AB 2516: California Grid Manufacturing Initiative.

Session Year: 2025-2026
House: Assembly
Latest Version Date: 2026-06-25

Current Status:

In Progress

(2026-06-29: From committee: Do pass and re-refer to Com. on APPR. (Ayes 8. Noes 2.) (June 29). Re-referred to Com. on APPR.)

Introduced

In Committee

First Chamber

In Committee

Second Chamber

Enacted

Version:

Existing law establishes the Governors Office of Business and Economic Development (GO-Biz) within the Governors office and requires GO-Biz to serve the Governor as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. Existing law creates within GO-Biz the Energy Unit to accelerate the planning, financing, and execution of critical energy infrastructure projects, as specified.

This bill would require the Energy Unit, in coordination with other specified state entities, to establish the California Grid Manufacturing Initiative. The bill would require the Energy Unit to identify and procure determine and provide appropriate forms of state assistance to address identified delays with critical electricity grid components, as defined, and to incentivize new or existing in-state manufacturing of critical electricity grid components. components, and to provide support to joint procurement initiatives.

This bill would require the Energy Unit to develop a process for each public utility, as defined, on or before January 1, 2028, and regularly thereafter, to submit a projection of its purchasing needs for critical electricity grid components for which the public utility has not entered into a purchase agreement and for which the public utility affirmatively seeks the assistance of the Energy Unit in coordinating resources and leveraging purchasing power. The bill would provide that, if the Energy Unit determines that centralized procurement is warranted for a critical electrical grid component, a participating public utility may, prior to the issuance of a solicitation by the Energy Unit for that component, submit to the Energy Unit the conditions under which the public utility commits to purchase those components from the initiative, as provided. Under the bill, if a procurement by the Energy Unit satisfies the conditions submitted by a public utility, the public utilitys commitment to purchase the component from the initiative would be binding, as provided. By imposing new duties on local publicly owned electric utilities, the bill would impose a state-mandated local program.

This bill would require the Public Utilities Commission, as soon as practicable, and in consultation with the State Energy Resources Conservation and Development Commission and the Independent System Operator, to develop a process to identify critical electricity grid components and to assess the statewide need for critical electricity grid components for the next 10-year period. The bill would require the assessment to include identification of specific strategies to reduce delays and ratepayer costs associated with the procurement of critical electricity grid components. The bill would require the Public Utilities Commission to determine, for each critical electricity grid component, whether requiring electrical corporations to engage in the joint procurement of the critical electricity grid component would further the purposes of the bill, and if the commission makes that determination, and also determines that electrical corporations would benefit from the joint procurement, the bill would authorize the Public Utilities Commission to require electrical corporations to engage in a joint procurement to fulfill the projected purchasing needs of each participating electrical corporation for the critical electricity grid component, as provided.

This bill would require electrical corporations that are required to engaged in a joint procurement pursuant to the bill to, not more than 12 months following the imposition of the requirement, take certain actions, including engaging in a joint cooperative process for the sourcing and negotiation of joint purchase agreements for the purchase of critical electricity grid components.

This bill would authorize the Energy Unit to issue requests for proposals or other competitive solicitations to procure critical electricity grid components, as provided, and would authorize the Energy Unit to provide financial assistance to projects that establish or expand manufacturing capacity in California for electrical critical electricity grid components, as specified. The bill would also authorize the Energy Unit to enter into production joint ventures with qualified private suppliers, as provided, and to provide bond financing and other assistance.

The bill would authorize the Public Utilities Commission to authorize the recovery of costs incurred under the initiative only to the extent it determines those costs are just and reasonable, cost-effective, and aligned with state energy policy, as provided. To the extent the joint procurement results in costs below prevailing market prices for critical electricity grid components, the bill would require the commission to ensure that the difference is credited to ratepayers, as provided.

Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because a violation of a commission action implementing certain requirements of the bill would be a crime, this bill would impose a state-mandated local program.

Existing law, the Bergeson-Peace Infrastructure and Economic Development Bank Act, establishes the California Infrastructure and Economic Development Bank (I-Bank) within GO-Biz and, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities, as provided.

This bill would create the California Grid Manufacturing Initiative Revolving Fund in the State Treasury, and the Manufacturing Incentive Account and the Procurement Account within the revolving fund, Treasury for the purpose of providing financial assistance pursuant to the initiative. The bill would make the moneys in the revolving fund continuously appropriated for expenditure in accordance with the initiative. The bill would authorize the I-Bank, on behalf of the Energy Unit, to issue revenue bonds to finance procurement and manufacturing of critical electricity grid components, and would authorize the I-Bank to provide financial assistance, including financial assistance from the proceeds of the revenue bonds, to a participating party, as defined, in connection with the financing or refinancing of a project to establish or expand manufacturing capacity for critical electricity grid components. The bill would require the I-Bank to meet and confer with the Energy Unit for eligible projects and would provide that final authority to provide financial support to an eligible project resides with the Energy Unit. The bill would require the proceeds of the any bonds to be deposited into the respective accounts the revolving fund and used exclusively for the purposes of the initiative. By establishing a continuously appropriated fund, the bill would make an appropriation.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for specified reasons.

This bill would provide that no reimbursement is required by this act for a specified reason.

Discussed in Hearing