Commission for doing such great work to highlight this issue. This is really fundamentally the problem is things are changing so rapidly that we are going to have a very difficult time getting ahead of that and properly planning. And having the transparency of this information is essential and critical to that work. So thank you for the bill in her stead. Mr. Zipper. Seeing no additional questions or comments from committee members, Assemblymember Zipper, would you like to close? Just on behalf of Assemblymember Bauer-Cahan, I know that she's been doing some important work on this area to really address the needs of our community around data centers. I know her goal is to make sure that data centers can move forward in the state of California because they're needed here. And with that, I respectfully ask for a yes vote. Thank you. All right. So do we have a motion? No. Okay. All right. We have a motion and a second. Madam Secretary, please call the roll. Item number one, AB 1577. The motion is do pass as amended to natural resources. Petrie Norris? Aye. Petrie Norris, aye. Patterson? No. Patterson, no. Burner? Aye. Burner, aye. Calderon? Aye. Calderon, aye. Chen, Davies, Gonzalez? Aye. Gonzalez, aye. Harabitian, Hart. Aye. Hart, aye. Irwin. Aye. Irwin, aye. Kalra. Pappen. Aye. Pappen, aye. Rogers. Aye. Rogers, aye. Schiavo. Schultz. Aye. Schultz, aye. Ta. Wallace. Zabir. Aye. Zabir aye All right 10 So that bill is out and we leave the roll open for absent members to add on And so we'll now move to Assemblymember Zabir's actual bill. File item 21, AB 2383. Thank you. Wanted to not have our witness from the Hoover Commission have to come up twice. We've got it. Thank you. Thank you, Madam Chair, members. I want to start by thanking the committee staff for working with my office on sharpening this policy and improving this bill, and I will be accepting the committee's amendments. Today, I'm proud to present AB 2383, which at its core is a step to advance affordability and electricity reliability for all Californians. This bill will ensure that large energy use facilities, such as data centers, pay their fair share for electricity, preventing costs from being shifted onto everyday taxpayers, and it advances key recommendations of the Little Hoover Commission. Over the next few years, the state expects a significant amount of load growth, as the California Energy Commission has projected the peak demand of the California Independent System Operator to increase by over 20 gigawatts through 2040. Notably, California being recognized globally for its leading footprint in the digital sector, technologies and demand have rapidly grown for greater cloud services, AI models, and computing power. This growth will require a substantial increase in energy usage by their associated data centers, demanding approximately 6.7 gigawatts of the new 20 gigawatts forecasted throughout the grid, the power equivalent to almost 4 million households. While the state has begun some planning for this new growth, there remains a need to develop statewide long-term planning to ensure protections for ratepayers as new large-load customers interconnect with the electric grid. Without proper guardrails, the cost of service to new large energy use facilities can create significant risks and burdens for existing residential and commercial customers. Furthermore, California has committed to ambitious climate and energy goals. In order for us to successfully meet our targets, we must ensure that electricity is affordable and that will be fundamental to the state's transition. AB 2383 aims to address this by directing the CPUC to create a new electricity rate structure for large energy use facilities that will properly assign costs. Specifically, it must be designed in a way that appropriately attributes costs of services, costs shifts to other ratepayers and promotes equitable contributions to the grid efficiency and state programs. Additionally, this bill provides guidelines to further mitigate against cost shifts by requiring service contracts between large energy use facilities and the load-serving entity. These are intended to avoid stranded assets such as unused procurement of large load or infrastructure investments in the electric grid. AB 2383 will ensure timely and efficient planning as the state prepares for the emergence of unprecedented demand on the electric grid and will be critical in protecting ratepayers and advancing system-wide reliability. With proper planning and strategies underway, we can move forward with an equity-based transition in California. Thank you, and I respectfully ask for your aye vote at the appropriate time. And with me today is McKenna Beck with the Natural Resources Defense Council and Ethan Rarick with the Little Hoover Commission. Hello, Madam Chair and members of the committee. My name Ms. McKenna Beck, an advocate at NRDC, testifying in support. Across the country, the data center boom is proliferating and California is certainly no exception The California Energy Commission projects that data centers will add roughly five gigawatts of electricity demand over the next decade to California That the energy equivalent of around 7 million Californian households Without strong guardrails, data centers and other kinds of large energy users can impose significant costs and burdens on Californians, including air and water quality, water availability, and our reliance on fossil fuels. At the same time, large loads can create serious financial risks for the broader rate base. Large loads require costly infrastructure investments that assume decades of continued use, and if those customers downsize or shut down, ratepayers can be left stranded with these costs. The bill addresses these risks. It creates a dedicated rate class that shields other customers from cross-subsidies and ensures that some of the largest infrastructure costs are paid for by customers they're built for. If these developments are done right, there is a potential upside. If large loads and data centers can use underutilized infrastructure without driving significant new investments, they can put a downward pressure on rates. But those benefits aren't automatic. They require very specific conditions, and they absolutely depend on guardrails that will ensure long-term financial commitments from these customers. Without those protections, the risks overwhelm the potential rewards. These are common-sense guardrails that align with actions taken in over a dozen jurisdictions, including similar legislation enacted in Oregon and Minnesota and large low tariff proceedings at over 30 state utility commissions. Data centers are coming online now, and failure to act will risk hurting Californians. For those reasons, I urge your support. Thank you. Thank you, Madam Chair and members. Ethan Rarick with the Little Hoover Commission. I will be brief, respectful of the committee's time. I already outlined the four principles that we identified in our report on data centers and the electricity grid. This bill addresses the first of those principles, ensuring that ratepayers are not burdened with costs that data centers impose on the system. I would echo the comments of Ms. Beck. I will additionally add that our report recommended requiring that large load facilities enter into long-term contracts with provisions for minimum payment obligations. This bill does exactly that. We also recommended a requirement that such facilities contribute to broader system costs, such as wildfire mitigation, again, something embodied in this bill. We view this bill as implementing some of our key recommendations and therefore respectfully request your aye vote. Thank you. All right, let's open it up for additional testimony in support. If you'd like to testify in support of AB 2383, come to the mic. Good afternoon. Brandon Ebeck on behalf of Pacific Gas Electric in strong support. Thank you. Good afternoon again, Chair and members. Catherine Charles on behalf of the Bay Area Council in support. Thank you. Turning to opposition testimony to our opposition witnesses. Come on up. We're actually OUA, so I don't know if you want to go first as opposition. Please, by all means, go ahead. All right. Good afternoon. Chair and members, Sean McNeil with the California Community Choice Association. We're the trade association for the CCAs, serving more than 15 million Californians in over 200 communities across the state, a lot of them in your districts. Cal CCAs oppose unless amended on 2383 because it undermines the founding legislation for CCAs. We don't have an issue with the intent of the bill, which was described by Mr. Zabur perfectly. But we don issue with the intent of the bill which is to protect rate payers from costs related to data centers In fact we strongly support that principle But protecting and serving CCA rate payers is our responsibility not the PUCs And we've proven that we can do that. First, CCA governing boards oversee contracts and rates for our customers. This bill reverses that longstanding policy established in 2002 in response to the energy crisis. It makes sense to have the PUC regulate the IOUs as outlined in this bill. IOUs serve the shareholders. CCAs were designed to be an alternative to the IOUs. We serve our communities. This is what separates us. It's why we exist, and we do it well. 21,000 megawatts of new build clean energy, 48.4 billion in investments, 48,000 high-paying construction jobs. Hopefully, Scott Wedge took notice of that. And we know what we're doing. Second, as an alternative to IOUs, CCAs drive competition. Competition lowers costs. Competition creates creativity. This is partly why the POUs are so successful, and this was acknowledged in an informational hearing earlier this year. No one raises concerns with the POUs protecting the ratepayers. We are no different, and we have a proven track record of that. Third, there are already protections in place. CCAs are required to protect their customers consistent with cost of service. PUC Section 366.2c4 requires that CCAs offer service that is reliable and provides equitable treatment of all classes of customers, meaning no class of customers can be privileged to the detriment of others. The PUC also agrees that laws protect CCA customers. In closing, we understand the desire for more protections, but this can be done by building those protections into statute without CPC oversight. For those reasons, we are opposed unless amended. Thank you. Good afternoon, Chair Petrie-Norris and members. John Kendrick from the California Chamber of Commerce. I'd like to acknowledge and appreciate the author's office for engaging on this issue and also commend the committee staff for a very thoughtful analysis here. I think ultimately we all share the same goal, making sure that costs are appropriately assigned based on causation and that rates are ultimately just and reasonable. As currently drafted, we have a few concerns. concerns. We're concerned that some of the concepts in here may unintentionally create barriers to load growth that can improve affordability for ratepayers. We also believe that when we're looking at doing these, there's this fundamental tension where the legislature tries to tell the PUC to do something, the PUC reacts, and then later on the legislature has to come and revisit that issue again. And so when we're looking at how to design rates in this specific instance, anything that's locking in a static framework in this era that we have substantial changes in how we're serving electricity, right, in terms of what our goals are, in terms of the load growth that we expect to see from transportation electrification, from building decarbonization, and then also what we want the future of economic growth to be in California. So anything that's locking in a static framework and mandating that the PUC take a particular path, we think that they need the flexibility to respond in this era of load growth. And so ultimately, looking at the committee analysis and the amendments that your office is looking at taking, I think it's moving in the right direction. Obviously, we need to see the amendments and figure out whether that strikes the right balance and right path. But again, I feel comfortable with the direction this is moving, but we do have concerns with the bill in print. Thank you. Thank you. All right. Moving to additional witnesses in opposition. If you'd like testify in opposition to AB 2383. Thank you, Madam Chair. Mark Fenstermaker for Valley Clean Energy. Opposed unless amended for the reasons stated by Mr. McNeil. Hi, Chair and members. Daniela Garcia-Hernandez with the Western States Petroleum Association. We also do not have an issue with the intent of the bill. However, the definition of a large energy use facility captures refinery, so therefore we're opposed unless amended. Thank you. Good afternoon. Audra Hartman on behalf of the California Large Energy Consumers Association, also known as CLICA. We're the large manufacturers in California. We're opposed unless amended also because of the definition and would prefer to have the bill restricted to data centers. Thank you. Thank you. Sarah Bridges on behalf of the Manufacturers and Technology Association. Much of our comments are aligned with both the Chamber and CLICA. Because of the definition, we are concerned about some of our energy users that are large energy consumers and also the decarbonization elements. We appreciate the committee analysis and the amendments that were proposed, and we look forward to working with the author's office as we have before. Thank you. All right, bringing it back to the committee. Questions, comments? Assemblymember Berner. Yes, thank you to the author for bringing this forward. I do represent two CCAs in San Diego, and I'll support this measure today, but I hope you continue working with the CCAs to make sure that they are not captured in this bill. Thank you. So the CCAs are not as captured in the bill, I think, as a lot of people might believe. The first thing I'll say is with respect to a fear that the PUC will now start regulating their rates, their generation rates, their ability to procure generation assets, this bill is not intended to do any of that, and to the extent that there's anything in the bill that implies that, we are going to clean that up. What the bill does do with respect to CCAs is it basically requires that the CCAs enter into these long-term contracts. Now, the contracts themselves are not going to be approved and subject to regulatory oversight by the PUC specifically, but there will be a proceeding that will determine the broad contours of what needs to be in these long-term contracts. The reason why it's important that those long-term contracts apply to both the IOUs and all load-serving entities is because you have data centers who can basically shop around parts of the state, and basically the contracts are meant to make sure that there are assets that are not stranded, so that you actually have a load-serving entity that doesn't have a long-term contract with a data center. The data center has no obligation to purchase power over the period of time that they need to finance the cost of the service. And so essentially, if the data center went away, there could be obligations to purchase significant amounts of power that needs to be offloaded to other customers. And so this protects both rate payers of the CCA, plus it protects rate payers outside the CCA when people are sort of shopping around. So it is intentional that the long-term contract provision apply to the CCAs. that's not different from what already happens with PUC oversight. PUC does a lot of things that set up the regulatory framework within which CCAs operate, but I'll tell you that this is not going to they not going to have oversight over the rates They not going to have oversight over the contracts to purchase generation They will actually set up sort of the contours of what's expected in these long-term contracts. And we will continue to work with the CCAs to make sure that, to the extent that it applies to the CCAs, that we're not actually eliminating that competition that we agree is really important that they retain. Through the chair, if I can ask the CCAs to respond. Yeah, I mean, I think what we would say is because the provisions are under CPC jurisdiction, it holds us under their jurisdiction. If it was a separate statute that says CCAs have to have exit fees or long-term contracts to prevent stranded assets or unnecessary costs to non-participating customers, that's something that we would welcome and something that we're already designing. So on the issue of venue shopping, I mean, I think to the assembly member's point, you have to be careful with that for sure. But venue shopping also promotes competition if you have guardrails. And if the guardrails are, you know, you have exit fees in place and you're protecting your customers just the same way as the PUC is requiring the IOUs to do it, they're just not telling us what those terms might be because every contract is going to be different. You can't lump them all together. If there is a requirement on CCAs to follow those kind of rules, we'd be open to that. Assemblymember Rogers. Thank you so much. And I want to thank the author for taking the time to talk with me about the bill. As I shared with you, I do also have two CCAs in my territory. The vast majority of my constituents are represented by them. And one of the things that I consistently hear from the general public is that they appreciate that they have some level of accountability for the CCA because the people who serve on the board of directors are directly elected by the communities that the CCA serve. The same does not go for the CPUC. And so there is always concern about unaccountable, unelected folks who have different motives than perhaps the board of directors that is directly embedded into those local communities. I heard the response from CalCCA. It seems like a reasonable ask that even if you were designing these safeguards, make those safeguards apply to them, but make it apply to them within their own statutes rather than rolling them into CPC jurisdiction. So I'm wondering if you've contemplated that at all. I'm not quite sure how we'd make it apply to them through their own statutes because I think that would have to be done at the local level. But I do think it's an important principle that there be protections against these stranded assets, which apply whether the load serving entity is an IOU or a POU or a CCA. I mean, it's an important thing that we do to make sure that there's adequate planning in the state. And so we're open to continuing to talk to the CCAs on this to make sure that we're not intruding on sort of the local authority that's important that we retain and the competition. I think that we can do that without that. I will say, again, the PUC, this doesn't make them subject to PUC, quote, regulation per se. There's lots of things that the PUC does to set the framework within which the CCAs operate. This would be one in terms of the broad contours of what needs to be in these long-term contracts, but not the specific terms, not the generation rates, any of that stuff. Yeah, I think I did share with you from my experience being on a board of directors for a CCA, there was legislation that Sacramento did that did open the door to telling CCAs where and how they had to procure their energy which is contrary to what their charge was So I think that there is always going to be sensitivity even to the extent that there is that this is impeding on one of the few authorities that they do have which is over the contracts And I do know members who serve on the boards would find it insulting to think that they'd have to be told that they should be putting in protections for their communities when it should be assumed that those who are serving their community are, in fact, doing that. I think it's perfectly happy for us to do that. We build frameworks within which the CCAs have to operate all the time and could be done without involving the CPUC. But happy to hear other perspectives from folks. Yeah, I think what I can say is that we're happy to continue work with the CCAs to make sure that the long-term contracts are not intruding on sort of the local authority that folks have. And, you know, we're willing to continue to dialogue with you and the CCAs. All right. Assemblymember Patterson. Great. Thank you. So, you know, with the amendments, I'm not sure if this was taken out, but there is apparently one section that says, you know, quote, any other conditions the commission may require that are in the public interest. You know that provision? I do. I don't remember whether that was part of the committee amendments or not, but happy to hear your concerns. and obviously consider them as we're going to be making more changes to this bill. I think my, you know, whether the amendments include that or not, I think my concern is that seems to be very broad in terms of like how, you know, the PUC can interpret that and kind of go run away, you know, with whatever they deem, you know, to be a cost. I mean, I agree with the intention of the bill. And I think, you know, in terms of CCAs, you know, I was actually involved in the creation of one, you know, in my community. And it was, you know, pretty small intended just for Placer County at the time. And then it ended up, you know, expanding. And that was by the vote, you know, we're going to increase rates 28 percent. And, you know, I got in and I was able to, you know, we were able to stop that from happening at the time, which is good, which I think gets to, you know, what Mr. Rogers was talking about. But now it has expanded so much that the dilution of the shares of the vote of the members of that board is so small that no individual community can really stop and stop whatever is being proposed. And actually, in my view, you know, it's such a huge local government agency now that I do have concerns about the inability for the people, you know, to actually be able to control, you know, the direction of where the rates are going to go in the community. And that doesn't mean that I think the intention of the CCAs are ever to, you know, the whole purpose is to save people money. But there are other purposes that other CCAs see fit, you know. Green energy, that might be more expensive, things like that. So I actually think that this does kind of open the door to regulation a little bit more on the CCAs. I don't know if I'm totally comfortable with that, but I do think giving the PUC kind of too much authority could be problematic. All of that said I think CMTA letter actually was sort of the most interesting one to me because I don want to put us at a disadvantage on manufacturing but also on the flip side and maybe I need to have conversations with them more is I look at it as can a manufacturer actually negotiate what their costs are going to be and know those in advance and enter into those contracts in advance to actually create that level of stability ongoing, which might actually be a good thing. So I'm interested in that conversation as well. But I think with the intent of stopping costs from being pushed on to everybody else, I think is a laudable goal. And we've heard that discussion in the solar discussion, by the way, every hearing. So it's an important discussion. I think this bill is kind of meeting what those discussions have been all about. So I think I'm going to support it today because I'm guilty of what everybody gets mad at us about, like supporting a bill that maybe needs some changes. But I do support the intent of the bill. And I trust you to make the changes that I think would make some comfort up here. So I look forward to supporting it today. Thank you. Happy to look at that provision and other provisions around the contracting provision. I mean, our goal is really not to fundamentally change the authority that the CCA boards have. It's really to have some broad guardrails to make sure that there's contracts in place that address the stranded cost issue. And I think you may have been referring to a provision that was struck by the committee amendment. So there was a provision. We struck the provision that the CPUC could require anything in public interest for contract requirements. This is partnership with my vice chair right here. She fixed my issue already. Thank you, Madam Principal Co-author. Assemblymember Irwin.

Thank you. I sent my member Hart. I just want to force that point that the CCA and the CCAs have raised, and your commitment to working with them is important to my future support for the bill, too, but I'll be supporting it today. Thank you. Okay. Seeing no additional questions or comments, Assembly members of birth, would you like to close? So I also have CCAs in my district. They're important components and I'm committed to continuing to work with CCAs and the Chamber and others to address the continuing issues related to the bill. And with that, I respectfully ask for your aye vote. All right. We need a motion. Motion. Second. All right. We've got a motion and a second. Madam Secretary, please call the roll. Item number 21, AB 2383. The motion is do pass as amended to appropriations. Petrie Norris. Aye. Petrie Norris. Aye. Patterson. Aye. Patterson. Aye. Burner. Aye. Burner. Aye. Calderon. Aye. Calderon. Aye. Chen. Davies. Aye. Davies. Aye. Gonzalez. Harris? Herbidion? Aye. Herbidion, aye. Hart? Aye. Hart, aye. Irwin?

Irwin, aye. Kallra? Pappin? Aye. Pappin, aye. Rogers? Aye. Rogers, aye. Schiavo? Aye. Schultz, aye. Ta? Wallace? Aye. Wallace, aye. Zabir? Aye. Zabir, aye. Zabir, aye. So that measure is out and we'll leave the roll open for absent members to add on. We are going to go. We are moving to file item number four, Assemblymember Berner. Thank you.

Thank you. Hi, everyone. I'm Joy Chen, Eaton Fire Survivor and Executive Director of the every fire survivors network. The EFSN is now the nation's largest survivor recovery hub, connecting more than 10,000 Eaton and Palisades fire survivors and allies. Our survivors paid the ultimate price for the failure of utility wildfire mitigation. We lost our homes our health our stability and in some cases our lives And today most of us are still not home As our great Assemblymember Harabitian is painfully aware eight out of ten Eaton Fire survivors remain displaced 15 months after the fire. More than half of us are expected to lose housing coverage in the coming months. Families are draining retirement savings, maxed out credit cards, and have taken on crushing debt just to say house. Yet we are still paying some of the nation's highest electricity bills to the for-profit utility whose equipment started the Eden Fire. Evidence shows that Edison collected hundreds of millions of dollars from Californians for transmission maintenance and upgrades that were meant to reduce wildfire risk, but that work was never completed. The LA Times has reported that Edison continued billing customers for this work while failing to spend those hundreds of millions of dollars authorized for transmission system upgrades before the fires. Californians funded wildfire prevention, and we survivors paid the price when that work was not done. Because utilities operate as regulated monopolies, Californians have no alternative provider. That makes accountability essential. AB 1774 simply requires independent audits of wildfire mitigation spending and requires a commission to consider those findings before approving future rate increases. Wildfires and all Californians deserve that basic accountability. I respectfully ask for your aye vote. Thank you so much. Thank you. Jamie Court from Consumer Watchdog. The three investor-owned utilities, the for-profit utilities in the state, spend approximately $9 billion, $9 billion every year on wildfire mitigation spending. And it's accelerating. And it's a huge amount of money. And we don't know how, where, or if it's ever spent, because there have only been three audits in modern history of that spending. And those audits found, as the Assemblymember said, that they can only account for $2.5 billion of $6 billion in wildfire mitigation spending. Almost half that spending is unaccounted for. Nonetheless, the PUC let the utilities keep the money they didn't spend and authorize more for the 21-23 wildfire spending year. AB 1774 is a real simple bill. It says utilities have to show how they spend wildfire mitigation money before they get more. And the Public Utility Commission has to address the audit results in the decision. It's not binding on them, but they have to address it. And that's only fair. If utilities know they're being watched, they're more likely to spend wildfire mitigation funds in effective ways rather than holding on to that money in investment accounts because that's what they do. Because they make money on investments. That's why Edison did not spend hundreds of millions of dollars on money it was appropriated for wildfire mitigation funds to remove transmission lines and to maintain transmission lines. And it was an old transmission line that started the Eaton Fire, we believe. Had Edison known that it was going to be accountable for those funds, the Eaton Fire might not have started. This bill is the most important bill that I can see on the table today because it guarantees the wildfire mitigation funds are spent and it creates accountability for that spending so maybe we won't have another Eaton Fire. I urge your aye vote. Thanks. Thank you. We'll now open it up for additional testimony in support. If you'd like to testify in support of AB 1774, please approach the microphone at this time. Will Ibrams and the Utility Wildfire Survivor Coalition in strong support. Adria Tinnin, Tern, the Utility Reform Network, also in support. Good afternoon. Good afternoon, Chair and members. Mari Lopez with the California Nurses Association in support. Good afternoon, Madam Chair and members. Leanne Troughton, registering support for Consumer Attorneys of California. Thank you. Madam Chair, members, Michael Bocadoro on behalf of the Ag Energy Consumers Association in support. My name is Amy McBain. I'm a campfire victim, and I'm representing utility fire victims in support. My name is Ken Klaassen. I'm from Paradise, California, survivor of the campfire, and very, very strong support for all the survivors that I represent. I'm here as an individual. Thank you. I am Doreen Zimmerman from the Paradise Fire and for the Utility Wildfire Survivor Coalition. I am in strong support, not only for the survivors, but for those who have passed. Thank you. Sydney Robinson, and I am with the Utility Wildfire Survivors Coalition, and I am in strong support of this bill for those who cannot be here and for those who have lost their lives due to utility wildfire negligence. Good afternoon, Chair and members. Kim Stone of Stone Advocacy for Consumer Watchdog, and I've been asked to relay the support of some of the coalition groups who couldn't be here in person. The Lona Wetlands Institute, the Bay Area System Change, Not Climate Change, California Environmental Voters, Center for Biological Diversity, Center for Community Action and Environmental Justice, Climate Hawks Vote, Coastal Lands Action Network, Courage California, Defend Bologna Wetlands, Environmental Working Group, Extreme Weather Survivors Action Fund, Food and Water Watch, Long Beach Grey Panthers, Public Citizen, Santa Cruz Climate Action Network, Sierra Club California, SoCal 350 Climate Action, Sunflower Alliance, the Protect Our Communities Foundation, Transition Sebastopol, and 350 Bay Area Action. Thank you. Thank you. Some of them might be here. I'm so sorry. Hi, my name is Jeanette Phelps, and I'm representing the Camp Fire, and for the victims in support of AB 1774, and also that I feel like the utility companies should be transparent. Okay, thank you. Mark Nelson PG Campfire Survivor here representing my family my friends and all the people of Paradise and the Ridge and also the Utility Wireflyer Coalition in support Thank you Turning now to opposition testimony Our witnesses can approach the dais. Good afternoon, Madam Chair and members. Joe Zanzi with San Diego Gas and Electric. I wanted to start by saying that we appreciate the committee's work and the amendments to the bill to address several significant concerns we had related to retroactive rate making and helping ensure the bill wouldn't disrupt ongoing wildfire mitigation work. However, the core issue still remains, and SDG and U.S. still oppose AB 1774. The bill would create new mandatory look-back review of wildfire mitigation spending that has already been reviewed and approved through the current CPUC process. That shift from a forward-looking approval to a backward-looking re-evaluation. And it also replaces targeted risk-based oversight with broad multi-year audits and continues to evaluate prudence outside of the CPUC's existing process. In effect, it creates a second layer of review of decisions that have already been made and reviewed and approved by the PUC. And that has real implications. It introduces uncertainty into how decisions are evaluated over time. It shifts resources away from implementation of wildfire mitigation work and moves that towards additional review and compliance. And it adds costs to ultimately show up on customers' bills. Additionally, these audits are being layered on top of recent changes made with SB 254, which was passed last year to align the GRC and wildfire mitigation plans. I think a lot of what's talked about with the audit, that has been somewhat resolved with the new alignment of the two cycles. So while the new elements are helpful, we think it still creates a duplicated process. and without a clear improvement in safety or ratepayer benefits. So for those reasons, we still oppose 1774. Thank you. Thank you, Valerie. Torello Vajos with Pacific Acid Electric Company, also in opposition today, respectfully. PG&E does support strong accountability, transparency, and effective reduction of wildfire risk. Our opposition letter lays out the many accomplishments of the legislature in this space. And one of those my colleague just mentioned, we just passed last year SB 254, which is a policy adopted as a direct result of the March 22 audit. that focused much on IOU, wildfire mitigation spending. But I also wanted to mention that meantime, 2022, the legislature passed and adopted AB 209. My colleague referenced risk-based approach to CPUC auditing. That was a budget trailer bill. one of our many back in 2022. And that bill, that is mentioned in the analysis under current law. I'm mentioning this because we just went to this risk-based approach. We completed an audit. It provided us findings of which a major one was implemented in SB 254. And we have accomplished a lot. We can also zoom out even more. And dare I say, a major report was just submitted to the legislature And we're going to have some discussions about wildfire mitigation and a statewide approach, we hope. And we get very in-depth in that. So PG&E, we support affordability. But at this time, we're not in alignment with the author. And for these reasons, we cannot support this bill. Thank you. All right. We'll open it up for additional witnesses in opposition. If you're here to testify in opposition to this measure, approach the microphone. Lynn Trujillo with Southern California Edison in opposition. Okay, bringing it back to committee. Questions, comments? Assemblymember Harbadian. Thank you, Madam Chair. Thank you to the author for bringing the bill. I am a proud joint author of the bill, and we'll be moving it formally. Thank you to Ms. Chen for being here and everything you're doing for the community and the Eaton Fire Survivors Network. I do think that this is in line with the report that we just got last night. Everyone's still digesting it, but SB 254 did call for additional tracking and assessment of our wildfire risk mitigation. So I think this is in line with SB 254, and I think that this will be a step forward in that regard. So thank you again and happy to support. All right. Assemblymember Rogers. Thanks so much, Chair. I just wanted to point out that some of the folks who earlier on a different bill were saying that we needed accountability and transparency on whether or not the public purpose programs on the bill were doing what was achieved are now also saying that we shouldn't have transparency and accountability on whether or not that portion of the CPC rate is being done appropriately. And I think it's a good bill. I think it's something that our constituents deserve and should have. And I'd love to be at it as a co-author. Assemblymember Schiavo. Thank you. Thank you so much for this bill. And, you know, losing over $2.2 billion is very concerning, obviously. And it certainly, I think, makes a case for why there definitely needs to be more oversight and accountability and transparency. I wondered if you or maybe your witness could talk a little bit about the CEA report that came out yesterday and how the bill plays into the recommendations around. Yeah.

Thank you, Madam Chair.

Are the rate payers financially responsible for audits? Because I think the opposition mentioned that there have been several measures passed, including SB254 last year that kind of, you know. It would come out, my understanding is it comes out of the CPUC funds, but that would ultimately go to the rate payers. I'm sorry. Can you speak a little louder? Sorry. No one's ever said that to me before. We have soft voice Tasha today. It's never soft voice Tasha. My understanding is that comes from CPC would have to pay for those independent audits. I did have a bill last year to create an inspector general, an independent inspector general of CPC. It was held in a probes in the Senate. Unfortunately, had that been passed, it would have been already accounted for. and I still support an independent inspector general for the CPUC who could have done this work, but it would be independent audits that would be paid for by the CPUC that ultimately could be passed on to rate payers. But if you look at the argument of making sure that the wildfire spending that the IOUs say they're doing is being done and the mitigated impact on communities, that it probably is a huge savings at the end of the day. Okay, so it's not the rate payers. Ultimately, the rate payers pay for the CPUC. So it ultimately is the rate payers, but we're talking about millions of dollars on an audit to save billions of dollars in averted spending. Does the opposition have any response to that?

Yes. I think, yes, there is always the very important distinction between can and shall, and I think that the entirety of this bill is moving from can to shall. May I ask a question? So the author in her opening comments referred to, was it a 2021, 22 audit that could not account for $2.5 billion in spending? Would the opposition witnesses like to respond to that? Is that true? Is that the Crow audit? Is that what you're talking about? I just want to make sure.

Yes. Thank you for clarifying. And do you have any reactions to that?

Yeah, because I think that statistic gives the members of this committee and the public much pause. I think when I hear that number, my jaw kind of drops to the ground. And so I would agree that while I think we have taken some very important steps over the course of the last several years to increase transparency and ensure that what right payers are being charged is accurate, it, I think that there's more to do. And so I just want to thank you for bringing this measure forward. Happy to support it today. Would you like to close? Respectfully ask for your aye vote. Sorry, was that loud enough? Respectfully ask for your aye vote. All right. So we have a motion and a second. Madam Secretary, please call the roll. Motion from Assemblymember Harbadian. I believe it was a second from Assemblymember Schiavo. Okay, item number four, AB 1774, the motion is do pass as amended to appropriations. Petrie-Norris? Aye. Petrie-Norris, aye. Patterson? Patterson, not voting. Berner? Aye. Berner, aye. Calderon? Not voting. Calderon, not voting. Chen? Davies? Davies, not voting. Gonzales? Aye. Gonzalez, aye. Herabideon. Aye. Herabideon, aye. Hart. Hart, aye. Irwin. Aye. Irwin, aye. Kalra. Pappan. Pappan, aye. Rogers. Aye. Rogers, aye. Chiavo. Aye. Chiavo, aye. Schultz. Aye. Schultz, Aye. Ta. Wallace. Wallace, not voting. Zabir. Aye. Zabir, aye. 11-0, so that measure is out, and we'll leave the roll open for absent members to add on. And now before we turn to Assemblymember Berner's next bill, we're going to pause for a minute and just do some votes on bills that were presented previously. Okay. All right. Item number one, AB 1577, the motion is do pass as amended to Natural Resources. Chen? Davies? No. Davies, no. Kerabidion Kerabidion aye Chalref Shiavo Shiavo aye Ta Wallace Wallace, no. 12-3. We'll leave that bill open for absent numbers. Item number 10, AB 2508. The motion is due pass to appropriations. Petrie Norris. Davies? Aye. Davies, aye. Gonzalez? Aye. Gonzalez, aye. Herabitian? Aye. Herabitian, aye. Hart? Not voting. Hart, not voting. Irwin? Not voting. Irwin, not voting. Kalra? Pappin? Aye. Pappin, aye. Rogers? Not voting. Rogers, not voting. Chiavo? Aye. Chiavo, aye. Schultz? Not voting. Schultz, not voting. Ta Wallace Wallace I saber I all right 10-0 we'll leave that open for absent members to add on item number 11 AB 2182 the motion is do pass as amended to natural resources Petrie Norris I Petrie Norris I Patterson I Patterson I Berner. Aye. Berner, aye. Calderon. Aye. Calderon, aye. Chen. Davies. Aye. Davies, aye. Gonzalez. Aye. Gonzalez, aye. Herbidion. Aye. Herbidion, aye. Hart. Aye. Hart, aye. Irwin. Aye. Irwin, aye. Kalra. Papin. Aye. Papin, aye. Rogers. Aye. Rogers, aye. Schiavo? Aye. Schiavo, aye. Schultz? Aye. Schultz, aye. Ta. Wallace? Aye. Wallace, aye. Zuber? Aye. Zuber, aye. 15-0. That bill's out. We'll leave it open for absent members. We need a motion on item number 12. Move the bill. All right. We're now looking. I'm sorry. At file item number 12, which is AB 2396 from Assemblymember Irwin, we have a motion and a second. Item number 12, AB 2396, the motion is do pass as amended to appropriations. Petrie-Norris? Aye. Petrie-Norris, aye. Patterson? Not voting. Patterson, not voting. Berner? Aye. Berner, aye. Calderon? Not voting. Calderon, not voting. Chen? Davies? Not voting. Davies, not voting. Gonzalez? Gonzalez, aye. Herbidion? Aye. Herbidion, aye. Hart? Aye. Hart, aye. Irwin? Aye. Irwin, aye. Kalra? Pappin? Aye. Pappin, aye. Rogers? Aye. Rogers, aye. Chiavo? Aye. Chiavo, aye. Schultz? Aye. Schultz, aye. Ta? Wallace? Aye. Wallace, aye. Zabir? Aye. Zabir, aye. 12-0. That bill's out and we'll leave the roll open for absent members. Next up is file item 13, AB 2589. Move the bill. All right. Item number 13, AB 2589. The motion is do pass to appropriations. Petrie-Norris? Aye. Petrie-Norris, aye. Patterson? Yes. Aye. Patterson, aye. Burner? Aye. Burner, aye. Calderon? Aye. Calderon, aye. Chen? Davies? Aye. Davies, aye. Gonzalez? Aye. Gonzalez, aye. Herabidian? Aye. Herabidian, aye. Hart? Aye. Hart, aye. Irwin? Aye. Irwin, aye. Calra? Pappen? Aye. Pappen, aye. Rogers? Aye. Rogers, aye. Schiavo? Aye. Schiavo, aye. Schultz? Aye. Schultz, aye. Ta? Wallace? Aye. Wallace, aye. Zabir? Aye. Zabir, aye. 15-0. 15-0. That pulls out and we'll leave the roll open for absent members. And then item 21. All right. We'll now go ahead and vote on the consent calendar. Thank you. We have a motion from Vice Chair Patterson. Second. And a second from everyone. Item number two, AB 1873. The motion is due pass to appropriations. Item number three, AB 2458, due pass to appropriations. Item number six, AB 2505, due pass as amended to appropriations. Item number seven, AB 2618, due pass as amended to appropriations. Item number eight, AB 2700, due pass to appropriations. Item number nine, AB 2200, due passes amended to appropriations. Item number 14, AB 21-24, do pass as amended to appropriations. Item number 16, AB 24-63, do pass as amended to appropriations. Item number 19, AB 22-66, do pass as amended to appropriations. Item number 20, AB 24-64, do pass to appropriations. Petrie-Norris? Aye. Petrie-Norris, aye. Patterson? Aye. Patterson, aye. Burner? Aye. Burner, aye. Calderon? Aye. Calderon, aye. Chen. Davies. Aye. Davies, aye. Gonzalez. Aye. Gonzalez, aye. Herbidion. Aye. Herbidion, aye. Hart. Aye. Hart, aye. Irwin. Aye. Irwin, aye. Kalra. Pappan. Aye. Pappan, aye. Rogers. Aye. Rogers, aye. Chiavo. Aye. Chiavo, aye. Schultz. Aye. Schultz, aye. Ta. Wallace. Aye. Wallace, aye. Zabir. Aye. Zabir, aye. 15-0, so the consent calendar is out. We will leave that open. And with that, I think, thank you, Assemblymember Berner, for the brief intermission. We are now coming back to file item number 5, AB 2289.

Thank you. All right. Do we have any Me Too support in the room for the Tasha B Special? Okay. Then bringing it back to transitioning to opposition, is there an opposition witness? Anyone wanting to provide opposition testimony? No. Okay. Bringing it back to the committee. Questions or comments? Seeing none. Assembly member, would you like to close?

All right. I think we missed her and beat you to it. Okay. So we've got a motion and a second. Madam Secretary, please call the roll. Item number five, AB 2289. The motion is due pass to communications and conveyance. Petrie-Norris. Aye. Petrie-Norris. Aye. Patterson. Berner. Aye. Berner. Aye. Calderon. Chen. Davies. Not voting. Davies. Not voting. Gonzalez. Aye. Gonzalez. Aye. Herbidion. Aye. Herbidion. Aye. Hart. Irwin. Aye. Irwin. Aye. Kalra. Pappan. Rogers? Aye. Rogers, aye. Sciabbo? Schultz? Aye. Schultz, aye. Ta? Wallace? Not voting. Wallace, not voting. Zabir? Aye. Zabir, aye. Okay, 8-0, so that fills on call, and we will wait for absent members to add on. I think that brings us to, I think that is going to be me. All right. We'll go ahead and open the roll on file item 21. Chen, Gonzalez. Aye. Gonzalez, aye. Calra, Chiavo, Ta. All right. 14-0, that bill is out, and we'll leave it open for absent members to add on. And then that brings us to file item 15, Assemblymember Pappin. The floor is yours. Move the bill. Well, thank you for the confidence. Good afternoon, Madam Chair and members. I am delighted to be here today to present AB 2111 I will be taking the committee Thank you so much AB 2111 reforms our transmission planning process to require a more comprehensive and risk assessment of future demand and resource needs helping advance our climate goals while at the same time protecting ratepayers Right now, transmission planning follows a sequential process. So you go before the California Energy Commission, they produce a demand forecast. The CPUC then develops a preferred system plan, and the California independent system operator builds transmission to match that specific portfolio. That portfolio is highly prescriptive. It assumes a specific level of load growth, electrification, and where new resources will be built. But that demand has been evolving faster and more unpredictably than those assumptions capture. And when planning falls behind reality, the grid becomes constrained. So in the most recent interconnection cycle, more than 10 gigawatts of proposed capacity did not advance in part due to transmission limitations and upgrade costs. When transmission is constrained, as we all know, fewer projects can interconnect. Competition is reduced. Costs go up for rate payers. and unreliability risks increase during periods of high demand. AB 2011 reforms the process by requiring the CPUC to incorporate a range of plausible futures into transmission planning decisions. By not relying on a single scenario, we can better identify where upgrades are needed across likely outcomes, reducing bottlenecks, and supporting a more reliable and cost-effective system. In short, AB 2011 updates transmission planning to reflect a more uncertain future. or to address a more ensued virtue, I should say. With me to testify in support of this fantastic bill is Miles Horton of Sonoma Clean Power and Graciela Castillo-Krings with Abundance Network. So I'll turn it over to you first, and then we'll go to you.

Good afternoon, Madam Chair and members. Graciela Castillo-Cringes with the Abundance Network. We are an organization that tries to involve our citizens to ensure that we are kind of promoting additional changes in the government. And we are very excited to be working with Assemblywoman Pappen on this bill, simply because, as you've heard the entire hearing today, we need a better way of forecasting and planning for our energy needs That how we going to get out of this Unfortunately we can kind of turn a spigot and overnight reduce the cost for a lot of Californians in order for us to reach those tangible Electricity rates that people can actually feel we need to plan we need to do things differently And this bill is getting kind of one step to getting us there So for those reasons, we're very excited to be partnering up with Sonoma clean power and the assemblywoman in order to support the bill

Thank you, and good afternoon, members. And before I jump into the challenges that have led us to introduce Assembly Bill 2493, I do want to take just a minute to remind all of us of the tremendous progress that California has made. We are a clean energy leader. Over the past decade, the state has added more than 30 gigawatts of new clean energy capacity. And today, two-thirds of California's electricity comes from clean, zero carbon sources. Looking forward, we also recognize that we have a monumental challenge before us in order to deliver on the incredibly ambitious and incredibly important goals that we have set for the state. Meeting these goals will require a dramatic acceleration in the deployment of new clean energy resources and supporting infrastructure. Bringing these new resources online requires coordination between developers and utilities. Clean energy developers identify project sites, secure permits, arrange financing, and enter into power purchase agreements. Utilities are responsible for connecting these projects to the grid. This often requires building or upgrading transmission and distribution infrastructure, including substations, transformers, and power lines. While clean energy developers have continued to advance projects to meet this unprecedented pace of growth, the pace of grid interconnection has simply not kept up. Delays in completing necessary grid upgrades have become the primary bottleneck, preventing otherwise ready-to-build projects from delivering clean power to California. Adding to the urgency, recent federal policy changes under H.R. 1 have significantly narrowed the window for new clean energy projects to qualify for federal clean energy tax credits. California ratepayers stand to lose billions in federal tax benefits as clean energy credits phase out under H.R.1. So the stakes are incredibly high. And this measure creates some accountability with teeth is what we're calling it. So AB 2493 creates four complementary accountability mechanisms. And I think my witnesses are going to dive into the details of those. But they fall into four categories. So number one, permitting initiation deadlines. Number two, independent audits. Number three, mandatory remedial action. And lastly, consequences in terms of return on equity. Together, we think that these steps will represent a meaningful incentive for the acceleration and the progress we need to achieve the clean energy future that we all care so much about. So with that, I am happy to welcome Alex Jackson from American Clean Power and Vivian Wang from the Union of Concerned Scientists.

I can go first. Yeah. Excuse me. Joe Zanzi with San Diego Gas and Electric in respectful opposition to AB 2493. We appreciate all the work the author is doing on this issue. But we think, from our perspective, we think another mandate is costly, would pull resources from actually implementing and getting these interconnections done faster from an SDG&E perspective. I know you noted the report that said that we provided incomplete information that was related to reporting requirements. We believe that all the reporting that has to be done out there could be condensed and streamlined, and therefore not creating those issues. And we've responded to the PUC and demonstrated that all of our interconnection projects are on track to meet goals and deadlines. So we think that pulling away from those projects would actually slow things down. Additionally, we think there's some FERC jurisdictional issues with the way that FERC has controlled the transition planning process and with some of the prioritization. We believe that that would create a conflict with FERC. And then additionally, there has been progress done on permitting. We think that is one of the top issues. GO 131 last year, but there's still a long delay at the PUC to get things done. We had some members of Err introduce a bill last year that would have created a shot clock for permitting decisions to the PUC, which unfortunately didn't pass the legislature. So we believe there are other things that would have more of an impact without taking resources away from actually doing the work and providing timely interconnections for developers. So I'll stop there and turn it over to my colleague.

Thank you very much. Appreciate that. Do we have any additional witnesses in opposition from the public?

All right. Thank you very much. Let's bring it back to the committee. Do we have any comments or questions? Second. All right. We have a motion and a second. Assemblymember, for clarification, are you accepting the committee amendments?

Thank you. Would you like to close?

Would you like to close? Do you want to ask for questions? Are there any questions? All right. Okay. Absolutely.

Thank you, Assemblymember. We have a motion and a second. The motion is due pass as amended to appropriations. Madam Secretary, please call the roll. Patriot Norris? Aye. Patriot Norris, aye. Patterson, Berner? Aye. Berner, aye. Calderon? Aye. Calderon, aye. Chen? Davies Davies I Gonzalez I Herbidion I heart heart I Erwin Erwin I cholera I call right I happen happen I Rogers Rogers I Shiavo Schultz I Schultz I talk Todd no Wallace Wallace not voting zipper zipper I Chen this is a B 24 93 Chen not voting. That vote's 13-1. We'll leave the roll open for absent members. And next up, we have file item 18, Assembly Bill 25-16.

All right. I think I've got the submitting coming on up in a minute. All right.

Good afternoon. My name is Tom Lewis, and I serve as Federal Policy Manager for Manufacturing and Industrial Policy at the Blue Green Alliance, a national coalition of labor unions and environmental organizations united around good jobs, a clean environment, and economic justice. Thank you, Chair Petrie-Norris and members of the Committee on Utilities and Energy, for holding this hearing and for inviting us to testify. California currently faces rising electricity costs in a grid that it cannot keep pace with its clean energy ambitions. Since 2019, residential electricity prices have risen 39%, the largest increase of any state in the country. A key component of this rise is a broken grid equipment supply chain. Nationally, demand for grid equipment such as transformers, switchgear, and wiring has surged since 2019 because of the growth of clean energy, economy-wide electrification, new manufacturing investment, and the growth of clean energy. Sorry. And new data centers. While new grid equipment manufacturing expansion to meet this demand has lagged. As of 2025, available supply met only half the demand for certain transformer types, and some lead times now stretch nearly three years. That shortage is driving up costs and exasperating delays to interconnect 13.2 gigawatts of renewable energy and battery storage projects in California, enough electricity to power nearly 10 million California homes. In Southern California Edison's territory alone, 76% of transmission projects developed since 2020 have been delayed, and nearly one in five of those delays was caused by long lead times on grid equipment. These year-long shortages show that supply gaps will not fix themselves. Manufacturers of high fixed costs and uncertain demand, and they currently benefit from full order books. They will not expand capacity without a long-term signal that orders will be there. In a capital-intensive sector, bad forecasting, such as what occurred in the industry before the great financial crisis, means excess production capacity that resulted in serious financial losses for those companies. Utilities competing individually in that market can only drive those costs higher, and those costs will then flow directly to ratepayers. Grid equipment price spikes from California utility spending in 2024 alone will cost California ratepayers an estimated $4 billion over the next 40 years. AB 2516 attacks both sides of this market failure. On the demand side, the California Grid Manufacturing Initiative centralizes procurement across utilities through coordinated demand aggregation and advanced market commitments, and that creates a consistent long-term demand signal that gives manufacturers the certainty they need to reduce and lower costs for investment in new capacity. And on the supply side, it gives the state flexible tools such as joint ventures, revenue bonds, and financial incentives to expand California production. And it conditions those incentives on measurable community benefits. With the federal government stepping back from its clean energy and manufacturing commitments to dismantling the Inflation Reduction Act, California must lead. AB 2516 is exactly the kind of bold pro-worker industrial policy that this moment demands. The Blue Green Alliance proudly supports it, and we urge this committee to do the

Brandon Nebeck from Pacific Gas Electric. We have an opposed unless amended position on the bill. We strongly support the move and the committee amendments to move from a mandatory procurement model to an optional model. It's no surprise that we are the largest utility in the country, so we have very long, very established relationships with our suppliers. And we have an outsized size in the market, so we actually do drive very good results in costs. As our costs have increased 100%, 200%, 300%, we're still delivering projects on time through other efficiencies. So we don't want to mess up that model. But we do find that there might be some value in some of these ultra-long lead time materials that are four, five, six years out, that we might need just some assistance financing some of those. Ultimately, we do support the provisions of the bill that direct GO-Biz to support manufacturing in California. There's a lot of other industries that the state puts a lot of money into. We think that this type of industry is very important to help us meet our clean energy goals. So we support those pieces of the bill. Thank you.

Josie, I'm just going to align my comments with my colleague from PGD.

Laura Parra, Southern California Edison.

Sorry, I apologize. I'm a laggard. I'm support. Sarah Phlox, California Federation of Labor Unions in support. Thank you.

I am happy to accept the committee amendments and respectfully ask for your support.