Under existing law, the California Renewables Portfolio Standard Program requires retail sellers and local publicly owned electric utilities to procure a minimum quantity of electricity products from eligible renewable energy resources during certain compliance periods up to December 31, 2030. Existing law provides that a local publicly owned electric utility is not required to procure a certain amount of eligible renewable energy resources if, during a year within those compliance periods, the local publicly owned electric utility receives more than 40% of its retail sales from large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018. Existing law authorizes the State Energy Resources Conservation and Development Commission (Energy Commission) to establish appropriate multiyear compliance periods for local publicly owned electric utilities beyond December 31, 2030.

This bill would provide that the provision related to the procurement of eligible renewable energy resources by local publicly owned electric utilities also applies to the compliance periods established by the Energy Commission.

Under existing law, the California Renewables Portfolio Standard Program requires retail sellers and local publicly owned electric utilities to procure a minimum quantity of electricity products from eligible renewable energy resources during certain compliance periods up to December 31, 2030. Existing law provides that a local publicly owned electric utility is not required to procure a certain amount of eligible renewable energy resources if, during a year within those compliance periods, the local publicly owned electric utility receives more than 40% of its retail sales from large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018. Existing law authorizes the State Energy Resources Conservation and Development Commission (Energy Commission) to establish appropriate multiyear compliance periods for local publicly owned electric utilities beyond December 31, 2030.

This bill would provide that the provision related to the procurement of eligible renewable energy resources by local publicly owned electric utilities also applies to the compliance periods established by the Energy Commission.

This bill would prohibit the state board from adopting any standard, regulation, or rule under this authority that affects the Low Carbon Fuel Standard or the California Greenhouse Gas Cap-and-Trade Program until the Legislative Analyst has analyzed the cost to the consumer of the proposed standard, regulation, or rule rule, as specified, and submitted its analysis to the Legislature.

Existing law requires the State Air Resources Board to adopt rules and regulations relating to vehicular emissions standards, as specified, that will achieve the ambient air quality standards required by federal law in conjunction with other measures adopted by the state board, air pollution control and air quality management districts, and the United States Environmental Protection Agency. Existing law requires the state board to adopt and enforce rules and regulations that anticipate the development of new technologies or the improvement of existing technologies if necessary to carry out its duty.

This bill would prohibit the state board from adopting any standard, regulation, or rule under this authority until the Legislative Analyst has analyzed the cost to the consumer of the proposed standard, regulation, or rule and submitted its analysis to the Legislature.

 CONSENT  

Bill No: AB 34

Author: Patterson (R), et al.

Amended: 1/5/26 in Assembly

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 16-0, 6/8/26

AYES: Allen, Ochoa Bogh, Archuleta, Arreguín, Ashby, Becker, Caballero, Dahle, Gonzalez, Grove, McNerney, Reyes, Richardson, Rubio, Strickland, Wahab

NO VOTE RECORDED: Hurtado

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 75-0, 1/26/26 - See last page for vote

SUBJECT: California Renewables Portfolio Standard Program: local publicly owned electric utilities: large hydroelectric generation

SOURCE: Northern California Power Agency

DIGEST:

This bill clarifies eligibility related to future compliance periods of the Renewables Portfolio Standard (RPS) for local publicly owned electric utilities (POUs) who have existing procurement of large hydroelectric energy resources, specifically extends beyond 2030 the ability to reduce their RPS compliance requirements up to the retail sales unserved by large hydroelectric energy resources.

ANALYSIS:

Existing law:

1. Defines a “renewable electrical generation facility” as one that, among other requirements, uses biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts (MW) or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current, and any additions or enhancements to the facility using that technology. (Public Resources Code §25741)
2. Requires, via the California RPS Program, retail sellers and local POUs to procure a minimum quantity of electricity products from eligible renewable energy resources during certain compliance periods up to December 31, 2030. (Public Utilities Code §§399.15 and 399.30(a)(b)(c))
3. Defines eligible renewable energy resources include small hydroelectric generation facilities of 30 MW or less, conduit hydroelectric facilities, and the incremental increase in electrical generation resulting from efficiency improvements of existing small hydroelectric facilities. (Public Utilities Code §§399.12 and 399.12.5)
4. Provides that a local POU is not required to procure a certain amount of eligible renewable energy resources if, during a year within those compliance periods, the local POU receives more than 40% of its retail sales from large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018. (Public Utilities Code §399.30(k)(2))
5. Authorizes the State Energy Resources Conservation and Development Commission (California Energy Commission (CEC)) to establish appropriate multiyear compliance periods for local POUs beyond December 31, 2030. (Public Utilities Code §399.30(c)(2))

This bill provides that the provision related to the procurement of eligible renewable energy resources by POUs also applies to the compliance periods established by the CEC beyond 2030, thereby allowing large hydroelectric energy resources to count towards RPS compliance beyond 2030.

Background

Renewable Portfolio Standard. The CEC administers the state’s landmark RPS which ensures the state’s utilities disclose electricity sources to consumers, supports renewable energy development, and tracks the state’s progress toward its renewable energy goals. Enacted by SB 1078 (Sher, Chapter 516, Statutes of 2002) and accelerated and expanded by subsequent legislation, California’s RPS establishes increasing renewable energy procurement targets spanning multiyear compliance periods for the state’s electric load-serving entities (LSE). Originally applicable to retail sellers, the statewide mandatory RPS was expanded by SBX1-2 (Simitian, Chapter 1, Statutes of 2011-12 First Extraordinary Session) to include local POUs. As a result of SB 100 (DeLeón, Chapter 312, Statutes of 2018), electricity retail sellers, including POUs, are required to increase their procurement of eligible renewable energy resources to 60% of retail sales by 2030. As part of its responsibilities, the CEC verifies the eligibility of renewable energy procured by retail sellers and POUs that are obligated to participate in California’s RPS. The CEC is also responsible for certifying RPS-eligible renewable energy resources, designing and implementing an accounting system to track and report renewable energy procurement for all program participants, and overseeing compliance and enforcement of POUs. The CEC participated in the development of the Western Renewable Energy Generation Information System (WREGIS), an independently administered renewable energy tracking system to verify renewable energy procurement for all program participants. The California Public Utilities Commission (CPUC) is responsible for compliance and enforcement for retail sellers.

RPS and large hydroelectric generation. California’s RPS program, and other energy programs predating RPS, have made distinctions between smaller hydroelectric facilities and larger facilities, those that are over 30 MW. These distinctions have largely reflected state policy to discourage more damming of rivers due to the impacts to the natural habitats rivers provide and the state’s desire to encourage development of new renewable energy projects (including, but not limited to, solar and wind energy resources). The passage of SB 100 (De León, 2018) accelerated the RPS requirements by requiring all LSEs to meet a 60% RPS requirement by 2030 and requiring a planning goal of 100% renewable energy and zero-carbon resources by 2045.

Comments

Need for this bill. The author states:

AB 34 extends the authority of publicly owned utilities to count hydroelectric power toward renewable portfolio standards, helping stop potential rate increases for consumers and assisting with electricity affordability.

RPS and POUs. SB 100 (De León, Chapter 132, Statutes of 2018), and previous RPS updates, SB 350, (De León, Chapter 547, Statutes of 2015), included an exemption for POUs that requires they procure renewable energy only up to the retail sales unserved by large hydroelectric generation. This applies to POUs that generate more than 40% of their electricity from existing large hydroelectric sources in a given year. The goal of this exemption is to address affordability by preventing unnecessary procurement of energy and recognizing that hydroelectric generation is a flexible and zero carbon resource that complements intermittent renewables. However, the exemption currently applies only through the year 2030, while the RPS program itself extends indefinitely beyond 2030. This gap between the exemption timeline and expected lifetime of the RPS program affects the procurement of a small group of POUs who source much of their renewable energy from large hydroelectric generation. However, for these utilities the economic impacts of aligning the large hydroelectric exemption with the duration of the RPS program can be substantial.

Extending the large hydroelectric application within RPS will help address affordability. The City of Palo Alto Utilities (CPAU) is one of the POUs negatively affected by the 2030 expiration of the large hydroelectric exemption. Their analysis estimates it will cost CPAU roughly $25 million from 2030 – 2045 in excess renewable energy procurement. The additional purchase of unneeded renewable energy will also increase electricity rates for other utilities, particularly as the energy market in recent years has at times been characterized as a seller’s market. From CPAU’s perspective, this is an unacceptable prospect considering the affordability issues that California utility ratepayers face. Based on current resource portfolios, other potentially affected POUs include Biggs, Gridley, Healdsburg, and Silicon Valley, all members of the Northern California Power Agency, the sponsor of this bill. This bill would clarify that treatment of large hydroelectric energy resources continues beyond the 2030 date to include future RPS compliance periods.

Governor vetoes AB 1273 (Patterson) of 2025. A similar bill was vetoed by the Governor in 2025, although that bill included unrelated provisions regarding processes at the CPUC that seem to be the crux of the reason for the Governor’s veto. The Governor’s veto message stated:

While the clarification of eligibility for electric POUs under the RPS deserves attention, this bill′s requirements on the CPUC′s public decision-making processes risk delaying action on critical issues, including ones that the CPUC is often accused of not acting on judiciously and expediently.

Prior/Related Legislation

AB 1273 (Patterson, 2025) included similar language, in addition to unrelated provisions concerning CPUC meetings. The bill was vetoed.

SB 386 (Caballero, 2020) would have limited the RPS obligations for Turlock and Modesto Districts to the electricity demands that are unsatisfied by the Don Pedro Hydroelectric Project, and in exchange requires the districts to procure energy storage, as specified. The bill was held in the Senate, Energy, Utilities and Communications Committee.

SB 100 (De León, Chapter 312, Statutes of 2018) established the 100 Percent Clean Energy Act of 2017 which increased the 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.

SB 350 (De León, Chapter 547, Statutes of 2015) established the goal of receiving 50% of California’s electricity from eligible renewable energy resources.

SB 591 (Cannella, Chapter 520, Statutes of 2013) limited the Merced Irrigation District’s RPS obligation to the electricity demands that are unsatisfied by the New Exchequer Dam.

SBX1 2 (Simitian, Chapter 1, Statutes of 2011-12 First Extraordinary Session) required retail sellers of electricity and POUs to procure at least 33% of their electricity from renewable resources by 2020.

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

SUPPORT: (Verified 6/23/26)

Northern California Power Agency (Source)

OPPOSITION: (Verified 6/23/26)

None received

ARGUMENTS IN SUPPORT: The Northern California Power Agency states:

Public power communities across Northern California have invested more than a billion dollars into the Central Valley Project and other federal hydropower facilities. They repay capital and environmental costs with interest each year, regardless of drought or wet years. In years with high water, hydropower output can spike, and current law properly allows POUs to count that clean energy toward RPS compliance. Without AB 34, those utilities would be forced to purchase additional renewable resources they do not need, driving millions in unnecessary costs to ratepayers. For example, the City of Palo Alto Utilities estimates that expiration of the current provision would result in roughly $25 million in extra procurement costs between 2030 and 2045. AB 34 simply continues existing law to align the RPS with the reality of California’s hydropower system and ensures that public utilities and their customers are able to benefit from the clean power they have already funded. This bill protects ratepayers, supports affordability, and maintains California’s commitment to ambitious clean energy goals while recognizing the variability of hydropower in a changing climate.

ASSEMBLY FLOOR: 75-0, 1/26/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NO VOTE RECORDED: Arambula, Lee, Papan, Celeste Rodriguez, Ta

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

6/24/26 16:28:28

**** END ****

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Benjamin Allen, Chair

2025 - 2026 Regular

Bill No: Hearing Date: 6/8/2026

SUBJECT:

DIGEST: This bill clarifies eligibility related to future compliance periods of the Renewables Portfolio Standard (RPS) for local publicly owned electric utilities (POUs) who have existing procurement of large hydroelectric energy resources, specifically extends beyond 2030 the ability to reduce their RPS compliance requirements up to the retail sales unserved by large hydroelectric energy resources.

ANALYSIS:

Existing law:

1. Defines a “renewable electrical generation facility” as one that, among other requirements, uses biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts (MW) or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current, and any additions or enhancements to the facility using that technology. (Public Resources Code §25741)
2. Requires, via the California RPS Program, retail sellers and local POUs to procure a minimum quantity of electricity products from eligible renewable energy resources during certain compliance periods up to December 31, 2030. (Public Utilities Code §§399.15 and 399.30(a)(b)(c))
3. Defines eligible renewable energy resources include small hydroelectric generation facilities of 30 MW or less, conduit hydroelectric facilities, and the incremental increase in electrical generation resulting from efficiency improvements of existing small hydroelectric facilities. (Public Utilities Code §§399.12 and 399.12.5)
4. Provides that a local POU is not required to procure a certain amount of eligible renewable energy resources if, during a year within those compliance periods, the local POU receives more than 40% of its retail sales from large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018. (Public Utilities Code §399.30(k)(2))
5. Authorizes the State Energy Resources Conservation and Development Commission (California Energy Commission (CEC)) to establish appropriate multiyear compliance periods for local POUs beyond December 31, 2030. (Public Utilities Code §399.30(c)(2))

This bill provides that the provision related to the procurement of eligible renewable energy resources by POUs also applies to the compliance periods established by the CEC beyond 2030, thereby allowing large hydroelectric energy resources to count towards RPS compliance beyond 2030.

Background

Renewable Portfolio Standard. The CEC administers the state’s landmark RPS which ensures the state’s utilities disclose electricity sources to consumers, supports renewable energy development, and tracks the state’s progress toward its renewable energy goals. Enacted by SB 1078 (Sher, Chapter 516, Statutes of 2002) and accelerated and expanded by subsequent legislation, California’s RPS establishes increasing renewable energy procurement targets spanning multiyear compliance periods for the state’s electric load-serving entities (LSE). Originally applicable to retail sellers, the statewide mandatory RPS was expanded by SBX1-2 (Simitian, Chapter 1, Statutes of 2011-12 First Extraordinary Session) to include local POUs. As a result of SB 100 (DeLeón, Chapter 312, Statutes of 2018), electricity retail sellers, including POUs, are required to increase their procurement of eligible renewable energy resources to 60% of retail sales by 2030. As part of its responsibilities, the CEC verifies the eligibility of renewable energy procured by retail sellers and POUs that are obligated to participate in California’s RPS. The CEC is also responsible for certifying RPS-eligible renewable energy resources, designing and implementing an accounting system to track and report renewable energy procurement for all program participants, and overseeing compliance and enforcement of POUs. The CEC participated in the development of the Western Renewable Energy Generation Information System (WREGIS), an independently administered renewable energy tracking system to verify renewable energy procurement for all program participants. The California Public Utilities Commission (CPUC) is responsible for compliance and enforcement for retail sellers.

RPS and large hydroelectric generation. California’s RPS program, and other energy programs predating RPS, have made distinctions between smaller hydroelectric facilities and larger facilities, those that are over 30 MW. These distinctions have largely reflected state policy to discourage more damming of rivers due to the impacts to the natural habitats rivers provide and the state’s desire to encourage development of new renewable energy projects (including, but not limited to, solar and wind energy resources). The passage of SB 100 (De León, 2018) accelerated the RPS requirements by requiring all LSEs to meet a 60% RPS requirement by 2030 and requiring a planning goal of 100% renewable energy and zero-carbon resources by 2045.

Comments

Need for this bill. The author states:

AB 34 extends the authority of publicly owned utilities to count hydroelectric power toward renewable portfolio standards, helping stop potential rate increases for consumers and assisting with electricity affordability.

RPS and POUs. SB 100 (De León, 2018), and previous RPS updates, SB 350, (De León, Chapter 547, Statutes of 2015), included an exemption for POUs that requires they procure renewable energy only up to the retail sales unserved by large hydroelectric generation. This applies to POUs that generate more than 40% of their electricity from existing large hydroelectric sources in a given year. The goal of this exemption is to address affordability by preventing unnecessary procurement of energy and recognizing that hydroelectric generation is a flexible and zero carbon resource that complements intermittent renewables. However, the exemption currently applies only through the year 2030, while the RPS program itself extends indefinitely beyond 2030. This gap between the exemption timeline and expected lifetime of the RPS program affects the procurement of a small group of POUs who source much of their renewable energy from large hydroelectric generation. However, for these utilities the economic impacts of aligning the large hydroelectric exemption with the duration of the RPS program can be substantial.

Extending the large hydroelectric application within RPS will help address affordability. The City of Palo Alto Utilities (CPAU) is one of the POUs negatively affected by the 2030 expiration of the large hydroelectric exemption. Their analysis estimates it will cost CPAU roughly $25 million from 2030 – 2045 in excess renewable energy procurement. The additional purchase of unneeded renewable energy will also increase electricity rates for other utilities, particularly as the energy market in recent years has at times been characterized as a seller’s market. From CPAU’s perspective, this is an unacceptable prospect considering the affordability issues that California utility ratepayers face. Based on current resource portfolios, other potentially affected POUs include Biggs, Gridley, Healdsburg, and Silicon Valley, all members of the Northern California Power Agency, the sponsor of this bill. This bill would clarify that treatment of large hydroelectric energy resources continues beyond the 2030 date to include future RPS compliance periods.

Governor vetoes AB 1273 (Patterson) of 2025. A similar bill was vetoed by the Governor in 2025, although that bill included unrelated provisions regarding processes at the CPUC that seem to be the crux of the reason for the Governor’s veto. The Governor’s veto message stated:

While the clarification of eligibility for electric POUs under the RPS deserves attention, this bill′s requirements on the CPUC′s public decision-making processes risk delaying action on critical issues, including ones that the CPUC is often accused of not acting on judiciously and expediently.

Dual Referral. Should this bill be approved by this committee, it will be re-referred to the Senate Environmental Quality Committee.

Prior/Related Legislation

AB 1273 (Patterson) of 2025, included similar language, in addition to unrelated provisions concerning CPUC meetings. The bill was vetoed.

SB 386 (Caballero) of 2020, would have limited the RPS obligations for Turlock and Modesto Districts to the electricity demands that are unsatisfied by the Don Pedro Hydroelectric Project, and in exchange requires the districts to procure energy storage, as specified. The bill was held in the Senate, Energy, Utilities and Communications Committee.

SB 100 (De León, Chapter 312, Statutes of 2018) established the 100 Percent Clean Energy Act of 2017 which increased the 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.

SB 350 (De León, Chapter 547, Statutes of 2015) established the goal of receiving 50% of California’s electricity from eligible renewable energy resources.

SB 591 (Cannella, Chapter 520, Statutes of 2013) limited the Merced Irrigation District’s RPS obligation to the electricity demands that are unsatisfied by the New Exchequer Dam.

SBX1 2 (Simitian, Chapter 1, Statutes of 2011-12 First Extraordinary Session) required retail sellers of electricity and POUs to procure at least 33% of their electricity from renewable resources by 2020.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Northern California Power Agency (Sponsor)

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: The Northern California Power Agency states:

Public power communities across Northern California have invested more than a billion dollars into the Central Valley Project and other federal hydropower facilities. They repay capital and environmental costs with interest each year, regardless of drought or wet years. In years with high water, hydropower output can spike, and current law properly allows POUs to count that clean energy toward RPS compliance. Without AB 34, those utilities would be forced to purchase additional renewable resources they do not need, driving millions in unnecessary costs to ratepayers. For example, the City of Palo Alto Utilities estimates that expiration of the current provision would result in roughly $25 million in extra procurement costs between 2030 and 2045. AB 34 simply continues existing law to align the RPS with the reality of California’s hydropower system and ensures that public utilities and their customers are able to benefit from the clean power they have already funded. This bill protects ratepayers, supports affordability, and maintains California’s commitment to ambitious clean energy goals while recognizing the variability of hydropower in a changing climate.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 34

Author:(Patterson)

As Amended Ver:January 5, 2026

Majority vote

SUMMARY

Extends, beyond 2030, existing provisions of the Renewables Portfolio Standard (RPS) that allow certain publicly owned utilities (POUs) with large hydroelectric resources to reduce their RPS obligations, as specified.

Major Provisions

COMMENTS

The RPS statute requires each retail seller of electricity, such as an electric utility, to procure 20% of total retail sales of electricity in California from eligible renewable energy resources by December 31, 2013, 33% by December 31, 2020, 50% by December 31, 2026, and 60% by December 31, 2030. Statute defines the types of electricity generation facilities that are eligible for credit under the RPS, including solar and wind energy, among others. Statute also makes generated by a hydroelectric facility RPS-eligible, but only if the facility has a generation capacity of 30 megawatts (MW) or less.

Since 2013, the RPS statute has accommodated POUs that have existing large hydroelectric resources (>30 MW) in excess of the fraction of RPS-eligible resources the POU would otherwise be required to procure. For example, a POU that received 45% of its electricity from a larger hydroelectric facility in 2028 would need to procure only 15% of its retail sales of electricity from RPS-eligible electricity generation resources.

This accommodation does not make large hydro eligible for the RPS, but it does effectively reduce the requirement to procure RPS-eligible resources for a few smaller POUs in Northern California. The most prominent example is the City of Palo Alto, which in 2024 reported 59% of its retail electricity sales were sourced from large hydro. Other POUs that have been near the 40% mark in recent years include Biggs, Gridley, and Redding. Most of the large hydro in these POUs' portfolios is from longstanding contracts with the federal Western Area Power Administration for hydroelectricity generated by Central Valley Project. These contracts continue beyond 2030.

This accommodation has been modified a couple times as the RPS has been amended, most recently by SB 100 (De León), Chapter 312, Statutes of 2018, which established the current RPS targets – ultimately 60% by 2030 and thereafter.

Current law makes this exemption effective during any year within a compliance period set forth in statute. However, the last compliance period set forth in statute is January 1, 2028, to December 31, 2030. So, the statutory exemption for POU large hydroelectric generation ends in 2031. This bill, by tying the exemption to "all other compliance periods" makes the exemption, in effect, permanent.

According to the Author

According to the author, "AB 34 extends the authority of publicly owned utilities to count hydroelectric power toward renewable portfolio standards, helping stop potential rate increases for consumers and assisting with electricity affordability."

Arguments in Support

The Northern California Power Agency (NCPA) writes in support of the bill, characterizing the measure as protecting ratepayers. NCPA notes "without AB 34, those utilities would be forced to purchase additional renewable resources they do not need, driving millions in unnecessary costs to ratepayers." NCPA also notes that the measures "simply continues existing law" [beyond 2030].

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations, this bill will result in some workload at the California Energy Commission; but that it "seems reasonable to assume [the work] will be minor."

VOTES

ASM UTILITIES AND ENERGY: 15-0-3

YES: Petrie-Norris, Patterson, Boerner, Chen, Mark González, Harabedian, Irwin, Kalra, Papan, Rogers, Schiavo, Schultz, Ta, Wallis, Zbur

ABS, ABST OR NV: Calderon, Davies, Hart

ASM NATURAL RESOURCES: 12-0-1

YES: Bryan, Alanis, Connolly, Patterson, Garcia, Haney, Hoover, Kalra, Muratsuchi, Schultz, Wicks, Zbur

ABS, ABST OR NV: Pellerin

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Stefani, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Bauer-Kahan, Pacheco, Pellerin, Solache, Ta, Tangipa

UPDATED

VERSION: January 5, 2026

CONSULTANT: Laura Shybut / U. & E. / (916) 319-2083 FN: 0002215

Date of Hearing: January 22, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 34

Author:(Patterson) – As Amended Ver:January 5, 2026

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

SUMMARY:

This bill extends indefinitely provisions of existing statute that allow a publicly owned utility (POU) to reduce its periodic obligation to procure electricity generated from renewable resources in proportion with the amount of electricity it receives from pre-existing hydroelectric resources.

FISCAL EFFECT:

This bill will likely create some workload for the California Energy Commission (CEC), which statute tasks with accounting compliance with the state’s Renewable Portfolio Standard (RPS). While the amount of this workload is unknown, it seems reasonable to assume it will be minor and that CEC could absorb it within existing resources.

COMMENTS:

The RPS statute requires each retail seller of electricity, such as an electric utility, to procure 20% percent of total retail sales of electricity in California from eligible renewable energy resources by December 31, 2013, 33% by December 31, 2020, 50% by December 31, 2026, and 60% by December 31, 2030. Statute defines the types of electricity generation facilities that are eligible for credit under the RPS. These facilities include those that generate electricity using renewable resources, such as solar energy and wind energy, among others. Statute also makes eligible for RPS credit electricity generated by a hydroelectric facility, but only if the facility has a generation capacity of 30 megawatts or less.

The Legislature established this limitation in recognition of the environmental harms caused by large hydroelectric facilities and to encourage the development of renewable energy resources other than large hydroelectric facilities. However, the limitation created a problem for several of the state’s smaller POUs that relied on large, legacy hydroelectric facilities for significant portions of the electricity used in their respective service territories. Such a POU was faced with the prospect of procuring additional electricity simply to comply with the POU’s RPS obligations, even though the POU had received much of its electricity from a greenhouse-gas (GHG)-free generation resource, the existence of which predated the RPS. Many parties objected to such an outcome, noting that it placed a cost on these POUs’ ratepayers without reducing electricity-generation-related GHG emissions.

In response, in 2018, the Legislature passed a law to allow a POU that receives more than 40% of its retail sales from large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018, to reduce its RPS procurement obligation in proportion to that hydroelectric generation. For example, a POU that received 45% of its electricity from a larger pre-2018 hydroelectric facility in 2026 would need procure only 15% of its retail sales of electricity from RPS-eligible electricity generation resources.

The law makes this exemption effective during any year within a compliance period set forth in statute. However, the last compliance period set forth in statute is January 1, 2028, to December 31, 2030. So, the statutory exemption for POU large hydroelectric generation ends in 2031. This bill, by tying the exemption to “all other compliance periods” makes the exemption, in effect, permanent.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: January 16, 2026

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Isaac G. Bryan, Chair

ABPCA Bill Id:AB 34 (

Author:Patterson) – As Amended Ver:January 5, 2026

SUBJECT: California Renewables Portfolio Standard Program: local publicly owned electric utilities: large hydroelectric generation

SUMMARY: Extends existing provisions of the Renewables Portfolio Standard (RPS) that permit a proportional reduction in RPS requirements for publicly-owned utilities (POUs) with large (over 30 megawatts) hydroelectric resources in excess of 40% of retail electricity sales, so that these provisions apply beyond 2030.

EXISTING LAW:

1. Requires utilities and other retail sellers of electricity to procure 60% of their retail electricity sales from eligible renewable energy resources by 2030 and thereafter. (Public Utilities Code (PUC) 399.11 et seq.)
2. Provides that a local POU is not required to procure eligible renewable energy resources in excess of retail electricity sales unmet by large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018. This provision applies to specified compliance period through December 31, 2030. (PUC 399.30(k)(2))
3. Authorizes the California Energy Commission (CEC) to establish appropriate multiyear compliance periods for local POUs beyond 2030. (PUC 399.30(c)(2))
4. Defines “eligible renewable energy resource” as an electrical generating facility that uses biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current, subject to multiple conditions. (Public Resources Code 25741)

FISCAL EFFECT: Unknown

COMMENTS:

1. Background. Since 2013, the RPS statute has accommodated POUs that may have existing large hydroelectric resources in excess of the fraction of RPS-eligible resources the POU would otherwise be required to procure, saving these POUs from having to procure renewable resources not needed to serve their customers in order to comply with the RPS.

This accommodation has been modified a couple times as the RPS has been amended, most recently by SB 100 in 2018, which established the current RPS targets – ultimately 60% by 2030 and thereafter.

Under SB 100, a POU that owns, or has a pre-2018 contract for, large hydroelectric resources in excess of 40% of retail sales may reduce proportionally its 60% RPS procurement obligation. This does not make large hydro eligible for the RPS, but it does effectively reduce the requirement to procure RPS-eligible resources for a few smaller POUs in Northern California. The most prominent example is the City of Palo Alto, which in 2024 reported 59% of its retail electricity sales were sourced from large hydro. Other city POUs that have been near the 40% mark in recent years include Biggs, Gridley, and Redding. Most of the large hydro in these POUs’ portfolios is from longstanding contracts with the federal Western Area Power Administration for hydroelectricity generated by Central Valley Project. These contracts continue beyond 2030.

1. Author’s statement:

AB 34 extends the authority of publicly owned utilities to count hydroelectric power toward renewable portfolio standards, helping stop potential rate increases for consumers and assisting with electricity affordability.  

1. Prior legislation:

SB 591 (Cannella), Chapter 520, Statutes of 2013. Following increased RPS targets established in 2011, SB 591 limited the RPS procurement obligations of the Merced Irrigation District (MID) to the portion of MID's electricity demands unsatisfied by its own hydroelectric generation.

SB 350 (De León), Chapter 547, Statutes of 2015. SB 350 increased the RPS to 50% and expanded the MID provisions to apply to any POU with large hydro in excess of 50%.

SB 100 (De León), Chapter 312, Statutes of 2018. SB 100 increased the RPS to 60% and adjusted the POU large hydro exception to 40%.

AB 1273 (Patterson, 2025) primarily prohibited the Public Utilities Commission from placing certain rate increase items on its consent calendar, but a provision identical to this bill was added in the Senate. AB 1273 was vetoed due to the former provision.

1. Double referral. This bill was heard and approved by the Utilities and Energy Committee on January 15, 2026.

REGISTERED SUPPORT / OPPOSITION:

Support

Northern California Power Agency

Opposition

None on file

Analysis Prepared by: Lawrence Lingbloom / NAT. RES. /

Date of Hearing: January 15, 2026

ASSEMBLY COMMITTEE ON UTILITIES AND ENERGY

Cottie Petrie-Norris, Chair

ABPCA Bill Id:AB 34 (

Author:Patterson) – As Amended Ver:January 5, 2026

SUBJECT: California Renewables Portfolio Standard Program: local publicly owned electric utilities: large hydroelectric generation

SUMMARY: This bill extends an existing Renewables Portfolio Standard (RPS) exemption for publicly owned utilities (POUs), permitting their existing large hydroelectric resources meet RPS requirements beyond 2030.

EXISTING LAW:

1. Defines a “renewable electrical generation facility” as one that, among other requirements, uses biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts (MW) or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current, and any additions or enhancements to the facility using that technology. (Public Resources Code § 25741)
2. Requires under the California RPS Program that retail sellers and local POUs procure a minimum quantity of electricity products from eligible renewable energy resources during certain compliance periods up to December 31, 2030. (Public Utilities Code §§ 399.15 and 399.30(a)(b)(c))
3. Defines eligible renewable energy resources, to include small hydroelectric generation facilities of 30 MW or less, conduit hydroelectric facilities, and the incremental increase in electrical generation resulting from efficiency improvements of existing small hydroelectric facilities. (Public Utilities Code §§ 399.12, 399.12.5)
4. Provides that a local POU is not required to procure a certain amount of eligible renewable energy resources if, during a year within those RPS compliance periods, the local POU receives more than 40% of its retail sales from large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018. (Public Utilities Code § 399.30(k)(2))
5. Authorizes the State Energy Resources Conservation and Development Commission (i.e., the California Energy Commission (CEC)) to establish appropriate multiyear compliance periods for local POUs beyond December 31, 2030. (Public Utilities Code § 399.30(c)(2))

FISCAL EFFECT: Unknown. This bill is keyed fiscal and will be referred to the Assembly Committee on Appropriations for its review. The Senate Committee on Appropriations identified no fiscal impact from similar provisions contained in AB 1273 (Patterson, 2025).

BACKGROUND:

California’s RPS Program. Enacted by Senate Bill 1078 (Sher, Chapter 516, Statutes of 2002) and accelerated and expanded by subsequent legislation, California’s RPS establishes increasing renewable energy procurement targets spanning multiple years – known as “compliance periods” – for the state’s electric load-serving entities (LSE). Originally applicable to retail sellers, the statewide mandatory RPS was expanded by Senate Bill X1-2 (Simitian, Chapter 1, Statutes of 2011, First Extraordinary Session) to include local POUs.

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. This policy was updated under SB 1020 (Laird, Chapter 361, Statutes of 2022) which established interim targets of 90% by 2035 and 95% by 2040 for all LSEs (except state agencies).

As part of its responsibilities, the CEC verifies the eligibility of renewable energy procured by retail sellers and POUs that are obligated to participate in California’s RPS. The CEC is also responsible for certifying RPS-eligible renewable energy resources, designing and implementing an accounting system to track and report renewable energy procurement for all program participants, and overseeing compliance and enforcement of POUs.

Driven by the RPS Program, California has progressed in decarbonizing its energy sector. Today, the majority of the state’s electricity mix is zero-carbon resources.^[1] Solar energy has been the dominant source, with its growth largely attributed to cheaper prices and California’s abundant solar capacity. However, as solar generation increases in California, the mismatch between when energy is generated and when it is needed poses challenges for grid stability and operation. As a result, California’s retail electric providers often need to purchase electricity to separately serve RPS and reliability compliance (capacity) obligations.

COMMENTS:

1. Author’s Statement. According to the author, “AB 34 extends the authority of publicly owned utilities to count hydroelectric power toward renewable portfolio standards, helping stop potential rate increases for consumers and assisting with electricity affordability.”
2. Counting Large Hydroelectric Generation. According to the CEC, in 2024, total generation for California was 278,338 gigawatt-hours (GWh).^[2] Approximately 62% was due to zero-carbon generation (nuclear, hydroelectric, and renewables); while 11% was due solely to large hydro generation. California’s RPS program, and other energy programs predating RPS, have distinguished between smaller and larger hydroelectric facilities as those that are either at or below (small) or over (large) 30 MW – enough electricity to power nearly 30,000 households. These distinctions have reflected state policy concerning natural river habitats, which discourage more damming of rivers, as well as state policy which encourages the development of new, alternative renewable energy projects.

The current RPS program, however, includes an exemption for POUs that generate more than 40% of their electricity each year from existing (pre-2018) large hydroelectric sources. For those POUs, they need only procure renewable energy up to the retail sales unserved by large hydroelectric generation. (i.e., for a POU with 99% of retail sales served by large hydro, their RPS obligation would only be 1% of retail sales.)

As currently written, this statutory exemption applies only to the RPS compliance periods through 2030. After 2030, statewide policy transitions to the SB 100 goals – i.e., 100% zero-carbon by 2045, made up of 60% renewable resources and 40% zero-carbon resources. Statute directs the CEC to determine the POU compliance periods for all subsequent years beyond 2030 but does not extend the POUs’ large hydroelectric exemption to cover these subsequent years.

This gap affects a small group of POUs who source much of their renewable energy from large hydroelectric generation. The City of Palo Alto Utilities (CPAU) is one of the POUs negatively affected by expiration of this exemption. Their analysis estimates it will cost CPAU roughly $25 million from 2030-2045 in excess renewable energy procurement, to replace retail sales currently served by their large hydroelectric resources. This bill would clarify that the current exemption continues beyond the 2030 date to include future compliance periods.

1. AB 1273 (Patterson, 2025) and the Governor’s Veto. In July of last year, the author included the same statutory amendment in his AB 1273, a bill focused on Public Utilities Commission (CPUC) public comment practices. AB 1273 (Patterson, 2025) advanced to Governor Newsom’s desk with both the CPUC reform provisions and the POU RPS provisions included. The Governor vetoed AB 1273 due to concern with the CPUC provisions, but stated in his veto message that “the clarification of eligibility for electric POUs under the RPS deserves attention.”^[3] This bill narrows the earlier effort in AB 1273 to focus solely on that RPS provision.
2. Prior Legislation.

AB 1191 (Tangipa, 2025) includes large hydroelectric generation resources as eligible renewable resources in the RPS Program. Deletes current allowances to RPS eligibility for specified, legacy large hydro or upgraded small hydro resources. Status: Failed passage in the Assembly Committee on Utilities and Energy; reconsideration granted.

AB 1273 (Patterson, 2025) would have changed the CPUC rules regarding items eligible for the consent agenda and public comment periods for rate setting cases. The bill would have also changed the eligibility of RPS compliance for local publicly owned electric utilities (POUs) who have existing large hydroelectric resources. Status: Vetoed.

SB 386 (Caballero, 2020) would have limited the RPS obligations for Turlock and Modesto Districts to the electricity demands that are unsatisfied by the Don Pedro Hydroelectric Project, and in exchange requires the districts to procure energy storage, as specified. Status: Died – Senate Committee on Energy, Utilities, and Communications.

SB 100 (De León) established the 100 Percent Clean Energy Act of 2017 which increased the 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.

SB 350 (De León) established the goal of receiving 50 of California’s electricity from eligible renewable energy resources. Status: Chapter 547, Statutes of 2015.

SB 591 (Cannella) limited the Merced Irrigation District’s RPS obligation to the electricity demands that are unsatisfied by the New Exchequer Dam. Status: Chapter 520, Statutes of 2013.

SBX1-2 (Simitian) required retail sellers of electricity and POUs to procure at least 33% of their electricity from renewable resources by 2020. Status: Chapter 1, Statutes of 2011-12 First Extraordinary Session.

1. Double Referral. This bill is double referred. Upon passage in this committee, it will be referred to the Assembly Committee on Natural Resources for its review.

REGISTERED SUPPORT / OPPOSITION:

Note: This bill was significantly amended on January 5^th. Position letters currently on file are in reference to the previous version of the bill, which is unrelated to its current policy.

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Laura Shybut / U. & E. / (916) 319-2083

1. 62% as of 2024; see https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2024-total-system-electric-generation ↑

2. Ibid. ↑

3. file:///C:/Users/shybutla/Downloads/202520260AB1273_Assembly%20Floor%20Analysis.pdf ↑