Senate Energy Utilities And Communications Committee

We have two Republican colleagues to present, so let's just do that. Let's get this started as a subcommittee. We will now ask Senator Jones to come to the dais to present SB 929.

All right. Let's ask witnesses in support or folks who want to come to the microphone and voice their support for the bill. Anyone who wants to raise concerns or opposition? Okay, questions from the committee? Yes, Senator McNerney.

this? I don't think we have any letters in opposition to this bill. They're not here to testify. I don't want to speak on their behalf, but we haven't heard any pushback from them. Thank you.

Actually it good research for me to be familiar with anyways And Mr Chair thank you for the DUPAS recommendation and look forward to affirmative action on this bill when everybody gets here Appreciate it Thank you Appreciate your support for affirmative action

I may proceed on writing. Well, thank you, Mr. Chair, and as my former, as my colleague formerly said, on-time members, we'll have to talk about that at caucus lunch, yes, of course. Thanks for the opportunity to present SB 1197, dealing with a very timely issue, our longstanding debate about ditching the switch, of time that is, and which switch to ditch. That's my own little Dr. Seuss quote. So now you've heard this before. I think this is my third or fourth attempt at that, and I think it must be the charm. But the difference is that I have a new proposal that I think strikes a good balance. The bill is about how California can control our own destiny regarding time, how standard time is the healthier choice for our bodies, and how we can finally ditch the time switch, something our constituents have long expressed to be in favor of. In 2018, voters approved Proposition 7, which allows the legislature to change the rules relating to time. Since the passage of Proposition 7, there's been some confusion. Many voters actually thought they had decided this issue, but like so many bills and propositions, the devil is in the details. So Proposition 7 actually authorizes the legislature to implement full-time daylight saving time by a two-thirds majority if authorized by Congress. The proponents of that proposition, which included the author, also stated in the ballot statement that the proposition could be used for going to permanent standard time also. Currently, federal law only allows for states to authorize permanent standard time or to utilize daylight saving time for part of the year, which is what we are currently doing. We switched our clocks a couple of weeks ago, and I think I might be used to the time change somewhere around Halloween. So, considering the lack of action by the federal government and the desires of our constituents clearly to ditch the switch, I think it's imperative for California to consider another option to address the issue The only option we have currently is moving to permanent standard time Now a recent Gallup poll nationwide admittedly, but it shows that a majority of Americans say they are ready to do away with the practice. Obviously, California voters said that. But the same poll also showed a plurality of Americans say they would prefer to have standard time the whole year, including summer. This bill will accomplish those sentiments as it will move California to standard time, and if Congress ever approves permanent daylight saving time, then we would move to that federal standard at that time. I've worked with lawmakers in bordering states. I've been chatting with them for a couple of years now, Washington, Oregon, Nevada, even Utah and Idaho. And we've been working on hopefully moving in the same direction so we'd have western states on the same time, which I think is important. So not only does SB 1197 eliminate the inconvenience for Californians, but there are multiple health and safety implications, as we all approved in my SCR 7 of, I think, last week or the week before. And that is the issue to which my witness will speak. We have Dr. Ken Yun, an adjunct associate professor at Stanford and UCSF, who is a sleep medical physician and has been for over 25 years in the Bay Area.

Thank you. Thank you so much, Doctor. I appreciate it. Other folks who want to come to the mic and express their support for the bill? Folks who want to raise opposition or concerns? Yes, sir. Come to the microphone.

This means looking beyond sleep studies to include 1 economic impacts on active outdoor recreational activities like golf and tourism, public health considerations associated with reduced time for and after school sports and recreation programs, and 3 public safety concerns due to increased crime and increased traffic accidents. We want to highlight the caution in the bill analysis that adopting permanent standard time likely requires voter approval because it may not be consistent with the passage of Proposition 7 in 2018. We also concur with the recommendation regarding the benefits of a measured approach that would allow for a full assessment of all the implications and interests of residents, communities, schools, businesses, and neighboring states. public safety and impacts on energy systems, considering all relevant factors as opposed to just one. The voters who approved Prop 7 deserve a careful analysis before reversing their decision. For these reasons and others that are in the lengthy letter filed with the committee, the California Alliance for Golf opposes the bill but would support the informed analysis that the staff analysts suggest would be the prudent course before making changes whose full implications have been fully vetted. Thank you for considering our views. Anyone else who wants to raise concerns or express their opposition? Good morning, Chair and members. Nicole Quinonez, registering opposition for the following organizations who couldn't be here today. The Southern California PGA, the California Golf Course Owners Association, Northern California Golf Association, Northern California PGA, San Francisco Public Golf Alliance, Golf Course Superintendents Association of America, High Low Desert Golf Course Superintendents Association, and the Latino Golfers Association. Thank you. All right. Thank you very much. Okay, why don't we give the author just a quick opportunity to answer this question of whether this would require a return to the voters for the election. vote because I'm not I'm not sure that proposition seven was as clear as it was just announced you know in terms of support for permanent daylight savings time I will quote from the argument in favor of that proposition in the voter pamphlet at the time this was signed by Assemblymember Chu, Assemblywoman Gonzales, now Senator Gonzales, and a Dr. Sion Roy, all signing the argument in favor. And I quote from their statement, a yes vote on Proposition 7 allows California to consider making daylight saving time or standard time our year-round time. that's a clear indication that proposition seven allowed for either one yeah and the problem with the former is that we cannot go to permanent daylight saving time uh in unless and until the federal government authorizes that yeah okay that's my understanding too okay um we don't have a quorum yet uh i'm going to just tell i'm going to lay off the bill um you know i i absolutely agree that if we ditch the switch, we should do a permanent standard time. I've become convinced of that from the sleep scientists. The concern I have is that getting rid of the status quo will move us toward a situation where we're going to have some times of the year the sun coming up in the four o'clock hour, 4.45 in the morning, and other times of the year it's going to come up at 8.15. And I don't know that people fully grappled with what that entails. And what our current system allows for sunrise to happen pretty much within the 630 to 715 range, depending on where you are in the state, consistently through the year. And that's one of my concerns about making a change, though I understand that a lot of people hate the time change. Everybody hates the time change, especially when you lose an hour of sleep. But I'm not asking the members to vote against this or lay off. I think that everyone's got a strong opinion about this. And I'm happy to have the bill pass out of committee if that's the member's will. Yes, so Senator Reyes. And then Senator Richardson. Thank you. And thank you for bringing the bill. I was in the Assembly when then Assembly Member Kanson Chu attempted this bill almost every year and brought forward the sleep study experts, brought forward safety experts to talk about the increased accidents, traffic accidents, a number of things. and we would get it out of the Assembly, and then it would get stuck somewhere. Oh, those senators. But I do appreciate that you brought it. I think that I hear from my son, I hear from my constituents how tired they are of this change over and over again. I did see the legislative analysts' comments regarding having to take it back to the voters. I agree with your interpretation. Of course, we will have to see exactly what will happen. My question was whether it had to have congressional approval. And your interpretation is that that is only if we go to daylight savings time? Yes. Congress has authorized states to go to permanent standard time but has only authorized states to recognize daylight saving time limited time during the year They specify up to six months or seven months, something like that. I think we're at five months, but not permanent daylight saving time. There have been proposals in Congress to do that, and they haven't moved out of the House where it originated, which was the Senate. So there does not appear to be any near-term legislative momentum in Washington, D.C. to settle this other than for us to go to permanent standard time at this point. Thank you. Thank you, Mr. Chair. Thank you, Senator. Senator Richardson. Thank you, Mr. Chairman. Mr. Nilo, I applaud your persistence and diligence. I always respect that in someone. Unfortunately, in this particular case, I'm actually one who prefers more daylight savings time. So I'm not going to vote yes for the bill, but I won't vote no either. I'll lay off just so your record is a little clear there, and hopefully you'll have enough to get there. But I have spoken to you about this. I have said what my preference is, and you have shared an openness either way. but the congressional issue seems to be the challenge with daylight savings time. So maybe you can work with the administration, and he might be open to your thoughts. And with that, I just wanted to share my comments. Thank you. Well, our president at differing times has stated that he's in favor in one or the other, So the administration hasn't given any clear direction either, but still it would have to originate in Congress, and there doesn't appear to be any consensus there. Well, he does a lot without Congress, so I tell you, go for it. That's certainly true. All right, let's go to Senator McNerney. Well, I want to thank the author for bringing this, but also clearing up the misconception I had that the voters of California settled this a while back and why that hasn't happened. That is a consistent confusion among a lot of voters also, but that was an advisory proposition. Well, I've supported this bill in the past. The change is disruptive for different reasons, once in the fall and once in the spring. So I'll be supporting this, and I yield back. Okay. Great. Thank you, Senator. We still don't have a quorum, such a big committee, but happy to have you close and respond to any concerns. Yes, a few things. The opposition to this proposal is entirely from the golfing community, but I'd like to add that I have a lot of friends who are golfers. They're retired, and they golf a few times a week, and they are frustrated when we change the clocks to daylight saving time and they can't tee off early because the sun's not up. So that argument, quite frankly, cuts both ways. And that – I was looking at a note that I made. And they are calling for a study and I would point out that in the legislative process the best way to avoid doing something is to call for a study But essentially, the debate in the golfing community is the one stated here and the one that's not stated here, and that is more light in the morning versus more light in the evening. And basically, that's where people come down on what they prefer. And I always like to point out that with regard to the morning light, yes, the sun rises earlier under standard time. But we went to permanent daylight saving time in the early 70s. It was intended to be for two or three years, and it was abandoned after about 10 months. because it was dark when kids were going to school in November, December, and January. It was dangerous. That is a bigger downside than a little bit more light in the morning, number one. And number two, even in the summertime, it's light until almost 8 o'clock. That's hardly the sun dropping into the horizon prematurely early. So the point of my measure is that voters want to stop switching time two times a year. we can do that but we can only do it by virtue of going to permanent standard time now if the federal government acts and the proposal there has been that the nation would go to permanent daylight saving time and at that time we would go to permanent daylight saving time i think we'd have to because the federal government mandated it but this bill specifically states it so that there isn't any confusion that that's what we'd do if Congress so acted. So in the interest of ditching the switch and making the decision now as to which switch we ditch, I request an aye vote. Well, thank you, Dr. Seuss-Neillow. We will absolutely entertain Senator McNerney's motion when there's a quorum. Thank you. Thank you. When he officially makes it. Okay, thank you. Thank you. All right. Let's go to Senator Padilla, who is here to present item number two in your packets. Members, that's SB 1138. Good morning, Mr. Chairman and members. I'm here and pleased to present SB 1138. I'm going to begin by accepting committee amendments, which I hope you have before you, and I'm thanking committee staff and the chairman for your diligent work with my office on this matter. It is no secret that California is experiencing energy bill affordability crisis. We have heard it from our constituents who are struggling to get back as they deal with some of the highest bills in the nation. What we learned over the last few years as we worked to tackle energy bill affordability is that there is no silver bullet Much of these cost increases are driven by the need to increase or upgrade transmission infrastructure and distribution infrastructure to supply the growing demand vegetation management grid hardening reducing wildfire risks and investments to the grid to meet our clean energy goals. Eliminating these costs are not entirely avoidable. But we can also take a look at the fact that we've learned in recent years that we can push practical consumer-focused solutions that can bring down costs while still achieving our goals and maintaining reliability. That's what I'm bringing you today in the form of SB 1138. For the past four years, as many of you know, the CPUC has been working on reforms to the Resource Adequacy, or RA, program. One of those reforms that was first implemented last calendar year requires the investor-owned utilities, CCAs, and direct access providers, any load-serving entity, to procure enough energy capacity to meet each hour of the peak day in each month, otherwise known as the slice-of-day framework as referenced in your analysis. This is a deviation from previous compliance requirement which set a monthly requirement based on the peak day of that month. The purpose was to make RA procurement more accurate and to better ensure grid reliability. While the program appears to be on the right path for reliability purposes, unfortunately leads often to excessive and unnecessary procurement of resources. As a result, customers are often paying for something they don't need. Additionally, these excessive purchases are also creating artificial market scarcity and driving up prices that these require. This bill proposes to address the problem by allowing load-serving entities to trade their hourly obligations to prevent these overpurchases and do so in a manner that is not a threat to grid reliability. This is a common-sense solution that would have saved ratepayers, for example, approximately $180 million in 2025, and a solution that should have been adopted when a new hourly compliance program went into effect last year. I'm pleased to state that with me today are Lauren Carr, Senior Manager of Regulatory Affairs and Market Policy for the California Community Choice Association, and Ted Bardacki, CEO of Clean Power Alliance, as many of you know, a CCA aggregator that provides services across Los Angeles and Ventura counties. Why don't you come to the microphone, please? Good morning, Chair and members. I'm Lauren Carr, Senior Manager of Regulatory Affairs at the California Community Choice Association. CalCCA is proud to sponsor SB 1138 and thank Senator Padilla for authoring this important legislation. The state's 25 community choice aggregators are non-profit local government agencies that procure energy for over 15 million Californians. California's Resource Adequacy Program ensures sufficient electricity supply to meet customer demand. The California Public Utilities Commission recently implemented a new slice-of-day compliance framework, which better aligns the RA program with system reliability needs. However, under current rules, RA products must transact monthly, even though the obligations are unique to each hour. This forces LSEs to purchase more RA than needed and unnecessarily drives up RA prices. This inefficiency largely explains why RA resources achieved a 23% reserve margin in September 2025, when the requirement was only 17%. The cost of unnecessary RA purchases fall directly on California ratepayers totaling tens of millions of dollars annually. SB 1138 supports energy affordability by allowing LSEs to transact RA load obligations hourly to align with the granularity of the requirements, reducing the need to purchase additional RA beyond what is needed to meet the requirements set by the CPUC. In 2025, hourly trading could have saved ratepayers approximately $180 million. At a time of rapidly rising costs, policymakers should provide LSEs maximum flexibility in how they contribute their fair share to system reliability. These reforms could save tens of millions of dollars each year, lowering customer costs while maintaining reliability and supporting California's clean energy goals. Cal CCA respectfully requests your aye vote on SB 1138. Thank you. Thank you. Hey, Ted. Good morning, Chair and Senators. Thanks for having me. My name is Ted Bartyke, I'm CEO of Clean Power Alliance. We are the largest CCA in the state, the number one green energy provider in the country, and serving over 3 million residents and businesses across 38 communities in Los Angeles and Ventura counties. Last year, resource adequacy comprised about one quarter of our energy costs to the tune of $287 million. Lowering costs in this area would have real-world impact on our customers. Under the new slice-of-day resource adequacy program, we have to demonstrate that we have enough energy capacity to meet the peak forecasted demand in each hour of the day of each month. The problem is that energy capacity is not tradable in those one-hour increments. Currently, with few exceptions, the smallest increments we can trade is monthly. That's just a mismatch. And this mismatch forces us to procure more, spend more than we need to meet that forecasted peak hour. There is a solution to this problem. We are a big state with a diverse climate. So, for example, in San Francisco, the peak is in the winter because a lot of homes have electric heat. In L.A., the peak is in the summer because of air conditioning. Allowing us to trade those obligations among different load-serving entities would be more efficient while still ensuring the system has enough capacity to maintain reliability throughout the year. Last, we already have systems in place to make these trades. There are requests for offers. There are bilateral negotiations. There are transactions through brokers. These are well-developed platforms to make the trades. We would just be doing it at a more granular level. So last year, we at Clean Power Alliance estimate we could have saved between $10 and $13 million in RA costs if this program had been in place. This is almost equal to the total amount of we dedicate to our customer programs, which serves currently assisting over 16,000 households to lower their energy bills and increase their resiliency through rebates and incentives for home hardening, backup batteries, and efficient AC units for low-income multifamily renters. this is real money that could be invested if we could just be more efficient please allow us to be more efficient thank you thank you thank you fantastic other folks who want to express their support for the bill Good morning, Chair and Senators. Will Breger, State Strategies for Climate Action California, we support. Thank you. Thank you. Good morning to the committee and Chair. Claire Sullivan, on behalf of the City of Belmont and the Town of Hillsboro, in strong support. Thank you. Good morning Jean Hurst here today on behalf of the Santa Cruz County Board of Supervisors in support Good morning Andrea DeVoe on behalf of Cal Choice Energy Authority in support Emily Pappas on behalf of Pioneer Community Energy and MCE in support Catherine Brandenburg on behalf of Sonoma Clean Power in support Good morning members Jason Eichert on behalf of Clean Power SF who are very strong supporters of the bill appreciate the author bringing it forward Alicia Priegue on behalf of San Jose Clean Energy in strong support. Vanessa Flores representing San Diego Community Powers in support and also asked to provide a Me Too for Clean Energy Alliance. Morning. Mr. Chair Mark Fenstermaker for Peninsula Clean Energy and Valley Clean Energy in strong support. Craig Scholler on behalf of AVA Community Energy in support. Thank you. All right. Opposition, folks who want to raise concerns about the bill. Okay, seeing none, we will go to the committee. Let's go to you, Senator Richardson. And then followed by Senator Becker after Senator Richardson. Thank you, Mr. Chairman. I'm in support of this bill and would be prepared to make the motion when deemed appropriate. I do, though, have a question from my colleague, Ochoa Bogue, for the author, and I agreed to ask the question for her. But I am in support of the bill as it is. Her question was, how would you address the concerns that the CPUC expressed regarding the limited evidence of need, uncertain benefits, and heightened implementation risks? Specifically, is it appropriate to pass this bill when the CPUC has stated that this framework needs time to mature and that the potential gains don't outweigh the complexity and risk of unintended consequences? Her staff is here to listen to the answer. But thank you, Arthur. Mr. Chairman, Senator, thank you for the question and for my esteemed colleague who requested the question, I would say twofold. One, before you, the amendments address that by providing the flexibility for the CPUC to suspend this option if it can be demonstrated that it undermines the RA schematic and does not achieve those goals that are obviously important for grid stability and reliability. Secondly, I think I would note, just refer you to page four of the, and refer the center of page four of the committee analysis, which clearly indicates sort of some of the critiques about the PUC's report, and that if permission to cite your own analysis, Mr. Chairman, and I quote, at the end of the first paragraph, staff reports focus on ability rather than the cost to comply. They state that the report materially understates the avoided excess procuring and associated cost savings. So again, I think I would concur in their argument and critique of the report by the PUC, and I think we've addressed it in the amendment. We'll go to Senator Becker. Thank you I want to thank the author and I think we been in touch with your team We love to be out as a co And as we are moving to hourly RA requirements it kind of makes sense that we allow it to be contracted for hourly rather than hourly chunks And I think it's pretty clear anything we can do to meet these requirements more efficiently will get passed on to ratepayers. So grateful for the bill. We're going to go to Senator McNerney and then Senator Stern. Well, I thank the Senator, and I think it's a great find to find this. I have a couple of questions, comments. First of all, we talked about all the savings that are going to be coming forth. I just want to make sure those savings go to the rate payers and not to investors or other sorts of pockets. Do you have a comment on that? Mr. Chairman, Senator, I think I would also refer both to the testimony of my witness, But based on the schematic and how we regulate the rate case per se, there are elements that deal with satisfying of these requirements under RA. And these are long demonstrated passed directly on as a component to the consumer on the consumer end, on the rate payer end. So if you can reduce the overpurchasing of unnecessary resource, you're not having to capture that. So that's an extra capture that's not passed on to the rate payer. So there is, I think, ample evidence that demonstrates this achieves savings for the right payer. My other question is concerned with the technical aspects of this. Where does the ISO fit in? I mean, this has got to go through ISO in one way or another if you're trading. And I think one of your witnesses said the systems are in place. But for hourly trading, do they have the capability to keep up with that? are we putting ourselves, would we be putting ourselves in risk for system issues, like when Enron took over back in the, just a little concern I have about system stability and trading at that frequency. Mr. Chairman, Senator, thank you for that word, my God. I don't want to ever hear that word again ever in my career. But thank you, sir. You might recall that in the early 2000s when the legislature responded by establishing the RA requirements and framework was a direct response to the energy crisis that we suffered, I think a lot of us miserably, at that time. And as you know, the Cal ISO and even some component of the federal regulatory oversight had to make sure that we were in compliance and alignment when we established the program. So the program provides for those parameters to begin with. And again, I would just refer you to the amendments that we're accepting here, which gives some flexibility for that determination if it is made. It has to be demonstrated. That's a standard in the committee amendments that we're accepting. Okay. You have answers. I'm sorry, sir? You have answers. I try. All right. I'll yield back. You may not always buy them, but I certainly have them for you. All right. Let's go to Senator Stern. Thank you for your answers and always bringing your diligence to this, Senator. I appreciate your efforts here and the sort of the push to drive down costs as best we can. I think the amendment makes sense. Just to add some more flexibility. I guess my central question is maybe more of a local one. So it might not be about the entire framework. But in my backyard where your lead witness represents, and maybe I could even bug him to come back up but my central concern is that we relying right now on a gas peaker to meet a lot of local reliability We are the softest part of the Southern California grid in the Moorpark subarea And that community in Oxnard has been suffering for too long. And I'm just worried about under-procurement in that region. So, I mean, it might be, again, more of a regional question, But I don't want to see us in a place where we sort of squeeze as much efficiency as we can out of the RA market, and then we don't have our CCAs buying any local generation capacity. We're desperate for getting batteries sited in that area. Unfortunately, one of our cities just rejected a couple hundred megawatts of batteries. It's been a slog to get the Peeker replaced with batteries. and I know Mr. Bardicke and I have had many conversations over the years about wanting to install more generation capacity because we're the PSPS heartland of Southern California as well. So maybe if you don't mind for the witness. Yeah, Mr. Chairman, I would defer to my expert witness to return. Yeah, please. Thanks, Senator. Yeah, please. So I just want to get some clarification from you on the record. Do you anticipate this reducing the amount of local generation you're going to be procuring if we went forward in this framework? So on the generation side and on the storage side, no. We know that there's a lot of value for relieving congestion, for increasing in that area. The RA program in the local capacity is actually centrally procured by the IOUs in those local subregions. So what we're talking here about is trading on the system level across the state. So this would not impact that local capacity framework if Lauren wants to get into sort of how there's three RA products. There's system, there's flex, and then there's local. and the local was given to the IOUs to centrally procure, I don't know, three, four years ago, something like that. So we don't see this as any disincentive to increasing our battery or generations. Because you're saying this is just limited to the system procurement? That's correct. And so that to allow sort of – Not to system and flex. Right. But there's not a sort of local benefit to the system in the flex RA markets in any way? Well, so it's not how we look at it when we make our procurement decisions. We can offer additional resources to the central procurement entity, but they're often well-procured and don't need it from us. So I really see this as more of a statewide thing than a local capacity. And right now you're not able to do that inter-regional trading. Only on a monthly basis. On the monthly basis, not on the hourly. But I mean I'm just thinking about, yeah, around the Goleta substation, around the Moorpark substations, all these areas that have been left in the dark during fire events. It's been really bad. And relying on fossil fuels to back that up just is a problem. so you don't see any sort of, any impact on, on that. I mean, if you were bidding in, If you were offering, say, to Edison more, if you actually wanted to do a battery project that was significant, I know you've done small, little, you know, a couple kilowatts here, a megawatt there, some community centers, but I'm talking about, like, real generation capacity locally, not just paper and renewables. I appreciate that you're the biggest green energy provider in the country, But that green energy means much less to us when it's on paper and when it's not in our backyard. And so I just want some assurance that if supporting this bill that I'm not going to do anything to diminish your motivation to go further and to do more locally. No, not at all. We do have significant batteries in L.A. County and generation capacity. capacity. You know, if we can squeeze every dollar out of new capacity by trading it, that only incentivizes us to, you know, deal with that excess can eventually lower our costs. So you're saying it actually might help? You know, every project is different. It's certainly not going to diminish it. Okay. Well, with that understanding, I'll support the bill today, but I'll definitely be keeping an eye on this issue. Thank you for letting me do that diligence here, Senator Padilla. Appreciate it. Yield back. Of course. Okay. I think we've been able to ask a lot of questions. Thank you so much, Senator, for bringing this bill forward. We'll entertain a motion when we have a quorum, but we'd love to give you the opportunity to close. Thank you, Mr. Chairman and members. Thank you for the great questions. Just reinforcing again, this promotes cost savings and efficiency. It better aligns with where our current RA framework is at. We need to do everything we can to achieve savings for our rate payers at the appropriate time when you have a quorum. Respectfully ask for an aye vote. Thank you. Thank you. Thank you so much. Thank you members. Thank you. Okay, let's now go to Senator Becker who's going to present SB 913. morning mr. chair members This morning I'm presenting SB 913, the Clean Local Power Act. This bill seeks to create an improved pathway for customer-cited resources to compete fairly to offer low-cost reserves, we say capacity, for the reliability of our electric grid. For the past few decades, electricity demand has remained fairly stable. However, the CC projects that trend is set to change dramatically, increasing between 42 and 61 percent over the next two decades. You often hear me talk about how the grid only reaches its maximum capacity a few hours on the hottest days of the year. and comparing it to our grid to the superstore parking lot, they have to build that parking lot big enough to handle the crowds on the Saturday before Christmas, which means it's less than half full most of the rest of the year. Same with our grid. As demand on the grid grows overall, it also tends to make the higher peaks highest. When that happens, we have two choices. We build more power lines and power plants and transmission lines just to handle those few hours a year when we need to meet higher demand. Or we could use devices already installed in our homes and businesses to shift demand away from those peaks and save a lot of money The CPUC reports we already have about three gigawatts of customer batteries already installed across the strait. These are customer-cited just batteries alone. And 100 megawatts of new customer-cited batteries are installed every month. So that's enough new capacity every month to effectively replace a peaker plant. The problem is that most of these customer-sided resources are currently on the sidelines. That's because of the rules currently in place. The rules for entry and participation in the RA program, we just heard a little about, the Resource Adequacy Program, and CAISO's energy markets have not evolved with the development of these new technologies. This bill asks the CPC to update these rules to align more closely to those that have enabled the CEC's highly successful DSGS, or Demand-Side Grid Support program to sign up more than 1,000 megawatts, 1 gigawatt, of these customer-cited resources. The bill levels the playing field by ensuring rules will allow customers to enroll multiple devices, allow performance to be measured at the device level, and allow customers to export energy back to the grid. And it ensures that rules won't create barriers to customer enrollment. The bill also directs the CPC to work with CAISO to ensure the new rules are aligned with the existing CAISO market mechanisms. The bill is not mandating more use of these devices or subsidizing them in any way. It's just allowing these devices to compete fairly with new utility scale generation to see which resources can meet the grid's needs at the lowest cost. Not letting customer-side devices compete would be a wasted opportunity to save right pairs money. Again, these devices already exist behind the meter today. I'm happy to accept the committee's amendments today, which clarify that procurement requirements reflect the attributes needed to serve the electrical system. We know that demand for electricity is growing. We are also grappling with the impact that wildfire mitigations had on our rates. It's becoming more and more clear that we have to use our grid more efficiently. This is a way to do that. With that, today I have Dan Jacobson, the Senior Policy Advisor for Environment California, and Eric Lyon, Energy Regulatory Manager for New Home, as my primary witnesses and support. Fantastic. Please come to the microphone. Good afternoon, Chair Allen and committee members. My name is Caleb Weiss, standing in for Dan Jacobson, who you all know, I'm sure. And I'm the Clean Energy Associate at Environment California. I'm here today to thank the Senator for authoring this bill and also express our strong support for SB 913, the Clean Local Power Act. According to a report by Environment California Research and Policy Center, California is leading the nation in the adoption of clean, distributed energy capacity resources like home batteries, smart thermostats, heat pumps, and electric vehicles. For example, we have over a quarter of a million home batteries in our state and over 2 million electric vehicles. Furthermore, according to the California Public Utilities Commission, Californians are installing over 2,000 additional home batteries per week. And none of these statistics include the commercial and public sector customers which have also installed and are continuing to install these technologies at scale. The existence of these resources presents an incredible opportunity to improve energy affordability in California and to accelerate California's transition to 100% clean energy. If we take decisive steps now to harness these abundant clean energy resources so that they they not only provide energy for their owners but also for their communities We now have the technology to aggregate these resources in our homes and throughout our state so that they can provide clean local energy to our communities during times of high energy demand However, right now these aggregated distributed capacity resources are restricted from fully participating in California's energy market. This bill will allow those resources to more fully participate in California's energy market and provide energy to California communities, including your constituents, when they're the most affordable energy resource, and therefore reducing energy costs for all, and not only for those who already have these technologies in their home or business. The more that we use this clean local energy, the less that the utilities need to pay for expensive, often dirtier energy to serve Californians at times of high energy demand. For that reason, we are strongly in support of this bill and respectfully request your aye vote. Thank you. Thank you. Anyone else who wants to weigh in and support? Good morning, Chair, committee members, special thanks to Senator Becker. Thank you for the opportunity to provide testimony today. My name is Eric Lyon, Energy Regulatory Manager for California and the Western U.S. with Renew Home. Renew Home is an aggregator of residential distributed energy resources with active participation in California's energy markets and utility programs. California has spent decades investing in customer located solar storage smart thermostats and other flexible appliances and devices But has not been able to fully unlock the value of these resources When these distributed capacity resources are aggregated they can offset traditional power plants And hundreds of thousands of these resources have already been deployed at homes and businesses At a time when the state desperately needs affordable clean and reliable energy solutions legislators should be looking to innovative solutions that support reliability while driving down costs and emissions. SB 913 is a bill that can do both. This bill would help address energy affordability by allowing cost competitive and dependable aggregated distributed capacity resources to compete in the resource adequacy market. Allowing these resources to compete will allow the state to harness hundreds of megawatts of existing capacity without the need to build out expensive infrastructure. It's worth noting that nothing in this bill presupposes any outcome. It simply directs the CPUC to make changes that will create a more fair market pathway. Our industry is confident that we can compete in the market with traditional generation, and this bill simply gives us a fair shot to do so. Aggregators like us would still be required to ensure that our capacity can deliver, that it is cost-effective, and that it is clean. If our resources are chosen in this competitive market, all ratepayers will benefit from the cost savings, which in turn helps drive down total energy costs. For the reasons I discussed, Renew Home is in strong support of SB 913. Thank you for your time, and I am open to any questions you might have. Thank you. All right. Other folks who want to voice their support for the bill, come to the mic and give us your name and affiliation. Hello, John Hart with the California Solar and Storage Association. On behalf of over 600 member companies, we strongly support the bill. Thank you. Good morning, Chair and members of the committee. Brandon Garcia on behalf of Advanced Energy United in strong support. Thanks to the other. Will Breger for ClimateX in California in support Thank you Emily Pappas on behalf of the California Efficiency and Demand Management Council in support Good morning, Chair and Committee members. My name is Allison Hilliard with the Climate Center in support on behalf of NextGen California Climate Action Campaign, DERAPI, USGBC California, EV.energy, and Friends Community on Legislation of California. Thank you so much. MS. Good morning, Chair and members. McKinley Thompson-Morley on behalf of the Solar Energy Industries Association in support. MS. Thanks, McKinley. MS. Good morning, members. My name is Pooja Agrawal with the Climate Center, one of the co-sponsors of this bill in strong support, along with Environmental Working Group, CalPIRG, 350 Humboldt, and the Center for Environmental Health. Thank you. MS. Good morning. Good morning, Claire Sullivan on behalf of the City of Mountain View in strong support. Thank you. Good morning, Chair and Members. Marissa Hagerman with Tratton Price Consulting, registering support on behalf of Vote Solar. Thank you. Kim Craig with Arc Strategies in support on behalf of QCELS. Thank you. Good morning, Mr. Chair and Members. Adam Hadafi here on behalf of Generac Power Systems and Deco B-Smart Thermostats in strong support. Strong support. Good morning, Mr. Chairman and members. Scott Cox on behalf of Ceres here in strong support. Thank you. All right. Let's go to opposition, folks who want to raise concerns about the bill. No? Okay. Seeing no one. Anyone want to come to the mic? All right. Let's go to the – let's bring it back to the committee. We'll go to Senator Stern. Yeah. Thank you for the back-to-back RA discussion here. Actually, I'm excited about this bill, and I think we can actually unlock a lot of the local capacity that I was actually just talking about if we opened up the market this way and allowed DERs to aggregate more. So I'm excited about the measure. I think it makes a lot of sense. I'd love to be added as a co whenever opportunity presents itself. Maybe it sounds like you're making one amendment, so perhaps even now. But, yeah, I think this is actually going to reduce our demand for local fossil fuel generation as a resource and instead empower people in their homes to provide that power. So thank you. I'll move the bill whenever we get a quorum. Great. We'll go to Senator Chowbuck. Good morning, Senator Becker. So I have a couple of questions for you. The first one has to do with the types of in-home distributed energy resources. Are they reliable enough to include in the RA capacity? And number two, what happens if the DER, such as a Tesla battery wall, isn't fully charged when the LSC – I sound – I'm going to go back to my definitions here. the load-serving entities need to call on that resource. Well, there are a lot of acronyms in this space. And I'm trying to go back and forth because I don't know them all by heart, so I'm trying to look at my notes. I have my own little glossary here. Yeah, for the purpose of the public, I think it's important to note all of the acronyms in place. Yeah. So I think that's really the point of this bill, is to say that these distributed resources are now critical infrastructure. And we've seen this not just in our state, but we've seen now in other states that are recognizing this. Virginia just passed a law. Maryland's passing one right now to recognize that and say that this moment is here. The technology has evolved enough that we can count on these resources as a critical infrastructure. So I think that's your first part of your question. Here's the second part of the question. I mean, you don't get paid if you don't have the resource. But I'll ask one of my experts maybe to weigh in. But if your battery is not charged at all, then you don't get paid. But is there a more sophisticated answer to that question? Yes, thank you. And John Hart with the California Solar and Storage Association. So to your question, what happens if a battery is not fully charged for the event? So a couple of things. One is one of the huge benefits of aggregations is you're not relying on one home. It's not going to make or break the grid. You're relying on, in aggregations, tens of thousands. So that's one. If one site is not fully ready, you plan for this in advance. Contingency that other sites can make up the difference. So that's one scenario. Also, it goes a lot into our member companies that are doing this invest a lot into the software and preparation that you're forecasting in advance what the weather is going to be, what the home patterns will be. And that allows you to prepare. You know typically in advance at least 24 hours if you're going to be called in an event the way that you participate in the market. So you have that time to prepare. There's going to be an event tomorrow at 4 p.m. and we prepare and charge for that. So you have the ability to prepare. And again, if one home is not completely ready, you have the rest of the aggregation that can really make up the difference for that. So there's a way – and I'm sorry, through the chair. So there's a way to exclude the homes that are not fully prepared. Is there a responsibility by the homeowner to be informed and be prepared to ensure that they're charging their batteries in order to be ready for the time that they are needed to be addressed? Is this going to take initiative on the homeowner? Great question. So the first one, you would not necessarily exclude a home. Let's say if a battery was not charged completely to where it was expected, you could still call on that battery, but maybe just not as much. And you would call on another one more to make up the difference. So you don't need to just completely exclude a home. On the second part, homeowners and businesses, it's very hands off for them. They agree. You can use the technologies I have here. and then the companies that typically the aggregator is able to operate and send signals. And even that is not a manual process with software. And again, across tens of thousands of sites, it's able to optimize the best way to meet that across all the loads. So for the homeowner itself or for the business owner, they are very hands-off after they agree to use these resources in these aggregations. So is this an opt-in program for people who have these type of batteries installed in their homes? They would sign to agree to this, yes. It's not happening without their permission. Okay, so it is. And I do have – there are a couple of our colleagues who were participating in the DSGS program before we – well, I guess it's still going, but unfortunately we didn't allocate really sufficient funds in last year's budget. but I could put you in touch with some folks who have who had been participating who opted into this program so it is an opt-in I mean the vision is to have an opt-in program yes yes yes and the rules as they're set up and these are rules we not proposing to change requires that every site sign agreeing to what they doing so the the the either the homeowner business they are aware that they are being enrolled in this program that their resources are being used in this way They sign to that Okay. And then for security purposes, I mean, I'm assuming you folks don't, quote unquote, suck the life out of the battery per se, right? You only have like a certain percentage that you utilize for each battery. Yes. And it's different across sites. Typically how it works is the customer can select an amount that they want reserved at all times. You could say never go past this point and that's respected across the aggregation. Okay and then my last question. So the homeowners of the businesses have paid for the installation, the maintenance and the use and use of these behind the meter technologies devices to reduce their consumption and hopefully reduce their electric bills. Are they then compensated? Yes. If you're participating in this program, there's compensation from, you mentioned the load serving entity, which that compensation goes to the aggregator. And then the aggregator would have a deal with the individual customers that they're compensated. And what that looks like will differ amongst aggregators, but the individual homeowner or business, they receive compensation for participating. Okay, so they do, they're compensated for their costs. Yeah, absolutely. Construction and so forth. Okay, I think that is all for me. Thank you very much. Yes, thank you. Okay, we're going to Senator McNerney. I thank Senator Beck for bringing this forward. It's very futuristic. It's something we've been thinking about for a long time. My caution is that there's going to be kinks when this is deployed, and I'm following up on Senator Ochoa Bogues, Vice Chair Joe Voke's comments. Suppose I've got an EV. I'm planning to go from the Bay Area to Santa Barbara tomorrow morning. I hop in the car, and it's only half charged. I can only get halfway. I'm going to be late for my meetings. I mean, there's going to be kinks and the unintended consequences. It's just a caution. I can see that's going to happen. We need to move forward with this kind of thinking and get those kinks out, but it's going to take a while. Yeah, I will say, so these are customer-cited batteries. These are batteries in the home right now. Actually, we do look forward to a day when we'll be able to tap into those car batteries as well with bidirectional charging. But I will say this builds on the success. I mean, one of the reasons you'll hear many of us talk about DSGS, DSGS, and here over in the Assembly as well is because it was working very successfully. We finally actually have the infrastructure. and you will hear a push in the legislature to make sure we have that continued funding for this DSGS program that referred to the demand-side grid support program, which was successful. But we see that as a bridge. That program really is a bridge to something like this, where you really have more of a market-based where all these customer-sided batteries are, again, considered critical infrastructure and can bid into the market. so again it's been working and it's been working in other states, you know when you hear about VPPs, virtual power plants, I mean that's the same thing here right, we're just tapping into these resources already in folks' homes but you know I understand that we will have to certainly watch things as we move along too okay thank you thank you okay well I'm very supportive of your bill and we still don't have a quorum but But we've got to reduce the number of people on this committee, I think. But I love to hear your close and we certainly Yeah I think it was already a good discussion Respectfully I ask for an aye vote Okay great Thank you Thank you Senator Let now go to Senator Richardson We're going to go a little out of order. Senator, our vice chair, graciously agreed to let Senator Richardson present her next two bills, because she's got to go present somewhere else. This is SB 1265, which is item six in your packets, members. You may proceed when ready. Well, thank you, Mr. Chairman and colleagues. Good morning. The California Alternative Energy and Advanced Transportation Financing Authority, or otherwise known as the Go Green Program, partners with public and private entities to provide financing that helps California industries reduce greenhouse gas emissions. GO GREEN supports the development of renewable energy, energy efficiency, and advanced transportation and manufacturing technologies, while simultaneously reducing air pollution, conserving energy, and creating jobs. Funding the GO GREEN program comes from investor-owned utility ratepayers to provide financing and partnerships within the IOU service areas. Over the last 15 years, the Go Green program was carried out through the Treasurer's Office and has expanded rapidly to become a one-stop entry point for Californians seeking financing for clean energy projects. Currently, according to the Treasurer's Office, the GO! Green program is oversubscribed and due to the immense popularity and support that its services provides, the need for this legislation has come forward. However, despite the immense success that the program has achieved, it is not protected in statute to continue past the current Treasurer's tenure. SB 1265 simply codifies this program into law and allows for future state treasurers to use and expand the program. Here with me today to speak in support of the bill is the Deputy Treasurer Morton on behalf of Fiona Ma, our treasurer, California State Treasurer, alongside Christina Cerrone. Here to provide some technical support. Deputy Treasurer Morton. Thank you, Mr. Chair. As said, Deputy Treasurer Connie Morton on behalf of State Treasurer Fiona Ma, the sponsor of SB 1265, and her capacity as chair of the California Alternative Energy and Advanced Transportation Financing Authority, known as CAITFA. Go Green financing is one of those initiatives, as Senator Richardson mentioned, increasing accessibility for financing for home and business energy-saving improvements by using its state-funded loss reserve to reimburse lenders. Through minimizing lender risk, it provides below-market interest rates, extended payback terms, and broader loan approval for borrowers. Go Green currently relies on IOU ratepayer funds and public purchase program surcharges, While helpful, as the Senator noted, these funding sources limit where the program can operate because IOU funds are restricted to specific service areas. The program can then only serve customers within those regions. This limits expansion and reduces access for Californians outside those areas and weakens the overall statewide impact. Without broader funding, Go Green cannot grow, reach more people, or maximize greenhouse gas reductions. This change is necessary to allow the program to continue to prioritize the state's environmental goals and support as many businesses as possible. SB 1265 creates the Alternative Energy and Advanced Transportation Expansion Fund, giving that authority to CAIFO to receive the ongoing funding and codifying the program within statute This would help Go Green financing programs under CAIFO to secure new funding and partnerships well beyond as was mentioned the current treasurer term to continue to serve Californians. Addressing this structural limitation would improve equity and allow the program to better align with statewide greenhouse gas reduction goals and expanding access beyond IOU boundaries and continue this program. Go Green is an important economic development tool for the state and have proven to effectively marry the state's economic and environmental goals. The Treasurer is proud to sponsor SB 1265 and respectfully request your aye vote. And additionally, as was mentioned with me, we have Christina Saron, who is Executive Director of CAEPFA, to help with any technical questions. Thank you. Great. Thank you. So just note that she's available. Let's have anyone who wants to weigh in support of the bill. I see you. Chair of Senators, Dean Grafiel with Capital Advocacy here on behalf of the California Life Sciences in support of SB 1265. Thank you. Thank you so much. All right. Opposition concerns? I know there's no registered opposition. Just want to make you have accepted the amendments. Yes. Yes, that's right. OK. OK. Great questions, thoughts. We'll go to Senator Achilleta. Thank you, Senator, for bringing the bill. My question is the fund and creating the fund, does that mean our state treasurer has sole authority? And who would benefit with this flexibility and to be able to expedite the funding? Can you give me an example of some of the recipients? Sure. I'll have the staff actually answer the question, but I will summarize. essentially we've had really frankly an excellent treasurer who this is my second year now that I brought forward a bill where she has had a program and has worked to maximize the outreach. And so hence these programs, they're utilizing the money and people are very excited about them. So to my understanding, the treasurer has been for the most part, I believe, under her direction of the program. But I'll let the staff clarify further. Good morning. My name is Christina Serrano. I'm the executive director for CAEPFA. And what we're seeking to create the fund is the ability to seek funding from outside sources. Currently, we receive funding from all of the IOUs, and that money is through a contract, and we're able to get that, and we use it specific to the contract, but it can only go to the IOU territory. We want to be able to seek partnerships with areas in rural communities and areas like that. And in order to be able to take those funds in, we have to have a fund that we have and be able to get that money into our and use it for those communities. But to clarify the question, the question was who actually determines and administers? And it's my understanding that's out of the treasurer's office. Yeah, it is out of the treasurer's office. But also CAFA has a board on it which contains members from the PUC Energy Commission, the Department of Finance as the governor's representative, as well as the treasurer's office. So staff brings forward suggestions, the board approves those, but it always is done trying to maintain the intent that the legislature authorizes with the program. And could you define CAFA? California Alternative Energy and Advanced Transportation. Financing Authority. Thank you. And the reason I ask, Senator, is because I know Fianna Ma and her desire to help the community. And I've seen her do this. And she's asking, how can I help? How can I help? Because her office and her department has resources and can actually help communities across the state. And I'm so excited that this is coming forward because it'll give her the flexibility she needs. But I just wanted to double check that it was going to the communities that need it the most and that she has the ability to expedite the funding when they request it. Correct. Thank you for that, sir. It is really about making sure that we are expanding access to reach more communities through this program. Very good. Thank you, Senator. And the other significant, if I might, through the chair, the other significant point is that by codifying this, it gives future treasurers the ability to continue to build upon the program. And that's really what their hope is today. Thank you. With that, I respectfully ask for an aye vote on SB 1265. Thank you to our friends from the treasurer's office as well. So let's let you now go ahead. So obviously we will entertain the motion, likely from Senator Archuleta, given his enthusiasm, when the moment is appropriate. So let's now go to SB 1337. Yes. Thank you, Mr. Chairman, and again, members. Let me begin by painting a picture. I grew up in Los Angeles, and over the last 30 years, I remember as a little girl going to school, my mom dropping me off at the bus stop, and you would look across the city, and you could not see the city skyline. It was very covered with smog, and this would go on from the morning until the end of the day. But fortunately, over the last 30 years, California has really pioneered in climate and air quality policies that have been critical to us protecting our community's health and our environment. Policies like the introduction of the cleanest gasoline in the world, started in 1996, has led to countless air quality, health, and life improvements. California's climate and air quality policies have supported more recently the adoption of highly fuel efficient conventional vehicles and zero emissions vehicles. Due to the petroleum markets evolving quickly amongst the state and, dare I say right now, the world, the volatility and the understanding of transitioning between some of the newer technologies and our existing technologies leads us to the importance of having groups work together that are making these future policies. With that in mind, currently the analysis indicates that in light of several refineries that have closed, even the CEC has noted that the current pace and what is occurring is difficult and could prove to be problematic to Californians. With that being said, successfully managing the introduction and use of new technologies while simultaneously maintaining fuel production, that coordination, the actions, the strategic alignment between state, regional, and local jurisdictions is desperately needed. You might wonder where this idea came from the need from the legislation It actually comes directly from the letter that Mr Gunda with the CEC had noted that we really needed to approach these policies in a more holistic matter. So this legislation was brought forward to address his recommendation. What we are working on to have this working group that would be established of stakeholders that were brought together largely out of the work that we did last year in SB 237. The key objectives would be to develop priority policies and programs informed by the fuel transition plan. It would strengthen coordination and establish clear lines of communication to prioritize critical energy regarding policies and regulations. And finally, the bill informing this working group would propose opportunities for partnerships between the governor's office, state agencies, boards, commissions, offices, independent consumer fuel advisory committees, and other industries as necessary, and the legislature to advance solutions to strategically align regulations and permitting processes across all levels of government that could best support the achievement of state policy goals. That was a little bit of a run-on sentence, but just to summarize, essentially what the group is intended to do is to pull all the levels of government together to make sure that they're discussing future policies and to make sure they're consistent with the overall objectives that we're trying to achieve, that we have successfully achieved in the past and we hope to achieve going forward. With that in mind, here to speak in support of the bill, we have Mr. Paul Darrow from WISPA, Western States Petroleum Association. All right, Paul, forgive me a second. Let's establish a quorum. Secretary, please call the roll. Alan? Here. Alan here. Echoboog? Here. Echoboog here. Archuleta? Here. Archuleta here. Aragene, Becker, Caballero, Daly, Gonzalez? Here. Gonzalez here. Grove, Hurtado, Reyes? Reyes here. Richardson? Here. Richardson here. McNerney? Here. McNerney here. Rubio? Stern? Here. Stern here. Strickland? Here. Strickland here. Wahab? All right. We have a quorum. You will have the great honor of being the first bill to be voted on this morning in this committee. Paul, may proceed.

Thank you. Thanks, Paul. Other folks who want to weigh in support or in opposition or raise concerns?

Thanks, Mike. Thank you. Anyone else want to come, either pro or support or opposition? Okay, seeing none, we'll bring it to the committee for questions, thoughts, comments. Senator McNerney, followed by Senator Reyes, followed by Senator Ochovo.

Thank you. Thank you. All right, we'll go to Senator Reyes. Thank you. I think having an interagency commission or group is extremely important. My concern is going back to SB237 and also SBX12 by then-Senator Skinner, who called for an independent consumer fuels advisory committee, trying to coordinate with all of those. so that there isn't duplicative work being done. So we don't have competing groups putting together reports, and we then have to review everything to determine which one is providing the information we actually need. You are right. We need to figure out the volatility of petroleum, the petroleum market here nationally and internationally. It's extremely important. but I am concerned about this coordination because it has become such a big issue, not just now, but it had become a big issue. And so these commissions, these groups had been formed. How will you figure out how to coordinate with the others? Permission through the chair. Thank you, Senator Reyes, for that question, and that's a very important question and one we've gotten a couple times. So I'm glad that you asked me to clarify. Essentially, the difference is this, as the witness presented, this one is specifically more to the fuel supply. You know, some of the other groups are into the different overall policies and, you know, whether we're using more zero emissions or how can we transition and all of that. This one is very directly related to the refineries, what they're producing, how are they transitioning. For example, two have closed in my district. One is now providing SAF, which is actually sustainable fuel for airplanes. So it's really more directed, very specific to the fuel aspect, which is what 237 was about. The other part is we have actually, when I originally brought this legislation forward, I brought it before we introduced it to the CEC. And so as we work through the bill in the process, if we need to more clearly delineate the difference between this group or how this group can work with the other groups, we're more than happy to do so. But it was our understanding that through 237, that was a unique way that the envirogroups, the refining groups, all these different groups actually really came together specifically talking about the fuel supply And we wanted to keep that group going keep it going together and wanted to make sure more importantly which is what I was going to add on to Mr McNerney comment that today right now, local air quality districts are making decisions based upon what's impacting having related to fuel. And those conversations are not always happening with the CEC. So you have the CEC that's meeting and doing their policies. We're meeting, talking about policies, local districts, and so no one is really pulling specifically regarding our fuel, fuel transitioning and all of that, having that specific discussion. So that's what the working group is intended to do. However, through the process, I commit to working with all the bodies to make sure that it is not duplicative, that it is working with all the other appropriate groups so we can get, you know, one report, one answer, and really more importantly, one direction that is right for California. Thank you. Yes, ma'am. Thank you. Senator Chilbo. Good morning. Good morning, Senator. Thank you. Question. I guess you kind of answered it, though, So I'm just going to – it might just be a little redundant, and I apologize for that. But I appreciated the angle that you said why. Because I think I'm piggybacking on Senator Reyes' question with regards to – we have all of these groups coordinating, but I think it's specific. But the question is, is the CEC not already coordinating and communicating with other boards and agencies to strategize ineffective policies? And I think you addressed it by saying this will be specific to the oil industries, to the refineries. Correct. And this, the individuals identified, not individuals, organizations identified in the bill were specifically those that were formed during the review of SB 237. So it's really intended to build upon that group that not everyone walked away, you know, perfectly happy, but that's the sign actually of a good compromise. And so it's really trying to keep that group together that was formed during SB 237. But again, I do commit to working with the CEC as this bill progresses. If there are any duplicates or ways that this group should form with another and, you know, give a more clear direction, we'll be happy to incorporate that. And I commit to coming back to the committee and sharing with you if we make any of those changes. Thank you. I'd be happy to support the bill. Thank you. Thank you. Okay. Seeing no other questions, it's been moved by Senator McNerney. You may close. As a good senator should say, I respectfully ask for your aye vote on SB 1337. All right. Secretary, please call the roll. SB 1337, Richardson, do passes amended to appropriations. Allen? Aye. Allen, aye. Echoboog? Aye. Echoboog, aye. Archuleta? Aye. Archuleta, aye. Aye. Arraguin. Becker. Caballero. Dally. Gonzales. Aye. Gonzales. Aye. Grove. Hurtado. McNerney. Aye. Reyes. Aye. Richardson. Aye. Rubio. Stern. Strickland. Aye. Strickland. Aye. Wahab. Aye. Wahab. Aye. Wahab. Aye. that's a SB 1191. Let's Let's see this first. Oh, do you want to? I have to go to elections. Yeah, I do too. So do you want to just? Okay, we can vote if that's. Yeah, just to make sure that. Of course, you're going to have to come back for this one too. All right, let's just go ahead and present. We'll lift the calls later. Okay. You may proceed, Senator. All right. Thank you and good morning, Mr. Chair, members of the committee. I'm grateful to be here. Senate Bill 1191 extends the sunset date for California High Cost Fund A and B programs by five years to January 1, 2033. These two universal programs are essential in ensuring that residents in rural and high-cost areas of the state have access to affordable, basic telephone services through reliable networks. These networks provide a critical connection between residents and emergency responders during natural disasters and other emergencies, as well as connectivity that's important to daily life. Due to the high cost of serving areas with sparse populations, tough terrain, and extreme weather, the high-cost fund programs continue to be necessary for rural communities. California has a long-standing commitment to affordable universal service, and these programs have been a key part of the effort since they were first established in statute in 1987 and reauthorized multiple times by the legislature. Joining me today is Eric Botal and VARCOM and Yolanda Benson with U.S. Telecom. And I apologize if I butchered your last name, sir. Eric Votaw, No, you did fine. Thank you. And I appreciate your help today. Good morning, Chair and members of the committee. My name is Eric Votaw. I'm the CEO and principal owner of VARCOM and Ducor Telephone Company, a California high cost fund A recipient and member of CALCOM. We are in strong support of SB 1191 by Senator Ochoa Bog. At its core, this bill is about one thing, making sure that every California, no matter where they live, can access essential telecommunications services. Ducor Telephone Company serves rural communities in Tulare and Tehama counties, where geography and economics make telecommunications service a challenge to provide. 100% of the children in my Ducor Exchange are receiving free lunch. The average median income in Ducor is $73,635 in comparison to the statewide median household income of $99,000. Ducor Telephone Company serves the working poor, those unforgotten who put food on everyone's table. In my Kennedy Meadows Exchange, which is at 7,000 feet in the Sierra Nevada mountains, There is no commercial power. We are the only lifeline to the community to make sure emergency calls go out and the community is able to reach the world. The California High Cost Fund A makes it possible for us to provide access to telecommunication services at rates that are affordable and comparable to what urban customers pay. This program ensures that our customers have access to something fundamental, the ability to dial 911 SB 1191 extends this critical program through January 1 2033 giving carriers like Ducor Telephone Company the regulatory certainty that we need to maintain and invest in the infrastructure that our communities depend upon No Californian should be unreachable in crisis because of where they live. We urge you a strong aye, vote on SB 1191, and thank you very much. Thank you. Yes, ma'am.

Pam Loomis on behalf of California's independent telephone companies in support.

Tracy Ryan with Rural Counties in support.

David Nelson on behalf of California Communications Association in strong support.

Thank you. Yolanda Benson, U.S. Telecom, the Broadband Association. The way that it's paid is through a surcharge. If you look at your telephone bill, it says California High Cost Fund A and B. On mine, it's about two cents as a surcharge. However, the fund itself has not really grown. It's actually gotten smaller. So the fund is not growing because these companies are very, very good at ensuring that they're doing exactly what they say they're going to do with that subsidy that is administered by the PUC.

Actually, I don't know. I don't believe so. No, because it is the surcharge on your telephone bill.

I'll move it.