Existing law establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by the State Energy Resources Conservation and Development Commission for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. Existing law creates, and continuously appropriates moneys in, the Voluntary Offshore Wind and Coastal Resources Protection Fund for purposes of the program and the Private Donations Account, which is created in the fund. Existing law authorizes the commission to accept federal and private sector moneys for purposes of the program and requires the private sector moneys to be deposited into the donations account and the federal moneys to be deposited into the fund. Existing law requires the commission to post a report on its internet website, within 30 days of receiving a donation, about specified information regarding each donation received. Existing law authorizes the commission to allocate moneys in the fund or donations account for specified purposes, including workforce development grants.

This bill would additionally authorize the commission to allocate moneys in the fund or donations account for capacity funding activities and grants within local communities and tribal communities to engage in the process of offshore wind energy development. By expanding the purposes for which continuously appropriated moneys may be allocated, the bill would make an appropriation.

This bill would create the Offshore Wind Community Capacity Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the commission to fund capacity funding activities and award capacity funding grants, thereby making an appropriation, as specified. The bill would require an offshore wind entity, as defined, to provide financial assistance to fund those activities and grants for the 3-year period after the offshore wind entity executes an offshore wind lease, as provided. The bill would make that financial assistance subject to the reporting requirement described above. The bill would authorize the commission to use up to 5% of the total amount deposited into the grant account, if needed, to administer the grant account. The bill would require the commission to annually prepare and submit a report, on or before March 1 of each year, to the Legislature on the implementation and effectiveness of those activities and grants. The bill would require the commission to develop guidelines, as provided, for the use of those moneys, and would require the guidelines to be subject to review and revision every 3 years.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of ²/₃ of the membership of each house of the Legislature.

Existing law establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by the State Energy Resources Conservation and Development Commission for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. Existing law creates, and continuously appropriates moneys in, the Voluntary Offshore Wind and Coastal Resources Protection Fund for purposes of the program and the Private Donations Account, which is created in the fund. Existing law authorizes the commission to accept federal and private sector moneys for purposes of the program and requires the private sector moneys to be deposited into the donations account and the federal moneys to be deposited into the fund. Existing law requires the commission to post a report on its internet website, within 30 days of receiving a donation, about specified information regarding each donation received. Existing law authorizes the commission to allocate moneys in the fund or donations account for specified purposes, including workforce development grants.

This bill would additionally authorize the commission to allocate moneys in the fund or donations account for capacity funding activities and grants within local communities and tribal communities to engage in the process of offshore wind energy development. By expanding the purposes for which continuously appropriated moneys may be allocated, the bill would make an appropriation.

This bill would create the Offshore Wind Community Capacity Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the commission to fund capacity funding activities and award capacity funding grants, thereby making an appropriation, as specified. The bill would require California an offshore wind leaseholders holding a lease executed on or after July 1, 2022, entity, as defined, to provide financial assistance to fund those activities and grants for the 3-year period after the leaseholder offshore wind entity executes an offshore wind lease, as provided. The bill would make that financial assistance subject to the reporting requirement described above. The bill would authorize the commission to use up to 5% of the total amount deposited into the Offshore Wind Community Capacity Funding Grant Account, grant account, if needed, to administer that the grant account. The bill would require the commission to annually prepare and submit a report, on or before March 1 of each year, to the Legislature on the implementation and effectiveness of those activities and grants. The bill would require the commission to develop guidelines, as provided, for the use of those moneys, and would require the guidelines to be subject to review and revision every 3 years.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of ²/₃ of the membership of each house of the Legislature.

Existing law establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by the State Energy Resources Conservation and Development Commission for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. Existing law creates, and continuously appropriates moneys in, the Voluntary Offshore Wind and Coastal Resources Protection Fund for purposes of the program and the Private Donations Account, which is created in the fund. Existing law authorizes the commission to accept federal and private sector moneys for purposes of the program and requires the private sector moneys to be deposited into the account and the federal moneys to be deposited into the fund. Existing law requires the commission to post a report on its internet website, within 30 days of receiving a donation, about specified information regarding each donation received. Existing law authorizes the commission to allocate moneys in the fund or account for specified purposes, including workforce development grants.

This bill would additionally authorize the commission to allocate moneys in the fund or account for capacity funding activities and grants within local communities and tribal communities to engage in the process of offshore wind energy development. By expanding the purposes for which continuously appropriated moneys may be allocated, the bill would make an appropriation.

This bill would create the Offshore Wind Community Capacity Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the commission to fund capacity funding activities and award capacity funding grants, thereby making an appropriation, as specified. The bill would require California offshore wind leaseholders holding a lease executed on or after July 1, 2022, to provide financial assistance to fund those activities and grants for the 3-year period after the leaseholder executes an offshore wind lease, as provided. The bill would make that financial assistance subject to the reporting requirement described above. The bill would authorize the commission to use up to 5% of the total amount deposited into the Offshore Wind Community Capacity Funding Grant Account, if needed, to administer that account. The bill would require the commission to annually prepare and submit a report, on or before March 1 of each year, to the Legislature on the implementation and effectiveness of those activities and grants. The bill would require the commission to develop guidelines, as provided, for the use of those moneys, and would require the guidelines to be subject to review and revision every 3 years.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of ²/₃ of the membership of each house of the Legislature.

Existing law establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by the State Energy Resources Conservation and Development Commission for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. Existing law creates, and continuously appropriates moneys in, the Voluntary Offshore Wind and Coastal Resources Protection Fund for purposes of the program and the Private Donations Account, which is created in the fund. Existing law authorizes the commission to accept federal and private sector moneys for purposes of the program and requires the private sector moneys to be deposited into the account and the federal moneys to be deposited into the fund. Existing law requires the commission to post a report on its internet website, within 30 days of receiving a donation, about specified information regarding each donation received. Existing law authorizes the commission to allocate moneys in the fund or account for specified purposes, including workforce development grants.

This bill would additionally authorize the commission to allocate moneys in the fund or account for capacity funding activities and grants within local communities and tribal communities to engage in the process of offshore wind energy development. By expanding the purposes for which continuously appropriated moneys may be allocated, the bill would make an appropriation.

This bill would create the Offshore Wind Community Capacity Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the commission to fund capacity funding activities and award capacity funding grants, thereby making an appropriation, as specified. The bill would require California offshore wind leaseholders to provide financial assistance to fund those activities and grants for the 3-year period after the leaseholder executes an offshore wind lease, as provided. The bill would make that financial assistance subject to the reporting requirement described above. The bill would require the commission to annually prepare and submit a report report, on or before March 1 of each year, to the Legislature on the implementation and effectiveness of those activities and grants. The bill would require the commission to develop guidelines guidelines, as provided, for the use of those moneys, and would require the guidelines to be subject to review and revision every 3 years.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of ²/₃ of the membership of each house of the Legislature.

Existing law establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by the State Energy Resources Conservation and Development Commission for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. Existing law creates, and continuously appropriates moneys in, the Voluntary Offshore Wind and Coastal Resources Protection Fund for purposes of the program and the Private Donations Account, which is created in the fund. Existing law authorizes the commission to accept federal and private sector moneys for purposes of the program and requires the private sector moneys to be deposited into the account and the federal moneys to be deposited into the fund. Existing law authorizes the commission to allocate moneys in the fund or account for specified purposes, including workforce development grants.

This bill would additionally authorize the commission to allocate moneys in the fund or account for capacity building funding activities and grants within local communities and tribal communities to engage in the process of offshore wind energy development. By expanding the purposes for which continuously appropriated moneys may be allocated, the bill would make an appropriation.

This bill would create the Offshore Wind Community Capacity Building Fund Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the commission to fund capacity funding activities and award capacity building funding grants, thereby making an appropriation, as specified. The bill would require California offshore wind leaseholders to provide financial assistance to fund those activities and grants for the 3-year period after the leaseholder executes an offshore wind lease, as provided. The bill would require the commission to annually prepare and submit a report to the Legislature on the implementation and effectiveness of those activities and grants. The bill would require the commission to develop guidelines for the use of those grant moneys, and would require the guidelines to be subject to review and revision every 3 years.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of ²/₃ of the membership of each house of the Legislature.

(1)Existing law requires the State Energy Resources Conservation and Development Commission Commission (Energy Commission), in coordination with specified entities, to develop a strategic plan for offshore wind energy developments installed off the California coast in federal waters. Existing law requires, if the commission requests the Department of Water Resources to procure eligible energy resources, and the department elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources, as provided, the commission, in consultation with the department, to develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of costs incurred by the department relating to bids for the development of eligible energy resources. waters and a second-phase plan and strategy for seaport readiness that builds on the recommendations and alternatives in the strategic plan, as specified. Existing law establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by the Energy Commission for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities, including environmental impacts monitoring and workforce development grants.

This bill would establish in the State Treasury the Local and Tribal Communities Offshore Wind Community Capacity Building Fund and authorize moneys in the fund to be used, upon appropriation by the Legislature, by the Energy Commission to establish the Offshore Wind Community Capacity Building Fund Grant Program to award grants for the purpose of building capacity within local communities, as described, communities and California tribal communities to engage in the process of offshore wind energy development. development, as specified. The bill would make certain local communities, California tribes, as described, and nonprofit organizations, as described, organizations eligible for the grants. grants, as described. The bill would require the department Energy Commission to establish a grant application process for the fund, program, develop guidelines for the use of grant moneys awarded, awarded from the fund, and prepare and submit an annual report to the Legislature on the implementation and effectiveness of the fund, program, as specified.

Existing law requires the State Energy Resources Conservation and Development Commission, in coordination with specified agencies, to develop a strategic plan for offshore wind energy developments installed off the California coast in federal waters, and requires the commission to submit the strategic plan to the Natural Resources Agency and the Legislature on or before June 30, 2023, as specified.

This bill would declare the intent of the Legislature to enact legislation to adopt policies to ensure equity and justice in Californias offshore wind energy development.

GOVERNOR'S VETO

GV Bill Id:AB 2537

Author:(Addis)

As Enrolled Ver:September 3, 2024

2/3 vote

SUMMARY

Creates the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local and tribal communities to support engagement on offshore wind (OSW) energy, and would make a continuous appropriation by expanding uses for which program funds can be allocated.

Senate Amendments

1. Include definitions for the following terms "donations account;" "grant account;" and, "offshore wind entity."
2. Provide distinction between uses of the Voluntary Offshore Wind and Coastal Resources Protection Fund, donation account, and grant account.
3. Replace term "leaseholders" with offshore wind entities.
4. Authorize the State Energy Resources Conservation and Development Commission (CEC) to use up to 5% of the total amount deposited into the Offshore Wind Community Capacity Funding Grant Account, if needed, to administer the Offshore Wind Community Capacity Funding Grant Account.
5. Require that financial assistance provided by offshore wind entities to fund capacity funding activities and grants to be used for activities related to consultation for purposes of, and participation in, project planning and development; activities related to the development of local and tribal benefit agreements; or, capacity funding grants.
6. Require financial assistance provided by offshore wind entities to be subject to specified reporting requirements.
7. Provide that eligible entities for the capacity funding activities and grants include local communities, California tribes, or a nonprofit organization selected by California tribes, including federally recognized tribes or California Native American tribes identified on the contact list maintained by the Native American Heritage Commission, to represent their interest, or a coalition of multiple of these eligible entities.
8. Require the CEC, in consultation with local communities, tribes, and other relevant stakeholders, to develop, through a public process that includes holding public workshops, guidelines for the use of those money from the Voluntary Offshore Wind and Coastal Resources Protection Fund.
9. Authorize the guidelines to include categories of eligible activities, application requirements, and criteria for evaluating applicants. 
10. Establish an annual deadline for the CEC to submit a report to the Legislature.

Governor’s Veto Message

While I share the author's desire to ensure communities hosting OSW projects are resources to constructively engage in their planning and development, this bill falls short of providing a viable funding stream to accomplish this very objective. I encourage the author and the OSW developers to collaborate further with communities to identify an approach that not only fosters capacity for engagement but considers community benefits from the development of these projects.

COMMENTS

AB 209 (Committee on Budget), Chapter 251, Statutes of 2022, among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

This bill expands that fund to include capacity building grants within local communities and tribal communities to engage in the process of offshore wind energy development, including, but not limited to, activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, and math, and the development and implementation of local and tribal benefit agreements.

According to the Author

As offshore wind energy moves forward in the waters off California's coastline, including off the coast of Morro Bay in my district, input from local communities and tribes is critically important. Despite this, I have heard loud and clear from local communities—like small tribes and cities—that there is a gap in resources preventing them from participating in offshore wind energy planning conversations. AB 2537 will authorize the CEC to provide capacity building grants to tribes and local communities, enhancing their ability to engage in the planning, development, and mitigation of offshore wind development.

Arguments in Support

A coalition of environmental organizations writes in support of this bill: "California's ambitious goals for offshore wind power also require thoughtful investments into communities that will be directly impacted by this planning process and its related port and transmission development. Tribes and local governments are important decision-makers in offshore wind development that need further capacity to support the permitting process. Local community-based organizations and stakeholder engagement in state and federal permitting processes are also vital to ensure that offshore wind can benefit all Californians. We believe that AB 2537 is essential for the thoughtful planning of California's offshore wind development to protect the state's cultural and natural resources."

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Senate Appropriations Committee, this bill will result in ongoing costs in the hundreds of thousands of dollars annually (Energy Resources Program Account [ERPA] or General Fund) for the CEC to implement provisions of this bill. While ERPA is the primary operating account of the CEC, because of the ongoing structural deficit within ERPA, staff notes it may not be the most appropriate funding source to support the implementation of this bill. Additional unknown, but potentially significant ongoing cost pressure (Voluntary Offshore Wind and Coastal Resources Protection Fund) for capacity funding activities and grants within local and tribal communities encouraging engagement in the process of OSW energy development.

VOTES

ASM NATURAL RESOURCES: 10-0-1

YES: Bryan, Flora, Friedman, Hoover, Kalra, Joe Patterson, Muratsuchi, Pellerin, Wicks, Wood

ABS, ABST OR NV: Bauer-Kahan

ASM UTILITIES AND ENERGY: 15-0-1

YES: Petrie-Norris, Bauer-Kahan, Calderon, Chen, Connolly, Friedman, Holden, Joe Patterson, Reyes, Santiago, Schiavo, Ting, Wallis, Wood, Zbur

ABS, ABST OR NV: Jim Patterson

ASM APPROPRIATIONS: 12-1-2

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Dixon

ABS, ABST OR NV: Jim Patterson, Ta

ASSEMBLY FLOOR: 64-0-16

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Mike Fong, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Dixon, Essayli, Flora, Vince Fong, Friedman, Gallagher, Holden, Mathis, Jim Patterson, Joe Patterson, Luz Rivas, Soria, Ta

SENATE FLOOR: 31-8-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener

NO: Dahle, Grove, Jones, Nguyen, Niello, Ochoa Bogh, Seyarto, Wilk

ABS, ABST OR NV: Alvarado-Gil

ASSEMBLY FLOOR: 66-0-13

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Flora, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Robert Rivas

ABS, ABST OR NV: Cervantes, Megan Dahle, Dixon, Essayli, Gallagher, Lackey, Mathis, Ortega, Jim Patterson, Joe Patterson, Soria, Ta, Zbur

UPDATED

VERSION: September 3, 2024

CONSULTANT: Paige Brokaw / NAT. RES. / (916) 319-2092 FN: 0005108

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2537

Author:(Addis)

As Amended Ver:August 23, 2024

2/3 vote

SUMMARY

Creates the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local and tribal communities to support engagement on offshore wind (OSW) energy, and would make a continuous appropriation by expanding uses for which program funds can be allocated.

Senate Amendments

1. Include definitions for the following terms "donations account;" "grant account;" and, "offshore wind entity."
2. Provide distinction between uses of the Voluntary Offshore Wind and Coastal Resources Protection Fund, donation account, and grant account.
3. Replace term "leaseholders" with offshore wind entities.
4. Authorize the State Energy Resources Conservation and Development Commission (CEC) to use up to 5% of the total amount deposited into the Offshore Wind Community Capacity Funding Grant Account, if needed, to administer the Offshore Wind Community Capacity Funding Grant Account.
5. Require that financial assistance provided by offshore wind entities to fund capacity funding activities and grants to be used for activities related to consultation for purposes of, and participation in, project planning and development; activities related to the development of local and tribal benefit agreements; or, capacity funding grants.
6. Require financial assistance provided by offshore wind entities to be subject to specified reporting requirements.
7. Provide that eligible entities for the capacity funding activities and grants include local communities, California tribes, or a nonprofit organization selected by California tribes, including federally recognized tribes or California Native American tribes identified on the contact list maintained by the Native American Heritage Commission, to represent their interest, or a coalition of multiple of these eligible entities.
8. Require the CEC, in consultation with local communities, tribes, and other relevant stakeholders, to develop, through a public process that includes holding public workshops, guidelines for the use of those money from the Voluntary Offshore Wind and Coastal Resources Protection Fund.
9. Authorize the guidelines to include categories of eligible activities, application requirements, and criteria for evaluating applicants. 
10. Establish an annual deadline for the CEC to submit a report to the Legislature.

COMMENTS

AB 209 (Committee on Budget), Chapter 251, Statutes of 2022, among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

This bill expands that fund to include capacity building grants within local communities and tribal communities to engage in the process of offshore wind energy development, including, but not limited to, activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, and math, and the development and implementation of local and tribal benefit agreements.

According to the Author

As offshore wind energy moves forward in the waters off California's coastline, including off the coast of Morro Bay in my district, input from local communities and tribes is critically important. Despite this, I have heard loud and clear from local communities—like small tribes and cities—that there is a gap in resources preventing them from participating in offshore wind energy planning conversations. AB 2537 will authorize the CEC to provide capacity building grants to tribes and local communities, enhancing their ability to engage in the planning, development, and mitigation of offshore wind development.

Arguments in Support

A coalition of environmental organizations writes in support of this bill: "California's ambitious goals for offshore wind power also require thoughtful investments into communities that will be directly impacted by this planning process and its related port and transmission development. Tribes and local governments are important decision-makers in offshore wind development that need further capacity to support the permitting process. Local community-based organizations and stakeholder engagement in state and federal permitting processes are also vital to ensure that offshore wind can benefit all Californians. We believe that AB 2537 is essential for the thoughtful planning of California's offshore wind development to protect the state's cultural and natural resources."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee, this bill will result in ongoing costs in the hundreds of thousands of dollars annually (Energy Resources Program Account [ERPA] or General Fund) for the CEC to implement provisions of this bill. While ERPA is the primary operating account of the CEC, because of the ongoing structural deficit within ERPA, staff notes it may not be the most appropriate funding source to support the implementation of this bill. Additional unknown, but potentially significant ongoing cost pressure (Voluntary Offshore Wind and Coastal Resources Protection Fund) for capacity funding activities and grants within local and tribal communities encouraging engagement in the process of OSW energy development.

VOTES:

ASM NATURAL RESOURCES: 10-0-1

YES: Bryan, Flora, Friedman, Hoover, Kalra, Joe Patterson, Muratsuchi, Pellerin, Wicks, Wood

ABS, ABST OR NV: Bauer-Kahan

ASM UTILITIES AND ENERGY: 15-0-1

YES: Petrie-Norris, Bauer-Kahan, Calderon, Chen, Connolly, Friedman, Holden, Joe Patterson, Reyes, Santiago, Schiavo, Ting, Wallis, Wood, Zbur

ABS, ABST OR NV: Jim Patterson

ASM APPROPRIATIONS: 12-1-2

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Dixon

ABS, ABST OR NV: Jim Patterson, Ta

ASSEMBLY FLOOR: 64-0-16

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Mike Fong, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Dixon, Essayli, Flora, Vince Fong, Friedman, Gallagher, Holden, Mathis, Jim Patterson, Joe Patterson, Luz Rivas, Soria, Ta

SENATE FLOOR: 31-8-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener

NO: Dahle, Grove, Jones, Nguyen, Niello, Ochoa Bogh, Seyarto, Wilk

ABS, ABST OR NV: Alvarado-Gil

UPDATED

VERSION: August 23, 2024

CONSULTANT: Paige Brokaw / NAT. RES. / (916) 319-2092 FN: 0004934

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2537

Author:(Addis)

As Amended Ver:August 23, 2024

2/3 vote

SUMMARY

Creates the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local and tribal communities to support engagement on offshore wind (OSW) energy, and would make a continuous appropriation by expanding uses for which program funds can be allocated.

Senate Amendments

1. Include definitions for the following terms "donations account;" "grant account;" and, "offshore wind entity."
2. Provide distinction between uses of the Voluntary Offshore Wind and Coastal Resources Protection Fund, donation account, and grant account.
3. Replace term "leaseholders" with offshore wind entities.
4. Authorize the State Energy Resources Conservation and Development Commission (CEC) to use up to 5% of the total amount deposited into the Offshore Wind Community Capacity Funding Grant Account, if needed, to administer the Offshore Wind Community Capacity Funding Grant Account.
5. Require that financial assistance provided by offshore wind entities to fund capacity funding activities and grants to be used for activities related to consultation for purposes of, and participation in, project planning and development; activities related to the development of local and tribal benefit agreements; or, capacity funding grants.
6. Require financial assistance provided by offshore wind entities to be subject to specified reporting requirements.
7. Provide that eligible entities for the capacity funding activities and grants include local communities, California tribes, or a nonprofit organization selected by California tribes, including federally recognized tribes or California Native American tribes identified on the contact list maintained by the Native American Heritage Commission, to represent their interest, or a coalition of multiple of these eligible entities.
8. Require the CEC, in consultation with local communities, tribes, and other relevant stakeholders, to develop, through a public process that includes holding public workshops, guidelines for the use of those money from the Voluntary Offshore Wind and Coastal Resources Protection Fund.
9. Authorize the guidelines to include categories of eligible activities, application requirements, and criteria for evaluating applicants. 
10. Establish an annual deadline for the CEC to submit a report to the Legislature.

COMMENTS

AB 209 (Committee on Budget), Chapter 251, Statutes of 2022, among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

This bill expands that fund to include capacity building grants within local communities and tribal communities to engage in the process of offshore wind energy development, including, but not limited to, activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, and math, and the development and implementation of local and tribal benefit agreements.

According to the Author

As offshore wind energy moves forward in the waters off California's coastline, including off the coast of Morro Bay in my district, input from local communities and tribes is critically important. Despite this, I have heard loud and clear from local communities—like small tribes and cities—that there is a gap in resources preventing them from participating in offshore wind energy planning conversations. AB 2537 will authorize the CEC to provide capacity building grants to tribes and local communities, enhancing their ability to engage in the planning, development, and mitigation of offshore wind development.

Arguments in Support

A coalition of environmental organizations writes in support of this bill: "California's ambitious goals for offshore wind power also require thoughtful investments into communities that will be directly impacted by this planning process and its related port and transmission development. Tribes and local governments are important decision-makers in offshore wind development that need further capacity to support the permitting process. Local community-based organizations and stakeholder engagement in state and federal permitting processes are also vital to ensure that offshore wind can benefit all Californians. We believe that AB 2537 is essential for the thoughtful planning of California's offshore wind development to protect the state's cultural and natural resources."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee, this bill will result in ongoing costs in the hundreds of thousands of dollars annually (Energy Resources Program Account [ERPA] or General Fund) for the CEC to implement provisions of this bill. While ERPA is the primary operating account of the CEC, because of the ongoing structural deficit within ERPA, staff notes it may not be the most appropriate funding source to support the implementation of this bill. Additional unknown, but potentially significant ongoing cost pressure (Voluntary Offshore Wind and Coastal Resources Protection Fund) for capacity funding activities and grants within local and tribal communities encouraging engagement in the process of OSW energy development.

VOTES:

ASM NATURAL RESOURCES: 10-0-1

YES: Bryan, Flora, Friedman, Hoover, Kalra, Joe Patterson, Muratsuchi, Pellerin, Wicks, Wood

ABS, ABST OR NV: Bauer-Kahan

ASM UTILITIES AND ENERGY: 15-0-1

YES: Petrie-Norris, Bauer-Kahan, Calderon, Chen, Connolly, Friedman, Holden, Joe Patterson, Reyes, Santiago, Schiavo, Ting, Wallis, Wood, Zbur

ABS, ABST OR NV: Jim Patterson

ASM APPROPRIATIONS: 12-1-2

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Dixon

ABS, ABST OR NV: Jim Patterson, Ta

ASSEMBLY FLOOR: 64-0-16

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Mike Fong, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Dixon, Essayli, Flora, Vince Fong, Friedman, Gallagher, Holden, Mathis, Jim Patterson, Joe Patterson, Luz Rivas, Soria, Ta

UPDATED

VERSION: August 23, 2024

CONSULTANT: Paige Brokaw / NAT. RES. / (916) 319-2092 FN: 0004934

 THIRD READING  

Bill No: AB 2537

Author: Addis (D), et al.

Amended: 8/23/24 in Senate

Vote: 27

SENATE ENERGY, U. & C. COMMITTEE: 13-1, 6/24/24

AYES: Bradford, Ashby, Becker, Caballero, Dodd, Durazo, Eggman, Gonzalez, Limón, Newman, Rubio, Skinner, Stern

NOES: Seyarto

NO VOTE RECORDED: Dahle, Grove, Min, Wilk

SENATE NATURAL RES. & WATER COMMITTEE: 8-2, 6/25/24

AYES: Min, Allen, Eggman, Hurtado, Laird, Limón, Padilla, Stern

NOES: Seyarto, Dahle

NO VOTE RECORDED: Grove

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/15/24

AYES: Caballero, Ashby, Becker, Bradford, Wahab

NOES: Jones, Seyarto

ASSEMBLY FLOOR: 64-0, 5/22/24 - See last page for vote

SUBJECT: Energy: Voluntary Offshore Wind and Coastal Resources Protection Program: community capacity funding activities and grants

SOURCE: Brightline Defense Project

DIGEST:

This bill establishes the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local communities and tribal communities to support engagement in the process of offshore wind (OSW) energy development in California, and continuously appropriates the funding.

Senate Floor Amendments of 8/23/24 recast language to capture OSW leaseholders in a manner intended to reduce conflicts with federal authority regarding issuing OSW leases and includes additional technical and clarifying amendments.

ANALYSIS:

Existing law:

1. Requires the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission (CEC)), in coordination with specified state entities and other relevant federal, state, and local agencies, to develop a strategic plan for OSW energy developments installed off the California coast in federal waters, and requires the CEC to submit the strategic plan to the Natural Resources Agency and the Legislature on or before June 30, 2023. (Public Resources Code §25991 et seq.)
2. Establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by CEC for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of OSW facilities. (Public Resources Code §25992.10)
3. Creates, and continuously appropriates moneys in, the Voluntary Offshore Wind and Coastal Resources Protection Fund for purposes of the program and the Private Donations Account, which is created in the fund. Authorizes the CEC to accept federal and private sector moneys for purposes of the program and requires the private sector moneys to be deposited into the account and the federal moneys to be deposited into the fund. Requires the CEC to post a report on its internet website, within 30 days of receiving a donation, about specified information regarding each donation received. Authorizes the CEC to allocate moneys in the fund or account for specified purposes, including workforce development grants. (Public Resources Code §§25992.20 - 25992.21)

This bill:

1. Creates the Offshore Wind Community Capacity Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the CEC to fund capacity funding activities and award capacity funding grants, thereby making an appropriation.
2. Defines and OSW entity as any entity engaged in OSW energy development that meets specified criteria, including: (1) has a planned generation capacity of 50 megawatts (MW) or more, (2) involves development activities expected to impact the coastal environment, (3) will require the entity to obtain a lease, permit, or other authorization from various state agencies (such as: State Lands Commission (SLC), California Coastal Commission (CCC), the California Public Utilities Commission, etc.).
3. Requires an OSW entity to provide financial assistance to fund capacity funding activities and grants for the three-year period after the OSW entity executes an OSW leases.
4. Makes that financial assistance subject to the reporting requirement of the Voluntary Offshore Wind and Coastal Resources Protection Program.
5. Authorizes the CEC to use up to five percent of the total amount deposited into the Offshore Wind Community Capacity Funding Grant Account, if needed, to administer that account.
6. Requires the CEC to annually prepare and submit a report by March 1^st of each year to the Legislature on the implementation and effectiveness of activities and grants from the fund.
7. Requires the CEC to develop guidelines for the use of those moneys, and would require the guidelines to be subject to review and revision every three years.
8. Includes a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of two-thirds of the membership of each house of the Legislature.

Background

1. SB 100’s Joint Agency Report. SB 100 (De León, Chapter 312, Statutes of 2018) established the state policy that renewable and zero-carbon resources should supply 100 percent of retail sales and electricity procured in the state by 2045. This policy was recently updated under SB 1020 (Laird, Chapter 361, Statutes of 2022) which accelerated the requirement on state agencies to 100 percent by 2035, and established interim targets to meet the 100 percent goal. SB 100 includes a requirement for a Joint Agency Report as a first step to evaluate the challenges and opportunities in implementing SB 100. OSW was included as part of the core scenario in the 2021 SB 100 Joint Agency report. The OSW system availability was limited to 10 gigawatts (GW) over four resource zones: Morro Bay, Diablo Canyon, Humboldt Bay, and Cape Mendocino. The model was given an input assumption of 2030 as the first available year for bringing OSW online, given the current California Independent System Operator (CAISO) interconnection queue and resource development needs of OSW, with costs for the different zones estimated between $69 and $82 per megawatt hour (MWh) for 2030. Given these input assumptions, nearly all 10 GW of OSW was selected when made available in the model, but this selection only occurred after 2035, regardless of the scenario, and the full 10 GW was selected only in 2045. OSW energy generation is projected to be an important component of the state’s efforts to decarbonize energy generation and to achieve carbon neutrality by 2045, particularly as OSW can be a more stable and complementary resource to help integrate variable renewable energy resources. However, the report notes these are preliminary findings and further work will be needed to delve more deeply into critical topics including land use. The next joint report will be released in 2025, and one every four years later.
2. OSW potential. As of 2019, almost six GW of installed wind capacity was generating in the state, the fifth largest amount of wind capacity in the United States, with all of it generated from land-based systems. Although California has no commercial OSW generation, the National Renewable Energy Laboratory has identified 112 GW of OSW technical potential for California. However, approximately 96 percent of this potential is located in water deeper than 60 meters, where the mature, fixed-bottom turbine technology is not technically feasible. Due to the water depth in areas with high ambient winds, much of the OSW energy projects serving California are likely to be composed of very large floating wind turbines (as tall as the Eiffel Tower) anchored to the sea floor in federal waters offshore. These projects will include components in state waters, such as cables transporting the energy onshore, vessels navigating state waters to serve the projects, and docking and support facilities onshore. Depending on the type of floating structure, some assemblage of floating turbines may need to occur offshore, requiring naval cranes and vessels to stabilize such operations, and port infrastructure and specific port water depths.
3. OSW Report. AB 525 (Chiu, Chapter 231, Statutes of 2021) required the CEC, in coordination with federal, state, and local agencies, California Native American tribes, and a variety of stakeholders, to develop a strategic plan for OSW energy development in federal waters off the California coast. In August 2022, the CEC approved a planning goal of 2,000 to 5,000 MW of OSW energy capacity by 2030, and 25,000 MW by 2045. In January 2024, the CEC released a long-awaited Draft Strategic Plan for Offshore Wind Development in three volumes which among its contents, t discusses the impacts and strategies to address those impacts in California’s underserved communities.
4. California Native Tribes – Impacts & Strategies. According to the AB 525 Report, the CEC and coordinating agencies had numerous tribal consultations and community engagement discussions on the potential impact of OSW energy development. There were a myriad of concerns for California Native Tribes, each with their own perspective, concerns, and priorities regarding OSW, including impacts to local fishing for subsistence and cultural impacts. On the North Coast, there have been significant concerns about the impacts on the population and migration patterns of the already endangered salmon. They have concerns about the impacts of OSW and associated infrastructure on tribal cultural resources. Additionally, there are concerns regarding the fiscal impact that comes with participating at ongoing meetings on planning processes such permitting processes. In Humboldt, there are three federally-recognized Tribes near the OSW lease site: the Yurok, the Wiyot, and the Mattole. Morro Bay and Diablo Canyon are ancestral lands of cultural, ceremonial, and spiritual importance to the Santa Ynez Band of Chumash Indians Tribe, and the Gabrieleño are near the Santa Barbara coastline.
5. Strategies for Addressing Impacts. Some of the suggestions in the AB 525 Report include conducting meaningful consultation with tribal representatives, supporting the establishment of strong, legally binding tribal community benefits agreements, continuing to study impacts on tribes including exploring public safety measures to reduce violent crime and sexual and gender-based violence against California tribes and other vulnerable populations, and collaborating with tribes on avoidance, mitigation, and co-management opportunities.
6. Underserved Communities – Impacts & Strategies. Supporters of this bill note that historically underserved communities have experienced a disproportionate share of economic, health and environmental burdens, which include poverty, high unemployment, air, and water pollution. Supporters of this bill state that OSW development can provide a variety of benefits such as the creation of well-paying jobs and new tax revenues. Industrial activity can impact underserved communities living near ports through air, water, noise, and light pollution. Additional air pollution may also occur from increased vehicle emissions on land and vessel emissions offshore to transport materials and turbines. Advocates would like to see increased engagement with potentially impacted communities. The CEC AB 525 Report notes that strategies to address these impacts include conducting early and meaningful community outreach and engagement efforts throughout the OSW planning and development process.
7. SB 286 Fisheries Working Group. SB 286 (McGuire, Chapter 386, Statutes of 2023) established the California Offshore Wind Energy Fisheries Working Group (Working Group) which includes representatives from the relevant permitting and resource agencies, commercial and recreational fishing industries, OSW energy industry, California Native American Tribes with affected tribal fisheries, and other stakeholders, as determined by the CCC. The Working Group is required to develop a statewide strategy by January 1, 2026, that proposes ways to minimize impacts of OSW on ocean fisheries, including the application of best practices in compensating impacted stakeholders. After the statewide strategy is developed, the CCC must review and adopt it on or before May 1, 2026. The Working Group is responsible for creating a framework for reasonable compensatory mitigation for unavoidable impacts associated with OSW energy projects and include a payment structure to reasonably compensate commercial, tribal, and recreational fisheries and impacted commercial fish processors. The California SLC – or a local trustee of granted public trust lands standing in its place – must consider reasonable compensatory mitigation for unavoidable impacts to fishing and tribal interests when granting a lease for an OSW energy project. In addition, SLC is required to deposit revenues generated from the leases into a newly created Offshore Wind Energy Resiliency Fund. Upon appropriation by the Legislature, the fund will be made available for reasonable compensatory mitigation for unavoidable impacts.
8. AB 209 establishes voluntary fund and program. AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) established the Voluntary Offshore Wind and Coastal Resources Protection Program at the CEC to support OSW development. The CEC provides grants to public and private entities, including state agencies, tribal entities, local governmental agencies, research institutions, and nonprofit entities. The CEC can also accept federal and private sector money for the Voluntary Program. AB 209 also established the Voluntary Fund which accepts donations from private and federal sources and requires specified reporting of these donations.

Comments

1. Need for this bill. The proponents of this bill contend that the development of OSW energy projects has the potential for both valuable benefits and harmful negative impacts. They argue that it’s crucial that communities have the opportunity to participate in this permitting, siting, and project development process. The proponents state that communities and tribes located close to OSW impacts, in particular, have a vested interest in decision-making opportunities during the OSW development process. However, not all communities have the financial means to do so. One way to facilitate their engagement is community capacity building to fund participation at meetings, hiring a representative(s) or consultants, etc. This bill would require OSW entities, as defined, to provide an undetermined amount of financial assistance to fund capacity building activities and grants and provided for the three-year period after the OSW entity executes a California OSW lease. The intent of this bill is that the amounts would be negotiated with OSW entities (essentially leaseholders) and that the CEC would award funding to tribes and local communities to engage in the development processes.
2. Continuous appropriation. This bill embeds the new Offshore Wind Community Capacity Funding Grant Account and its related activities within the statutory language adopted in AB 209 which creates a continuous appropriation. This bill is silent on the amount of the financial assistance for capacity building with the notion that this would likely be negotiated with the OSW entities. The CEC would have the discretion to award any funding deposited into the Account in an equitable manner determined by the CEC. This bill requires the CEC to develop guidelines for the use of the moneys, working with relevant stakeholders, and to revise the guidelines via a public process every three years.

Related/Prior Legislation

AB 3006 (Zbur, 2024) would have amended the definition of “infrastructure” for purposes of the Governor’s annual infrastructure plan to include port infrastructure for OSW energy development. The bill was held in the Senate Appropriations Committee.

SB 286 (McGuire, Chapter 386, Statutes of 2023) established, among its provisions, the Working Group to address OSW project impacts to certain fisheries and other interests, including providing for compensation to those affected, among other things.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) established, among its many energy-related provisions, the Voluntary Offshore Wind and Coastal Resources Protection Program.

AB 525 (Chiu, Chapter 231, Statutes of 2022) required the CEC to establish, by June 1, 2022, planning goals, as specified, for the years 2030 and 2045 from electricity generated by OSW. The bill also required the CEC, in coordination with specified agencies, to develop a strategic plan, as specified, for OSW developments and to submit the plan to the Natural Resources Agency and the Legislature by June 30, 2023.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• Ongoing costs in the hundreds of thousands of dollars annually (Energy Resources Program Account [ERPA] or General Fund) for the California Energy Commission (CEC) to implement provisions of this bill. While ERPA is the primary operating account of the CEC, because of the ongoing structural deficit within ERPA, staff notes it may not be the most appropriate funding source to support the implementation of this bill.
• Unknown but potentially significant ongoing cost pressure (Voluntary Offshore Wind and Coastal Resources Protection Fund) for capacity funding activities and grants within local and tribal communities encouraging engagement in the process of OSW energy development.

SUPPORT: (Verified 8/13/24)

Brightline Defense Project (source)
350 Humboldt
350 Sacramento

American Clean Power-California

California Chamber of Commerce

California Environmental Voters
Central Coast Alliance United for a Sustainable Economy
Central Coast Legislative Caucus

City of Morro Bay

Climate Action California

County of San Luis Obispo

Elected Officials to Protect America - California
Environment California
Environmental Defense Center
Environmental Protection Information Center
Humboldt California's Redwood Coast
Monterey Bay Aquarium Foundation
National Resources Defense Council
National Wildlife Federation
Peninsula Community Collaborative
Redwood Community Action Agency
Redwood Region Climate & Community Resilience Hub
Sierra Club California
SLO Climate Coalition
The Climate Reality Project, Los Angeles Chapter
The Climate Reality Project, San Fernando Valley Chapter
Union of Concerned Scientists
USC Schwarzenegger Institute

OPPOSITION: (Verified 8/13/24)

None received

ARGUMENTS IN SUPPORT: In support of this bill, Brightline Defense states:

In our engagement with community-based organizations, Tribal members, and community leaders across the state, we have heard a resounding urgency and need for equity in California’s offshore wind future and a particular need for opportunities to expand technical and community capacity to deeply engage in ongoing processes. Brightline is pleased to sponsor AB 2537, a bill that will help create necessary and important funding for communities to prepare for offshore wind development. Tribes and local governments are important decision makers in offshore wind development that need further capacity to support the permitting process. Local community-based organizations and stakeholder engagement in state and federal permitting processes are also vital to ensure that offshore wind is able to benefit all Californians. As permitting and state planning processes move forward, community capacity to engage at this time is critical.

ASSEMBLY FLOOR: 64-0, 5/22/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Mike Fong, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Dixon, Essayli, Flora, Vince Fong, Friedman, Gallagher, Holden, Mathis, Jim Patterson, Joe Patterson, Luz Rivas, Soria, Ta

Prepared by: Nidia Bautista / E., U. & C. / (916) 651-4107

8/26/24 17:01:18

**** END ****

 THIRD READING  

Bill No: AB 2537

Author: Addis (D), et al.

Amended: 8/15/24 in Senate

Vote: 27

SENATE ENERGY, U. & C. COMMITTEE: 13-1, 6/24/24

AYES: Bradford, Ashby, Becker, Caballero, Dodd, Durazo, Eggman, Gonzalez, Limón, Newman, Rubio, Skinner, Stern

NOES: Seyarto

NO VOTE RECORDED: Dahle, Grove, Min, Wilk

SENATE NATURAL RES. & WATER COMMITTEE: 8-2, 6/25/24

AYES: Min, Allen, Eggman, Hurtado, Laird, Limón, Padilla, Stern

NOES: Seyarto, Dahle

NO VOTE RECORDED: Grove

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/15/24

AYES: Caballero, Ashby, Becker, Bradford, Wahab

NOES: Jones, Seyarto

ASSEMBLY FLOOR: 64-0, 5/22/24 - See last page for vote

SUBJECT: Energy: Voluntary Offshore Wind and Coastal Resources Protection Program: community capacity funding activities and grants

SOURCE: Brightline Defense Project

DIGEST:

This bill establishes the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local communities and tribal communities to support engagement in the process of offshore wind (OSW) energy development in California, and continuously appropriates the funding.

ANALYSIS:

Existing law:

1. Requires the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission (CEC)), in coordination with specified state entities and other relevant federal, state, and local agencies, to develop a strategic plan for OSW energy developments installed off the California coast in federal waters, and requires the CEC to submit the strategic plan to the Natural Resources Agency and the Legislature on or before June 30, 2023. (Public Resources Code §25991 et seq.)
2. Establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by CEC for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of OSW facilities. (Public Resources Code §25992.10)
3. Creates, and continuously appropriates moneys in, the Voluntary Offshore Wind and Coastal Resources Protection Fund for purposes of the program and the Private Donations Account, which is created in the fund. Authorizes the CEC to accept federal and private sector moneys for purposes of the program and requires the private sector moneys to be deposited into the account and the federal moneys to be deposited into the fund. Requires the CEC to post a report on its internet website, within 30 days of receiving a donation, about specified information regarding each donation received. Authorizes the CEC to allocate moneys in the fund or account for specified purposes, including workforce development grants. (Public Resources Code §§25992.20 - 25992.21)

This bill:

1. Creates the Offshore Wind Community Capacity Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the CEC to fund capacity funding activities and award capacity funding grants, thereby making an appropriation.
2. Requires California OSW leaseholders holding a lease executed on or after July 1, 2022, to provide financial assistance to fund capacity funding activities and grants for the three-year period after the leaseholder executes an OSW leases.
3. Makes that financial assistance subject to the reporting requirement of the Voluntary Offshore Wind and Coastal Resources Protection Program.
4. Authorizes the CEC to use up to five percent of the total amount deposited into the Offshore Wind Community Capacity Funding Grant Account, if needed, to administer that account.
5. Requires the CEC to annually prepare and submit a report by March 1^st of each year to the Legislature on the implementation and effectiveness of activities and grants from the fund.
6. Requires the CEC to develop guidelines for the use of those moneys, and would require the guidelines to be subject to review and revision every three years.
7. Includes a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of two-thirds of the membership of each house of the Legislature.

Background

1. SB 100’s Joint Agency Report. SB 100 (De León, Chapter 312, Statutes of 2018) established the state policy that renewable and zero-carbon resources should supply 100 percent of retail sales and electricity procured in the state by 2045. This policy was recently updated under SB 1020 (Laird, Chapter 361, Statutes of 2022) which accelerated the requirement on state agencies to 100 percent by 2035, and established interim targets to meet the 100 percent goal. SB 100 includes a requirement for a Joint Agency Report as a first step to evaluate the challenges and opportunities in implementing SB 100. OSW was included as part of the core scenario in the 2021 SB 100 Joint Agency report. The OSW system availability was limited to 10 gigawatts (GW) over four resource zones: Morro Bay, Diablo Canyon, Humboldt Bay, and Cape Mendocino. The model was given an input assumption of 2030 as the first available year for bringing OSW online, given the current California Independent System Operator (CAISO) interconnection queue and resource development needs of OSW, with costs for the different zones estimated between $69 and $82 per megawatt hour (MWh) for 2030. Given these input assumptions, nearly all 10 GW of OSW was selected when made available in the model, but this selection only occurred after 2035, regardless of the scenario, and the full 10 GW was selected only in 2045. OSW energy generation is projected to be an important component of the state’s efforts to decarbonize energy generation and to achieve carbon neutrality by 2045, particularly as OSW can be a more stable and complementary resource to help integrate variable renewable energy resources. However, the report notes these are preliminary findings and further work will be needed to delve more deeply into critical topics including land use. The next joint report will be released in 2025, and one every four years later.
2. OSW potential. As of 2019, almost six GW of installed wind capacity was generating in the state, the fifth largest amount of wind capacity in the United States, with all of it generated from land-based systems. Although California has no commercial OSW generation, the National Renewable Energy Laboratory has identified 112 GW of OSW technical potential for California. However, approximately 96 percent of this potential is located in water deeper than 60 meters, where the mature, fixed-bottom turbine technology is not technically feasible. Due to the water depth in areas with high ambient winds, much of the OSW energy projects serving California are likely to be composed of very large floating wind turbines (as tall as the Eiffel Tower) anchored to the sea floor in federal waters offshore. These projects will include components in state waters, such as cables transporting the energy onshore, vessels navigating state waters to serve the projects, and docking and support facilities onshore. Depending on the type of floating structure, some assemblage of floating turbines may need to occur offshore, requiring naval cranes and vessels to stabilize such operations, and port infrastructure and specific port water depths.
3. OSW Report. AB 525 (Chiu, Chapter 231, Statutes of 2021) required the CEC, in coordination with federal, state, and local agencies, California Native American tribes, and a variety of stakeholders, to develop a strategic plan for OSW energy development in federal waters off the California coast. In August 2022, the CEC approved a planning goal of 2,000 to 5,000 MW of OSW energy capacity by 2030, and 25,000 MW by 2045. In January 2024, the CEC released a long-awaited Draft Strategic Plan for Offshore Wind Development in three volumes which among its contents, t discusses the impacts and strategies to address those impacts in California’s underserved communities.
4. California Native Tribes – Impacts & Strategies. According to the AB 525 Report, the CEC and coordinating agencies had numerous tribal consultations and community engagement discussions on the potential impact of OSW energy development. There were a myriad of concerns for California Native Tribes, each with their own perspective, concerns, and priorities regarding OSW, including impacts to local fishing for subsistence and cultural impacts. On the North Coast, there have been significant concerns about the impacts on the population and migration patterns of the already endangered salmon. They have concerns about the impacts of OSW and associated infrastructure on tribal cultural resources. Additionally, there are concerns regarding the fiscal impact that comes with participating at ongoing meetings on planning processes such permitting processes. In Humboldt, there are three federally-recognized Tribes near the OSW lease site: the Yurok, the Wiyot, and the Mattole. Morro Bay and Diablo Canyon are ancestral lands of cultural, ceremonial, and spiritual importance to the Santa Ynez Band of Chumash Indians Tribe, and the Gabrieleño are near the Santa Barbara coastline.
5. Strategies for Addressing Impacts. Some of the suggestions in the AB 525 Report include conducting meaningful consultation with tribal representatives, supporting the establishment of strong, legally binding tribal community benefits agreements, continuing to study impacts on tribes including exploring public safety measures to reduce violent crime and sexual and gender-based violence against California tribes and other vulnerable populations, and collaborating with tribes on avoidance, mitigation, and co-management opportunities.
6. Underserved Communities – Impacts & Strategies. Supporters of this bill note that historically underserved communities have experienced a disproportionate share of economic, health and environmental burdens, which include poverty, high unemployment, air, and water pollution. Supporters of this bill state that OSW development can provide a variety of benefits such as the creation of well-paying jobs and new tax revenues. Industrial activity can impact underserved communities living near ports through air, water, noise, and light pollution. Additional air pollution may also occur from increased vehicle emissions on land and vessel emissions offshore to transport materials and turbines. Advocates would like to see increased engagement with potentially impacted communities. The CEC AB 525 Report notes that strategies to address these impacts include conducting early and meaningful community outreach and engagement efforts throughout the OSW planning and development process.
7. SB 286 Fisheries Working Group. SB 286 (McGuire, Chapter 386, Statutes of 2023) established the California Offshore Wind Energy Fisheries Working Group (Working Group) which includes representatives from the relevant permitting and resource agencies, commercial and recreational fishing industries, OSW energy industry, California Native American Tribes with affected tribal fisheries, and other stakeholders, as determined by the California Coastal Commission. The Working Group is required to develop a statewide strategy by January 1, 2026, that proposes ways to minimize impacts of OSW on ocean fisheries, including the application of best practices in compensating impacted stakeholders. After the statewide strategy is developed, the CCC must review and adopt it on or before May 1, 2026. The Working Group is responsible for creating a framework for reasonable compensatory mitigation for unavoidable impacts associated with OSW energy projects and include a payment structure to reasonably compensate commercial, tribal, and recreational fisheries and impacted commercial fish processors. The California State Lands Commission (SLC) – or a local trustee of granted public trust lands standing in its place – must consider reasonable compensatory mitigation for unavoidable impacts to fishing and tribal interests when granting a lease for an OSW energy project. In addition, SLC is required to deposit revenues generated from the leases into a newly created Offshore Wind Energy Resiliency Fund. Upon appropriation by the Legislature, the fund will be made available for reasonable compensatory mitigation for unavoidable impacts.
8. AB 209 establishes voluntary fund and program. AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) established the Voluntary Offshore Wind and Coastal Resources Protection Program at the CEC to support OSW development. The CEC provides grants to public and private entities, including state agencies, tribal entities, local governmental agencies, research institutions, and nonprofit entities. The CEC can also accept federal and private sector money for the Voluntary Program. AB 209 also established the Voluntary Fund which accepts donations from private and federal sources and requires specified reporting of these donations.

Comments

1. Need for this bill. The proponents of this bill contend that the development of OSW energy projects has the potential for both valuable benefits and harmful negative impacts. They argue that it’s crucial that communities have the opportunity to participate in this permitting, siting, and project development process. The proponents state that communities and tribes located close to OSW impacts, in particular, have a vested interest in decision-making opportunities during the OSW development process. However, not all communities have the financial means to do so. One way to facilitate their engagement is community capacity building. This bill would require OSW lease holders to provide an undetermined amount of financial assistance to fund capacity building activities and grants and provided for the three-year period after the leaseholder executes a California OSW lease.
2. Continuous appropriation. This bill embeds the new Offshore Wind Community Capacity Funding Grant Account and its related activities within the statutory language adopted in AB 209 which creates a continuous appropriation. This bill is silent on the amount of the financial assistance for capacity building with the notion that this would likely be negotiated with the OSW leaseholders. The CEC would have the discretion to award any funding deposited into the Account in an equitable manner determined by the CEC. This bill requires the CEC to develop guidelines for the use of the moneys, working with relevant stakeholders, and to revise the guidelines via a public process every three years.

Related/Prior Legislation

AB 3006 (Zbur, 2024) amends the definition of “infrastructure” for purposes of the Governor’s annual infrastructure plan to include port infrastructure for OSW energy development. The bill was held in the Senate Appropriations Committee.

SB 286 (McGuire, Chapter 386, Statutes of 2023) among its provisions, established the Working Group to address OSW project impacts to certain fisheries and other interests, including providing for compensation to those affected, among other things.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022), among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

AB 525 (Chiu, Chapter 231, Statutes of 2022) required the CEC to establish, by June 1, 2022, planning goals, as specified, for the years 2030 and 2045 from electricity generated by OSW. The bill also required the CEC, in coordination with specified agencies, to develop a strategic plan, as specified, for OSW developments and to submit the plan to the Natural Resources Agency and the Legislature by June 30, 2023.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

According to the Senate Committee on Appropriations:

• Ongoing costs in the hundreds of thousands of dollars annually (Energy Resources Program Account [ERPA] or General Fund) for the California Energy Commission (CEC) to implement provisions of this bill. While ERPA is the primary operating account of the CEC, because of the ongoing structural deficit within ERPA, staff notes it may not be the most appropriate funding source to support the implementation of this bill.
• Unknown but potentially significant ongoing cost pressure (Voluntary Offshore Wind and Coastal Resources Protection Fund) for capacity funding activities and grants within local and tribal communities encouraging engagement in the process of OSW energy development.

SUPPORT: (Verified 8/13/24)

Brightline Defense Project (source)
350 Humboldt
350 Sacramento

American Clean Power-California

California Chamber of Commerce

California Environmental Voters
Central Coast Alliance United for a Sustainable Economy
Central Coast Legislative Caucus

City of Morro Bay

Climate Action California

County of San Luis Obispo

Elected Officials to Protect America - California
Environment California
Environmental Defense Center
Environmental Protection Information Center
Humboldt California's Redwood Coast
Monterey Bay Aquarium Foundation
National Resources Defense Council
National Wildlife Federation
Peninsula Community Collaborative
Redwood Community Action Agency
Redwood Region Climate & Community Resilience Hub
Sierra Club California
SLO Climate Coalition
The Climate Reality Project, Los Angeles Chapter
The Climate Reality Project, San Fernando Valley Chapter
Union of Concerned Scientists
USC Schwarzenegger Institute

OPPOSITION: (Verified 8/13/24)

None received

ARGUMENTS IN SUPPORT: In support of this bill, Brightline Defense states:

In our engagement with community-based organizations, Tribal members, and community leaders across the state, we have heard a resounding urgency and need for equity in California’s offshore wind future and a particular need for opportunities to expand technical and community capacity to deeply engage in ongoing processes. Brightline is pleased to sponsor AB 2537, a bill that will help create necessary and important funding for communities to prepare for offshore wind development. Tribes and local governments are important decision makers in offshore wind development that need further capacity to support the permitting process. Local community-based organizations and stakeholder engagement in state and federal permitting processes are also vital to ensure that offshore wind is able to benefit all Californians. As permitting and state planning processes move forward, community capacity to engage at this time is critical.

ASSEMBLY FLOOR: 64-0, 5/22/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Mike Fong, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Dixon, Essayli,

Flora, Vince Fong, Friedman, Gallagher, Holden, Mathis, Jim Patterson, Joe Patterson, Luz Rivas, Soria, Ta

Prepared by: Nidia Bautista / E., U. & C. / (916) 651-4107

8/19/24 12:35:56

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2537 (Addis) - Energy: Voluntary Offshore Wind and Coastal Resources Protection Program: community capacity funding activities and grants

Bill Summary:

This bill would establish the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local and tribal communities to support engagement on offshore wind (OSW) energy, and would make a continuous appropriation by expanding uses for which program funds can be allocated.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 15, 2024

Fiscal Impact:

• Ongoing costs in the hundreds of thousands of dollars annually (Energy Resources Program Account [ERPA] or General Fund) for the California Energy Commission (CEC) to implement provisions of this bill. While ERPA is the primary operating account of the CEC, because of the ongoing structural deficit within ERPA, staff notes it may not be the most appropriate funding source to support the implementation of this bill.
• Unknown but potentially significant ongoing cost pressure (Voluntary Offshore Wind and Coastal Resources Protection Fund) for capacity funding activities and grants within local and tribal communities encouraging engagement in the process of OSW energy development.

Author Amendments:

These amendments would allow the CEC to use up to 5% of funds to cover the cost of administering the grant program, clarify which leaseholders are covered, and allow a coalition of eligible entities to apply for a grant as a single entity.

The author amendments would also permit the CEC to use processes and guidelines established for other similar programs in developing guidelines for the Offshore Wind Community Capacity Funding Grant Account.

Committee Amendments:

The committee amendment would remove the author amendment permitting the CEC to use established processes and guidelines.

-- END --

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2537 (Addis) - Energy: Voluntary Offshore Wind and Coastal Resources Protection Program: community capacity funding activities and grants

Bill Summary:

This bill would establish the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local and tribal communities to support engagement on offshore wind (OSW) energy, and would make a continuous appropriation by expanding uses for which program funds can be allocated.

Fiscal Impact:

• The California Energy Commission (CEC) estimates ongoing costs of about $240,762 (Energy Resources Program Account [ERPA] or General Fund) to implement provisions of this bill. While ERPA is the primary operating account of the CEC, because of the ongoing structural deficit within ERPA, staff notes it may not be the most appropriate funding source to support the implementation of this bill.
• Unknown but potentially significant ongoing cost pressure (Voluntary Offshore Wind and Coastal Resources Protection Fund) for capacity funding activities and grants within local and tribal communities encouraging engagement in the process of OSW energy development.

Background:

SB 100 (De León, Chapter 312, Statutes of 2018) established the state policy that renewable and zero-carbon resources should supply 100 percent of retail sales and electricity procured in the state by 2045. This policy was recently updated under SB 1020 (Laird, Chapter 361, Statutes of 2022) which accelerated the requirement on state agencies to 100 percent by 2035, and established interim targets to meet the 100 percent goal.

As of 2019, almost six GW of installed wind capacity was generating in the state, the fifth largest amount of wind capacity in the United States, with all of it generated from land-based systems. Although California has no commercial OSW generation, the National Renewable Energy Laboratory has identified 112 GW of OSW technical potential for California.

AB 525 (Chiu, Chapter 231, Statutes of 2021) required the CEC, in coordination with federal, state, and local agencies, California Native American tribes, and a variety of stakeholders, to develop a strategic plan for OSW energy development in federal waters off the California coast. In August 2022, the CEC approved a planning goal of 2,000 to 5,000 MW of OSW energy capacity by 2030, and 25,000 MW by 2045. In January 2024, the CEC released a long-awaited Draft Strategic Plan for Offshore Wind Development in three volumes, and is currently taking public comment on this plan. Among its contents, the strategic plan discusses the impacts and strategies to address those impacts in California’s underserved communities.

Some of the suggestions for addressing impacts in the AB 525 Report include conducting meaningful consultation with tribal representatives, supporting the establishment of strong, legally binding tribal community benefits agreements, continuing to study impacts on tribes including exploring public safety measures to reduce violent crime and sexual and gender-based violence against California tribes and other vulnerable populations, and collaborating with tribes on avoidance, mitigation, and co-management opportunities.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) established the Voluntary Offshore Wind and Coastal Resources Protection Program at the CEC to support OSW development. The CEC provides grants to public and private entities, including state agencies, tribal entities, local governmental agencies, research institutions, and nonprofit entities. The CEC can also accept federal and private sector money for the Voluntary Program. AB 209 also established the Voluntary Fund which accepts donations from private and federal sources.

Proposed Law:

This bill would establish the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local and tribal communities to support engagement on OSW energy, and would make a continuous appropriation. Specifically, it would:

1. Authorize the CEC to allocate moneys in the fund or account for capacity funding activities and grants within local communities and tribal communities to engage in the process of OSW energy development. By expanding the purposes for which continuously appropriated moneys may be allocated, this bill would make an appropriation.
2. Create the Offshore Wind Community Capacity Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the CEC to fund capacity funding activities and award capacity funding grants, thereby making an appropriation, as specified.
3. Require California OSW leaseholders to provide financial assistance to fund capacity funding activities and grants for the three-year period after the leaseholder executes an OSW lease, as provided. Make financial assistance subject to reporting requirements, as specified.
4. Require the CEC to annually prepare and submit a report, on or before March 1 of each year, to the Legislature on the implementation and effectiveness of those activities and grants.
5. Require the CEC to develop guidelines for the use of those moneys, and would require the guidelines to be subject to review and revision every three years.
6. Include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of two-thirds of the membership of each house of the Legislature.

Related Legislation:

AB 3006 (Zbur, 2024) would amend the definition of “infrastructure” for purposes of the Governor’s annual infrastructure plan to include port infrastructure for OSW energy development.

SB 286 (McGuire, Chapter 386, Statutes of 2023) among its provisions, established the Working Group to address OSW project impacts to certain fisheries and other interests, including providing for compensation to those affected, among other things.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022), among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

AB 525 (Chiu, Chapter 231, Statutes of 2022) required the CEC to establish, by June 1, 2022, planning goals, as specified, for the years 2030 and 2045 from electricity generated by OSW. The bill also required the CEC, in coordination with specified agencies, to develop a strategic plan, as specified, for OSW developments and to submit the plan to the Natural Resources Agency and the Legislature by June 30, 2023.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Steven Bradford, Chair

2023 - 2024 Regular

Bill No: AB 2537 Hearing Date: 6/24/2024

SUBJECT: Energy: Voluntary Offshore Wind and Coastal Resources Protection Program: community capacity funding activities and grants

DIGEST: This bill establishes the Offshore Wind Community Capacity Funding Grant Account for the purpose of building capacity within local communities and tribal communities to support engagement of the process of offshore wind (OSW) energy development in California, and continuously appropriates the funding.

ANALYSIS:

Existing law:

1. Requires the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission (CEC)), in coordination with specified state entities and other relevant federal, state, and local agencies, to develop a strategic plan for OSW energy developments installed off the California coast in federal waters, and requires the CEC to submit the strategic plan to the Natural Resources Agency and the Legislature on or before June 30, 2023. (Public Resources Code §25991 et seq.)
2. Establishes the policy that all of the state's retail electricity be supplied with a mix of renewable portfolio standard-eligible and zero-carbon resources by December 31, 2045, for a total of 100 percent clean energy. Requires the California Public Utilities Commission (CPUC), in consultation with the CEC, California Air Resources Board and all California balancing authorities, to issue a joint report to the Legislature by January 1, 2021, reviewing and evaluating the 100 percent clean energy policy, and every four years thereafter. (Public Utilities Code § 454.53)
3. Establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by CEC for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of OSW facilities. (Public Resources Code §25992.10)
4. Creates, and continuously appropriates moneys in, the Voluntary Offshore Wind and Coastal Resources Protection Fund for purposes of the program and the Private Donations Account, which is created in the fund. (Public Resources Code §25992.20)
5. Authorizes the CEC to accept federal and private sector moneys for purposes of the program and requires the private sector moneys to be deposited into the account and the federal moneys to be deposited into the fund. Existing law authorizes the CEC to allocate moneys in the fund or account for specified purposes, including workforce development grants. (Public Resources Code §25992.21)
6. Requires, if the CPUC requests the Department of Water Resources (DWR) to procure eligible energy resources, and DWR elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources, as provided, the CPUC, in consultation with DWR, to develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of costs incurred by DWR relating to bids for the development of eligible energy resources. (Water Code §80820)

This bill:

1. Authorizes the CEC to allocate moneys in the fund or account for capacity funding activities and grants within local communities and tribal communities to engage in the process of OSW energy development. By expanding the purposes for which continuously appropriated moneys may be allocated, this bill would make an appropriation.
2. Creates the Offshore Wind Community Capacity Funding Grant Account in the fund, and would continuously appropriate the moneys in this account to the CEC to fund capacity funding activities and award capacity funding grants, thereby making an appropriation, as specified.
3. Requires California OSW leaseholders to provide financial assistance to fund capacity funding activities and grants for the three-year period after the leaseholder executes an OSW lease, as provided.
4. Requires the CEC to annually prepare and submit a report to the Legislature on the implementation and effectiveness of those activities and grants.
5. Requires the CEC to develop guidelines for the use of those moneys, and would require the guidelines to be subject to review and revision every three years.
6. Includes a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of two-thirds of the membership of each house of the Legislature.

Background

California’s clean energy goals. SB 100 (De León, Chapter 312, Statutes of 2018) established the state policy that renewable and zero-carbon resources should supply 100 percent of retail sales and electricity procured in the state by 2045. This policy was recently updated under SB 1020 (Laird, Chapter 361, Statutes of 2022) which accelerated the requirement on state agencies to 100 percent by 2035, and established interim targets to meet the 100 percent goal.

SB 100’s Joint Agency Report. SB 100 established a target for renewable and zero-carbon resources to supply 100 percent of retail electricity sales by 2045 and includes a requirement for a Joint Agency Report as a first step to evaluate the challenges and opportunities in implementing SB 100. OSW was included as part of the core scenario in the 2021 SB 100 Joint Agency report. The OSW system availability was limited to 10 gigawatts (GW) over four resource zones: Morro Bay, Diablo Canyon, Humboldt Bay, and Cape Mendocino. The model was given an input assumption of 2030 as the first available year for bringing OSW online, given the current California Independent System Operator (CAISO) interconnection queue and resource development needs of OSW, with costs for the different zones estimated between $69 and $82 per megawatt hour (MWh) for 2030. Given these input assumptions, nearly all 10 GW of OSW was selected when made available in the model, but this selection only occurred after 2035, regardless of the scenario, and the full 10 GW was selected only in 2045. OSW energy generation is projected to be an important component of the state’s efforts to decarbonize energy generation and to achieve carbon neutrality by 2045, particularly as OSW can be a more stable and complementary resource to help integrate with variable renewable energy resources. The report notes “The preliminary findings [in the report] are intended to inform state planning and are not intended as a comprehensive nor prescriptive roadmap to 2045… future work will delve deeper into critical topics such as system reliability and land use and further address energy equity and workforce needs.” The next joint report will be released in 2025, and one every four years later.

OSW potential. As of 2019, almost six GW of installed wind capacity was generating in the state, the fifth largest amount of wind capacity in the United States, with all of it generated from land-based systems. Although California has no commercial OSW generation, the National Renewable Energy Laboratory has identified 112 GW of OSW technical potential for California. However, approximately 96 percent of this potential is located in water deeper than 60 meters, where the mature, fixed-bottom turbine technology is not technically feasible. Off the coast of California, a steep continental shelf and increased wind speeds combine to make floating turbines the primary technically feasible option. Depending on the type of floating structure, some assembly of floating turbines may need to occur offshore, requiring naval cranes and vessels to stabilize such operations, and port infrastructure and specific port water depths. In contrast, most of the development of OSW globally has occurred via fixed turbine technologies where the turbines are anchored to the seabed through a solid foundation. Due to the water depth in areas with high ambient winds, much of the OSW energy projects serving California are likely to be composed of very large floating wind turbines (as tall as the Eiffel Tower) anchored to the sea floor in federal waters offshore. These projects will include components in state waters, such as cables transporting the energy onshore, vessels navigating state waters to serve the projects, and docking and support facilities onshore. Depending on the type of floating structure, some assemblage of floating turbines may need to occur offshore, requiring naval cranes and vessels to stabilize such operations, and port infrastructure and specific port water depths.

OSW Report. AB 525 (Chiu, Chapter 231, Statutes of 2021) required the CEC, in coordination with federal, state, and local agencies, California Native American tribes, and a variety of stakeholders, to develop a strategic plan for OSW energy development in federal waters off the California coast. In August 2022, the CEC approved a planning goal of 2,000 to 5,000 MW of OSW energy capacity by 2030, and 25,000 MW by 2045. In January 2024, the CEC released a long-awaited Draft Strategic Plan for Offshore Wind Development in three volumes, and is currently taking public comment on this plan. Among its contents, the strategic plan discusses the impacts and strategies to address those impacts in California’s underserved communities.

California Native Tribes – Impacts & Strategies. According to the AB 525 Report, the CEC and coordinating agencies had numerous tribal consultations and community engagement discussions on the potential impact of OSW energy development. For California Native Tribes:

• Each of them has its own perspective, concerns, and priorities regarding offshore wind development. Many tribal members depend on local fishing and harvesting of sea life for cultural, subsistence, and commercial needs, and have concerns about the potential impact on their ability to feed their families and loss of income from commercial fishing.
• On the North Coast, there have been significant concerns about the impacts on the population and migration patterns of the already endangered salmon.
• They have concerns about the impacts of OSW and associated infrastructure on tribal cultural resources.
• There have been concerns regarding the fiscal impact that comes with participating at ongoing meetings on planning processes such permitting processes.

In Humboldt, there are three federally-recognized Tribes near the OSW lease site: the Yurok, the Wiyot, and the Mattole. Morro Bay and Diablo Canyon are ancestral lands of cultural, ceremonial, and spiritual importance to the Santa Ynez Band of Chumash Indians Tribe, and the Gabrieleño are near the Santa Barbara coastline.

Strategies for Addressing Impacts. Some of the suggestions in the 525 Report include conducting meaningful consultation with tribal representatives, supporting the establishment of strong, legally binding tribal community benefits agreements, continuing to study impacts on tribes including exploring public safety measures to reduce violent crime and sexual and gender-based violence against California tribes and other vulnerable populations, and collaborating with tribes on avoidance, mitigation, and co-management opportunities.

Underserved Communities – Impacts & Strategies. Historically, underserved communities have experienced a disproportionate share of economic, health and environmental burdens, which include poverty, high unemployment, air and water pollution. OSW development can provide a variety of benefits such as the creation of well-paying jobs and new tax revenues. Industrial activity can impact underserved communities living near ports through air, water, noise, and light pollution. Additional air pollution may also occur from increased vehicle emissions on land and vessel emissions offshore to transport raw materials and turbines. Advocates would like to see increased engagement with potentially impacted communities. The CEC 525 Report notes that strategies to address these impacts include conducting early and meaningful community outreach and engagement efforts throughout the OSW planning and development process.

SB 286 Fisheries Working Group. Among its provisions, SB 286 (McGuire, Chapter 386, Statutes of 2023), established the California Offshore Wind Energy Fisheries Working Group (Working Group). This group includes representatives from the relevant permitting and resource agencies, commercial and recreational fishing industries, OSW energy industry, California Native American Tribes with affected tribal fisheries, and other stakeholders, as determined by the California Coastal Commission (CCC). The Working Group is required to develop a statewide strategy by January 1, 2026, that proposes ways to minimize impacts of OSW on ocean fisheries, including the application of best practices in compensating impacted stakeholders. After the statewide strategy is developed, the CCC must review and adopt it on or before May 1, 2026.

The Working Group is responsible for creating a framework for reasonable compensatory mitigation for unavoidable impacts associated with OSW energy projects. The framework must include a payment structure to reasonably compensate commercial, tribal, and recreational fisheries and impacted commercial fish processors. The California State Lands Commission (SLC) – or a local trustee of granted public trust lands standing in its place – must consider reasonable compensatory mitigation for unavoidable impacts to fishing and tribal interests when granting a lease for an OSW energy project. In addition, SLC is required to deposit revenues generated from the leases into a newly created Offshore Wind Energy Resiliency Fund. Upon appropriation by the Legislature, the fund will be made available for reasonable compensatory mitigation for unavoidable impacts.

AB 209 establishes voluntary fund and program. AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) established the Voluntary Offshore Wind and Coastal Resources Protection Program at the CEC to support OSW development. The CEC provides grants to public and private entities, including state agencies, tribal entities, local governmental agencies, research institutions, and nonprofit entities. The CEC can also accept federal and private sector money for the Voluntary Program. AB 209 also established the Voluntary Fund which accepts donations from private and federal sources.

Central Procurement Entity. AB 1373 (Garcia, Chapter 367, Statutes of 2023) authorized the DWR under the request of the CPUC to serve as a central procurement entity for procurement of diverse clean energy resources in order to support the state’s clean energy and reliability goals. OSW may qualify for such procurement. Furthermore, AB 1373 required the CPUC to adopt procedures that govern competitive procurement obligations and recovery of costs incurred by DWR relating to bids for the development of eligible energy resources. Under that requirement, DWR must consider a project’s viability, the useful life of a project when evaluating bids received through the solicitation process. The CPUC, by September 1, 2024, is required to determine if there is a need for procurement of these eligible energy resources.

Comments

Need for this bill. The proponents of this bill contend that the development of OSW energy projects has the potential for both valuable benefits and harmful negative impacts. They argue that it’s crucial that communities have the opportunity to participate in this permitting, siting, and project development process. The proponents state that communities and tribes located close to OSW impacts, in particular, have a vested interest in decision-making opportunities during the OSW development process. However, not all communities have the financial means to do so. One way to facilitate their engagement is community capacity building. This bill would require lease holders to provide financial assistance to fund capacity building activities and grants and provided for the three-year period after the leaseholder executes a California OSW lease.

Continuous appropriation. This bill embeds the new Offshore Wind Community Capacity Funding Grant Account and its related activities within the statutory language adopted in AB 209 which creates a continuous appropriation. This bill is silent on the amount of the financial assistance for capacity building, with the notion that this would likely be negotiated with the leaseholders. The CEC would have the discretion to award any funding deposited into the Account in an equitable manner determined by the CEC. This bill requires the CEC to develop guidelines to the use of the moneys, working with relevant stakeholders and to revise the guidelines every three years.

Need for amendments. The author and committee may wish to amend this bill to:

• Clarify that the CEC must develop the guidelines via a public process with public workshops.
• Clarify the language related to tribal participation.
• Clarify the funding collected as proposed by this bill is subject to the donation reporting requirements in existing law.
• Add a date by when the CEC must annually report to the Legislature.

Dual referral. Should this bill be approved by this committee, it will be re-referred to the Senate Committee on Natural Resources and Water.

Prior/Related Legislation

AB 3006 (Zbur, 2024) amends the definition of “infrastructure” for purposes of the Governor’s annual infrastructure plan to include port infrastructure for OSW energy development. The bill is pending in the Senate Committee on Appropriations.

SB 286 (McGuire, Chapter 386, Statutes of 2023) among its provisions, established the Working Group to address OSW project impacts to certain fisheries and other interests, including providing for compensation to those affected, among other things.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022), among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

AB 525 (Chiu, Chapter 231, Statutes of 2022) required the CEC to establish, by June 1, 2022, planning goals, as specified, for the years 2030 and 2045 from electricity generated by OSW. The bill also required the CEC, in coordination with specified agencies, to develop a strategic plan, as specified, for OSW developments and to submit the plan to the Natural Resources Agency and the Legislature by June 30, 2023.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

SUPPORT:

Brightline Defense Project, Sponsor
350 Humboldt
350 Sacramento

American Clean Power-California

California Environmental Voters
Central Coast Alliance United for a Sustainable Economy
City of Morro Bay

Climate Action California

County of San Luis Obispo

Elected Officials to Protect America - California
Environment California
Environmental Defense Center
Environmental Protection Information Center
Humboldt California's Redwood Coast
Monterey Bay Aquarium Foundation
National Resources Defense Council
National Wildlife Federation
Peninsula Community Collaborative
Redwood Community Action Agency
Redwood Region Climate & Community Resilience Hub
Sierra Club California
SLO Climate Coalition
The Climate Reality Project, Los Angeles Chapter
The Climate Reality Project, San Fernando Valley Chapter
Union of Concerned Scientists
USC Schwarzenegger Institute

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: In support of the bill, Brightline Defense states:

In our engagement with community-based organizations, Tribal members, and community leaders across the state, we have heard a resounding urgency and need for equity in California’s offshore wind future and a particular need for opportunities to expand technical and community capacity to deeply engage in ongoing processes. Brightline is pleased to sponsor AB 2537, a bill that will help create necessary and important funding for communities to prepare for offshore wind development. Tribes and local governments are important decision makers in offshore wind development that need further capacity to support the permitting process. Local community-based organizations and stakeholder engagement in state and federal permitting processes are also vital to ensure that offshore wind is able to benefit all Californians. As permitting and state planning processes move forward, community capacity to engage at this time is critical.

-- END --

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Dave Min, Chair

2023 - 2024 Regular

Bill No: AB 2537 Hearing Date: June 25, 2024

Subject: Energy: Voluntary Offshore Wind and Coastal Resources Protection Program: community capacity funding activities and grants

SUMMARY

This bill would create the Offshore Wind Community Capacity Funding Grant account within the Voluntary Offshore Wind and Coastal Resources Protection Fund, and would continuously appropriate monies in this account to the State Energy Resources and Development Commission to fund capacity funding activities and award capacity funding grants, and require California offshore wind leaseholders to provide financial assistance to fund those activities and grants, as provided, among other provisions.

BACKGROUND AND EXISTING LAW

Over the past few decades, California has established ambitious clean energy goals, including a requirement for 100% renewable and zero-carbon energy resources by the end of 2045. An important component of California’s strategy to meet these goals is the development of offshore wind energy resources.

In 2021, AB 525 (Chiu) set the foundation for the state’s efforts to develop offshore wind by requiring the State Energy Resources and Development Commission (California Energy Commission, CEC) to establish 2030 and 2045 planning goals for electricity generated by offshore wind energy resources. AB 525 also required the CEC to develop a five-part strategic plan for offshore wind development and to submit the plan to the Natural Resources Agency and the Legislature.

In 2022, the state set dual goals of 5 gigawatts (GW) of offshore wind energy by 2030 and 25 GW by 2045. At the same time, SB 1020 (Laird) accelerated the requirement for state agencies by requiring them to meet the 100% clean energy target by 2035, and created benchmarks to help the state meet the broader 100% requirement. At the federal level, President Biden set a goal of deploying 30 GW of offshore wind electricity generation by 2030.

In order to facilitate state efforts, AB 209, the 2022 energy budget trailer bill, established the Voluntary Offshore Wind and Coastal Resources Protection Program (Voluntary Program) to support activities related to offshore wind development, as provided. The CEC administers the Voluntary Program and awards funding to public and private entities, including state agencies, tribal entities, local government agencies, research institutions, and nonprofit entities through a variety of mechanisms, including grants.

Funding may be awarded to state agencies to engage in postlease assessments including project compliance and monitoring; for research; for contracts with technical experts to help to develop guidelines and best practices with the overall goal to avoid and minimize impacts to coastal resources; and to support infrastructure readiness, as provided.

AB 209 also established a new fund, the Voluntary Offshore Wind and Coastal Resources Protection Fund (Voluntary Fund), to accept donations from private and federal sources.

In late 2022, the federal Bureau of Ocean Energy Management (BOEM) awarded five leases off the shores of Morro Bay and Humboldt. The California Coastal Commission conditionally concurred with this federal action. More BOEM lease areas will be required to achieve the state’s 2045 goals, and further federal auctions are anticipated.

In January of 2024, the CEC submitted their draft Offshore Wind Strategic Plan required by AB 525 for public comment. The Strategic Plan describes the potential economic benefits of offshore wind, including direct benefits, indirect benefits, induced benefits, and potential increased tax revenue. A recent study estimates that more than 8,000 jobs will be generated by offshore wind during peak development. Offshore wind has the potential to benefit the communities located near its development.

However, the Strategic Plan and related reports also note potential negative impacts on frontline communities. Historically, communities that have hosted large infrastructure projects have borne the brunt of their impacts, including various different types of pollution, noise, and traffic impacts.

As part of the process of preparing their plan and reports, the CEC consulted with California tribes to solicit their thoughts and concerns about offshore wind development. Different tribes have unique concerns about development in their communities. Tribes have raised concerns regarding access to commercial and recreational fishing grounds, access to areas used for subsistence fishing and hunting, impacts to species that use or pass through federal lease areas, impacts to culturally important areas, and tribal access to the coastline and tribal resources. Some tribes also expressed concerns about their ability to participate in the regular meetings involved in the offshore wind development process, which involves significant costs.

Under current law, offshore wind leaseholders are required to develop community benefits agreements (CBAs) with local communities to fulfill their lease bidding credits, which may include training and educational programs and requirements for local hiring that would benefit port communities and California tribes. Considering the potential for both valuable benefits and harmful negative impacts, it’s crucial that communities have the opportunity to participate in this process. However, not all communities have the financial means to do so. One way to facilitate their engagement is through community capacity building.

The CEC’s draft Strategic Plan recommends identifying and evaluating ways to increase capacity for stakeholders to engage in the permitting, development, and mitigation of offshore wind development. The draft Strategic Plan recommends that the state should prioritize community capacity building opportunities in working toward achieving its offshore wind planning goals. Communities and tribes located close to offshore wind impacts, in particular, have a vested interest in decision-making opportunities during the offshore wind development process.

Existing law:

1. Establishes the policy goal of the state that eligible renewable energy resources and zero-carbon resources supply 100% of all retail sales of electricity to California end-use customers and 100% of electricity procured to serve all state agencies by December 31, 2045. (Public Utilities Code §454.53)
2. Requires the CEC, in coordination with relevant federal, state, and local agencies, to develop a strategic plan for offshore wind energy developments installed off the California coast in federal waters, and requires the CEC to submit the strategic plan to the Natural Resources Agency and the Legislature on or before June 30, 2023. (Public Resources Code (PRC) §25991)
3. Establishes the California Offshore Wind Energy Fisheries Working Group. Requires the working group to be composed of numerous members including representatives of federal and state agencies, the offshore wind energy industry, and California Native American tribes with affected tribal fisheries, among others. Provides for compensation for participation by certain members of the working group. (PRC §30616)
4. Establishes the Voluntary Offshore Wind and Coastal Resources Protection Program (Voluntary Program) and Voluntary Offshore Wind and Coastal Resources Protection Fund (Voluntary Fund), administered by the CEC, to support state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. Requires the CEC to award and allocate moneys under the Voluntary Program for various purposes. Authorizes the CEC to accept federal and private sector monies for purposes of the Voluntary Program, and to allocate monies in the Voluntary Fund for certain purposes, including workforce development grants. (PRC §§ 25992.10, 25992.20, 25992.21)

1. Requires, if the California Public Utilities Commission (CPUC) requests the Department of Water Resources (DWR) to procure eligible energy resources, and DWR elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources, as provided, the CPUC, in consultation with DWR, to develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of costs incurred by DWR relating to bids for the development of eligible energy resources. (Water Code §80820)

PROPOSED LAW

This bill would create the Offshore Wind Community Capacity Funding Grant account within the Voluntary Offshore Wind and Coastal Resources Protection Fund, and would continuously appropriate monies in this account to the CEC to fund capacity funding activities and award capacity funding grants, and require California offshore wind leaseholders to provide financial assistance to fund those activities and grants, as provided, among other provisions.

Specifically, this bill would:

1. Authorize the CEC to allocate moneys in the Voluntary Program for capacity funding activities and grants within local communities and tribal communities, as specified.
2. Create the Offshore Wind Community Capacity Funding Grant Account in the Voluntary Fund, and require the moneys in the account be continuously appropriated to the CEC to fund capacity funding activities and award capacity funding grants, as provided.
   1. Require these moneys to be awarded in an equitable manner, as specified.
   2. Require the CEC to develop guidelines for the use of these moneys, and require the guidelines to be subject to review and revision every three years, as specified.
3. Require California offshore wind leaseholders to provide financial assistance to fund capacity funding activities and grants, as provided. Authorize the leaseholder to satisfy this requirement through one or more payments pay within the three year period after the leaseholder executes a California offshore wind lease.
   1. Require financial assistance provided by leaseholders to be used for activities related to consultation for project planning and development, activities related to the development of local and tribal benefit agreements, and capacity funding grants.
   2. Require that eligible entities for the capacity funding activities and grants include local communities, California tribes, or a nonprofit organization selected by California tribes, as provided.
   3. Prohibit the use of financial assistance provided by leaseholders to satisfy financial commitments made to fulfill a lessee’s bidding credits, as provided. Specify that the financial assistance is not a donation, as provided.
4. Require the CEC to annually prepare and submit a legislative report on the implementation and effectiveness of the capacity funding activities and grants, including the amount of activity and grant moneys and direct financial assistance provided by leaseholders, and the total amount of capacity funding activity and grant moneys and direct financial assistance awarded for purposes of those activities, and grants, a description of the activities and grants funded, and an assessment of the impact of the funding, as provided.
5. Expand the purposes for which continuously appropriated monies are allocated and make an appropriation.

ARGUMENTS IN SUPPORT

According to the author, “As offshore wind energy moves forward in the waters off California’s coastline, including off the coast of Morro Bay in my district, input from local communities and tribes is critically important. Despite this, I have heard loud and clear from local communities—like small tribes and cities—that there is a gap in resources preventing them from participating in offshore wind energy planning conversations. AB 2537 will authorize the California Energy Commission to provide capacity building grants to tribes and local communities, enhancing their ability to engage in the planning, development, and mitigation of offshore wind development.”

ARGUMENTS IN OPPOSITION

None received

COMMENTS

This bill is double-referred. This bill was referred to both the Senate Energy, Utilities, and Communications Committee (Senate Energy Committee) and this Committee. This Committee is the Committee of second referral. Elements of the bill within the jurisdiction of the Senate Energy Committee are included here for context and completeness only.

Senate Energy Committee amendments. Due the processing time needed for amendments and the short time period between the Senate Energy Committee’s hearing and this Committee’s hearing, amendments proposed by the Senate Energy Committee have to be processed by this Committee. These are largely technical and clarifying, and, for example, provide for public participation in the CEC’s development of the guidelines and reporting dates. [Amendment #1]

The potential impacts to coastal resources are significant. As offshore wind energy systems are built out, there is the potential for significant and profound impacts to coastal resources, including local ports and fishing areas. In view of this, there is merit in specifically providing for local community and tribal capacity to participate in the planning efforts. Capacity building could include activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, and math, and the implementation of local and tribal benefit agreements. Establishing a standardized process with funding to build capacity with local communities and tribal communities impacted by offshore wind could complement existing efforts directly targeted at job skills training and port development.

Continuous appropriation. This bill would provide moneys for the capacity building program from a continuously appropriated account. One of the usual legislative methods to provide oversight over programs is through the budget and appropriations process.

California Native American tribes impacted by offshore wind. Many California Native American tribes and peoples have connections to the Pacific Ocean, the coast, and marine habitats and species. Each California Native American tribe has its own perspective, concerns, and priorities regarding offshore wind. Many tribal members depend on local fishing and harvesting of sea life for cultural, subsistence, and commercial needs, and have concerns about the potential impact on their ability to feed their families and loss of income from commercial fishing. On the North Coast, tribes expressed significant concern about the impacts on the population and migration patterns of the already endangered salmon.

In Humboldt, there are three federally-recognized tribes near the offshore wind lease site: the Yurok, the Wiyot, and the Mattole. For the southern leases, Morro Bay and Diablo Canyon are ancestral lands of cultural, ceremonial, and spiritual importance to the Santa Ynez Band of Chumash Indians Tribe, and the Gabrieleño are nearby on the Santa Barbara coastline.

Tribes are seeking a direct role in the decision-making process throughout the planning, permitting, operation, and decommissioning of offshore wind operations and associated infrastructure for offshore wind development.

Recent related legislation

AB 2212 (Lowenthal, 2024) would enact the Offshore Wind Workforce Safety Training Facility Development Act and require the CEC to oversee the allocation and use of funds allocated for the development of training facilities and to develop standardized training curricula tailored to the specific needs of the offshore wind industry. (This bill was held on the suspense file in the Assembly Appropriations Committee.)

AB 3006 (Zbur, 2024) would amend the definition of “infrastructure” for purposes of the Governor’s annual infrastructure plan to include port infrastructure for offshore wind (OSW) energy development. (This bill is pending before the Senate Governmental Organization Committee.)

AB 80 (Addis, 2023) would require the Ocean Protection Council to establish and oversee, in coordination with other state agencies, a West Coast Offshore Wind Science Entity. (This bill was held on the suspense file in the Senate Appropriations Committee.)

SB 286 (McGuire, Chapter, 386, Statutes of 2023) established the California Offshore Wind Energy Fisheries Working Group to address offshore wind project impacts to certain fisheries and other interests, including providing for compensation to those affected, among other things.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022), the energy budget trailer bill, among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

SB 1020 (Laird, Chapter 361, Statutes of 2022) established interim targets to reach SB 100 clean energy goals and requires state agencies to purchase 100 percent zero carbon electricity by 2035 to serve their load, including obligations on State Water Project. This bill also required the development of electric and gas utility service affordability metrics.

AB 525 (Chiu, Chapter 231, Statutes of 2021) required the CEC to develop a strategic plan for achieving 3,000 MW of offshore wind development off the California Coast by 2030, and at least 10,000 MW by 2040.

SB 100 (De León, Chapter 312, Statutes of 2018) established the 100 Percent Clean Energy Act of 2018, which increased the Renewable Portfolio Standard (RPS) requirement from 50 percent by 2030 to 60 percent, and created the policy of planning to meet all of the state’s retail electricity supply with a mix of RPS-eligible and zero-carbon resources by December 31, 2045, for a total of 100 percent clean energy.

SUGGESTED AMENDMENTS

AMENDMENT 1

• Clarify that the CEC must develop the guidelines via a public process with public workshops.
• Clarify the language related to tribal participation.
• Clarify the funding collected as proposed by this bill is subject to the donation reporting requirements of existing law.
• Add a date by when the CEC must annually report to the Legislature.

SUPPORT

Brightline Defense Project (sponsor)

350 Humboldt

350 Sacramento

California Environmental Voters

Central Coast Alliance United for a Sustainable Economy

City of Morro Bay

Climate Action California

CORE Hub

County of San Luis Obispo

Elected Officials to Protect America

Environment California

Environmental Defense Center

Environmental Protection Information Center

Humboldt California’s Redwood Coast

National Wildlife Federation

Natural Resources Defense Council

Peninsula Community Collaborative

Redwood Community Action Agency

Sierra Club California

SLO Climate Coalition

The Climate Reality Project, Los Angeles Chapter

The Climate Reality Project, San Fernando Valley Chapter

Union of Concerned Scientists

University of Southern California Schwarzenegger Institute

OPPOSITION

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2537

Author:(Addis)

As Amended Ver:April 29, 2024

2/3 vote

SUMMARY

Creates the Offshore Wind Community Capacity Building Fund Grant Account and continuously appropriates moneys in the account to the California Energy Commission (CEC) to award capacity building grants.

Major Provisions

1. Expands the eligible uses of the Voluntary Offshore Wind and Coastal Resources Protection Fund and the Private Donations Account within the fund to include capacity building grants within local communities and tribal communities to engage in the process of offshore wind energy development.
2. Creates the Offshore Wind Community Capacity Building Fund Grant Account in the Voluntary Offshore Wind and Coastal Resources Protection Fund and continuously appropriates moneys in the account to CEC to award capacity building grants.
3. Requires moneys appropriated be awarded in an equitable manner, as determined by CEC, that takes into account the needs and capacities of the communities, tribes, and organizations that apply for the capacity building grants. Requires CEC to develop guidelines for the use of grant moneys, and subjects the guidelines to review and revision every three years.
4. Requires California offshore wind leaseholders to provide financial assistance to fund the capacity building grants for the three-year period after the leaseholder executes an offshore wind lease, as specified.
5. Requires CEC to annually prepare and submit a report to the Legislature.

COMMENTS

AB 209 (Committee on Budget) Chapter 251, Statutes of 2022, among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

This bill expands that fund to include capacity building grants within local communities and tribal communities to engage in the process of offshore wind energy development, including, but not limited to, activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, and math, and the development and implementation of local and tribal benefit agreements.

According to the Author

As offshore wind energy moves forward in the waters off California's coastline, including off the coast of Morro Bay in my district, input from local communities and tribes is critically important. Despite this, I have heard loud and clear from local communities—like small tribes and cities—that there is a gap in resources preventing them from participating in offshore wind energy planning conversations. AB 2537 will authorize the CEC to provide capacity building grants to tribes and local communities, enhancing their ability to engage in the planning, development, and mitigation of offshore wind development.

Arguments in Support

A coalition of environmental organizations writes in support of this bill: "California's ambitious goals for offshore wind power also require thoughtful investments into communities that will be directly impacted by this planning process and its related port and transmission development. Tribes and local governments are important decision-makers in offshore wind development that need further capacity to support the permitting process. Local community-based organizations and stakeholder engagement in state and federal permitting processes are also vital to ensure that offshore wind can benefit all Californians. We believe that AB 2537 is essential for the thoughtful planning of California's offshore wind development to protect the state's cultural and natural resources."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, the CEC estimates ongoing annual costs of approximately $241,000 (General Fund) for one new position to conduct extensive stakeholder engagement, develop program guidelines, hold public workshops, develop competitive grant solicitations, award grants, develop and expand data collection and tracking systems, provide grant oversight and ongoing support to grant recipients, track and report program metrics, and modify program guidelines as needed to maximize the program's effectiveness.

VOTES

ASM NATURAL RESOURCES: 10-0-1

YES: Bryan, Flora, Friedman, Hoover, Kalra, Joe Patterson, Muratsuchi, Pellerin, Wicks, Wood

ABS, ABST OR NV: Bauer-Kahan

ASM UTILITIES AND ENERGY: 15-0-1

YES: Petrie-Norris, Bauer-Kahan, Calderon, Chen, Connolly, Friedman, Holden, Joe Patterson, Reyes, Santiago, Schiavo, Ting, Wallis, Wood, Zbur

ABS, ABST OR NV: Jim Patterson

ASM APPROPRIATIONS: 12-1-2

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Dixon

ABS, ABST OR NV: Jim Patterson, Ta

UPDATED

VERSION: April 29, 2024

CONSULTANT: Paige Brokaw / NAT. RES. / (916) 319-2092 FN: 0003029

Date of Hearing: May 8, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2537

Author:(Addis) – As Amended Ver:April 29, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill creates the Offshore Wind Community Capacity Building Fund Grant Account and continuously appropriates moneys in the account to the California Energy Commission (CEC) to award capacity building grants.

Specifically, this bill, among other things:

1) Expands the eligible uses of the Voluntary Offshore Wind and Coastal Resources Protection Fund and the Private Donations Account within the fund to include capacity building grants within local communities and tribal communities to engage in the process of offshore wind energy development.

2) Provides that eligible applicants for the capacity building grants include local communities, California tribes, and nonprofit organizations selected by California tribes.

3) Creates the Offshore Wind Community Capacity Building Fund Grant Account in the Voluntary Offshore Wind and Coastal Resources Protection Fund and continuously appropriates moneys in the account to CEC to award capacity building grants.

4) Requires moneys appropriated be awarded in an equitable manner, as determined by CEC, that takes into account the needs and capacities of the communities, tribes, and organizations that apply for the capacity building grants.

5) Requires CEC, in consultation with local communities, tribes, and other relevant stakeholders, to develop guidelines for the use of grant moneys, and subjects the guidelines to review and revision every three years.

6) Requires California offshore wind leaseholders to provide financial assistance to fund the capacity building grants for the three-year period after the leaseholder executes an offshore wind lease, as specified. Requires the financial assistance to be provided directly to an applicant eligible for a capacity building grant or deposited into the Offshore Wind Community Capacity Building Fund Grant Account for allocation, as specified.

7) Requires CEC to annually prepare and submit a report to the Legislature on the implementation and effectiveness of the capacity building grants, including the amount of grant moneys and direct financial assistance provided by leaseholders, using information provided by leaseholders, local communities, and tribes. Requires the report to include the total amount of grant moneys and direct financial assistance awarded for purposes of the grants, a description of the activities funded by the grants, and an assessment of the impact of the grants.

FISCAL EFFECT:

CEC estimates ongoing annual costs of approximately $241,000 (General Fund) for one new position to conduct extensive stakeholder engagement, develop program guidelines, hold public workshops, develop competitive grant solicitations, award grants, develop and expand data collection and tracking systems, provide grant oversight and ongoing support to grant recipients, track and report program metrics, and modify program guidelines as needed to maximize the program’s effectiveness. According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

COMMENTS:

1) Purpose. According to the author:

As offshore wind energy moves forward in the waters off California’s coastline, including off the coast of Morro Bay in my district, input from local communities and tribes is critically important. Despite this, I have heard loud and clear from local communities—like small tribes and cities—that there is a gap in resources preventing them from participating in offshore wind energy planning conversations. AB 2537 will authorize the California Energy Commission to provide capacity building grants to tribes and local communities, enhancing their ability to engage in the planning, development, and mitigation of offshore wind development.

2) Background. AB 209 (Committee on Budget), Chapter 251, Statutes of 2022, established the Voluntary Offshore Wind and Coastal Resources Protection Program at CEC. The stated purpose of the program is to support state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities, including federal laws providing for offshore wind lease conditions set by the Bureau of Ocean Energy Management. The program includes the Voluntary Offshore Wind and Coastal Resources Protection Fund and an account within the fund, namely the Private Donations Account. The fund and the account are allowed to accept donations from private and federal sources. To date, no donations or other deposits have been made into the fund or account and the balances of each are zero. According to a March 2024 report, the CEC plans to initiate an informal process and work with tribes, state and federal agencies, and other stakeholders to develop guidelines for the program and the fund. This bill expands the existing program and creates a new Offshore Wind Community Capacity Building Fund Grant Account within the Voluntary Offshore Wind and Coastal Resources Protection Fund to fund capacity building grants, and requires California offshore wind leaseholders to provide financial assistance to fund the grants.

A coalition of environmental organizations writes in support of this bill:

California’s ambitious goals for offshore wind power also require thoughtful investments into communities that will be directly impacted by this planning process and its related port and transmission development. Tribes and local governments are important decision-makers in offshore wind development that need further capacity to support the permitting process. Local community-based organizations and stakeholder engagement in state and federal permitting processes are also vital to ensure that offshore wind can benefit all Californians. We believe that AB 2537 is essential for the thoughtful planning of California’s offshore wind development to protect the state’s cultural and natural resources.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 24, 2024

ASSEMBLY COMMITTEE ON UTILITIES AND ENERGY

Cottie Petrie-Norris, Chair

ABPCA Bill Id:AB 2537 (

Author:Addis) – As Amended Ver:April 10, 2024

SUBJECT: Energy: offshore wind energy development: Offshore Wind Community Capacity Building Fund Grant Program

SUMMARY: Requires the California Energy Commission (CEC) to establish the Offshore Wind Community Capacity Building Fund Grant for the purpose of building capacity within local communities and tribal communities to support engagement of the process of offshore wind energy development in California.

Specifically, this bill:

1. Establishes the Community Capacity Building Fund in the State Treasury. The fund upon appropriation of the Legislature shall support the establishment of the Offshore Wind Community Capacity Building Fund Grant Program at the CEC for the purpose of building capacity within local communities and tribal communities to engage in the process of offshore wind energy development in California.
2. Prohibits the fund from being used to fulfill the purposes of financial commitments made to fulfill a lessee’s bidding credits in a bureau lease sale auction.
3. Requires entities eligible for a grant to include, but not be limited to, all of the following entities:
   1. Local communities located within unspecified miles of the geographic center of a lease tract of applicable proposed or existing offshore wind energy developments, rural communities, coastal zone communities, disadvantaged communities, and low-income communities.
   2. California tribes, including federally recognized tribes or California Native American tribes, identified on the contact list maintained by the Native American Heritage Commission.
   3. Nonprofit organizations that represent the interests of local communities or California tribes in relation to offshore wind energy development, if the organization meets specified requirements.
4. Requires the CEC to establish a grant application process for the Building Fund Grant Program.
5. Requires the grant application process ensures that the allocation of grant moneys is done in an equitable manner that takes into account the needs and capacities of the communities, tribes, and organizations that apply for those grants.
6. Requires the CEC, in consultation with local communities, tribes, and other relevant stakeholders to develop guidelines for the use of the grant and also requires the guidelines to be subject to review and amendment every three years.
7. Requires the CEC to prepare and submit an annual report to the Legislature, in accordance with Section 9795 of the Government Code, on the implementation and effectiveness of the program. Requires the report to include, but not be limited to, the total amount of grant moneys awarded by the Program, a description of the activities funded by the grant program, and an assessment of the impact of the grant program on the capacity of local communities and tribes to engage in offshore wind energy development.
8. Requires Department of Water Resources (DWR) to consider the bidder’s impact on the Fund when evaluating the bids received through a solicitation for eligible energy resources.

EXISTING LAW:

1. Requires the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission (CEC)), in coordination with specified state entities and other relevant federal, state, and local agencies, to develop a strategic plan for offshore wind (OWE) energy developments installed off the California coast in federal waters, and requires the CEC to submit the strategic plan to the Natural Resources Agency and the Legislature on or before June 30, 2023. (Public Resources Code § 25991 et seq.)
2. Establishes the policy that all of the state's retail electricity be supplied with a mix of RPS-eligible and zero-carbon resources by December 31, 2045, for a total of 100 percent clean energy. Requires the California Public Utilities Commission (CPUC), in consultation with the CEC, CARB, and all California balancing authorities, to issue a joint report to the Legislature by January 1, 2021, reviewing and evaluating the 100 percent clean energy policy, and every four years thereafter. (Public Utilities Code § 454.53)
3. Requires, as part of CEQA, a lead agency to prepare, or cause to be prepared, and certify the completion of an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment. (Public Resources Code § 21000 et seq.)
4. Establishes the Voluntary Offshore Wind and Coastal Resources Protection Program (Voluntary Program) and Voluntary Offshore Wind and Coastal Resources Protection Fund (Voluntary Fund), administered by the CEC to support state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. Requires the CEC to award and allocate moneys under the Voluntary Program for various purposes. Authorizes the CEC to accept federal and private funding for the purposes of the Voluntary Program. (Public Resources Code § 25992.10 and § 25992.20)
5. Requires, if the CPUC requests the Department of Water Resources (DWR) to procure eligible energy resources, and DWR elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources, as provided, the CPUC, in consultation with DWR, to develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of costs incurred by DWR relating to bids for the development of eligible energy resources. (Water Code § 80820)

FISCAL EFFECT: Unknown. This bill is keyed fiscal and will be referred to the Committee on Appropriations for its review.

BACKGROUND:

California’s Ambitious Goals & SB 100’s Joint Agency Report – SB 100 (De León, Chapter 312, Statutes of 2018) established the state policy that renewable and zero-carbon resources should supply 100% of retail sales and electricity procured in the state by 2045.^[1] This policy was recently updated under SB 1020 (Laird, Chapter 361, Statutes of 2022) which accelerated the requirement on state agencies to 100% by 2035, and established interim targets to meet the economy-wide 100% goal. To meet these goals, California will need to significantly increase the deployment of clean energy resources. As such, offshore wind energy is emerging as a promising source of renewable energy generation to support the California’s ambitious climate, clean-energy, and grid-reliability goals.

In March 2021, the CEC, California Public Utilities Commission (CPUC), and California Air Resources Board (CARB) released the first SB 100 report, and offshore wind energy was modelled to 10 gigawatts (GW) over four resource zones: Morro Bay, Diablo Canyon, Humboldt Bay, and Cape Mendocino. The model was given an input assumption of 2030 as the first available year for bringing offshore wind energy online given the current California Independent System Operator (CAISO) interconnection queue and resource development needs of offshore wind energy.^[2] The report notes “The preliminary findings [in the report] are intended to inform state planning and are not intended as a comprehensive nor prescriptive roadmap to 2045.”^[3] The subsequent report is due by 2025.

Offshore Wind Energy Technologies – Offshore wind energy technology designs fall into two main categories: fixed and floating. Most fixed turbines are anchored to the seabed through a solid monopile, tripod, or jacket.^[4] These designs prevent machines from moving significantly in response to wave or wind pressures. Fixed foundations typically have a maximum usable water depth of 50 meters to 60 meters; beyond this depth, fixed wind designs are not economically or technically feasible. Floating platforms unlock offshore wind access in ocean waters with depths greater than 60 meters.^[5]

Offshore Wind in California – Although California has no offshore wind generation currently, the National Renewable Energy Laboratory has identified 112 GW^[6] of offshore wind technical potential^[7] for California. However, approximately 96% of this potential is located in water deeper than 60 meters, where the mature, fixed-bottom turbine technology is not technically feasible.^[8] Off the coast of California, a steep continental shelf and increased wind speeds combine to make floating turbines the primary technically feasible option. Nearly all project proposals in the United States are for fixed foundation projects sited in federal waters – which start three nautical miles from shore out to 200 nautical miles – and fall under the jurisdiction of the federal Bureau of Ocean Energy Management (BOEM). In December 2022, BOEM’s awarded five existing offshore wind leases in California two in northern California off Humboldt County, and three in Central California near Morro Bay.^[9]

Offshore wind Report – AB 525 (Chiu, Chapter 231, Statutes of 2021) required the CEC, in coordination with federal, state, and local agencies, California Native American tribes, and a variety of stakeholders, to develop a strategic plan for offshore wind energy development in federal waters off the California coast. In January 2024, the CEC released the strategic plan, which are guided by three AB 525 interim reports:^[10]

• The first report evaluated and quantified the maximum feasible capacity of offshore wind to achieve reliability, ratepayer, employment, and decarbonization benefits and established aspirational planning goals of 2 to 5 gigawatts (GW) for 2030 and 25 GW for 2045.^[11]
• The second report provided a preliminary assessment of the economic benefits of offshore wind as they relate to seaport investments and workforce development needs and standards.
• The third report described permitting roadmap options that included time frames and milestones for a coordinated, comprehensive, and efficient permitting process for offshore wind energy facilities and associated electricity and transmission infrastructure off the coast of California. ^[12]

The strategic plan also discusses the impacts and strategies to address those impacts in California’s underserved communities.

California Native Tribes – Impacts & Strategies. According to the AB 525 Report, the CEC and Coordinating agencies had numerous tribal consultations and community engagement discussions on the potential impact of offshore wind energy development. For California Native Tribes:^[13]

• Each of them has its own perspective, concerns, and priorities regarding offshore wind development. Many tribal members depend on local fishing and harvesting of sea life for cultural, subsistence, and commercial needs, and have concerns about the potential impact on their ability to feed their families and loss of income from commercial fishing.
• On the North Coast, there have been significant concerns about the impacts on the population and migration patterns of the already endangered salmon.
• They have concerns about the impacts of offshore wind and associated infrastructure on tribal cultural resources.
• There have been concerns regarding the fiscal impact that comes with participating at ongoing meetings on planning processes such permitting processes.

In Humboldt, there are three federally-recognized Tribes near the offshore wind lease site: the Yurok, the Wiyot, and the Mattole. Morro Bay and Diablo Canyon are ancestral lands of cultural, ceremonial, and spiritual importance to the Santa Ynez Band of Chumash Indians Tribe, and the Gabrieleño are near the Santa Barbara coastline.

Strategies for Addressing Impacts – Some of the suggestions include conducting meaningful consultation with tribal representatives, supporting the establishment of strong, legally binding tribal community benefits agreements, continuing to study impacts on tribes including exploring public safety measures to reduce violent crime and sexual and gender-based violence against California tribes and other vulnerable populations, and collaborating with tribes on avoidance, mitigation, and co-management opportunities.

Underserved Communities – Impacts & Strategies. Historically, underserved communities have experienced a disproportionate share of economic, health and environmental burdens, which include poverty, high unemployment, air and water pollution. Offshore wind development can provide a variety of benefits such as the creation of well-paying jobs and new tax revenues. Industrial activity can impact underserved communities living near ports through air, water, noise, and light pollution. Additional air pollution may also occur from increased vehicle emissions on land and vessel emissions offshore to transport raw materials and turbines.^[14] Advocates would like to see increased engagement with potentially impacted communities. As such, strategies to address these impacts include and not limited to conducting early and meaningful community outreach and engagement efforts throughout the offshore wind planning and development process.^[15]

Working Group – Among other requirements, SB 286 (McGuire, Chapter 386, Statutes of 2023), establishes the California Offshore Wind Energy Fisheries Working Group (Working Group). This group includes representatives from the relevant permitting and resource agencies, commercial and recreational fishing industries, offshore wind energy industry, California Native American Tribes with affected tribal fisheries, and other stakeholders, as determined by the California Coastal Commission (CCC). The Working Group is required to develop a statewide strategy by January 1, 2026, that proposes ways to minimize impacts of offshore wind on ocean fisheries, including the application of best practices in compensating impacted stakeholders. After the statewide strategy is developed, the CCC must review and adopt it on or before May 1, 2026.

The Working Group is responsible for creating a framework for reasonable compensatory mitigation for unavoidable impacts associated with offshore wind energy projects. The framework must include a payment structure to reasonably compensate commercial, tribal, and recreational fisheries and impacted commercial fish processors. The California State Lands Commission (SLC) – or a local trustee of granted public trust lands standing in its place – must consider reasonable compensatory mitigation for unavoidable impacts to fishing and tribal interests when granting a lease for an offshore wind energy project. In addition, SLC is required to deposit revenues generated from the leases into a newly created Offshore Wind Energy Resiliency Fund. Upon appropriation by the Legislature, the fund will be made available for reasonable compensatory mitigation for unavoidable impacts.

Existing Funds – AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) established the Voluntary Offshore Wind and Coastal Resources Protection Program at the CEC to support offshore wind development. The CEC provides grants to public and private entities, including state agencies, tribal entities, local governmental agencies, research institutions, and nonprofit entities. The CEC can also accept federal and private sector money for the Voluntary Program. AB 209 also established the Voluntary Fund which accepts donations from private and federal sources. No donations or other deposits have yet been made into the Voluntary Fund. However, the process may still be considered early, and federal dollars are likely on the way.

Central Procurement Entity – AB 1373 (Garcia, Chapter 367, Statutes of 2023) authorized the Department of Water Resources (DWR) under the request of the CPUC to serve as a central procurement entity for procurement of diverse clean energy resources in order to support the state’s clean energy and reliability goals. Offshore wind may qualify for such procurement. Furthermore, AB 1373 requires the CPUC to adopt procedures that govern competitive procurement obligations and recovery of costs incurred by DWR relating to bids for the development of eligible energy resources. Under that requirement, DWR must consider a project’s viability, the useful life of a project when evaluating bids received through the solicitation process. The CPUC has until September 1, 2024 to determine if there is a need for procurement of these eligible energy resources.

COMMENTS:

1. Author’s statement. According to the author, “AB 2537 will establish the Local and Tribal Communities Offshore Wind Capacity Building Fund, which will enhance the ability of tribes and local communities to actively participate in the offshore wind development process, including project planning and development. This will empower local governments and tribes to engage in the next chapter of California’s renewable energy leadership.”
2. Purpose of the bill. The offshore wind industry could present an opportunity to create job growth and economic development particularly for communities that are located close to the offshore wind resource. However, the potential impacts on commercial and recreational fishers, California Native American tribes, environmental justice communities, and other stakeholders is yet to be clearly understood. As such, the author contends that providing funding for capacity building for these communities could be a way for these communities to take a proactive approach in the planning, permitting, development, and mitigation of offshore wind development.
3. Funding for the Capacity Building. This bill creates the Offshore Wind Community Capacity Building Fund at the State Treasury. This fund will support the creation of the Capacity Building Fund Grant Program at the CEC for purposes of providing grants to build capacity within local communities and tribal communities to engage in the process of offshore wind energy development. This bill links the new Capacity Building Fund to the central procurement entity process under AB 1373. As eluded earlier, the CPUC has yet to determine if there is a need for procurement of these eligible energy resources. The CPUC has until September 1, 2024 to decide. Additional requirements to AB 1373, such as those provided by this bill, may delay the CPUC’s decision. As such, the committee recommends deleting section 2 of this bill that is related to the central procurement process.
4. Existing Grant Process. As noted in the background, under the Voluntary Offshore Wind and Coastal Resources Protection Program the CEC can provide grants to public and private entities, including state agencies, tribal entities, local governmental agencies, research institutions, and nonprofit entities. Given the existing grant process, the committee recommends the new capacity building grants that this bill seeks for local communities and California tribes be included in the Voluntary Offshore Wind and Coastal Resources Protection Program at the CEC. Eligible applicants for these grants shall include and not be limited to local communities, California Tribes, or non-profit organizations selected by California Tribes.
5. Guidelines for Grant Awards. Given that this new capacity building grants process will be administered by the CEC, the committee recommends that the CEC, in consultation with local communities, tribes, and other relevant stakeholders, shall develop guidelines for the award of these grants. The guidelines shall be subject to review and amendment every three years.
6. Financial Obligation for Offshore Leaseholders. As eluded earlier, The CEC provides grants to public and private entities, including state agencies, tribal entities, local governmental agencies, research institutions, and nonprofit entities. The CEC also accepts donations from private and federal sources. No donations or other deposits have yet been made into this fund. As such the committee recommends California offshore wind leaseholders shall provide financial assistance to support capacity building grants for the purposes provided by this bill.
7. Transparency and Accountability. Reporting of funding activities at the CEC serves as an important step in evaluating whether these grants are operating efficiently, effectively, and equitably. Such information is important for improving program implementation and informing forthcoming legislative funding and policy decisions. As such the committee recommends the CEC prepare and submit an annual report to the Legislature of the funding activities that includes grant making and direct assistance by leaseholders to local communities, or tribes.
8. Clarification. The Bureau of Ocean Energy Management (BOEM) considers a combination of a monetary bid and bidding credits in determining the outcome of the auction. To qualify for the bidding credit, the bidder must commit to make a qualifying monetary contribution to programs or initiatives, as specified by BOEM requirements. The financial contribution for grants for the purposes of capacity building as provided by this bill does not count towards BOEM requirements. As such, the committee recommends amendments to clarify that the requirements of this bill shall not be used to fulfill the purposes of financial commitments made to fulfill a lessee’s bidding credits in a bureau lease sale auction.
9. Related Legislation.

AB 2212 (Lowenthal) enacts the Offshore Wind Workforce Safety Training Facility Development Act and requires the CEC to oversee the allocation and use of funds allocated for the development of training facilities and to develop standardized training curricula tailored to the specific needs of the offshore wind industry. Status: This bill is pending hearing in this committee.

AB 3006 (Zbur) requires the annual California infrastructure plan to include, and an assessment of funding needs for port infrastructure for offshore wind energy development beginning in the 2026-2027 fiscal year. Status: This bill is pending hearing in the Assembly Committee on Appropriations.

AB 2208 (Zbur) enacts the California Ports Development and Offshore Wind Infrastructure Bond Act of 2024, to authorize $1 billion in general obligation (GO) bonds for offshore wind energy. Authorizes the bond act for the November 5, 2024, general election. Status: This bill was pending hearing in this committee but the hearing was cancelled at the request of the author.

1. Prior Legislation

AB 3 (Zbur) requires the CEC to develop a plan for seaport readiness for offshore wind energy developments by December 31, 2026, and to conduct a study on the feasibility of achieving specified in-state assembly and manufacturing goals, as well as federal domestic content thresholds, in the development of offshore wind energy by December 31, 2027. Chapter 314, Statutes of 2023.

AB 80 (Addis), would have required the Ocean Protection Council, upon an appropriation by the Legislature, to establish and oversee a West Coast Offshore Wind Science Entity to ensure that comprehensive baseline assessments and ongoing monitoring data related to the California ocean ecosystem are available to inform state and federal decision-making. Status: Held in Assembly Committee on Appropriations.

AB 1373 (Garcia), among other provisions, establishes the Offshore Wind Workforce Development Fund in the State Treasury, for which monies may be used upon legislative appropriation to award grants for educating, training, maintaining, and strengthening the workforce needed for offshore wind energy development. Status: Chapter 367, Statutes of 2023.

SB 286 (McGuire) establishes the California Offshore Wind Energy Fisheries Working Group to address offshore wind project impacts to certain fisheries and other interests, including providing for compensation to those affected, among other things. . Status: Chapter 386, Statutes of 2023.

AB 209 (Committee on Budget), among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program. Status: Chapter 251, Statutes of 2022

SB 1020 (Laird) establishes interim targets for the statewide 100% clean energy policy. Additionally requires state agencies to accelerate their 100% clean energy policy goal by 10 years. Status: Chapter 361, Statutes of 2022.

AB 525 (Chiu) required the CEC to establish, by June 1, 2022, planning goals for the years 2030 and 2045 from electricity generated by OWE. The bill also requires the CEC, in coordination with specified agencies, to develop a strategic plan for OWE developments and to submit the plan to the Natural Resources Agency and the Legislature by June 30, 2023. Status: Chapter 231, Statutes of 2021.

SB 100 (De León, Chapter 312, Statutes of 2018) established the 100% Clean Energy Act of 2017 which increases the Renewables Portfolio Standards (RPS) requirement from 50% by 2030 to 60%, and creates the policy of planning to meet all of the state's retail electricity supply with a mix of RPS-eligible and zero-carbon resources by December 31, 2045, for a total of 100% clean energy. Status: Chapter 312, Statutes of 2018.

1. Double Referral. This bill was previously heard in the Assembly Committee on Natural Resources on April 22nd, 2024, where it passed 10-0-1.

REGISTERED SUPPORT / OPPOSITION:

Support

350 Humboldt: Grass Roots Climate Action
350 Sacramento
Brightline Defense Project
City of Morro Bay
Climate Action California
Elected Officials to Protect America - California
Environment California
Environmental Information Protection Center
Hcvb
Monterey Bay Aquarium Foundation
Natural Resources Defense Council
Peninsula Community Collaborative
Redwood Community Action Agency
Union of Concerned Scientists
Usc Schwarzenegger Institute

Opposition

None on file.

Analysis Prepared by: Lina V. Malova / U. & E. / (916) 319-2083

1. Public Utilities Code §454.53 ↑

2. Pg. 41; Inputs & Assumptions: CEC SB 100 Joint Agency Report; June 2020. ↑

3. Pg. 1, CEC, CPUC, & CARB; 2021 SB 100 Joint Agency Report: Achieving 100 Percent Clean Electricity in California: An Initial Assessment;” March 2021. ↑

4. Solid monopile foundations are piles driven into the subsurface for stability. Jacket and tripod platforms involve three to four connection points with the subsurface. ↑

5. Pg. 11; “CEC, “Research and Development Opportunities for Offshore Wind Energy in California.” CEC-500-2020-053; August 2020 ↑

6. Pg. 1; Ibid ↑

7. “Technical potential” is defined as the amount of offshore wind capacity that could be developed while taking into account exclusion factors related to water depth, mean wind speed, industry uses, and environmental conflicts. ↑

8. Pg. 7; CEC Research and Development Opportunities for Offshore Wind Energy in California; CEC-500-2020-053; August 2020. ↑

9. BOEM. “BOEM Announces Environmental Review of Future Development of California Offshore Wind Leases.” https://www.boem.gov/newsroom/press-releases/boem-announces-environmental-review-future-development-california-offshore ↑

10. Pg. 1; California Energy Commission, “California Energy Commission Draft Commission Report”. January 2024 ↑

11. Flint et al; Offshore Wind Energy Development in Federal Waters Offshore the California Coast: Maximum Feasible Capacity and Megawatt Planning Goals for 2030 and 2045. August 2022. ↑

12. Pg. 1; California Energy Commission, “California Energy Commission Draft Commission Report”. January 2024 ↑

13. Pg 11-13, CEC; “California Energy Commission Draft Commission Report.” January 2024 ↑

14. Pg 16, CEC; “California Energy Commission Draft Commission Report.” January 2024 ↑

15. Ibid ↑

Date of Hearing: April 22, 2024

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Isaac G. Bryan, Chair

ABPCA Bill Id:AB 2537 (

Author:Addis) – As Amended Ver:April 10, 2024

SUBJECT: Energy: offshore wind energy development: Offshore Wind Community Capacity Building Fund Grant Program.

SUMMARY: Establishes Offshore Wind Community Capacity Building Fund Grant Program (Program) at the State Energy Resources Conservation and Development Commission (CEC) to award grants for the purpose of building capacity within local communities and tribal communities to engage in the process of offshore wind energy development.

EXISTING LAW:

1. Establishes the policy goal of the state that eligible renewable energy resources and zero-carbon resources supply 100% of all retail sales of electricity to California end-use customers and 100% of electricity procured to serve all state agencies by December 31, 2045. (Public Utilities Code 454.53)
2. Requires the CEC, in coordination with relevant federal, state, and local agencies, to develop a strategic plan for offshore wind energy developments installed off the California coast in federal waters, and requires the CEC to submit the strategic plan to the Natural Resources Agency and the Legislature on or before June 30, 2023. (Public Resources Code (PRC) 25991)
3. Establishes the Voluntary Offshore Wind and Coastal Resources Protection Program (Voluntary Program) and Voluntary Offshore Wind and Coastal Resources Protection Fund (Voluntary Fund), administered by the CEC to support state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. Requires the CEC to award and allocate moneys under the Voluntary Program for various purposes. Authorizes the CEC to accept federal and private funding for the purposes of the Voluntary Program. (PRC 25992.10 and 25992.20)

1. Requires, if the California Public Utilities Commission (CPUC) requests the Department of Water Resources (DWR) to procure eligible energy resources, and DWR elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources, as provided, the CPUC, in consultation with DWR, to develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of costs incurred by DWR relating to bids for the development of eligible energy resources. (Water Code 80820)

THIS BILL:

1. Defines the following terms for purposes of the bill:
   1. “Fund” means the Community Capacity Building Fund (Fund).
   2. “Program” means the Offshore Wind Community Capacity Building Fund Grant Program (Program).
2. Establishes the Fund in the State Treasury.
3. Authorizes moneys in the Fund to be used, upon appropriation by the Legislature, by the CEC to establish the Program to award grants for the purpose of building capacity within local communities and tribal communities to engage in the process of offshore wind energy development, including, but not limited to, activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, math, and the implementation of local and tribal benefit agreements.
4. Prohibits moneys in the Fund from being used to fulfill the purposes of financial commitments made to fulfill a lessee’s bidding credits in a bureau lease sale auction.
5. Requires entities eligible for a grant from the Fund to include, but not be limited to, all of the following entities:
   1. Local communities located within unspecified miles of the geographic center of a lease tract of applicable proposed or existing offshore wind energy developments, rural communities, coastal zone communities, disadvantaged communities, and low-income communities.
   2. California tribes, including federally recognized tribes or California Native American tribes, identified on the contact list maintained by the Native American Heritage Commission.
   3. Nonprofit organizations that represent the interests of local communities or California tribes in relation to offshore wind energy development, if the organization meets all of the following criteria:
      1. Is recognized by the federal government as a 501(c) or 521(a) nonprofit entity pursuant to the Internal Revenue Code;
      2. Is registered and certified as a nonprofit organization by the State of California; and,
      3. Is not on the list of organizations for which the tax-exempt status is revoked that is published and maintained by the Franchise Tax Board.
6. Requires the CEC to establish a grant application process for the Program.
7. Requires the grant application process to ensure that the allocation of grant moneys is done in an equitable manner that takes into account the needs and capacities of the communities, tribes, and organizations that apply for those grants.
8. Requires the CEC, in consultation with local communities, tribes, and other relevant stakeholders to develop guidelines for the use of grant moneys awarded from the Fund. Requires the guidelines to be subject to review and amendment every three years.
9. Requires the CEC to prepare and submit an annual report to the Legislature, in accordance with Section 9795 of the Government Code, on the implementation and effectiveness of the program. Requires the report to include, but not be limited to, the total amount of grant moneys awarded by the Program, a description of the activities funded by the Program, and an assessment of the impact of the Program on the capacity of local communities and tribes to engage in offshore wind energy development.
10. Requires DWR to consider the bidder’s impact on the Fund when evaluating the bids received through a solicitation for eligible energy resources.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author’s statement:

AB 2537 will establish the Local and Tribal Communities Offshore Wind Capacity Building Fund, which will enhance the ability of tribes and local communities to actively participate in the offshore wind development process, including project planning and development. This will empower local governments and tribes to engage in the next chapter of California’s renewable energy leadership.

1. Offshore wind. The advantage of offshore wind over its land-based counterpart is that the offshore wind resource is far more consistent, reliable, and energetic, with little of the topographic and small-scale variability typically seen on land. In September 2021, the Legislature passed AB 525 (Chiu), Chapter 231, Statutes of 2021, requiring the CEC to develop a strategic plan for offshore wind energy developments installed off the California coast in federal waters.

The strategic plan, released in January 2024, is guided by three AB 525 interim reports. The first report, adopted in August 2022, evaluated and quantified the maximum feasible capacity of offshore wind to achieve reliability, ratepayer, employment, and decarbonization benefits and established aspirational planning goals of 2 to 5 gigawatts (GW) for 2030 and 25 GW for 2045. The second report, adopted in February 2023, provided a preliminary assessment of the economic benefits of offshore wind as they relate to seaport investments and workforce development needs and standards. The third report, adopted in May 2023, described permitting roadmap options that included time frames and milestones for a coordinated, comprehensive, and efficient permitting process for offshore wind energy facilities and associated electricity and transmission infrastructure off the coast of California. The strategic plan also discusses the impacts and strategies to address those impacts in California’s underserved communities.

1. California Tribes impacted by offshore wind. Many California Native American tribes and peoples have connections to the Pacific Ocean, the coast, and marine habitats and species. Each California Native American tribe has its own perspective, concerns, and priorities regarding offshore wind. Many tribal members depend on local fishing and harvesting of sea life for cultural, subsistence, and commercial needs, and have concerns about the potential impact on their ability to feed their families and loss of income from commercial fishing. On the North Coast, tribes expressed significant concern about the impacts on the population and migration patterns of the already endangered salmon.

There are five existing offshore wind leases in California: two in northern California off Humboldt County, and three in Central California near Morro Bay. In Humboldt, there are three federally-recognized Tribes near the offshore wind lease site: the Yurok, the Wiyot, and the Mattole. Morro Bay and Diablo Canyon are ancestral lands of cultural, ceremonial, and spiritual importance to the Santa Ynez Band of Chumash Indians Tribe, and the Gabrieleño are nearby on the Santa Barbara coastline.

Tribes are seeking a direct role in the decision-making process throughout the planning, permitting, operation, and decommissioning of offshore wind operations and associated infrastructure for offshore wind development. The CEC’s AB 525 strategic plan identifies and proposes strategies for potential impacts to Native American and Indigenous peoples.

Strategies for addressing impacts to California Native American tribes could include conducting meaningful consultation with tribal representatives, supporting the establishment of strong, legally binding tribal community benefits agreements, continuing to study impacts on tribes including exploring public safety measures to reduce violent crime and sexual and gender-based violence against California tribes and other vulnerable populations, and collaborating with tribes on avoidance, mitigation, and co-management opportunities.

1. Communities impacted by offshore wind. Offshore wind development can provide a variety of benefits to local communities, including tax revenues, supply chain and manufacturing activities, and job creation. It can also lead to concerning impacts, such as changes in the local workforce, increased construction traffic, and changes to the environment valued by the nearby communities. Establishing a standardized process with funding to build capacity with local jurisdictions impacted by offshore wind could complement existing efforts directly targeted at job skilled training and port development.
2. Offshore Wind Community Capacity Building Fund Grant Program. This bill creates the Program at the CEC for purposes of providing grants to build capacity within local communities and tribal communities to engage in the process of offshore wind energy development. Capacity building could include activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, math, and the implementation of local and tribal benefit agreements.

Grants could be awarded to local communities near the geographic center of an offshore wind energy lease tract, rural communities, coastal zone communities, disadvantaged communities, and low-income communities; California Native American tribes, and nonprofits that represent the interests of local communities or California tribes in relation to offshore wind energy development.

As it relates to local governments, the bill includes “local communities located within ____ miles of the geographic center of a lease tract of applicable proposed or existing offshore wind energy developments.” The offshore wind turbines will be up to 10 miles offshore, so referencing the center point of the lease tract as it relates to defining eligible grant recipients should be reevaluated.

1. Funding the Fund. The Program would be supported by the Fund created in the bill, but the bill does not specify how the Fund would be funded.

The Fund is linked to an existing law that requires the CPUC to adopt procedures that govern competitive procurement by, obligations on, and recovery of costs incurred by DWR relating to bids for the development of eligible energy resources. Under that law, evaluating the bids received through a solicitation, DWR must consider a project’s viability, the useful life of a project, and the capability to supply energy, among others. This bill would require DWR to additionally consider the bidder’s impact on the Fund, thus making any deposits into the Fund both voluntary and just a single (non-prioritized) consideration made by DWR when procuring renewable energy. There is nothing in that law, or proposed by this law, directly connecting DWR’s renewable energy procurement to offshore wind.

The Voluntary Program is an existing grant program at CEC that supports state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities. The CEC provides grants to public and private entities, including state agencies, tribal entities, local governmental agencies, research institutions, and nonprofit entities. The CEC can accept federal and private sector money for the Voluntary Program; the Voluntary Fund is funded with federal dollars, and the Private Donations Account (Account) within the Voluntary Fund can accept private donations. As of March 19, no donations or other deposits have been made into the Voluntary Fund or the Account and the balances of each are zero. However, it is still early in the process, and federal dollars are likely coming down the pike to support the current offshore wind leases approved off California.

The author may wish to consider providing financial assistance for capacity building to local communities or tribes either directly, through a nonprofit, as defined currently in the bill, or by providing money from the existing Voluntary Fund.

1. Double referral. This bill is also referred to the Assembly Utilities & Energy Committee.
2. Related legislation:

AB 80 (Addis) requires the Ocean Protection Council to establish and oversee, in coordination with other state agencies, a West Coast Offshore Wind Science Entity. This bill is in the Senate Appropriations Committee.

AB 2212 (Lowenthal) enacts the Offshore Wind Workforce Safety Training Facility Development Act and requires the CEC to oversee the allocation and use of funds allocated for the development of training facilities and to develop standardized training curricula tailored to the specific needs of the offshore wind industry. This bill is referred to the Assembly Natural Resources Committee.

SB 286 (McGuire), Chapter, 386, Statutes of 2023, established the California Offshore Wind Energy Fisheries Working Group to address offshore wind project impacts to certain fisheries and other interests, including providing for compensation to those affected, among other things.

AB 209 (Committee on Budget), Chapter 251, Statutes of 2022, among its many energy-related provisions, established the Voluntary Offshore Wind and Coastal Resources Protection Program.

REGISTERED SUPPORT / OPPOSITION:

Support

350 Humboldt: Grass Roots Climate Action
350 Sacramento
Brightline Defense Project
City of Morro Bay
Climate Action California

Opposition

None on file

Analysis Prepared by: Paige Brokaw / NAT. RES. /