Assembly Standing Committee on Utilities and Energy
- Eduardo Garcia
Person
Good afternoon, everyone. We're going to get started as a Subcommitee. We will then establish a quorum once we have folks here. I know we have two authors already that are eager to present, so we'll give them the opportunity to do so. Welcome. We are now calling to order the Assembly Committee on Utilities and Energy Hearing and ask the sergeants to please call the absent Members before we move the agenda. I have a few housekeeping announcements to make.
- Eduardo Garcia
Person
Assembly Member Tina Mckinnor will be substituting for Assembly Member Rebecca Bauer-Khan. Assembly Member Diane Dixon will be substituting for Assembly Member Jim Patterson. Welcome. Today we have 13 measures on the agenda, seven are on consent, and as always, we will maintain decorum during the hearing as is customary in order to hear from all of the public witnesses within their time limits of course. We will not permit or disorderly conduct, and we do have the right to ask the sergeants to remove folks from the room.
- Eduardo Garcia
Person
Testimony is limited to four minutes total, two minutes support, two minutes opposition. For any additional witnesses on a measure only state your name, position and affiliation, if any. If we exceed this time, please submit your testimony through the email address on your website.
- Eduardo Garcia
Person
And so we don't have a quorum, but we will ask the first Member to present, will be Mr. Berman, and I will just mention that AB 1664, Assembly Member Friedman's bill, was pulled off of the consent calendar and we will be hearing that as well.
- Marc Berman
Legislator
Thank you, Mr. Chair.
- Marc Berman
Legislator
Mr. Chair and colleagues. First, I really want to thank Committee staff for their work on this bill. I will be accepting the Committee's suggested amendments that further clarify the bill. Industrial emissions are the second largest source of greenhouse gas emissions in California. While the state continues to be a leader in transitioning from combustion to zero-emission technologies in the electricity and transportation sectors, industrial emissions have largely remained unaddressed.
- Marc Berman
Legislator
Therefore, we must identify the low-hanging fruit in industrial electrification that can help California meet its carbon neutrality goals. If we do not start planning now, we risk a disorderly, expensive, and last-minute effort to reduce industrial emissions to meet our climate goals. AB 841 is a key first step for California to push the transition of our industrial sectors to zero-emission by tasking the California Energy Commission with preparing an industrial heat electrification roadmap on or before January 1st, 2025.
- Marc Berman
Legislator
This report will provide a critical information for the state to continue in our efforts to reduce our emissions, and I respectfully ask for an aye vote. And with me today are the bill's sponsors, Mark Fenstermaker, on behalf of Earth Justice, and Kayla Robinson, on behalf of Industrious Labs.
- Mark Fenstermaker
Person
Thank you very much, Mr. Chair. Mark Fenstermaker, on behalf of Earth Justice, a proud cosponsor of the bill. As Mr. Berman just noted, industrial emissions are the second largest for greenhouse gases in the state, but in addition, they're also a key source of large quantities of criteria, air pollutants, and toxic air contaminants that add to the heavy air pollution that burdens primarily low-income and underresourced communities.
- Mark Fenstermaker
Person
Unfortunately, emissions from this sector have remained flat or even risen in recent years, and we have continued to hear that they are hard to decarbonize or hard to electrify. But technology is developing fast. These industrial sub-sectors, such as food manufacturing and commercial bakeries, paper and pulp production, glass manufacturing and beverage production, can be transitioned to electric zero-emission appliances.
- Mark Fenstermaker
Person
And we are seeing some movement at the local level, such as at the South Coast Air Quality Management District, which is currently considering a commercial oven rule, setting a standard for some industrial grade oven categories to be all-electric. The potential to electrify commercial ovens and boilers and transition to industrial heat pumps will eliminate a major source of emissions in communities across California that are overburdened by air pollution.
- Mark Fenstermaker
Person
But to make this transition happen, we need to evaluate which industrial processes can feasibly electrify, create a focus on benefiting underresourced communities as quickly as possible, and develop a plan to pull this transition together. And that's what AB 841 proposes. We want to thank Assembly Member Berman for authoring this bill and respectfully ask for your aye vote.
- Kayla Robinson
Person
Good afternoon, Chair and Members. Kayla Robinson on behalf of Industrious Labs, an organization leading efforts to decarbonize the global industrial sector by 2045. California is a leader in manufacturing as we know, and critically, we have a host of industries that have simple, clean energy-based solutions to reducing emissions. Despite knowing that these solutions exist, the state does not have a roadmap on how to strategically electrify low heat portions of this sector.
- Kayla Robinson
Person
The U.S. Department of Energy is allocating approximately six billion dollars in funding to accelerate the decarbonization of energy-intensive industries, and additionally, California itself plans to invest at least 90 million of its own dollars towards decarbonizing this sector. So without an electrification roadmap and current data to help guide this funding moving forward, California will miss an opportunity to access these federal funds and strategically invest state dollars in the most cost-effective way.
- Kayla Robinson
Person
AB 841 is critical to guiding these investments in the strategy necessary to decarbonize the sector. So for these reasons, respectfully ask for your aye vote. Thank you.
- Eduardo Garcia
Person
Thank you. We'll ask to see if there's anyone speaking in opposition. Primary witnesses in opposition. Okay. Seeing no one come forward, I will open it up for public comments. Anyone can speak in favor or against the bill. Please state your name, affiliation, and your position.
- Rod Brewer
Person
Good afternoon, Mr. Chair and Members. Rod Brewer for Southern California Edison, here in support for Assembly Member Berman's bill.
- Marc Berman
Legislator
Why are we so surprised?
- Eduardo Garcia
Person
Thank you. Anyone else? Okay, I'll bring it back to dais. Any questions for the author? Any comments? Any complaints?
- Marc Berman
Legislator
I hope not.
- Eduardo Garcia
Person
All right. Is there a motion to move his bill? Motion and a second, and at the right moment, we'll take full action. Would you like to close?
- Marc Berman
Legislator
Respectfully ask for your aye vote.
- Marc Berman
Legislator
Respectfully ask for your Aye vote. Appreciate you.
- Eduardo Garcia
Person
Thank you. Bill does have a support recommendation with the amendments that were accepted. Item three, AB 1198. Mr. Grayson.
- Unidentified Speaker
Person
For both of you.
- Timothy Grayson
Legislator
Good afternoon, Mr. Chair and Members and I would also like to thank the Committee as well for their work on the Bill and would like to accept Committee suggested amendments. I am pleased to present to you AB 1198, which establishes the Equity and Energy Task Force to develop a comprehensive strategy aimed at addressing equity and participation in the energy industry.
- Timothy Grayson
Legislator
California has been and continues to be a global leader on climate change policy, and as a result, the state has made significant and sustained investments towards programs whose purpose is to reduce California's greenhouse gas emissions, offering a variety of funding opportunities to advance the state's transition to clean energy and transportation. Furthermore, small businesses or small business enterprise play a critical role in fighting climate change. California's small businesses account for 99.8% of business and 1.2 million are minority-owned.
- Timothy Grayson
Legislator
While they each can have a relatively small carbon footprint, the overall impact of those emissions can be huge. Despite the significant role that minority small businesses have in the clean energy transition, there remains a huge gap in minority small business enterprise participation in the market transition to a low carbon future. Small businesses may lack the same resources and support that larger corporations have when it comes to reducing emissions and implementing new technologies and operations.
- Timothy Grayson
Legislator
It is essential that minority enterprises actively participate in delivering solutions that help California achieve its aggressive climate goals. But the state needs to support disadvantaged businesses by providing effective pathways and resources to create community wealth-building opportunities. AB 1198 establishes the Equity and Energy Task Force to take a comprehensive look at all energy-related policies in California and identify gaps that may exist for minority-owned businesses and their employees.
- Timothy Grayson
Legislator
By establishing this task force, AB 1198 will help us achieve our climate goals and support our essential small businesses. With that and through the Chair, I would like to introduce my witnesses, Pat Fong, President and CEO of the California Asian Chamber of Commerce, as well as Julian Konetti, President and CEO of California Hispanic Chambers of Commerce.
- Eduardo Garcia
Person
All right, welcome. Please proceed.
- Pat Kushida
Person
Thank you. Good afternoon. Can you all hear me okay?
- Unidentified Speaker
Person
Hold the mic closer, please. Thank you.
- Pat Kushida
Person
Okay, here we go. All right. Better? Okay. Good afternoon, chair Garcia and Committee Members. Ms. Pat Fong Kushida I'm President CEO of the California Asian Pacific Chamber of Commerce. The CalAsian Chamber was formed in 2010 and represents over 600,000 Asian American and Pacific Islander-owned businesses across California.
- Pat Kushida
Person
I want to thank Assembly Member Tim Grayson for authoring AB 1198, along with the other Members that have coauthored this pivotal piece of legislation. As the state makes its transition with a goal of achieving carbon neutrality by 2045, together with our statewide ethnic chambers and our small business coalition, we want to emphasize that small businesses play a significant role in combating climate change and need support to fully participate in this transition to a green economy.
- Pat Kushida
Person
As the Assembly Member referenced, California's small business accounts for 99.8% of all businesses here in California, and 30% of those businesses are minority-owned. An individual small business can have a relatively small carbon footprint, but collectively the impact of those emissions are significant. In order to reach the state's goal of achieving carbon neutrality, it's imperative to incentivize and assist small businesses to make clean energy investments. We commend the state for making investments towards programs aimed at reducing California's greenhouse gas emissions.
- Pat Kushida
Person
However, our small businesses may lack the same resources and support that larger companies have to make this transition. We are in full support of AB 1198 as this Bill will establish the Equity and Energy Task Force to take a comprehensive look at all the energy-related mandates and policies within California and identify the gaps and barriers that exist for our minority-owned businesses. Thank you.
- Julian Canete
Person
Good afternoon, Mr. Chairman, Committee Members, Julian Canete President CEO at the California Hispanic Chambers of Commerce. We are pleased to co-sponsor AB 1198, and we want to thank Assemblymember Grayson not only for authoring the Bill, but for his enthusiasm about the Bill and carrying it forward. And we would also like to thank his staff and the Committee consultant for their hard work and effort on this piece of legislation. AB 1198 simply establishes a 15-member task force within GO-Biz.
- Julian Canete
Person
We are happy to say that this task force would also include representation from California's ethnic and diverse communities. The Bill would take a deeper dive into how energy policies will and have impacted small businesses. The task force will then provide a report with statistics and data that can help shape better the policies and provide the information, what truly needs to be done to assist small businesses in various issues, including access to capital, et cetera, to fulfill obligations required by these policies and perhaps reshaping these policies.
- Julian Canete
Person
We're experiencing some issues now when we have companies that are trying to go green and are they getting the assistance and the grants that they really need out there. We look forward to working closely with the task force on these issues outlined in this Bill. Again, thank you for the opportunity to address you this afternoon, and we ask for your support of AB 1198.
- Eduardo Garcia
Person
Thank you, sir. We will ask to see if there are any primary witnesses in opposition, in opposition to this Bill. Please come forward. Seeing no one, we will open it up for public comments. You may wish to express your support or opposition to the Bill. Your name, affiliation, and again, your position.
- Mimi Khalili
Person
Mimi Khalili with AG Global Solutions, representing the Fresno Metro Black Chamber of Commerce, in support.
- Assagai, Mel
Person
Mr. Chair and Members, Mel Assagai with the California African American Chamber of Commerce, in strong support and a proud co-sponsor.
- Eduardo Garcia
Person
Okay. Seeing no one else bring it to the dias. Okay. We have motion. Ms. Connolly. Second, Ms. Schiavo. Any questions? Comments? Okay. Yes.
- Pilar Schiavo
Legislator
Just wanted to thank you for bringing this forward and the sponsors. And as a small business owner, I know how hard it can be and want to be added on as a co author, if you'd have me love to support the Bill. Thank you.
- Timothy Grayson
Legislator
Would be honored to have you as co-author.
- Eduardo Garcia
Person
All right. Would you like to close?
- Timothy Grayson
Legislator
Thank you so much for your consideration. Respectfully asks for an Aye vote.
- Eduardo Garcia
Person
All right. We will take action once we establish quorum. Again, thank you for presenting. Mr. Gabriel. Please proceed.
- Jesse Gabriel
Legislator
Thank you very much, Mr. Chair and Members. And I want to start by accepting the Committee amendments. I want to thank you and your staff for your thoughtful feedback and assistance here. I will be very brief. We have introduced a number of bills this year around the idea of expanding our EV charging infrastructure in the state. Obviously, with the Governor's Executive Order, we're no longer going to be selling internal combustion engines here in the State of California in just a few years.
- Jesse Gabriel
Legislator
And we have nowhere near the EV deployment infrastructure, nowhere near the deployment of EV charging infrastructure that we need to be ready for that future. And so we have introduced a number of proposals to try to address that, to try to expedite the deployment of EV charging infrastructure.
- Jesse Gabriel
Legislator
And this is a very small piece of that package of bills that we have introduced to basically take a look at how we might be able to convert gas stations, where appropriate, particularly along transit corridors for folks who are going to take longer trips into. To identify what would be the financial incentives and regulatory incentives to get folks to install EV charging at gas stations.
- Jesse Gabriel
Legislator
I've always said that we will be where we need to be when charging your electric vehicle is as easy as filling up your tank at a gas station, and we are nowhere near that yet. So we're hoping to look at what are some of the incentives, what are some of the regulatory boundaries?
- Jesse Gabriel
Legislator
How can we take advantage of all of these gas stations, particularly along our main transit corridors, provide EV charging infrastructure there so folks can get over some of their range anxiety, have confidence in purchasing electric vehicles, and we can move towards a future that's going to be better for our planet and better for our kids. So with that, would respectfully request an Aye vote.
- Eduardo Garcia
Person
Thank you. Do you have any primary witnesses for the Bill? All right, and anyone wishing to be primary witness in opposition? Okay, see no one. I'll open it up for public comments. Anyone wishing to speak in public comments? None. Bring it back to the dais. Questions? Comments? Yes.
- Pilar Schiavo
Legislator
Just appreciate you bringing this forward. As someone who did make that drive from L.A. to Sacramento, I understand that range anxiety very well and think it's really critical that we figure this out so that people feel safe and secure in making this transition. Would love to be added as a co-author and, you know, I have a Select Committee on EV charging, which you are a part of, I think, and infrastructure, and look forward to having some discussions about what you find through this process.
- Jesse Gabriel
Legislator
Wonderful. Thank you. I would be honored to have you.
- Eduardo Garcia
Person
All right, any other questions or comments? Is there a motion to move the Bill? Moved. Second. All right, we have motion and second. We'll take action when we establish quorum. Thank you.
- Jesse Gabriel
Legislator
Thank you, Mr. Chair. I think that's my quickest ever, so.
- Eduardo Garcia
Person
Thank you. Sergeants, will you please, one, call Members of the Committee. And the second would be authors. We want authors.
- Unidentified Speaker
Person
[Indistinct conversation].
- Eduardo Garcia
Person
All right, back to our regular scheduled meeting here.
- Steve Bennett
Legislator
There we go.
- Eduardo Garcia
Person
Welcome. Item Six: AB 1550. Mr. Bennett, floor is yours.
- Steve Bennett
Legislator
Thank you very much, Mr. Chair and Members. We'll start by accepting the Committee amendments listed in the analysis and thank the Chair and the Committee staff for all their work on this. California has very ambitious goals to reach 100 percent clean grid by 2045. Specifically, our grids require to be powered by 100 percent by renewable portfolio standards or the RPS, eligible sources which include biodiesel, biomass, biomethane, geothermal, solar, and wind.
- Steve Bennett
Legislator
Much of our recent focus has been on increasing the use of wind, both on land and offshore, and solar paired with battery storage. And although I'm a firm believer that solar and wind offer us extraordinary climate benefits, we just saw last year that the supply chain issues and project delays coupled with climate change can lead to real and serious reliability issues.
- Steve Bennett
Legislator
One of the ways that we can address our reliability issues without having to rely on natural gas like we did last year is to use hydrogen to help power our grid. It has multiple uses, and one of the particularly strong points about hydrogen is it can be a good long-term storage source that you won't get with some of the other options out there. Enormous potential to provide clean energy without greenhouse gas emissions.
- Steve Bennett
Legislator
However, there are very real concerns about whether hydrogen can live up to its potential, and AB 1560 seeks to bring greater certainty to everybody by making clear that any of the hydrogen used and produced in this state must be green by the same deadline that we have for the grid currently. So it's trying to put molecules on par with electrons in terms of the grid. Bringing greater certainty about California's goal regarding hydrogen produces three major benefits.
- Steve Bennett
Legislator
One: investors in hydrogen projects benefit from increased certainty by knowing that the investments they make today will be used going forward as long as they plan to achieve a standard of 100 percent green by 2045. And I can't underestimate the importance of that as we talk to investors as uncertainty kills them when they're trying to figure out whether to make massive investments.
- Steve Bennett
Legislator
Two: we'll have less uncertainty and concern as to whether hydrogen projects are going to be used to extend the lifecycle of oil and gas, harming local communities with pollutants and emissions. And three: there are serious concerns that if we do not move forward to begin establishing an infrastructure for hydrogen soon, we will not be able to timely decarbonize hard to electrify sectors, and the industry will not appropriately invest in California.
- Steve Bennett
Legislator
I want to be clear and say that I recognize the bill before you is a work in progress, and that we may not get to a definition of green hydrogen that works for all stakeholders. But I think it's an important enough issue that we should have the robust discussion now, and it will take time as we go forward. The federal government has already begun launching efforts to spur creation of a hydrogen economy.
- Steve Bennett
Legislator
58 Members of the Assembly signed on to a bill--signed on to a letter to the Administration asking for a hydrogen hub to be located here, a billion dollar investment in that hydrogen hub, and what we must begin to consider is what that hydrogen economy looks like and ensure that it meets our practical needs while being consistent with our goals of a carbon-free environment for California. I just wanted to point out that the amendments created by the Committee just were released last night.
- Steve Bennett
Legislator
Really appreciate the hard work and significant improvement. It's pretty hard to have a bill that says we're going to be 100 percent green hydrogen by 2045 if you don't have a definition of green hydrogen. You have endeavored to come up with that, and I know there'll still be more conversations about that. So I'm certainly willing to accept this as the beginning part of a longer conversation about this as it moves forward. Thank you very much.
- Eduardo Garcia
Person
Thank you, Assembly Member. Do you have any primary witnesses?
- Eduardo Garcia
Person
Okay. Anyone wishing to speak in opposition as a primary witness, please come forward. You have two minutes. Wherever you like. Two minutes to each witness, and then we'll open it up to public comments.
- Steve Bennett
Legislator
No, I don't.
- Mikhael Skvarla
Person
Chair and Members, Mikhael Skvarla here on behalf of the California Hydrogen Coalition and California Hydrogen Business Council. While we share the desire and the principle of decarbonization of hydrogen by 2045, we do not believe this bill is ready to move out of Committee. And the Committee amendments create significant financial risks for major projects and even the federal hub opportunity in front of us.
- Mikhael Skvarla
Person
The applications were due April 7th, so any amendments that counter that could risk our opportunity to win. Legislature did the right thing last year in adopting SB 1075, which instructs CARB, CPUC, and CEC to provide an in-depth analysis on hydrogen and its different production pathways and end uses. We should allow that work to take place and receive that report back before moving forward with this. Additionally, we understand that while this bill might be effective in 2045, that's not how we regulate in California.
- Mikhael Skvarla
Person
The minute this is passed, regulations will start to be ratcheted down, which could have a chilling effect on investment going forward. To that end, the bill does restrict the use of some of the best carbon reduction opportunities as identified by Lawrence Livermore National Laboratory, and the elimination of biomass and biogas direct production. We could indirectly produce based on these amendments, where we could take biomass, burn it through a facility, create electricity, then take that electricity to create electrolytic hydrogen.
- Mikhael Skvarla
Person
But it's far more effective, less wasteful, and cost-effective to just take the biomass, use paralysis, and convert it to hydrogen directly, leaving solid carbon in a negative carbon fuel. Additionally, the amendments taken in this Committee place a standard on hydrogen as a renewable technology that no other renewable technology faces. That includes the requirement to colocate the inability to use wrecks, which would eliminate our ability to wield electrons at night or day.
- Mikhael Skvarla
Person
These things are chilling and would prevent most of the projects that we know in the power space from going forward. And so to that end, we really urge the Committee to hold this bill today. We commit to working with the author, but we want to ensure that hydrogen has a stake in decarbonization. It is our goal to decarbonize in the same pace. Thank you.
- Ryan Kenny
Person
Hi. Good afternoon, Chair Garcia, Members of the Committee. My name is Ryan Kenny with Clean Energy. My company is the nation's largest provider of renewable natural gas transportation fuel, and at some point in the future, we can reconfigure our over 200 stations here in California to dispense hydrogen for medium-duty and heavy-duty vehicles. But we're here today in appreciation of the author's intent to continue discussion.
- Ryan Kenny
Person
But I think the language in print is premature, and this is a very nascent industry that hasn't even gotten off the ground yet. My company compares it to the EV industry back in the 1990s. So we're concerned about setting a goal at this point when the industry really is nascent and hasn't gotten off the ground. Also, last year, this Committee did pass SB 1075, which requires CARB, the CEC, and the PUC to study hydrogen and provide an evaluation back by June 1st of 2024.
- Ryan Kenny
Person
Also, the CEC must also, through their IEPR process in 2023 and 2025, model potential growth and look at decarbonization for hydrogen in the transportation and electricity sectors. So we think this bill really is premature at this point, and again, we do appreciate the author wanting to continue conversations. We ask that the bill be held in Committee. Also, just one final point.
- Ryan Kenny
Person
We do believe on the transportation side, that instead of using colors, look at using a carbon intensity framework as used in the low carbon fuel standard. And that really is going to alleviate a lot of confusion with stakeholders. That's even mentioned in the 2022 CEC IEPR. A lot of stakeholders had concerns about the colors instead of a carbon intensity framework. So for those reasons, we ask that the bill just be held for further consideration. Thank you.
- Eduardo Garcia
Person
Okay. Thank you. We'll open it up for public comments now. Please state your name, affiliation, and position.
- John Wenger
Person
Mr. Chair and Members, John Wenger, on behalf of the Coalition for Renewable Natural Gas. We have significant concerns with the amendment that's being proposed today and would urge further discussion on that. Thank you.
- Chris Maurer
Person
Mr. Chair and Members, Chris Maurer, on behalf of Oberon Fuels. We oppose the bill as proposed to be amended as well. Thank you.
- Chris Micheli
Person
Mr. Chair, Chris Micheli, on behalf of the California Renewable Transportation Alliance, in respectful opposition.
- Paul Deiro
Person
Mr. Chair and Members, Paul Deiro, representing Western States Petroleum Association, in opposition.
- Ignacio Hernandez
Person
Mr. Chair and Members, Ignacio Hernandez, on behalf of the Utility Reform Network. TURN has a support if amended position. We do appreciate the amendments and actually like the amendments that were proposed by the Committee, thank the author for taking them, and look forward to working with the author on this bill.
- Michael Monahan
Person
Mr. Chair and Members, Mike Monahan, on behalf of the State Building and Construction Trades. We're in opposition.
- Gregory Cook
Person
Mr. Chair and Members, Greg Cook, representing Northern California Power Agency. We certainly support the intent of the legislation. The amendments that were adopted today do raise some concerns with us, so we look forward to working with the author as the bill goes forward. Thank you.
- Eduardo Garcia
Person
Thank you. Seeing no one else, we'll bring it back to the dais. Questions? Mr. Connolly?
- Damon Connolly
Legislator
Yeah, I guess more kind of a reflection on the posture. I mean, I have not seen the amendments. I appreciate that the work is ongoing, so it's more just kind of a timing question of would it be feasible to come back to this Committee for further evaluation? I did have some original questions down some of the issues that were raised.
- Lisa Calderon
Legislator
Can you hear me? Okay. I'd like to thank you for bringing this bill forward. I just want to kind of piggyback on my colleague's comments and something that the opposition raised.
- Lisa Calderon
Legislator
You that we just passed last year. And so we have not got that data yet. So to me, it feels a little premature to be considering this right now. And so I wonder if you could speak to that.
- Steve Bennett
Legislator
Sure, I'd be happy to. And number one, I really appreciate the questions, and I think that they're very appropriate. We did just get these amendments from the Committee. We, and you got the amendments just recently from the Committee. And I would just offer my perspective that this is an appropriate starting spot. So I want to sort of address the issue of timing.
- Steve Bennett
Legislator
I don't think there's anything that would keep this Committee from saying we want this conversation to go forward, but we Reserve the right to bring this thing back because the Committee can do that. They can bring it back at any time. Correct me if I'm wrong, but I'm sure that chair Garcia has no hesitation in terms of bringing it back if he decided. The advantage of this moving forward is, as you heard from the two opposition speakers here, it's a complicated issue.
- Steve Bennett
Legislator
What is the definition of green hydrogen or clean hydrogen or carbon free hydrogen or whatever? And so this is where we are at this point in time. If there's no Bill, there's no conversation is what it really comes down to. People have so many things that they need to be focused on that you just don't get a serious conversation. If this Bill moves through its First Committee, then I think you'll actually get people to be serious about engaging in the conversation.
- Steve Bennett
Legislator
And this is going to take a while. I don't anticipate this being something we're going to vote on before we end this session. I think this is going to take a considerable amount of time. But we've been given a definition by the environmental organizations, all of them, I assume you may have received them, but it is very different from what the industry has talked to us about. And the industry, we've asked the industry, give us your definition then.
- Steve Bennett
Legislator
And they have pledged that they will get that to us, but they haven't yet. Now, if the Bill dies or doesn't move today, I think it may be a lot longer before we get these two groups to actually engage and for us to have a robust conversation, which is how we learn.
- Steve Bennett
Legislator
It's not that we're going to take either one's definition, but how we learn what the best things are and if the Committee staff of this Committee and other committees and all of us could benefit from those conversations. So I hope to bring the various definitions together and try to sort that out. What I appreciate about this is the definition that the utility Committee staff and the chair have come up with.
- Steve Bennett
Legislator
Here is a definition that is not shared by either the environmental side or the industry side. It is somewhere in between those two. Well, that's a perfect starting spot for this conversation to take place. They didn't take either of those two, but it will take a considerable length of time. The benefits of tentatively approving this now sends that message that we can have that healthy conversation. Thank you. Any other questions or comments? Yes, I appreciate the discussion here and the author's intent.
- Steve Bennett
Legislator
I do have one question, and I'm happy to be wrong here, but it feels to me that this appears to treat hydrogen worse than any other RPS eligible technology, and I wanted to know if you could speak to that. Well, I think the answer I would most offer is in my mind, it's an attempt to put hydrogen on the exact same level as the rest of the grid. We have the grid and all energy technologies that are going to power the grid in 2045. We've identified.
- Steve Bennett
Legislator
This is okay. This is not okay. We're trying to put hydrogen on parity at the starting point of this conversation. Now, with the starting point of this conversation, we may say 2045 is the wrong year, it's too late or too soon, but it seems that's the appropriate place for us to start. So I don't think it's a disadvantage as much as it's a parity. It's an attempt to try to create parity. Thank you, sir. I appreciate it. Any other questions? I'm going. Mr. Mathis question.
- Steve Bennett
Legislator
Can't help but notice you're strictly looking at green hydrogen, and in reality, hydrogen is a lot like moonshine. You can make it out of just about anything. So why are we looking at this as only green when we know there's different types? Why specify?
- Steve Bennett
Legislator
Because I think the bottom line, I agree with your goal that hydrogen needs to be on an equal playing field, but to cut out other options, because we have other ways of making hydrogen out of different types of methane collection and other things that are within a renewable portfolio themselves. So to block those other methods out, I don't think helps get us to that goal of having hydrogen overall, because we know that in the state right now, we have a lack of hydrogen production.
- Steve Bennett
Legislator
We have hydrogen stations that are out for vehicles that have lack of fuel, and that's why they're having issues. So that's where I kind of run into concerns with your Bill, is that by taking those off and not giving them the same parity. That's where my concerns lie. If I could respond, I would turn it around the other way.
- Steve Bennett
Legislator
When you say hydrogen can be created in lots of different ways, electricity can be created in lots of different ways, and we are taking off the table in 2045, creating electricity in certain ways, that's the same thing we're doing with hydrogen. We're trying to take off the carbon. We're trying to convert from a carbon economy to a carbon less economy. Correct. So we've taken options off the table for electricity generation, and we're doing the same thing. We're trying to, again, create parity.
- Steve Bennett
Legislator
That means some things are off the table. Some things are on the table, and the sooner we have the right conversation. I'm not saying the sooner we adopt a definition. I'm saying the sooner we have the right conversation, the better off we're going to be in California. And I think this is the right time to start this. If we have a hydrogen hub. If we have a hydrogen hub application in and demonstrating that we're also trying to talk about clean hydrogen. Valid point.
- Steve Bennett
Legislator
That electricity is made different way, but ultimately, hydrogen is a zero carbon fuel. So if there are ways to produce it, we need to make sure that we're able to produce it and that we're not tying the hands of the industry. Well, electricity being used. Exactly. Historical. I wasn't asking the question. That's my point. Thank you. Please.
- Diane Dixon
Legislator
I admire your goals. I think this is where we're all headed. But I wasn't here last year with SB 1075, but it seems like that set the table for looking at hydrogen and how it becomes part of the whole compilation of different energy sources and clean energy sources. So, has this study been done? Has it been completed, or do we have any findings from this study?
- Steve Bennett
Legislator
No, that study is not completed, and I believe it'll be June of a year from now. That study will come forward.
- Diane Dixon
Legislator
Well, I just wonder if we're getting ahead of ourselves. Let's wait until that study comes forward. I understand your point. Let's just get something out there, and it can continue to be molded or melded accordingly. But there's so much unknown right now in terms of which hydrogen and how and green or yellow or what have you.
- Steve Bennett
Legislator
I would offer that the focus of that study of SB 1075 is how can we use hydrogen to power various things in this economy. It's not focused on the question of what is the right standard for us to have for hydrogen use whenever we decide to do that. So, as was mentioned electricity use. Hydrogen by itself is carbon free. Electricity coming out of the grid by itself is carbon free. It's how did the electricity get created?
- Steve Bennett
Legislator
How does the hydrogen get created is not the focus of what SB 1075 is doing in that report. These are complementary and make sense to say we're going to wait until this action is done. It puts us even further behind in terms of sending the message. The final thing I would mention in response to that is this is a CEC study that is going to be done.
- Steve Bennett
Legislator
To what extent does the Legislature want to provide their own leadership on things like hydrogen versus sit back and say, well, we're just going to wait for the Administration and the Administration agencies to be the ones that come up with this.
- Steve Bennett
Legislator
To the extent that it was the Legislature that said 2045 is when we ought to get the grid green, and it was the Legislature that said this is what we should do to get the grid green, the Legislature ought to also be the ones who say 2045 is the starting spot for a conversation about getting hydrogen green and 2045 is.
- Steve Bennett
Legislator
And we need to come up with this definition from a Legislature standpoint, not waiting for the Administration to necessarily be the ones to indicate to us what they want to have happen with this.
- Diane Dixon
Legislator
May I just do a follow up to that? But the word requires all hydrogen produced and used in California for not. We don't know where that is yet until the study. Or maybe what you really want to do is propose a study specifically, if it's not covered in SB 1075, do a study before you start requiring something.
- Steve Bennett
Legislator
We have tremendous experts out there. We have industry experts. We have experts on all kinds of sides and scientists on all kinds of sides to do a study. I wasn't here, but I'll turn to my colleagues. I don't believe we did a study before we came up with 2045 and what the electricity grid items are. We have the robust scientific and factual information out there to make a decision about how do we put hydrogen on parity with the grid.
- Steve Bennett
Legislator
In my mind, it's far better for us to have the conversation than to wait for another study that will just be a controversial study that then people will engage. zero, we don't like this part of the study. We don't like that part of the study. That's my sense. Right.
- Diane Dixon
Legislator
Okay, thank you. More questions to my left. Questions.
- Eloise Gómez Reyes
Legislator
I know I arrived a little late, but I was briefed by my staff about some of the questions. My concern, and we've chatted about this is the definition of clean hydrogen. The question may have been asked, and my concern, as I understand, is that the feds are in the process of defining clean hydrogen. CARB is doing their studies as well, and they intend to adopt what the feds describe, or what they define as clean hydrogen.
- Eloise Gómez Reyes
Legislator
As this moves forward, should those decisions come down with the definition, is that something that you will entertain?
- Steve Bennett
Legislator
Absolutely. The Bill that I introduced to this Committee simply was starting with the first process, which is, should hydrogen be on the same plane with the rest of the grid? In other words, at 2045, should we do whatever it takes to get our hydrogen cleaned up enough that it's like the grid? Now, admittedly, at some point in the process, we have to then define what do we mean by green hydrogen. But that is a robust conversation that we need to have.
- Steve Bennett
Legislator
And as I explained to the Committee shortly before you got here, was that I think that the healthiest way for us to have that conversation is for this first Committee to, with their fine definition, that is in between sort of the environmental group and the industry group, they have come up with a definition that's a good starting spot for us to have a long conversation. And I think this will take significant amount of time.
- Steve Bennett
Legislator
During that time, we will get the information from the Federal Government, we'll get the information from CARB as it moves forward. But it does put the Legislature in the leading role in terms of trying to say, what's the policy for hydrogen? And not have regulatory agencies be the ones in the leading role trying to indicate to us what that policy is. So, absolutely, 100% committed. I only received these yesterday also. So there's a lot that we have to digest in terms of trying to do this.
- Steve Bennett
Legislator
Thank you. Mr. Bennet
- Chris Holden
Person
Okay. Any other questions, Mr. Holden? And again, maybe my question was answered as well. And I know that when I came in, there was some conversation around the Skinner Bill, and I just want to make sure, one, that we were trying to figure out what definition of green energy or green hydrogen represented in that conversation.
- Chris Holden
Person
And then I recall there are a variety of colors of green, and that green may not be necessarily green as we're thinking of it in terms of clean, comes back to Ms. Reyes's question about the definition of clean, and then we have federal definitions. So we have emerging more definitions that are different than kind of a universal definition. So maybe what you're suggesting is that through this process, more conversations, and the Legislature starts to craft a clearer future or vision.
- Chris Holden
Person
I guess the thing that I'm concerned about is, does your Bill complement the Skinner Bill? How does it work together with that Bill, or is it on its own dual path? Well, I certainly believe it complements it because the focus of the Skinner Bill is not on. When do we get to, for lack of a better word, clean hydrogen? That's not the focus. The focus of Skinner Bill is what are the roles?
- Steve Bennett
Legislator
What are all the options, what are all the benefits and what are the disadvantages of hydrogen in our economy? That by itself is a robust conversation and a pretty extensive report. So a complement to that is while we're doing that, we have already out there identified 2045 as the time that we want the grid to be clean. So is it appropriate for us to have a starting conversation about 2045 also being the deadline for hydrogen to achieve whatever definition we settle on?
- Steve Bennett
Legislator
We have had the very first tentative attempt to try to define that by the Committee here, but this is going to be a long process. But as I mentioned, as I think, you know, being experienced, if you don't have a Bill moving, you don't really have a conversation because people have so many things they want to focus on.
- Steve Bennett
Legislator
So if we want to begin the conversation about what is the definition of hydrogen that we want to have clean by 2045, this is the best way to do this, is to move this, but move the Bill slowly. I'm not trying to rush this Bill through. No, I understand. I guess every Bill is a market signal, right? And the market responds to it.
- Chris Holden
Person
And if we have a definition that says clean hydrogen in one Bill and then we have another, that's saying we need to look at a definition around green hydrogen, what is the market signal? Or are we not concerned about that? Because then we'll get people coming to us saying, hey, we're moving, or waiting for a regulatory agency to give us some direction on the last Bill, and now we're moving in a different lane, but not, I guess I'm just trying to.
- Steve Bennett
Legislator
Sure, I certainly don't see that the industry, I can't speak for how the industry is going to respond, but I don't think the intention is to have the industry say, zero, these are in conflict in any way. We should get a good report from the agencies, from the Energy Commission about all of these things about hydrogen.
- Steve Bennett
Legislator
And that report may or may not have some impact on what we're thinking about in terms of the proper definition that we want to reach parity within terms of the grid. At the same time, we have this conversation is better than waiting until they're done, then trying to start up a conversation about that. Certainly, I think in this situation. Any other questions? Mr. Muratsuchi, thank you. I also apologize for coming in in the middle of the discussion.
- Al Muratsuchi
Legislator
You know, I mean, I am a little reluctant to vote for a Bill, you know, as a moving vehicle to mandate that by 2045 all hydrogen produced and used in California for electricity or for vehicles to be green hydrogen, with the green hydrogen to be undefined.
- Al Muratsuchi
Legislator
It's my understanding that with the amendment the chair is recommending know I am inclined to defer to you, Mr. Bennett, to give a courtesy mean, I just want to state from the record that from my perspective, green hydrogen has got to be something along the lines that no fossil fuels are used to produce the green hydrogen. And the production and the use of the green hydrogen is not going to have a disparate harmful impact on environmental justice communities.
- Al Muratsuchi
Legislator
Those are the central principles that I would like to state at this point. What can you tell me to assure that that is your intent of this language of green hydrogen as presented in your Bill? To the same extent that if you are comfortable with what we have come up with for the grid in terms of, by 2045, we have said we want the grid to be clean or green or whatever definition. Yeah, 100% clean.
- Steve Bennett
Legislator
That's the same parity that I think we should have as the goal here. And the devil's in the details of what that definition is, which is why we need to have a significant conversation and have the stakeholders really come to the table and have them counter each other's arguments. No, have people sit there and take the best argument from one side and have the other side respond, why, that's not true. And then vice versa have that happen. But that is the goal.
- Steve Bennett
Legislator
If you are comfortable, and that's my starting spot is, yes, I'm comfortable with where we are at 2045 and I'm trying to then begin the same thing, same conversation to happen with hydrogen, because we need both energy sources, battery technology and hydrogen fuel cell technology to be out there competing with each other for us to have any chance of actually getting there.
- Steve Bennett
Legislator
Well, if we don't move promptly, we risk having people making investments and then saying, hey, I made these investments because I thought it was going to be okay. And now you're going to. You know how difficult it is once somebody's made the investments, once you have the jobs, and then those people that are employed come and say, hey, you're going to cost me my job if you pass this, it's far better for people to know.
- Steve Bennett
Legislator
And the other possibility is people won't make any investments in hydrogen infrastructure, because they have been waiting and waiting and waiting. It seems that it's appropriate for us to do that. So, yes, to this same commitment that I want to make sure we move from a carbon economy to a carbon less, carbonless economy, and I mean 100% carbonless.
- Steve Bennett
Legislator
That's my goal as we go forward with this, where the Legislature ends up with, in terms of what we can finally settle on in terms of a definition, is that's the art of legislating. Right. Mr. Chair, a question for you. In terms of procedure, once this Bill does land on a definition of green heritage, will we have another opportunity to hear this Bill in this Committee? Yeah, there's a good chance that the Bill may come back. As the author has mentioned, we have that discretion.
- Eduardo Garcia
Person
The Bill does go to natural resources if it does come out of this Committee, and so we'll definitely be watching this very closely. Our team dared to put a definition out there. As the author has mentioned, it's not a definition that goes one way or the other. As we've heard from many other stakeholders, we do recognize that there are a lot of other moving parts taking place trying to shape the definitions of hydrogen, and that will ultimately need to be integrated into this conversation as well.
- Eduardo Garcia
Person
The authors also mentioned that this is a long conversation. This is only the beginning. I don't anticipate this to be the end all, be all discussion. As I mentioned, it goes to natural resources, and our team will be intimately involved in those discussions every step of the way. I guess my question is, if this is going to be my last opportunity to weigh in in this Committee, then I have concerns in voting for the Bill at this time. Well, we will be watching the Bill closely.
- Eduardo Garcia
Person
If the Bill does take a different shape than what we have before us, we will pull the Bill back. All right. Thank you. Question.
- Lisa Calderon
Legislator
Yeah, I'm sorry, one last question. And again, I really appreciate your thoughtfulness and answering all our questions, and you indicated that you're willing to take this process slowly and be thoughtful. And as you move through this, if this gets out today, would you consider making this a two year Bill?
- Steve Bennett
Legislator
Absolutely.
- Lisa Calderon
Legislator
Okay. All right. Thank you.
- Steve Bennett
Legislator
I don't know if Assembly Member Muratsuchi heard that, but I've just committed that I would be willing to make this a two year Bill. That's been my intention. Right. Okay. That this will need that kind of time. Summer Wallace. Yeah. I'm sorry, Mr. Chair. I do really appreciate the discussion and the author taking all of our questions. We have some experts in the room, and just because we've had such a robust conversation.
- Committee Secretary
Person
Would it be allowable to give them some time to respond to some of the debate that we've been having? Well, is that at your request? Is there someone that would second that request? I think we've had a pretty good conversation on the matter. I think we have expressed the concerns. We've heard industry experts testify. I'm not sure if there needs to be any additional. Yes, just a question.
- Chris Holden
Person
Is there a specific question that you have as a Member that you have asked or you need before you got here and Mr. Bennett answered it, but I was just wondering if we could get a response from the industry on that because they will be impacted. Well, you like, why don't you repeat your question and let's have one of the expert witnesses in opposition come forward and respond to it. The question was very simple.
- Devon Mathis
Person
It was just about how this appears to treat hydrogen worse than other RPS eligible technology. And we discussed parity levels there with that. But I just wanted to see if we could get sure. So I'll ask one of the opposition expert witnesses if they want to come forward to the microphone and respond to that question. And before you do that, let me just establish a quorum real quick before anyone else has to get going.
- Committee Secretary
Person
[Roll Call]
- Unidentified Speaker
Person
Okay. Please. So to the question of the disparity in treatment, the amendments that are being proposed and have been accepted would require colocation and would disallow the use of tradable wrecks. And so an electrolyzer, so electricity to water to produce hydrogen would not be able to wheel electrons away from nondedicated sources.
- Unidentified Speaker
Person
So we lose the utility of using hydrogen as the ability to balance the grid loads during, say, times where we're not using as much load in middle part of the day producing hydrogen with that excess. Last year we produced enough hydrogen. We produced enough electricity that was curtailed wind and solar that was curtailed that we could have powered 192,000 cars for a year with money that the ratepayers have already paid for the procurement of that electricity.
- Unidentified Speaker
Person
And so these amendments would preclude us from that activity by not allowing us to wheel renewables from wind or solar projects into these centralized electrolyzers where they're at a good, the whole point of the hydrogen hub, the hub is the hydrogen production and then we spoke out the hydrogen to different end uses as written right now, as proposed, the restrictions on hydrogen here within this confines of the amendments, which a lot of respect for the Committee consultants, they're under a lot of pressure right now and had to put this stuff together, but it wouldn't allow that activity for us.
- Unidentified Speaker
Person
And so we think it takes away hydrogen is being treated differentially than biomethane or biomass. And while it has references to those requirements, we can use biomethane and biomass and freely move those recs to other parts of the state for different end uses. But we're not allowing that for hydrogen production or the hydrogen end use. And so I think to that end, it is differential at that point and kind of needs additional definition. We do believe that we're absolutely in agreement.
- Unidentified Speaker
Person
Let's create hydrogen parity and so add a renewable hydrogen definition into the RPS eligible resources. We'll adopt the timelines. We've proposed that in three different bills over the last three years and more than willing to accept it and can provide those principles to this Committee. Thank you. Just ask the Committee team. There's no pressure. No one's under any pressure. And so we're prepared to continue to have the conversation.
- Unidentified Speaker
Person
And as I mentioned earlier, we dared to put a definition out there, and we're looking forward to all of the other moving parts that are taking place in order to integrate, consolidate, and hopefully move forward with a very specific target, very specific definition. And as I mentioned, this Bill will go to natural resources. The author has mentioned that he's prepared to move slow in order to be inclusive in the discussions.
- Unidentified Speaker
Person
And if it needs to be a longer conversation than what most of us ever expect our bills need to be, he's agreed that that would be the case. So, any other questions?
- Eloise Gómez Reyes
Legislator
Mr. Chair, I just want to say that, Mr. Bennett, you're a very thoughtful Legislator, and this has been a topic that you have spent a lot of time on. And I know that when you say you're going to take this slow and you're going to look at all of the concerns of everyone, I believe you. And with that, I move the Bill.
- Eduardo Garcia
Person
We have a motion. Is there please question your second motion. You have questions? Okay, please.
- Wendy Carrillo
Person
Mr. Bennett, I want to echo the sentiments of our majority leader and recognize your leadership in this space. It's difficult to come to the table with ideas about what the future looks like. We've set a lot of goals for the state. I also grapple with the details on how we get there, especially when it comes to renewable energy and equity and overlaying potentially a census track over communities that are often disenfranchised.
- Wendy Carrillo
Person
And we don't get the data to be able to ensure that equity is a part of the conversation moving forward. We've done that on a few bills in this Committee. I also want to acknowledge the opposition and the experts in the field and how we can balance legislation with science and the future and infrastructure. I think all of that is important, and I think the robust and thoughtful and respectful conversation that we're having today, again, apologies.
- Wendy Carrillo
Person
I was watching and came in as well as many others. But I, like the majority leader, trust your leadership and also recognize your leadership and budget Subcommitee related to natural resources and transportation. So not only on policy, but also on the fiscal responsibility that we have as a state to move something forward.
- Wendy Carrillo
Person
And so I'm glad that to my colleague as well, who mentioned the opportunity to make this a two year Bill, to really think through the policy and what that looks like for the people of the state, I think that says a lot about your willingness to be able to find the solution.
- Wendy Carrillo
Person
And I think you'll find that given the goals that we have already set, that there's a really great opportunity for a bipartisan, bicameral approach on how we get this done and how do we achieve the details of the goals already set in place. So appreciate that and happy to second the motion and make sure that the conversations continue and that your Committee staff is also involved in the following process. Thank you.
- Steve Bennett
Legislator
And that there's no pressure on them. That's important to me. There's a motion, there's a second. Would you like to close very briefly, just to honor the opposition? Colocation is one of the things that I went, wow, we have to really carefully look at that. But I do want to go back and compliment you. Your Committee said, hey, we probably should have a definition as this moves forward and you bit the bullet and came up with something that allows us to have a really full conversation.
- Steve Bennett
Legislator
But people will be more willing to actually come. And I want to publicly announce this, that my goal is to try to bring some representatives from industry, some representatives from the environmental side with their definitions and have them literally have a debate about their definitions. I think that would be really informative as we go forward. I will certainly invite all the Members of this Committee to that whenever that happens. And if I don't feel comfortable about this, I will not keep moving the Bill forward.
- Steve Bennett
Legislator
And if you want to have this come back, I will have no objections to coming back to this Committee as we move this thing forward. Thank you very much. We have a second. I'm going to ask. Secretary call the road. It does have a do pass recommendation.
- Committee Secretary
Person
With amendments to natural resources, item number six, AB 1550. The motion is do pass. Ayes amended to natural Resources. [Roll Call]. That's 73.
- Eduardo Garcia
Person
All right, we'll leave the roll open for other Members to add on at this time. I'll ask for a motion to approve the consent calendar motion in a second. Madam Secretary. Please go down the list and call Rome.
- Committee Secretary
Person
Item number one, AB 580, the motion is do pass. As amended to appropriations, item number four, AB 1434. The motion is do pass. To appropriations, item number seven, AB 1626. The motion is do passes. Amended to transportation, item number nine, AB 691. The motion is do pass. To appropriations, item number 10, AB 998. The motion is do passes. Amended to appropriations, item number 11, AB 1172. The motion is do passes. Amended to appropriations and item 1569.
- Committee Secretary
Person
The motion is do pass to appropriations. [Roll Call]
- Eduardo Garcia
Person
All right, we'll now proceed with the next Bill and then we'll bring it back to add on to other bills. Please.
- Al Muratsuchi
Legislator
Thank you very much, Mr. Chair. I am here to present Assembly Bill 1538, which seeks to establish an incentive program, the clean energy Reliability program, to pay load serving entities, specified amount for the procurement of eligible resources to be defined that exceed the LSE's procurement targets as set by the Public Utilities Commission.
- Al Muratsuchi
Legislator
The goal of this Bill is to provide a market mechanism to increase the supply of clean energy to meet our SB 100 goal, while at the same time to decrease electricity price by increasing the supply and increasing energy reliability, again by increasing the supply of clean energy production. I am joined today with Matthew Langer, the Chief Operating Officer of Clean Power Alliance, the sponsor of this Bill.
- Al Muratsuchi
Legislator
Before I turn it over to him, just want to point out that I'm proud that this Bill is not only supported by the Clean Power alliance, but by utilities, a utility. We also have language in there to require a project labor agreement, and so I am optimistic that labor will come out in support of this, although I can't speak for them. I'd like to at this point, turn it over to Mr. Langer. Good afternoon.
- Matthew Langer
Person
Thank you to Assembly Member Muratsuchi for authoring this important legislation, to chair Garcia and Committee Members for allowing me to speak today, and to the Committee for its thorough analysis of the Bill. My name is Matthew Langer, Chief Operating Officer for Clean Power Alliance, a community choice aggregator and the state's fourth largest load serving entity that serves 30 cities and the incorporated counties of Los Angeles and Ventura.
- Matthew Langer
Person
CPA serves over 3 million people and is governed by a board of local elected officials that care deeply about creating affordable rates and clean, reliable energy for their constituents. We are the proud sponsor of AB 1538, which focuses on a concern of every Member of this Committee and every Californian. How can we increase electricity reliability and reduce customers'electricity bills? California has an increasing risk of not having enough resources on the grid to meet peak demand.
- Matthew Langer
Person
The shortage of supply has led suppliers to raise prices, increasing costs on consumers. Without a steady influx of new resources, prices will continue to go up, electricity bills will continue to rise, and grid emergencies and rotating outages will become more frequent. The traditional approach to assess penalties on lses that don't meet their capacity targets, while an appropriate tool, has not been successful in increasing resources by the amount needed.
- Matthew Langer
Person
AB 1538 is a new approach that would send a signal to lses to procure resources beyond their minimum requirements. Increasing the supply of reliable capacity would put downward pressure on the cost of these resources, which would translate to lower electricity rates. Importantly, incentives would go only to lses for projects that sign a project labor agreement and use fair labor practices. Any savings would have to be passed on to customers, reducing their bills.
- Al Muratsuchi
Legislator
AB 1538 complements the work that is currently being done at the CPUC to create long term clean energy targets. By providing reliability incentives for lses, the states can achieve electricity reliability, lower rates and a smoother transition to a clean electric grid. Thank you.
- Al Muratsuchi
Legislator
Thank you, Mr. Muratsuchi. The Committee had amendments there. Are you prepared to accept those?
- Al Muratsuchi
Legislator
Yes. I apologize. I want to thank the Committee for their work on this Bill, and I'm happy to accept all of the Committee's proposed amendments as stated in the analysis.
- Chris Holden
Person
We'll turn to the public comment. Those in favor?
- Unidentified Speaker
Person
Chair Members. Max Perry, on behalf of the City of Mario, in support.
- Unidentified Speaker
Person
Catherine Borg from the Southern California Edison. In support.
- Unidentified Speaker
Person
Thank you Members. Jason Eichert on behalf of the California Community Choice Association. Also in support.
- Unidentified Speaker
Person
Lillian Mervis with MCE here in support. Catherine Brandenburg on behalf of cinema clean power in support.
- Chris Holden
Person
Thank you. Any witnesses in opposition? Seeing none. We'll bring it back to the Committee. Are there questions from the Committee? Is there a motion? It's been moved and seconded. Mr. Marisushi,
- Al Muratsuchi
Legislator
I respectfully ask for aye vote. Okay. Call the rule.
- Committee Secretary
Person
Item number 12, AB 1538. The motion is do pass as amended to natural resources.[Roll Call]
- Chris Holden
Person
You have the requisite number of votes. We'll keep the roll open for Members to add on. Thank you. And we'll now turn to Ms. Friedman. 1664 move the Bill? It's been moved. Is there a second. Consider it? Yes. Okay. There's a motion. Second.
- Laura Friedman
Person
Thank you Mr. Chair.
- Chris Holden
Person
Considering? Second.
- Laura Friedman
Person
Okay. Thank you, Mr. Chairman. Members. AB 1664 seeks to provide additional $630,000,000 proposed earmark as part of Governor Newsom's proposed budget released in January and is agreed upon in last year's budget process to supplement to support low income residential household adoption of solar paired energy storage technologies. I thank the chair and the Committee for your thorough analysis of this Bill.
- Laura Friedman
Person
AB 1664 would require the CPUC, upon funding appropriation by the Legislature, to develop a block grant structure to facilitate the deployment of funds to low-income customers who have not had access to s chip dollars in the past to enable demand flexibility, resiliency, and decarbonization. Currently, the three IOUS administer the ratepayer funds for the self-generation incentive program SGIP for customers within the IOU service areas seeking to adopt on-site clean energy technologies.
- Laura Friedman
Person
While SGIP has supported the adoption of on-site distributed energy among IOU customers, it's not been successful in achieving equitable participation by low-income households, whereby low-income participation is only about 1%, according to the CPUC. Furthermore, low-income California residents served by publicly owned utilities have no access or only limited access to SGIP. Low-income rural households in California served by Western Area Power Administration have no access whatsoever with the governors proposing to use General Fund Dollars.
- Laura Friedman
Person
And I want to be clear, because there was an opposition letter today that consistently said that we were going to be using repayer money. This Bill does not use repayer money. It's using General Fund Dollars that have already been identified by the Administration, and this Bill is intending to equitably distribute that money. This is the companion Bill.
- Laura Friedman
Person
So with the governor's proposing to use General Fund Dollars and not repayer dollars, the state can have a more equitable deployment of clean technology statewide and should be able to develop guidelines specific to the needs and circumstances of low-income working-class house households across the state, including in rural areas. So we did receive opposition today with concerns on cost effectiveness with regards to valuation of resiliency benefits.
- Laura Friedman
Person
I'd like to point to page three of the Committee analysis to note that resiliency considerations are already incorporated as part of the continuing s chip program due to the years of the state combating wildfires and psps events. So to be clear, the resiliency we're talking about here is to make sure that if your power is turned off because of a wind event, that your refrigerator stays on, and that customers don't have the cost impact of having to replace an entire refrigerator's worth of food.
- Laura Friedman
Person
So that a hospital, maybe that is the beneficiary of this, can keep their lights running so that maybe you have a senior center that can continue to have air conditioning in the middle of an extreme heat event, that a wind event that's led to a power down. That's the kind of resiliency we're talking about here, is making sure that everybody can keep their power on as best as we can.
- Laura Friedman
Person
I, of course, would love to sit down with anyone who has concerns to continue to work and address their concerns. We have always been very open to talking to stakeholders and I would invite them to sit down with us in advance and we will continue to work with anyone who has got concerns to ensure that appropriate guardrails are in place to ensure fiscal discipline in the deployment of these funds. With me today to speak in support of the Bill is Patrick Welch with the California Municipal Utilities Association and John Moffatt on behalf of NRG. Thank you.
- Patrick Welch
Person
Thank you. I'm Patrick Welch with the California Municipal Utilities Association. We represent public owned electric utilities that provide power to 25% of the state. I think the Assembly Member did a really good job articulating the issues. We appreciate her leadership and thoughtfulness on this Bill and really just want to emphasize that AB 1664 simply recognizes that POU's are locally governed and that they should have a level of discretion when it comes to designing this program.
- Patrick Welch
Person
If and when this Legislature chooses to appropriate the money for this expanded program. The Governor has put on the table as part of his January budget proposal, a $630,000,000 package specifically for low-income customers. This Bill simply says if the PUC receives that, just set aside a portion of that and distribute it in block grants to publicly owned utilities so that they can design the program as they see fit to match needs or communities.
- Patrick Welch
Person
With that, we respectfully urge your aye vote and again appreciate the author's leadership on this issue. Thank you.
- John Moffatt
Person
Good afternoon, Mr. Chair. Members of the Committee, John Moffatt, on behalf of NRG, also in support of the Bill, want to align our comments with those of CMUA. Again, appreciating the author's work on this issue. We think it's an appropriate approach.
- John Moffatt
Person
A block grant structure is a good structure to be utilized as the Bill allows, by CCAs, by tribes, by POU's, and the focus on low-income consumers, perhaps an area where the current existing program is falling short, we think is an appropriate measure to move forward, and we ask for the Committee's aye vote today.
- Chris Holden
Person
Thank you. Anyone wishing to speak in opposition? Witnesses in opposition. Okay, see no one. Public comments. Those wishing to speak in favor? Support. Name, affiliation and position, please.
- Greg Cook
Person
Mr. Chair and Members Greg Cook, representing Northern California Power Agency, in support.
- Anthony Sampson
Person
Good afternoon, Mr. Chair and Members. Anthony Sampson, on behalf of the Southern California Public Power Authority, in support.
- Chris Holden
Person
Okay, anyone else see no one. Bring it back to the daison. Any questions? Comments? Is there a motion? Okay, we have a motion. A second already. Would you like to close request?
- Laura Friedman
Person
An aye vote so we can continue moving the conversation forward so that the Legislature has a hand in figuring out how to best equitably distribute these funds.
- Chris Holden
Person
All right, Madam Secretary, please call.
- Committee Secretary
Person
Item number eight, AB 1664. The motion is do pass to appropriations. [Roll Call]
- Eduardo Garcia
Person
All right, we'll leave the roll open for other Members to add on. We're going to go back to the top of the agenda. We'll start with the consent calendar, make a round for Members to add on, followed by the bills that were just heard.
- Committee Secretary
Person
Mmhmm. Item number 14791011 and 13 of this consent file. [Roll Call]
- Committee Secretary
Person
Wallace aye item number three, AB 1198, the motion is due pass as amended, to jobs, economic development and the economy Committee. [Roll Call]
- Committee Secretary
Person
[Roll Call]
- Committee Secretary
Person
Item number 12, AB 1538, the motion is due pass, as amended to natural resources. [Roll Call]
- Eduardo Garcia
Person
We're going to leave the roll open till about 3:20 - 3:25. We need to add Mckinnon. Okay, we're going to add for the other Members. 3:20 - 3:25 we will be gaveling down. So we're going to go back to the top of the agenda.
- Committee Secretary
Person
Just a moment. Yeah, I do I have you. This is the consent file. [Roll Call]
- Eduardo Garcia
Person
Okay, we will stay open for another 10 minutes for last Member to add on. I know.
- Unidentified Speaker
Person
I don't even know my.
- Eduardo Garcia
Person
All right.
- Committee Secretary
Person
[Roll Call]
- Eduardo Garcia
Person
Gets out.
- Committee Secretary
Person
[Roll Call]
- Eduardo Garcia
Person
Two. The Bill gets out. Did we announce that the kids in the calendar got out?
- Eduardo Garcia
Person
Consent calendar has all been approved. 15 - 0. And so at this time, everyone's added on and we will adjourn.