Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection and Energy

Senate Budget Subcommittee number two on resources, environmental protection, energy will come to order. Good morning. The Senate continues to welcome the public in person and via the teleconference service. For individuals wishing to provide public comment today, the number is 877-226-8163 877-226-8163 and access code is 6948930. Before we begin, let's establish a quorum. Consultant, pease call the role.

[Roll Call]

Quorum is present. We are going to begin with issue number two offshore wind energy resources, related roles and responsibilities. I'll ask the CEC, and yeah, I guess maybe the CEC to come on up and start out with presentations there. Sure. Fish and Wildlife Coastal Commission state Lands Ocean Protection Council want to come up as well? Department of Finance. Then we'll be ready to just go right into questions. So thank you for that clarification. Go ahead when ready.

Microphone on. Okay. Perfect. Good morning, Chair and members. My name is Eli Harland and I am part of the Climate Initiatives Branch within the California Energy Commission's, citing Transmission and Environmental Protection Division. Our division director, Elizabeth Huber, is out of the country and she asked if I could present this morning. Offshore wind has been a part of my work portfolio since the first Bureau of Ocean Energy Management Intergovernmental Task Force meeting nearly seven years ago. I was asked to summarize the Assembly Bill 525 conceptual permitting roadmap, which I, along with others at the CEC and other state agencies that are here today, worked on. First, the why. California, particularly the northern and central coast regions, have some of the best offshore wind resources in the country. It requires floating technology, and floating offshore wind is emerging as a promising source of renewable energy generation across the globe. The development of floating offshore wind in California can diversify the state's energy portfolio and provides an opportunity for good-paying jobs and statewide economic benefits. Floating offshore wind at scale certainly could have impacts and requires best available science to ensure that permitting process and associated environmental reviews protect ocean and coastal resources. Some background on AB 525, the bill requires the Energy Commission to complete three interim reports that will inform the Comprehensive Assembly Bill 525 Offshore Wind Strategic Plan. The first interim report was the maximum feasible capacity of megawatt planning goals for 2030 and 2045, which resulted in planning goals of two to five gigawatts of offshore wind by 2030 and 25 gigawatts by 2045 in federal waters. The goals report was adopted in August at a CEC business meeting. The second completed interim report was the preliminary assessment of economic benefits of offshore wind related to seaport investments and workforce training, which was also adopted at February 23 business meeting. CEC business meeting. The third and final interim report. On a permitting roadmap process which was adopted May 10, just a couple of weeks ago, following public and partner agency input on a conceptual roadmap that was released earlier in December. The May 10 report included six permitting approaches for offshore wind, which I'll touch on in just a second. The report also described a stakeholder and tribal engagement process to further develop permitting approaches for offshore wind. The input we received comment, letters and discussions went across many similar themes. At the forefront is the importance for continued engagement with stakeholder and tribal communities, as well as concurrent state and federal environmental project reviews pursuant to the National Environmental Policy Act and the California Environmental Quality Act. Public comment also included the need for a strong mechanism for interagency coordination. Some themes I'll highlight from some of the sectors environmental organizations emphasized the use of an environmental review checklist, the possibility of being able to use any data collection as part of any permit conditions, and they advocated for the establishment of a science entity to direct the monitoring of impacts and research priorities. We also heard from the offshore wind industry that an agency assigned to lead other agencies as well as some in the industry, even suggesting that the roadmap define a sequel lead agency and the clear identification of sequencing of events, requirements and timelines. Comments from the fishing industry groups on the roadmap included their support for a process where the fishing industry and ocean users informed the Bureau of Ocean Energy Management where offshore wind facilities should be located. Fishing industry commented that a programmatic Environmental Impact Statement or other programmatic environmental reviews for the entire West Coast should be prepared by Bohem and the need for mitigating impacts and providing compensation to the fishing industry. Tribal governments shared their concerns with the industrialization of the shoreline, the possible impacts to a proposed national marine sanctuary, ensuring meaningful tribal consultation based on sound science, and tribal members have asked for being included on any intergovernmental or interagency partnerships and making decisions that could potentially impact all ancestral lands. So, following comment and hearing that input from stakeholders and from tribes, the CEC developed the final permitting roadmap, which was adopted in May. That roadmap included approaches for permitting offshore wind, and the first approach was a collection of concepts for coordinating state and federal agency environmental reviews and permitting processes. That report pointed to a previous body called the Renewable Energy Action Team as a possible model, which was used for permitting large renewable energy projects in the California desert. It also pointed to an example from the Bay Area, the San Francisco Bay Restoration Regulatory Integration Team, or the BRIT, which has employed an interagency approach to habitat restoration projects in the Bay. As mentioned, the report also pointed back to a December 2022 document that was prepared by the CEC that was called the Conceptual Permitting Roadmap, which laid out a proposed interagency structure for permitting offshore wind energy. The report also touched on the possibility of identifying a lead coordinator or a lead agency that could coordinate the agencies concepts for consolidated state application processes and coordinated review. The report further touched on the importance of being able to sequence NEPA and CQUA in the environmental review process and the ideas around having a programmatic environmental impact report or a programmatic environmental impact statement or even just a programmatic approach to looking at not only additional sea spaces, but being able to compare outside of current lease areas the potential impacts outside of those. The next steps for the offshore wind permitting roadmap include continued discussions with stakeholders, tribes, federal and state and local agencies as we develop these permitting approaches even further. We've been working through those public processes over the last couple of weeks in earnest and the CEC will be holding a public workshop on June 2 that'll focus on fleshing out some more of these permitting approaches to arrive at a recommendation. Our intent is to be able to take what has been prepared that workshop and the discussions we're having and be able to include that in a draft offshore wind strategic plan that'll include several other chapters that address the statutes that are required there. I think, last, I can share from my experience that there is definitely a need, and we've always identified a need for early investment into agencies and stakeholders, especially agencies with regulatory responsibilities to have the resources necessary to ensure they're engaged as this federal process unfolds and well ahead of the state entitlement processes and all the way through project operations with the other agencies would be better at describing could share their insights on the timing of when these resources make the most sense and how resources have already been used to that extent. So thank you for the opportunity to make remarks. I look forward to the questions and the discussion.

Thank you. Let's see, should we go right into questions or there are any other presentations, Joanne, that we want to do beforehand? Okay, let me open it up. I know, let me turn over to Senator McGuire to help lead off of this discussion.

First and foremost, I want to take a moment to say thank you to Chairman Becker. Chairman Becker is incredibly busy with the budget getting all issues landed and to be able to advance this hearing today. Just want to say how much appreciate it to have this conversation and thank you for bringing all of us together sir, and for your leadership. So look, I have some comments and obviously we'll want to be able to hear from each and every one of you. I guess my bottom line in taking a look at our coastal communities, offshore wind is absolutely critical to the future of the green energy for our green energy economy and obviously backfilling where we need to go for our energy demand. And I think that we can all agree that this state has talked a big game when it comes to offshore wind energy. So many of us, including myself, we wax poetically about the need to deploy offshore wind in an expedited manner. We grateful for the governor talking about advancing a 270 day judicial review. I'm a firm believer that we need to be able to cut the coastal permitting timeline. I'm biased. We have a proposal that would cut it by five years. We desperately need centralized procurement, which grateful that the governor is standing behind, yet we don't staff up the agencies that are responsible to be able to get this new green energy source up and running. And I'll go into some specifics on that. I am frustrated as I was able to share with the chair, that we've put some ban-aids on it. Some may call them gimmicks of lending staff from one agency to another. But if we're serious about landing the billions of dollars in investment that is out there right now, we need to ensure that the state agencies that are responsible for the permitting have the responsible individuals to be able to get this energy deployed. And I think that we can all agree that budgets are value statements. So I'm a firm believer that if we value combating this climate crisis and expanding our new green energy economy and ensuring that Californians have the energy that they need to be able to power up their homes and their cars and public transit, we're going to need to be able to invest in offshore wind. So again, there is no other state or nation that is advanced in a broad-scale offshore wind without having centralized procurement. It's grateful to the governor that focusing on that because we need a guaranteed rate. Two, we do need expedited permitting to be able to get the stateside red tape cut and I think that there are some varying proposals on that. We need to coordinate with the feds and do appreciate your discussion about that. Coordinating NEPA and CEQA formally. I think that we need to now, in a formalized process in statute, bring all stakeholders together early to have a first-of-its-kind coast-wide policy discussion and get it into statute. Because learning from the East Coast where you have those eleven states, that's been a mess and it's been like herding cats to try to be able to get each of those states to be able to come together and speak with one voice. We're really lucky that we have such a large coastline that we can actually do that. But I think that we need to be able to do that sooner rather than later, and we have to staff up appropriate agencies. And again, I'm going to just speak for my own opinion. We have one temporary staff, one, at the coastal commission. It's temporary. I don't understand how we continue to talk about the importance of offshore wind and we're not staffing up the agencies, the permitting agencies, the leasing agencies, appropriately. I am grateful to Ms. Huber at the CEC. She is a rock star. I have deep respect for her and I hope that she is getting some well deserved time off since she's out of the country and I think the world of her, I think that the CEC does amazing work. The CEC is overflowing with funds right now. Overflowing with funds. If I could just be blunt, billions of dollars to be able to accomplish their goal. But I am going to speak my own opinion. Rather than being an active collaborator, we need to be able to staff up the agencies that are on the front lines of this deployment. So State Lands, they handle the leasing from shoreline to 3 miles out. Long term, we're going to need to staff them up further. Long term. Coastal Commission. Coastal Commission, and happy to hear from the executive director. They're in charge of the developmental permits in the coastal zone. Understand from industry and communities. There may be some frustration with the Coastal Commission, but it is what it is. And for the first time, they're saying that they're willing to be able to cut the permitting timeline by five flipping years. Five damn years. And they have one temporary staff. I don't even understand how we get to this point where we're talking about the deployment of offshore wind on such a grand level, yet we're not stuffing up the agencies to be able to get there. The PUC does procurement. The California Department of Fish and Wildlife, which I'm grateful to the director, is protecting marine life and coastal waters. Cal ISO on transmission, yet we're still not investing like we value this energy into the agencies that are going to be in charge of the deployment of our green energy future. So I'm not trying to be crunchy today, but I also think that we need to be real about the facts that are at hand. We have staffed up. We have funded the CEC on so many levels, yet those who are going to be on the front lines working with industry and communities, the agencies don't have the funds to do it, especially on such a grand scale. There's billions of dollars of investment waiting to be invested in this state, and this investment is critical to the future of our economy. But it's also critical to meet our energy needs. We have backfilled the energy generated, luckily, by Diablo Canyon. That is not going to last, nor should it. So I have more comments today. I'm happy to have you react. Pretty familiar with each of the staffing, how it's organized in each of the agencies that are going to be touching this. We're not going to get into transmission today. I think that's also the Achilles heel that we need to be able to have a long term conversation about. And I think that there are different ways to be able to fund that. We've seen in other nations, like in Great Britain, where the developer comes in funds and then gives that transmission system back to the government. In that case, in Great Britain, after the investment has been done, but it's with the central procurement system. So today just focusing on these agencies, Mr Chair happy to be able to get the take. I don't have a lot of questions have done some research. And I want to say thank you to both the Coastal Commission and State Lands for their work know that we have a lot of work to do and this is not at all trying to throw rocks, but simply figure out how we can invest and move this along.

Well, thank you for those comments. Maybe we'll see if we have reactions from any folks here to Senator Mcguire's comments. Do you want to start?

Well, I just wanted to say thank you for acknowledging all of our work and also acknowledging what we have ahead of us in terms of the opportunities, really excellent opportunities. I'm happy to provide remarks as part of my formal presentation. I'm just not sure how the Chair would like us to proceed on.

Well, let's see. I know we've sort of time constraints here, so maybe kind of quick reactions and then maybe we're going to have time to dive in a little deeper in a moment, but any kind of quick reactions and want to give Senator McGuire a chance to follow up.

I would just say, having worked on offshore wind for seven years in a state agency, with state agencies, it has been extremely collaborative. It hasn't always been necessarily resourced, but everybody has found a way to make it work and I think we're at a good starting place and a good foundation. I think your points about scale and time are spot on and we hope to highlight that in all of our reports. And also just note that Elizabeth Huber is in Europe but not on vacation. She is there for work.

That's too bad. Yeah. Look, I think my piece Mr. Chair, and I'll be very quick, is I think we've done an enormous amount of work to be able to scale up the industry. I think where we have fallen short and again, I hope I'm not coming off as being critical because that is not the intent here today. I have great respect for each of the commissions. The CEC has done an enormous amount of groundwork to be able to create a roadmap for success. The only way that it's going to be successful is if we fund it.

And the longer we wait, the more challenged we're going to be to be able to get this deployed. And where I will be candid, at times, this state over promises and under-delivers. We talk and talk about how important the climate is. We talk about how we're going to transition to a new green energy economy. We talk about how folks are going to have enough power for their cars and homes, yet we don't act in an expedited manner that will protect our values like our coast, and cut the timeline. And to be able to do that, we need people on the ground and so that have not seen the administration advance a proposal that would help staff up to the scale we need to go and the timeline we need to go to be able to meet these demands.

Yeah and I'll say for my own part that but asking for the last year or so, or whenever I meet with anyone, either from within government or within industry, I'm always saying, give me the roadmap for offshore wind just so we can know if we're on track. Right? Like, and what are we really shooting for and what are the key milestones so we can know if we're on track. And Joe, from my team found me yesterday from the CEC, and this might be from the just recent report, but a timeline that really goes through planning, leasing, site assessment, and review of project application. And the ranges are between seven and twelve years.

As Senator McGuire said, this is a critical resource which is perfectly inversely coordinated, right, with our solar and onshore wind. And what we really need to do is be tackling the peak. And as we're going to double or triple our electricity use, as we decarbonize buildings and transportation, this is going to become even more critical. So I know Resources Agency likes to talk about cutting the green tape and so this is a case where we certainly need to do that. But to Senator McGuire's point, be staffed up as well, as you just said, in a coordinated fashion. Right. We want to make sure there's not duplication.

So while we're staffing up, we want to make sure we do that in a way that's looking ahead to that collaboration so that we're not duplicating. One agency is not duplicating the work of another and I think that's absolutely critical. And I appreciate you guys coming in here in that spirit, but that's something we're going to absolutely have to maintain. So any other quick reactions? I have some more detailed questions, but I think there's a few other thoughts. Yeah. Go ahead.

Chair, Senators, Chuck Bonham. I'm the director of the California Department of Fish and Wildlife. If I polled my colleagues here, I think we share your interest, your energy, but also your concerns. No one has tried something like this anywhere in the world in the middle of the California Current, which is something that exists nowhere else on the planet. But like you, we're living daily climate disruption. For my department, we have the difficult assignment of closing fisheries when there's climate impact in the ocean. The workload ahead to achieve these goals is often terrifying, but we don't have a choice. We need to do this. We need to do it now. We need to do it correctly. I think the Governor spoke well last Friday on the need to create a different California for our future. So we appreciate the panel and we hear you. We'd like to get into the details as we go through the questions.

Great.

So just digging deep into this, if it's all right. Mr. Chair, let's just be honest. I know it's a little awkward. Everyone's going to need to toe party line, so let's just be blunt. So that said, okay, hey, there we go. But look, hot day on Vice Chair. There we go. I think that we can all agree that enhanced resources, financial resources, are going to be needed in each of the agencies to be able to accomplish what we want to accomplish. And we are seeing a burgeoning industry at our doorstep. So what resources does the Coastal Commission as lead permitting and state lands commission lead on all leases out to 3 miles need here initially and long-term?

Thank you, Senator. Kate Hucklebridge, Executive Director of the California Coastal Commission. If the Legislature and the Administration decided to prioritize expediting permitting beyond what we can do with our existing staff, we do know the types of folks that we would need to bring on, the types of expertise to pull that permitting process and make it go a lot faster. That would include environmental scientists to do permitting, technical experts, and engineering, geology, ecology, tribal experts, and then administrative and legal staff to support that. But again, I think there's any number of ways that the state could choose to go forward and we'll be waiting to see how that works.

And that could mean just being I'll give you my own editorial and won't ask, but I think that having both commissions, having their own employees working on these projects would probably be the best way to accomplish this. I know that there's been discussions about potentially loaning staff out. That's just a band-aid. What we did when it comes to cannabis is that we borrowed from the general fund and have the residual tax dollars pay back the general fund to be able to staff up CDFW, to be able to staff up the bureau of cannabis control.

And it wasn't an outright allocation by the state when it comes to general fund. I mean, I think there's several ways that we can do this. But Madam Director, I want to ask you, would it be fair to say to look at an expedited, let's just say as you've been talking about five years, cutting five years off, there would need to be additional staff above and beyond the one temporary staff that you currently have.

Well, what we do know from our experience, of course, is that front loading the process is how we're going to get there successfully. The more that we have the right expertise and focus on these topics early in the process, the better. And so that it depends on how fast we want to go. I think it is absolutely true that these are really complex issues. They're technically scientifically complex. And so it requires longer term investment on staff in terms of making sure they're up to speed and then focused on this work so that they can move forward.

This is long-term. I mean, offshore wind is here to stay for all of our agencies. This is not something that even once we got turbines in the water, this doesn't go away for us. We have ongoing monitoring requirements. So it is a long-term investment.

So can you do it with one staff?

I can't go fast with one staff.

Right. Thank you so much. I'm very grateful for that Madam Director.

And I failed to introduce myself earlier, sorry about that. Jennifer Lukezi, the Executive Officer of the State Lands Commission. As Senator McGuire was referencing, we manage the lands offshore to the state federal boundary. We are the leasing agency for the state offshore. As part of that, for what we anticipate in terms of federal offshore wind, is that there will be five projects. All of those projects will need leases for that infrastructure that crosses state waters to shore from the State Lands Commission.

As part of that process, we need boundary and surveying staff, appraisers. We have to do tribal consultation, environmental justice evaluations and assessments, also looking at fishing industry impacts and mitigation and monitoring, as Dr. Hucklebridge was saying. And then also we have to take into consideration in our lease terms, end of life and decommissioning considerations as part of the project. And so a lot of what we do as part of that, we do as the CEQA lead agency. So there's a high likelihood that we will be the CEQA lead agency. So that means we will also need to prioritize our environmental scientists to help manage those.

And we are potentially looking at five EIRs, so that's going to take one to two years to complete. With that said, we are also the primary leasing agency for the state for offshore oil and gas. And we have been anticipating this transition for some time. And so through attrition, and retirements, and other things, we have been reprioritizing our existing engineers, our existing scientists, our existing attorneys, our existing land agents to be able to create the capacity to meet this moment. We're still in the process of doing that, and there's a lot of work ahead, but that's where we stand.

Madam Executive Officer, on that. So do you believe with the transition that's happening with oil and gas and the positions that you have, if we're looking at an expedited approach, right, whether it's on the Coastal Commission side, on the permitting, it could be on asking courts to do a 200 guaranteed 270 day judicial review, right. Do you believe that there is appropriate staff long-term to be able to meet the needs that's going to come through your shop?

Yeah, I think a lot of it comes down to whether we will be the CEQA lead agency or not for all five of those projects offshore.

So if you are?

if we are, then it's moving targets a little bit, to be honest with you, Senator, because at this time we don't fully understand the pace of offshore oil and gas platform decommissioning. We're currently doing conducting decommissioning of two offshore facilities. We also have three other state platforms. We aren't sure of the horizon on those. There's a lot of variables. Plus the federal platforms, there's eight in the process of being decommissioned now. So it's a moving target. We're trying to create that capacity in-house at this time.

Thank you, Madam Executive Officer. I don't want to put words into your mouth, Madam Executive Officer, but please push back on me if you think I'm incorrect. I think that we, and don't mean to drag Director Bonham into this damn thing as well, but look, CDFW was staffed up, not saying fully, but staffed up to be able to help assist with what may be coming with workload with offshore wind, in addition to everything they're doing in regards to the protection of marine life within their jurisdiction.

So I just can't imagine, long-term, that the commission is going to be able to hold a line status quo when if you're going to be CEQA agency and we have one department that's already receiving funds, that is going to have to be protecting Marine life. I just can't imagine that the status quo is going to be, is going to work long term, especially if we're looking at trying to expedite this. I don't want to put words in your mouth, but I think this is my 6th year, fifth year sitting on this budget sub and I have not seen a state agency say that they're going to be able to do potentially double the amount of work with the same amount of staff.

And I have great respect, Madam Executive Officer, for your team. I'm not saying that because of their work ethic, it's just an enormous amount of work heading your way.

I don't disagree with the enormous amount of work ahead of us.

Thank you so much.

Well, thank you. With that, we'll start with some more detailed questions and I'll open up to Senator Dahle as well. I wanted to start with the CEC and maybe start walk us through your department's role in minimizing environment impacts, mitigation monitoring and talk about maybe the state's role versus the federal role in offshore wind.

Sorry. Yeah, sure. As I mentioned, the CEC has been engaged in offshore wind since about 2016. We've served as a role of helping coordinate other agencies and interacting with the Bureau of Ocean Energy Management and helping manage that task force. In that process, we've had to learn a lot in the assessment of offshore wind when it comes to environmental monitoring and impacts and strategies to address those. We're not a permitting agency for offshore wind, so it's not something that's always at the forefront, but it is something that is part of the needs that we see and questions that need to be answered.

AB 525, it requires us to look at those. We have a workshop June 1 where we'll be looking at sea spaces as well as potential impacts and strategies to address those. Monitoring, adaptive management, those are going to be topics alongside others that are presented at that workshop. We also have and it's not the area that I work in, but we have the Electric Program Investment Charge that the CC's Research and Development Division administers. There have been investments from that program in technologies that could be developed to be able to monitor in the Pacific OCS and in those conditions.

So that's sort of where we're at. And I think for the CEC it's going to be the strategic plan that really identifies what the potential impacts are, the strategies to address those. And as we develop that, we work very closely with our state agencies as well, who live and breathe that world a lot more than we do.

Got it. And any comments on state versus federal or how we're also working together with not only local agencies, but the federal agencies as well?

Yeah, through the Intergovernmental Renewable Energy Task Force, we work with federal, state, local, and tribal governments who are on that task force. It's an informational task force, so it doesn't have a decision making authority, but it brings everybody together to talk about issues. The Bureau of Ocean Energy Management typically pulls those together around big milestones. So before there was a call area, they would have a task they had a task force meeting. Before there was a lease sale, there was a task force meeting.

But that's not the only place that we coordinate and talk, because there's only been five of those. So that wouldn't be enough time. We spend time with. We have regular meetings with BOEM, who is the federal lead agency here. And all of that coordination, really, I would say, resulted in the lease sale that occurred last year and the way that that lease sale was structured and the way that the rules in that lease sale from things like the bidding credits that were included to stipulations that recognize California priorities and values.

We did our best to push BOEM as far as they could against their own federal regulations and their own laws. And that work is on a weekly basis, basically, to be able to arrive at a lease sale that looked like something that California could get behind, essentially.

I asked this question. I don't know if Senator McGuire has any info on this. When I was meeting with some federal officials, this was end of last year, there was a federal bill to try to allow local communities to retain some of the money from the leasing because I think it all goes to the federal government today. Any update on that or any is that still an effort going in Congress, do you know?

Yeah, I'm not sure if that is one. I know I have seen proposals where revenues that are raised from the lease sales would be appropriated to local communities. There's a formula there. I'm not sure on the status of what that is, but.

I believe right now it all goes federally. And I know there was a bill that was trying to change that, but we'll see if we can get any updates on that. Two questions. Which recommendations from the permitting roadmap does the CEC plan of funding in the CERIP for offshore wind energy development?

So I know that the CERIP is the Clean Energy Reliability Investment Plan.

Yeah. Money for offshore wind.

Yeah correct. Yeah, I know that that's the next topic in the hearing but the line item that's in there, my understanding is that's an example of the types of things that could be funded for that line item which is related to transmission corridor studies. And so I think there's more time to work through exactly how those monies are spent after or if they are appropriated. And David Erne, who's my colleague who's going to be talking about the CERIP program later, I think could have a better sense of that.

Let's do that. It's a bit of a long question, but I just wanted to ask. So last year Legislature, probably 45 million approved for CEC to be in plan for upgrades at ports and AB 209. And some stakeholders are concerned about the timing of the rollout of that money. As we understand that the CEC has indicated they will need to go through the Administrative Procedures Act and get their guidelines approved through the Office of Administrative Law, which would take at least a year.

That delay would result in California failing to meet its 2030 and 2034 targets if all else remains on track. Is CEC aware of these time concerns and what are you doing to help move that money out faster?

Yeah, we have heard mostly from port authorities and harbors that that money is something that they would like to see really soon and have that available. That package was passed as part of AB 209, which is a much larger package of programs. I think, as Senator McGuire had mentioned, that the CEC did receive large appropriations last year and it's one we are working through. I wouldn't definitively say that there has to be a particular process that we have to go through before those funds can be released.

But we do need to have a process that's public and that we have public input on how we go about funding those. The actual mechanism, I think we are still exploring how to do that. If we're going through the administrator or if we're going through the Administrative Procedures Act, the APA Act, it does potentially add some time to that because in order to get to a solicitation to get money on the street, you have to jump through and pass through those hoops first. So that can add time.

But we're investigating how we can do that with a robust public process up front to get input into that program. It's got a four-year limit on the liquidation period and a four-year limit on spending. So it is envisioned as a program that's available for quite some time.

Good. Well, thank you. This committee will be very much following to make sure that's what I want that timeline so that we can try to hit those 2030 goals. And this is a piece of that. Again, we thank you for this report that was just released. Having a chance to go through all the detail, but we'll be going through that. But thank you for addressing this part. We'd love to stay on top of that issue with you.

Want to turn to the awardees for the Solicitation for the Advancing Environmental Monitoring Technologies. So I know there were three awardees, and maybe you could tell us a little about those projects and how are they going to be helpful in developing and operating offshore wind projects?

Yeah, the awardees you're talking about are from a Solicitation that our Research and Development Division released and made proposed awards. So right now, those awards have not been approved by the CEC at a business meeting, but they've gone through the screening and the scoring and the selection criteria of the CEC. And so right now, they're proposed and being negotiated. The purpose of that solicitation was to receive proposals from organizations proposing to develop technologies that don't necessarily exist today.

And these technologies are for monitoring the potential impacts or the interaction of floating offshore wind systems, which include turbines. They include a foundation, and then they also include mooring cables and anchors and the ability to monitor how those are interacting with the ocean environment. We see early on as a very important component of the strategy here, because you're going to reach moments where you're not going to have the best answer in the world about what is the impact, what is not the impact.

And the next question is, well, if we don't quite know, but we have a range of what those could be, or we have an understanding, how do we monitor and make sure that we can evaluate those and see those? And without the technology available at the moment, that a decision maker or somebody who's investing in these projects has to make that decision, it may take even longer. So these research projects are not going into the ocean 1,300 meters deep tomorrow.

They are being tested and developed in the lab so that they can be available at the moment where, like I said, a decision maker, somebody making an investment, can have confidence that there's a technology that exists. The three projects, I'll just say one is Lawrence Berkeley National Lab, and they're developing sensors, and the sensors are used to detect the presence of marine mammals.

The Shots Energy Research Center will be developing an integrated monitoring system for turbines as well as for platforms. And they'll be looking at how to get around assessing entanglement hazards. And then Integral Consulting is the third project, and they will also be developing sensors that allow for 3D-visioning at project sites.

Great. I went out to see the floating offshore wind in Portugal. Quite a rocky ride, I can tell you, to get out there. Obviously, they've been out there, they've been dealing with some of these effects. Obviously not exactly what we're dealing with here, but are you looking to see what's working and these other deployments around the world and what technologies are out there?

Yeah, absolutely. We started with MOUs, with Denmark, and with Scotland back in 2018 and developed relationships with Norway and other Pan-Pacific countries. And most of those were focused on fixed-bottom. But it was clear those countries had been thinking about floating technology before we had. And so we definitely do our best to reach over and figure out what kind of lessons learned or experiences that we can take that would apply to California. That's actually where Elizabeth Huber is currently in Norway with the Chair of the CEC with the Chair of.

The Coastal Commission, and they're there to go and look at a pretty recently installed floating offshore wind system.

Yeah. Another thing, I remember a friend of mine working with our principal power, this was like 15 years ago, and now their technology is being used in some of these floating platforms based out here in California. So I just know this takes a long time. Are there other biological, ecological issues you anticipate needing to be addressed with additional research and monitoring projects?

Yeah, absolutely. Part of the AB 525 strategic plan will hopefully identify what some of those gaps are because they're not going to be able to identify, it's not going to lay out the blueprint for everything. There's going to be places where we have unknowns, and I think that we'll be able to lay out in those gaps there. I would say that other agencies that are sitting here definitely have their own work streams that they're looking at that bring all of their experts together on assessing those impacts.

Excellent. We'll move on, a couple more areas. I'll run through my questions of agencies and I'll turn over to Senator Dahle. Let me start with the Ocean Protection Council and Ms. Eckerle, thank you for being here today. What roles the Ocean Protection Council have in offshore wind energy development and projects?

Thank you, Chair and Senator Dahle. My name is Jenn Eckerle. I'm the executive director at the Ocean Protection Council. And the Ocean Protection Council is a state policy agency, so we are not a regulatory agency. Our role in offshore wind is to make sure that we have the best available science that's informing the suitable areas for offshore wind development so that we can accelerate our clean energy goals while also minimizing impacts to marine life and habitats, to tribes and cultural resources, to coastal communities and to fisheries. So we have made some accelerated investments in environmental monitoring to help inform places where we should be focusing our attention to minimize those impacts. And we have also invested in fishing ground mapping, and cultural resource inventories to really start to understand where those areas of conflict are that we should be avoiding. That being said, and building on the feedback that you've heard from my colleagues, we have a lot of work to do. This is new in California. While we have some lessons we can learn from Europe, it's new. Our shoreline is different. Our continental shelf drops deeply very close to shore, and our ecosystem is unique. And so we need to have early and ongoing monitoring so that we understand the baseline, the situation that's happening during construction, and ongoing operations. So the Ocean Protection Council actually just released a solicitation last week to develop environmental monitoring guidance, and this will lay out a framework for how we're going to understand the potential impacts at various scales, what's happening at the project level and what's happening cumulatively at a regional or statewide scale. So we have a lot of information that we can work from now. We have an understanding of where marine mammals or seabirds might be present. What we don't have a clear understanding of is the sensitivity. So just because a species is in a place at a certain time doesn't necessarily mean it could be impacted or it could be impacted significantly. So we're still trying to understand those pieces. And I just want to acknowledge that we have been working really closely with all of my colleagues here. That coordination and ongoing collaboration and the leveraging of expertise and resources is critical and is the way that we're going to continue to work together on this really important issue.

Well, thank you for that. And I think you partly answered this, but so this framework is looking at--it sounds like--the diversity, species, habitat uses, stressors in the Pacific Coast waters and kind of looking at gaps in knowledge. Is that right?

Yeah. So we have early modeling now that's looking at the presence and distribution of species. We're also overlaying that with the fisheries' mapping grounds. And those are the key inputs that are serving to inform CEC and our collective effort on our sea space analysis. But there are a lot of unknowns, right? We've never done this before. And so we have questions, as Eli mentioned, about impacts to marine mammals, to birds, to bats, understanding the impacts of the infrastructure, the mooring, the cabling, how we're bringing that infrastructure onshore. Questions about impacts to the oceanography: are we going to see changes in upwelling? And really conflicts also around existing uses, so fishing activity, shipping, and really making sure that we're also being thoughtful about impacts to coastal communities, including tribes. So we've got culturally significant view sheds and also resource implications that we need to be really focused on.

Okay, excellent. My recollection, I was just trying to find it, but that we were in Portugal that some of their concerns on the marine life, at least that aspect, was proved to be not realized that there actually were that those potential effects or negative effects were not happening. You had a comment on that.

I was just going to add that part of the planning process that we've all been going through with the federal government, and the reason why we're seeing proposals and leases 20 miles offshore, is that there's an understanding that we could potentially minimize many of those impacts because we're seeing species who are spending much more of their time closer to shore. So we've been very thoughtful about that in the planning and the leasing process to date.

Great. And does the Ocean Protection Council have the staff and funding it needs as part of this?

So right now, we have one limited-term environmental scientist who is in her second year of that two year term period. She's our lead. There's some limited activity by myself and another senior scientist working on this. And so I think, as you heard from my colleagues, understanding the pace of how we're going to do this is really important. We will likely need to think about kind of shifting program priorities and investment priorities if we're going to continue on an accelerated pace to get this done.

Excellent. So I guess turning over to Ms. Hucklebridge, you address this as well, I guess in terms of the positions, maybe you could just kind of walk us through again what some of those positions are. And again, maybe for both of you, just how can we ensure that this is not going to lead to duplication essentially in these efforts?

Thank you, Senator. I think in terms, that we know the types of expertise and sort of building on our existing staff expertise at the various agencies, and that includes both, at least at the Coastal Commission, the jobs we have in front of us include permit analysis and actual permit writing. But it also includes a lot of science, science synthesis. All of the various science questions that Jen was talking about are things that we will distill into permit conditions and requirements and monitoring plans that will then be implemented through the Coastal Commission's regulatory process. So in that way, we work with our partners on the science and also with Chuck and his agency to really understand what the science is telling us, and then what does that mean in terms of regulatory requirements and monitoring and adaptive management? That's another thing we haven't really talked too much about yet. A lot of monitoring. But the key here is that there are so many unknowns that we are going to have to build these so that we can manage them when we do find out more about what the actual impacts are. So in terms of the Coastal Commission, we need additional technical expertise to bring to bear to some of those questions. So understanding seabed dynamics and from an engineering standpoint and decommissioning, there's so many questions that come into once you put in enormous piece of infrastructure 20 miles out in the ocean, what happens and how do you bring it back when it breaks? So understanding the engineering and geology implications of that, let alone the ecological as sort of Jenn discussed, would all be something that the Coast Commission will need to be considering as we move forward. And then there are legal issues as well that we'll need to take on. And then there's the engagement piece, which I think all of us have talked about a little bit. But front loading this process, and I spoke to that earlier, I think is critical to a smoother process when you get to the permitting stage. And it means a lot of time and effort spent out in communities with tribal governments, with fishing communities, local communities, communities around ports to kind of envision what this looks like for those places and what that means in terms of our regulatory review. So I think it's a whole host of different kinds of expertise that will need to come to bear.

Thank you, Director Hucklebridge. And I should be calling you all Director. I apologize for that. I guess, Director Eckerle, just to wrap up on that, I mean, you mentioned species and migration studies. Those can take multiple years. Are those gating items? Are these things that can be ongoing as we're going through the leasing and assessment and all the other processes?

Yeah. So we're doing a 'yes, and?' approach. Right. So with the monitoring guidance that I mentioned that will provide a roadmap for that long term monitoring framework that'll probably take us two years. But we recognize and acknowledge there are near-term research and information gaps that we need to fill now. And so we lead a bi-weekly state agency coordinating group to get at those research questions, some of them identified in the Coastal Commission's consistency determinations, and I think also will come out of the analysis in the AB 525 strategic plan. So we are poised and ready to invest in those near-term critical monitoring and research needs and then building off of that because we're going to continue to need additional information not only to understand what's happening, but also, as Dr. Hucklebridge said, to adaptively manage.

Okay, excellent. Thank you. We'll turn to Director Bonham. Tell us about CDFW's role in this and just in offshore wind generally, and then we'll call for that. Yeah.

Thank you, Chair. So, Chuck Bonham, Director of the Department of Fish and Wildlife. Two weeks ago at the Pacific Offshore Summit here in Sacramento, I got a similar question. And my answer was: our role and our responsibilities in offshore wind are both historical and contemporary. What I mean when I say historical is our department, perhaps more than any other, has been in the ocean space since the California Constitution, which created the Board of Fish Commissioners. So our history is the regulation of who can catch how many fish in the ocean, and involves enforcing against bad actors who are fishing in places they're not allowed to or over limit. That is a significant tool to ensure the sustainability of fisheries over time. But our role isn't just historical. So commercial and recreational fishing, men and women in the ocean are kind of one of our core people, if you will. But when you come to 2023, this dynamic is contemporary. Back then, we didn't allow a space for tribes to have a voice in those discussions. Now we do. We must. We will in the ocean space. Similarly, we're managing global climate disruption dynamics in the ocean, domoic acid, heat waves, crab fisheries, whales, salmon. And we're learning because we've lived through, perhaps, except for the Energy Commission, more permitting of energy on land than any other department in the state as well. So we have a wealth of knowledge, lessons learned, on how we might translate experiences in that permitting world to this permitting world. So it's historical, it's contemporary, and it runs across countless laws. We have the Marine Life Protection Act, we have the Marine Life Management Act, we have the federal fisheries venues where the federal venue decides who can catch how much of certain species. We have a state analog for the fisheries that are from shore to 3 miles out. We often are a responsible agency in the California Environmental Quality Act space. And of course, any proponent that may impact a designated species that's endangered or threatened needs some form of approval from us. And lastly, I think we serve for you and all Californians as your trustee for all the critters, all the flora and the fauna, which there are many in the California current, because there's no place like it in the world.

Well, thank you on that last part, just from my own knowledge, because we also heard from the Ocean Protection Council about species monitoring and migration. How do you work together in that work?

We work together well. And often, the Ocean Protection Council can serve as an incredible catalyst for investing in the monitoring and the data. It is also a place that has connectivity to the academic and kind of professional consulting world in biological ecological analyses. And you're seeing those tools come to bear here. So when I read the assessments coming out of the Energy Commission through AB 525, what I see are different options that could be chosen. For example, you could scrap everything and start over and create a single entity. You could invest in respective entities but ensure collaboration. My personal preference is to learn from what we did on the land side. And it was referenced by Eli, the Renewable the Renewable Energy Action Team. Federal-state dynamic. You put the right people on a time clock in a room, regularly managing individual projects to get them from start to scratch. But what's different here is we're not anywhere near yet applications for specific projects. If you use the federal four steps at BOEM, they had planning analysis, they had leasing. Maybe we're somewhere between two and three leasing and site assessment before you get to the last step, construction and operation. So I think we work well. We have room to grow that collaboration, and that's one of our ingredients for success here.

Thank you. Let's see. The Governor's sharing budget included 25 permit positions and 6.4 million to CDFW for permitting energy projects. Roughly what percent of these resources are expected to be focused on offshore wind energy projects?

Great question, Chair. I have two answers to that question. When you look at the 2021/'22 Budget Act, our department received 16 positions to dedicate to energy permitting. We took three of those, and they are committed full time to offshore wind energy. So two environmental scientists and one attorney. We've also redirected three additional staff, three more environmental scientists, program managers. So we have a total of six people working on energy now. But you're also aware that currently in this budget cycle you have a proposal going through both subcommittees for 40 positions, and we've talked previously about having 25 of those positions available for energy projects and 15 for water. We could see a dedication of those 25, one or two also being available for offshore. But as you know, the positions we've received, which in the offshore space may appear to be more than our colleagues, sits in a bigger context of our ongoing service based budgeting dynamic at the department for which environmental permitting is one of our largest under capacity areas. And let me just offer my own personal view. I know it's rewarding, it's regularly, challenging, whether it's transportation, housing, energy, on land, energy and ocean, most of these things have some nexus with our department, unlike the other agencies at this table. And when you look at analyses done in the private sector through McKinsey, in the public sector, through Lean Six Sigma, and you think about the innovative and important proposals put forward last Friday by the administration for efficiencies, you end up seeing the same common denominators over and over and over. When one asks, how do you permit faster? Early and often. You need everyone conceivable talking early and often. Here, I would add, we need data and information as soon as possible to help us on the back end. We will not have perfect data. We will be forced to make decisions with some measure of uncertainty. Getting information going now is better than waiting, because one of the single biggest delays in permitting is argument over the record and the information. Finally, when we get to sighting, we need developers talking to all of us from the get go, because where you put something is how you avoid and minimize which shrinks impacts. And lastly, all the analyses tell you at the end of the day, those things plus capacity are how you deal with going faster.

When you say data on the front end, what kind of data are you talking about? I mean, it relates into this discussion that we've had here today.

Yes, pick any topic. But for our area of expertise, a lot of what Jenn mentioned at OPC. Migration patterns, fishing grounds, presence/absence, bats. What you might do with the turbines themselves. The ability to do hydroprene. Hydrophones for tracking mammals as they migrate. Aerial surveys, boat surveys. You can get information off the turbines themselves. How we might go to other places in the world that have tested some technology and see what can transport, including their data and information generated. All those things.

Well, thank you. And we heard from Director Lukezi earlier in response to Senator McGuire's questions, some of the part about state land's role. Anything generally you want to say before I turn it over for other questions?

Yeah the only thing I would just add to this broader discussion and especially in response to your question about making sure that we aren't duplicating efforts. And I think you're hearing from all of us about the different and discrete roles that we all play. But importantly, what you're hearing from Director Eckerley and Dr. Hucklebridge and Director Bonham is all this data that we need and analysis that we need, it's going to funnel into the CEQA documents, the EIRs that we'll be preparing. And as part of that, our general practice as state agencies is to work together. Early on that document, we set up a joint review panel which essentially allows all of us, our experts, to get together and look at all the data, analyze the impacts, come up with mitigation measures and monitoring and adaptive management together, and resolve conflicts early before even a draft goes out to the public. So that as state agencies, as local agencies, and with the federal government, we are leaning into any potential conflicts and resolving that before the draft EIR hits the streets. So I wanted to just highlight that one example of how we collaborate in order to make the CEQA process more efficient and effective and also more legally defensible at the end of the day.

Great. Thank you. I'm really grateful to all of you for what I've heard so far about this collaboration, about working together, and about the roles that you all play in this really, really important endeavor. With that, let me turn over to Senator Dahle.

Thank you, Mr. Chairman. I appreciate you all being here. I want to start out with just some comments because I think that--I voted for 525. I thought that was a good start to our look at what we're going to do on our coastline. And I just want to kind of maybe draw a picture from where I stand and some fears I have, actually, quite frankly, about the pace we're moving. So, first off, our original goal is to have five gigawatts. So we looked up how many megawatts per wind turbine. It's ten to 12 MW. These are a lot different than what we see on land there, as you all know. So that's, to get the five gigawatts, that's 416 structures to get to five gigawatts, according to the math, or roughly right there, along our coastline. We don't know what that's going to look like as far as, and then we have transmission. The other thing we have is we do have a continental shelf that drops off that is very deep. We have currents that are different than where you went to see the projects in where it was, Norway or somewhere. Well, I'm Norwegian, so they do a good job of getting out on the boats. But anyway, my point is that California is different, our currents are different, and our wildlife is obviously different. So I want to just, for the people that are out there that are watching this process, 416 structures in our ocean is the first phase. And we're talking about 2030 is the goal. And I think that's overly aggressive. I think we're moving in a place that if we do it wrong. Out of all the panelists here, I've worked with Director Bonham a lot on the land side and on the ocean side of fish. Just fish mainly are the species that we're trying to make sure don't go extinct. And we have lots of issues in those areas. So I want to just kind of lay that out to talk about, 525 is the roadmap, it's the roadmap and we really don't know, so. Senator McGuire started out with, "we're going to tow the party, we're going to do the party thing." And I'm not part of that party, and I'm not part of the people that want to see California do it wrong, because we have federal money that's available, and we have some state money that's available, and we have people who want to do offshore wind because they think it's the answer to our global climate change. And I don't believe that. I don't think it's the answer. I don't think that putting 416 structures in the first phase is the answer. And I think we're moving too fast. So I want to just put that out there. And then the frustration that I have is this will probably be in a trailer bill, which, first of all, this is not directed at any of you. This is directed at the policies, how this place works. You're going to do what the agencies tell you to do or we tell you to do, and the governor. And I'm opposed to that. I think these bills should be heard in policy committees. I think we should talk about what the things that the Director brought up is, what they did in other places, and how we would manage it for. This is all going to be done on the other side of the aisle with a governor, and it's going to be done in a trailer bill. That's scary for California. And what happens is when you move down that path and you make those decisions, they're hard to fix, they're hard to change when you start making that decision. And I'll give you a perfect example. We have a bullet train that was made in that similar type fashion. Actually, it was more bipartisan, and we were promised something that we're never going to get, but we're stuck with it. It's hard to get away from it once you start moving that. We're going to talk in the next--I think wherever the Chairman goes here--we're going to talk about central procurement, which once you have central procurement, they're going to tell those developers that are doing those wind turbines, we're going to buy your power. Now, the question I have is: what's the cost of that power? That is a question I have for this panel. What is the cost of that power going to cost the Californians? And is the cost related to the environmental, what is that costing the environment to get that cost that's going to be translated to a ratepayer? That's actually a question I have.

Well, I think the California Public Utilities Commission has probably the most current and best information on cost. They've contracted with the National Renewable Energy Laboratory a couple of years ago to begin updating their cost assumptions in their integrated resource plan process. But the cost estimates that are prepared there are an all-in levelized cost of energy. So they do take into account the project cost and the assumed markup on environmental regulation, the leasing cost. So they're sort of a baked all in cost. There's assumptions that are made in those cost estimates that are based on the trajectory of the scale of the technology. So today they're pretty expensive electrons.

I don't want to put a year on it. But I think I heard you say phase, which is how I think about it as well. AB 525 puts a year on it, so we think about a year. But I think phase is the right way to say that. By the time you get to that phase, if the global market has pretty much followed California's trajectory with having installed capacities, those costs do come down pretty rapidly in the future. But that's based on everybody sort of tooling their economies to drive those economies of scale down. And the models that, the CPUC can talk about this more, we'll be looking at this at the CEC within the SB 100 report that's going to be prepared again this year. But you can see that when you start looking at the peaks in future years out under high electrification demand and trying to find resources that are available that meet the criteria of these models. So they're greenhouse gas, there's no greenhouse gases from these. The model will find resources that are available at those times and start selecting those. So a lot of assumptions baked in, but the models today are really valuing those electrons even at a higher price. I wouldn't want to give you an exact cost estimate because I don't have it in front of me, but I could take that question back and definitely follow up.

I would appreciate that because we saw when we went solar, our original plan was to go solar, and we saw contracts as high as--long term contracts--as high as thirty cents a kilowatt down to twenty two, and now it's down to three or five or whatever it--is very low. Not taking into consideration that they get tax credits and all kinds of other benefits that don't get counted in that. But these are going to be very expensive long term contracts that are going to have to be paid for eventually by the ratepayer. The ratepayer will pay the bill eventually, even though we're going to front load it. So I'm concerned about that. And so one of the last comments I want to make and this is not as a question, but I am very nervous about this. And I think the public should really scrutinize this. And I think the environmental groups, which I have just received today, we call it the NASCAR letter of environmental people, that are saying wrote a letter to the pro tem. And I believe the speaker saying we need to slow down on this process and actually do a little better job. And I'm with them on that. I'm very nervous that we get this wrong and it'll be like the super fun sites that we had when they mined and ruined our streams because we had sulfides going into our streams. So I'm very much concerned about that. And I think when we really look at the broadness of the infrastructure that's put out there and what we get back for it, a gigawatt is going to serve, according to your information, around 700,000 people in a year. We have 40 million people. We obviously have on-land resources and we have a lot of others. But to get to the--I think it was 30 gigawatt--if we're going to electrify cars, and at some point it was 30 gigawatts. That's a lot of infrastructure out there and a lot of impact. So I want to make that very clear to the public that's watching. If this goes in a trailer bill, and this gets jammed through, they ought to be outraged, because I'm going to be. I think we need to slow down and really take a good look at how we do this, because we don't want to get it wrong. So thank you for your testimony. I know that you are going to do with a lot of things that you're appointed by people, you're hired by people that run this place. And it's not all of us that agree with how we're going forward. I think there's some of us that want to slow down. And so that's what I just say. And we shouldn't be making decisions because the federal government is giving us money and we have tax breaks and we have industry that wants to go do it. When we're going to hear testimony today and I'll guarantee you the trades will be in here telling us how great it's going to be for jobs. And they told us that for the train and they've told us that for a lot of things and we want good paying jobs here, but at the expense of the ratepayers and the environment, it's not worth it. So thank you again.

Well, thank you. I'll just have some of my own comments, I think, related to Eli's answers to Senator Dahle's questions. I just say that first of all, solar is clearly a success story in the fact that we brought down the cost of solar so much. Solar is the cheapest thing to build. And so we actually have many days, basically almost free electricity during the day at this point. But we really do have to. Focus on those peaks, this 4:00 to 9:00 p.m. time slots. That's why a lot of my legislatures been have focused on 24/7 clean energy and offshore wind just has tremendous promise for that. For 24/7. We're doing it with battery storage. I think we've built two or three Diablo Canyons worth of battery storage just since 2020. So we're adding storage. We're working on new long duration storage. But this resource, because it provides energy right when solar and our onshore wind is decreasing, is really critical. And essential procurement is going to help us actually bring down the cost and save taxpayer money, because the lenders and such will see that we do have an offtake situation and therefore we'll get better rates. I don't think, I know that's actually going to bring down the cost of the cost to our ratepayers if we have central procurement, which we're working on and working on the guardrails around that, but that's critical as well. And then on the permitting side, I know Senator Dahle will agree with speeding permitting on the transmission side as well. And I think that's partly what the governor's proposals are, both on the transmission side as well as getting some of these resources up and running quickly as well. The critical part, as we saw last year when we hit that September peak, right, we're really looking at those five to ten to 15 days where we have extreme heat throughout, not just in California, but throughout the west. And fortunately, we'll have more hydro this year than we did last year, so that, I know that will help. But we're really looking at those five to ten to 15 days where we just have to make sure the grid holds up as it did last year. And that's why I also spend so much time on demand response as we'll get to maybe a little bit in the next section as well, because that helps us shave off that peak at those critical times. So from my standpoint, grateful to what you all are doing too. I don't think seven to twelve years is too fast. I think my book, we need to move as fast as possible for this technology, and I appreciate what you all are doing. With that, we're going to move on to issue number two today, which is the CERIP, the Clean Energy Reliable Investment Plan. Thank you all for being here for your testimony here today. So we'll invite up our witnesses for that issue, including Mr. Erne, the Deputy Director of the CC, Simon Baker from the CPUC, Delphine, who from DWR, Lauren Greenwood from GO-Biz and Department of Finance.

Great. We've got the LAO here as well. So let's start out and get right into it. Will it be the CC leading us off?

Yes, I'm happy to make some introductory comments.

Great, go ahead.

Thank you. So hi, I'm David Erne. I'm Deputy Director of the Energy Assessments Division, the Energy Commission, and helped pull together, in collaboration with CPUC, CARB and actually DWR, the Clean Energy Reliability Investment Plan. SB 846 required us to develop the plan and provide it to you by March 1. The plan was to lay out a strategy for investing a billion dollars in clean energy technologies that would support both our clean energy goals as well as reliability, and lay those investments out in three year time frame: first year being 100 million, 2nd year 400 million, 3rd year 500 million. And through that and developing that report through a stakeholder process. So we did engage in a stakeholder process last year. We had our first workshop in October, soliciting input from stakeholders about the potential opportunities for the investments. We also put out a request for information in November and solicited additional feedback. Received a substantial number of comments from stakeholders, over 50 responders, providing us insights on different opportunities to invest those dollars. That included technology firms, technology associations, utilities, CCAs, non-governmental entities, both environmental and other associations, provided us a substantial amount of feedback. We assessed that feedback and in collaboration with the other agencies, we developed the plan and laid that out. Provided the plan in a draft form in early February, received comment on that, finalized the plan and then submitted it to the Commissioners for adoption at the February 28 business meeting to provide you by March 1. So that was kind of the overall process that we developed for the approach. And let me get into the details of the strategy that we came up with. So, as was in our previous briefing hearing a few months ago, we talked about some of the major challenges facing the state regarding our reliability and clean energy plans. That includes the need to improve our planning processes, to account for climate change, and to ensure that we're building out those resources in the most expedited fashion, that we need to scale resources, both supply and demand side resources, and that we need to augment for emergencies or for emergency events. As such, we developed four different investment buckets, if you will, to support those three priorities. The first one enables investments, so that was both for supporting planning and capacity building to support the broader initiatives. A very large portion of the funding is allocated towards scaling both demand and supply side resources, and a smaller amount to augment the Strategic Reliability Reserve, particularly the DSG, Demand Side Grid Support Program and the Distributed Electricity Backup Assets Programs. And we aligned certain projects to the first year, very detailed layout of funding and have broader categories for the ongoing, subsequent two years. Where we put the majority of the effort on scaling both supply and demand side resources in those two years where there was the largest amount of funding and we could initiate projects that are much more substantial. So the strategy was for the first year to address the planning and the capacity building, and that planning for statewide planning, but also planning for the larger investments and initiatives in the second and third year. In addition, through the process of stakeholder input, we received quite a bit of feedback on the process and as I mentioned, a number of opportunities. We also received feedback that they would like more engagement on the planning of the scaling of demand and supply side resources. So again, part of that first year is engaging in that greater amount of stakeholder involvement to lay out the initiatives for the subsequent two years. And I can walk through in more detail if you'd like or I can turn it back to you if you have specific questions that you would like to ask about the plan.

A few little more detail you want to provide, that's fine.

Okay. So for the first year, again, that was primarily focused on planning and enabling capacity. So that included activities to enable the Department of Water Resources to stand up the procurement mechanism or procurement facility, as well as support for CEC to engage more closely with community-based organizations and primarily for a number of our initiatives, but primarily for ensuring that the investments in years two and three, on both supply and primarily demand side, engage communities to ensure that we are strategizing on those initiatives in a way that provides the greatest value to justice communities and provides for affordability for ratepayers, and so greater engagement with them will be important. We have had substantial engagement with community-based organizations and feel that that's kind of been on their dime, so to speak, and we're asking more of them and we'd like to have support for that to ensure that we can engage with them even more moving forward. We put in a small amount for transmission planning as well as amount for permitting and interconnection support, which I think we mentioned in our previous hearing. That is one of the challenges as well as supply chain issues for getting new resources online. For scaling supply and demand side resources. We have a number of activities that we proposed under their at least broad categories. On the demand side, as we were looking through the opportunities and we were hearing from the stakeholders we identified, there are quite a few different paths that we could take for demand side. In addition, many of those recommendations from stakeholders were, I would say, potentially add ons or supplemental to existing programs, maybe taking existing program and making it even better with some additional resources as well as opportunities to create new initiatives. And so again more time to identify the specific activities for that demand side resources. But we definitely feel and got a lot of feedback that demand response and expanding our demand response capabilities in the state would be very valuable could be through adding additional controls and ensuring that those controls are available not just on a daily basis, but during those net peak on the hot days. There'll be opportunities for more deployment of storage, primarily to support solar in the state and also activities or programs around panel upgrades which become difficult for those who are installing solar and storage there's. Oftentimes you have to do a panel upgrade that can be very expensive and make it very difficult, particularly for those injustice communities who are already stretched, to be able to do the panel upgrade can be very difficult. As well as considering activities such as distribution system upgrades. Again in justice communities where we want to expand deployment of distributed resources and that can put a strain on the distribution system. Could we apply some of that funding to the distribution system upgrades in a way that would reduce the cost to ratepayers and enable those resources to come online? For the supply side resources, had kind of three separate topic areas. One is providing additional support for long lead time resources such as those that would be procured by the central procurement function, in effect providing the ability to have a buy down of some of those resources if determined that was necessary. If not, we could utilize that funding for additional supply side resources and expanding other opportunities such as additional non lithium-ion energy storage. It can also be more expensive than lithium-ion and sometimes harder to get in, but we do need to diversify our energy storage resources so that we have more of those energy storage resources online and that can be difficult when we're focusing primarily on lithium-ion. Additional funding for the long duration energy storage program to a small amount and also the opportunity to utilize some of this funding for cost share for federal opportunities. We're tracking a number of federal opportunities that are coming. We've either just responded to or coming online where additional cost share is required and we could utilize some of this funding for that additional cost share. And lastly, extreme event support. The reason for adding additional funding here was that when the demand side grid support and the DEBA program were established last year, they were directed towards those customers that were not allowed to or not participating in ELRP. And so--I'm sorry--the CPUC's Emergency Load Reduction Program. And then AB 209. Give us the opportunity to expand into those territories. And so the additional funding will help us in that expansion and bring additional customers that are not participating in the emergency load reduction program but possibly could participate in one of these types of programs, bring them online and participating in those programs, so expanding it, so additional funding for the extreme event support would help in that arena. And lastly, there was the administration of the funding, which was a higher amount in the first year, relatively speaking. Again, most of that is for CPUC and CEC to stand up and conduct the stakeholder outreach that is necessary to establish and lay out the strategy for the investments in years two and three. And then funding for administration goes down proportionately after that.

Excellent, thank you. And we have the detailed in our agenda, the detailed May revision proposal for the CERIP. Let's hear from the LAO and then we'll get into some questions.

Thank you. I'm Sarah Cornett with the LAO. So we do have a few comments for you on the CERIP proposal. Reliability clearly has merit, and we've seen over the past couple of years how important it is to ensure that we have energy reliability. However, the general fund condition has changed since SB 846 was passed and greater reductions are needed. Reliability programs also received significant funding last year, about 3.4 billion in total, and much of those programs still have funds remaining in the balance, including the DSGS and the DEBA programs. We think you could consider delaying action on CERIP to prioritize general fund savings and revisit implementation in a future year once these new programs are further underway and the general fund condition has improved. Should you want to take action now, we recommend that you only do so with the 2023/'24 funds. It's unclear what the out year programs look like. We did just hear kind of an overview of some some high level considerations for those those programs that are proposed to begin starting in 2024. However, we think it might make sense for you to wait and hold off on making those commitments until again, we see more about how these newer programs are taking shape. Should you do take action on the '23/'24 proposals, we also recommend that you consider removing the 32 million for DWR to stand up central procurement. We find this premature for a few reasons. First, the central procurement proposal has not yet passed. Second, it's unclear if DWR will be selected by CPUC even if the proposal does pass. And third, the proposal for the 32 million is mostly intended to support contracting staff rather than full time staff, and those timelines are generally shorter. There are, of course, trade offs. Delaying on providing that funding, should the proposal go forward, could result in some delays. But ultimately, we think it could be an option for you to consider just to, again, prioritize general fund savings and ensure that that kind of investment wouldn't be rendered unnecessary should DWR not be called upon. Thank you.

Thank you very much. Good. Well, let's start with some questions and then turn over to Senator Dahle. If you wanted to walk through just with various aspects of the proposed plan. As mentioned, I'm very supportive of the central procurement. Question for the DWR, however, is why do we need 32 million to staff that? I mean, shouldn't that be pretty, I don't know, to be overly simplistic, but it seems fairly straightforward to stand up that function. Why do we need that kind of resources?

Thank you very much, Chair. Delphine Hou with Department of Water Resources and happy to answer that question. So the 32 million that we've budgeted would be to support 14 temporary positions as well as external professionals such as technical consultants or legal consultants that we would need in order to stand up the function. This function currently just does not exist today at DWR, but also on a more practical side in standing up this function that actually would enable the CPUC to point to the DWR as a viable option for consideration in their Integrated Resource Plan proceeding for essential procurement. So, for example, if they were to point at DWR today, we don't have that function, we wouldn't be able to do the work. And I think that would cause some consternation in their proceeding to point at a state entity that wouldn't be prepared to do that work. So the funding is to go hand in hand in establishing that basic foundational need for the temporary positions, for the expertise, but also to enable the CPUC to point to DWR as a potential viable option for the central procurement work if they should choose us.

And if yours is selected to procure this, how long will this funding support potential procurement function?

Thank you. For the temporary positions and the external staffing, we're estimating that to be spread across three years, and we think that's a feasible time frame in order for the PUC to go through their processes and potentially point to DWR if that should be their determination. So we're looking at a three year time span.

Okay, thank you. We will look into that all, but appreciate that. Let's see, for GO-Biz and Ms. Greenwood, in terms of how would the GO-Biz Permit Assistance Office utilize 15 million of funding? Like it's 20 million over two years, because it talks about establishing best practice and documentation. But could you provide any more details how GO-Biz tends to model this new permitting effort, say after the prior implementations of the plug-in EV charging station readiness and broadband for all permitting playbook? Are there more details how this would be done?

Sure. Thanks for the question. Lauren Greenwood with GO-Biz. With CERIP, we're proposing to develop a permitting playbook for energy infrastructure that needs local permitting approval. And similarly, like we have done with the broadband playbook and EV charging Stations of readiness guide, we would work closely with government, private, and community stakeholders to publish a best practices manual to simplify permitting for local jurisdictions. Unlike the electric vehicle charging stations, where there is a mandate to adopt permitting streamlining, we believe that the GO-Biz CERIP funds, we can put those into awards for local jurisdictions that adopt the energy permitting playbook. And so this could incentivize these jurisdictions to accelerate adoption. Given that there are significant demands for energy across the state, especially for large projects that are needed for us to meet our climate objectives, as well as federal dollars at stake that have stipulations for streamlined permitting. GO-Biz is looking for creative, timely ways to induce permitting for these projects. Through a better permitting environment we create in California, the better position California is to compete for these federal dollars tied to critical infrastructure projects such as broadband, power, water, et cetera.

Well, thank you. I see the use of best practices, but I guess as a follow-up, how would GO-Biz assess the effectiveness of their efforts and whether this documentation best practices are actually used in supporting the goal of streamlining energy projects?

Sure. I think we would see adoption as long as it's created with our stakeholders, those government, private and community stakeholders. And so by working with them closely from beginning to end to create this playbook, we believe it'll be useful. And then tracking wise, similar to the ZEV EV charging station, we can create a public tracker and like a map and tally of jurisdictions. And for the ZEV charging station, we publish how many jurisdictions that have adopted the permit streamlining, how many are in progress and how many have not adopted. So I think we'd be wanting to build out that evaluation tool.

Good. I have seen the EV one, that was a while back. I should revisit to see how many have adopted. Okay, I guess, are there other folks doing this work? Do you think this should be within GO-Biz or the other folks you'd collaborate with in terms of the streamlining?

Thanks for the question. We would definitely work with our agency stakeholders as we've done with our other playbooks. And given the extensive experience with permitting assistance within GO-Biz, I think we would be well positioned to put this together.

If I can add on to that. So GO-Biz is one of the lead members for the Tracking Energy Development Task Force, which also includes the CEC and CPUC as well as Cal ISO. And we currently are talking to developers all the time and understanding some of the challenges that they're having, as well as local entities with permitting. And so we continue to, I think, to utilize that opportunity of the TED Task Force, the collaboration we have there, to bring in perspectives from both sides, both from the permitting entities as well as the developers, to align and develop that permitting roadmap in a way that will bring the best of both ideas together and try to speed up the process of getting those technologies developed, particularly around energy storage, which we're seeing the most challenge around getting those codes change quite rapidly. And so just the ability for the fire departments to keep up with code changes, this kind of tool will help in that process, and I think as such, will make it a lot easier and a lot safer to implement those technologies.

Excellent. Well, thank you. Thank you both for that. Turning to the demand side, clean energy resources. As briefly stated, I do believe this is very important, but I just would like a few questions to make sure I understand. So what are some examples that CEC would like to fund through this program? Is it DSGS, DEBA or other programs as well?

No, Chair, through the demand side scale up, it would be new resources beyond what we're focusing on from technically within the Strategic Reliability Reserve. So in collaboration with CPUC, we've identified a number of opportunities. I mentioned a few of them earlier, but I'll go into a little bit more detail. So I think there are definitely opportunities for adding additional controls and that can be at both the residential or commercial level. But we're seeing a great opportunity, I think, for additional controls for agriculture and for water wastewater. They do a lot of pumping, they have a lot of load, they can shift those loads, but they don't often have the controls, the software to be able to control the pumping and irrigation that they would be able to if they had those controls. I think branching out into those areas and providing opportunities in those areas would be really valuable for those communities, particularly small farmers that wouldn't afford to be able to have this kind of control technology as well as some of the water wastewater. In addition, in the water wastewater world, there's a lot of pumping that happens and when there are emergencies, there are the use of backup generators to keep the pumping going. Some of that could be provided through DEBA. We could look at whether some of the demand side could help replace some of that diesel backup with clean energy backup for keeping that pumping going as well. So those are some areas on the demand resolve side. Also feel that there are opportunities to expand upon our clean transportation programs that are implementing or putting out EV charging and the ability to do things like incorporate energy storage with EV charging to help enable those chargers to be put in more places and have less of an impact on the distribution system. So that could be another opportunity. And working with CPUC, we've identified some opportunities around their programs with SGIP and others to, as I mentioned, think about could we incentivize panel upgrades through those programs, particularly in justice communities, and can we help with distribution system upgrades in those communities as well, where distribution system upgrades are making the costs for those justice communities even more difficult for those technologies to be put in and can save costs for those ratepayers as well through that process. And so we'll be working collaboratively with CPUC throughout the first year to frame out those opportunities.

Well, good. Wastewater feels like there's lots of opportunities. Agriculture. I'm sure Senator Dahle would agree. I spoke to several agriculture groups recently and having proactive demand response would be good, but this was a case where they said they had six or seven brownouts which could have a directive effect on equipment and a lot of concern there, but proactively working together, that would be very powerful. Do you have estimates in those two areas, for example, of what the savings could be from a peak load perspective?

We are working with those entities to try to develop an estimate of that, but we do not have one currently.

Okay. And the distribution upgrades, as you said, in justice communities, important. A little more detail on that as you sounds like that's sort of the issue that many communities are facing, right, where if you're the one to put on solar who then triggers an upgrade to the system, then right now that whole cost could be borne by you, right? And that's something we need to look at. If we're going to expect and ask people where people voluntarily want to do upgrades of their electricity, upgrades of their homes, we're going to need to tackle that. I know there have been some efforts around that, but is that the kind of thing that you're looking at when you say distribution upgrades in these communities?

Yes, those kinds of opportunities is both the distribution as well as panel upgrades as necessary to support those projects which may not happen due to those costs borne by the customer. And again, in justice communities that can be difficult for them to have that. So we'd work with CPUC on those programs to help identify where those investments could be made in the best interest of the ratepayer.

Great. And as far as DSGS, you mentioned those efforts to open it up beyond the emergency load, I forget the acronym, but program, how is that going? And I've expressed concerns in previous hearings to make sure that we open this up, say to third parties and not just funnel all the money, say through utilities which have I think been challenged at least in the past in some of these customer-facing programs. So how are you finding that work?

Well, we're finding that first of all, the program is growing, so we think that we're going to be able to double the participation from last year to this year. So it's a very positive indication and that's before additional funding for those in the CPUC jurisdictional territory. So I think that'll be valuable. And we're working through updating guidelines and working through stakeholder process on that. We have draft updates to the guidelines out now and we're looking for feedback on those and those topics as well.

And are you working with these third parties who have in many cases fancy their own controls, not with ratepayer dollars, millions of nest thermostats and such? Are you working with them to make sure they have the ability to participate in these programs?

We are looking at developing pilots that we could explore those opportunities and identify the benefits of engaging directly with them on those kinds of opportunities. So yes, that is planned for the joint DSGS and DEBA programs.

Okay. I think it makes sense. I don't know if pilots are necessary necessarily. This is a proven technology, right? That's working in many parts of the state today. I think it's just making sure that they're not excluded from these programs. We don't prioritize, say, utility programs that are ratepayer based.

That is true. In those cases, though, we would have the burden of the evaluation of those programs to ensure that they're performing. Whereas right now when we go through the utilities, utilities do that area themselves and so we'd have to be picking that up.

Okay, but that's possible. That's something that might?

Yes.

Okay, moving on to the supply side resources, and I guess you talked about some of those. See if I have any additional questions there. I had a question, I don't think it was answered. What are some of the federal cost share opportunities that the Cost Share Innovation grants aim to potentially leverage? Any thoughts on that?

Yes, we have one opportunity that we just sent a proposal for to DOE, which is the grid resilience program, and that does require cost share for that. And so we could utilize possibly some of the CERIP funding for that to support that cost share. And there are more opportunities that DOE is expecting to come out with in the not too distant future that include industrial decarbonization strategies, green hydrogen, and the third one is technology manufacturing, clean energy technology manufacturing. And so we think there are opportunities around not only the one that we just submitted, but other future ones that we could utilize cost share for.

And just to understand, so cost share, so this is through the federal programs. They say, hey, you have to we'll provide this money as long as the state steps up.

Right. I don't remember the exact breakdown for the grid resilience program, but I think it was either one for one. Like if they provided 200 million, we had to provide 200 million for the program. And so it's coming up with those additional funds through existing programs that apply or relevant to be able to create that cross share.

Okay, let's see. Is administration considered funding community scale solar and storage projects as part of scaling supply side clean energy resources. We believe from all my meetings that this is an area where there's significant federal funding available and can directly benefit low-income and disadvantaged communities. So how's the administration looking at that?

Thank you, Chair. We are looking at that in both CPUC's program, which is supporting community scale solar and storage. But that's not always possible. There sometimes needs a little bit of a buy down to help support those programs. And so we could utilize CERIP funding for supporting community solar and storage. And we received actually a substantial amount of feedback, stakeholder feedback, as opportunities in that area as well. We want to be able to dig into that in more ways in the first year to help structure that program in conjunction with the CPUC.

I do not believe so, but I will check and we'll get back to you on that.

Okay, great. Just on the community scale solar piece that build that out a little bit. It it's our understanding that within the U.S. EPA's $27 billion greenhouse gas reduction fund, there's a $7 billion Solar for All pot specifically earmarked to expand number, low-income and disadvantaged communities that are primed for investment in residential and community solar. And a notice of intent to apply for this funding pot is opening in one month. Applications are due this summer. Is administration aware of this funding opportunity and the urgent deadlines to apply?

That is not my particular area within our organization. I'm not sure if any of the others on the dais can.

Do we have CPUC as well available?

So Chair, Eamon Nalband, I'll speak to your first question. The administration is tracking the Solar for All released this summer and is closely working with the leadership of GoBiz for that funding. We do have a representative from CPUC here, Simon Baker from the Energy.

Okay. Checking my list here. Any comments on that, Mr. Baker?

Not with regard to the Solar for All fund that you mentioned there, but we do have a docket that's open right now that's working on a review of all of our community solar programs. And we're also implementing AB 2316, which required us to do a review of our community solar programs and to look at some new proposals for advancing that area as well. And so we're in the midst of that. We've got proposals that are before us right now, and we're developing the record in our proceeding to take any potential future action.

Okay, well, I appreciate you would look at it. I've met with many equity environmental justice advocates who see that $7 billion Solar for All pot as an excellent opportunity for California to advance, expand equitable access to community solar and storage. And as noted earlier, that would bring significant benefits to these communities. So I appreciate you looking into that because your understanding is the applications will be due this summer on that piece.

And then EPA guidance for that also says applicants should demonstrate how they are leveraging private capital and available federal, state, and local subsidies. So specifically and if you haven't looked into it as much, let me know. But what will California do to leverage state subsidies so it can have the most competitive application for these programs? Any thoughts on that? I mean, I think it relates back to previous question. Is that something you need to look into and get back to us?

It does. One of the key questions in the proceeding that we have right now is the extent to which ratepayers would be looked to to provide subsidies for community solar. Some of the prior programs that we've had, like the Green Tariff Green Tariff Shared Renewables Program did have some ratepayer indifference principles in there that we're really looking out for affordability issues and cost shift concerns.

Some of our current programs, the Green Tariff Community Solar programs do have some subsidies in there that are provided through the electric cap and trade funds. And so one of the issues that's being looked at in the proceeding is the extent to which ratepayers could be looked to to provide some subsidies to make this more affordable for some of the participating customers. And that's one of the issues that we're balancing in the proceeding.

Okay, great. When you get back to us on this Solar for All piece, just other note, the EPA guidance suggests showing number of households serve, megawatts or solar political time strategy for subsidy development, incorporating meaningful benefits, community engagement strategy, supporting community ownership, and workforce training, among others. So there's a lot of pieces there, I think, to pull together to make sure that we're competitive. So I'd appreciate really prompt response from the CPUC on that what we can do, because it seems like those deadlines are coming up.

Yeah, we'll work with the administration on a response.

Okay, let's see, I think with that, let me turn over to you might come back to a few things, but let me turn over to Senator Dalhe, see what questions he has on these.

Well, first I want to just since the CPUC is here, I'd like to go back to our previous conversation when I asked about what the cost was going to be for offshore wind to the customer. I'd like a response on that. I didn't know you were here. All right. They said you weren't here. We didn't get the answer.

So I did a little bit of research while I was sitting back there. So we have a process in the Integrated Resource Plan proceeding where we periodically update the inputs and assumptions that go into the modeling that's that's done in that proceeding. And so most recently, that was updated in September of last year. I'm looking at a graph here, but basically from 2020 out to 2035, we're looking at costs for offshore wind in the Morro Bay Area, which was the set of assumptions that we used here.

Again, going to some sources from NREL, the National Renewable Energy Laboratory that are kind of starting in the $300 per kilowatt year range and then expected to drop over time to a little bit over $200 in the 2035 range.

So for the public that may or may not be listening, that's thirty cents a kilowatt. That's how they measured at their meter, right? For $300 equates, $300 per megawatt equivalates to then it would go down from 30 to 20 is the estimate for offshore wind. Thank you, appreciate that. On to the next issue, which I wanted to I had some questions for. I'm sorry, I forgot your name, but about DWR. So procurement. So why is DWR, why do you think that DWR or the governor or whoever thinks that that's the agency we should use what's not working? Why aren't we using just what we already have?

Thank you for the question. Delphine Hou from Department of Water Resources.

Thank you. Sorry.

No problem. Happy to say it as many times as you'd like. I would venture to say that it isn't necessarily what isn't working. But I think in moving forward, some of the challenges before us are kind of growing in magnitude. So I think pursuant to the conversation that was here right before this panel, offshore wind, that is new for everyone in the state, it's a fairly large investment. So there are questions about whether or not, even if there is interest from load serving entities, will there be sufficient interest in procurement for any single load serving entity or even a group of load serving entities to do that level of procurement?

Because in order to get something large like that off the ground, there are likely economies of scale. There were discussions here in the last panel about other resources that need to be developed, even around the resource, such as port infrastructure, transmission infrastructure. So I would venture to say that for some resources, it's not that something isn't necessarily working today, but that the challenges before us might need potentially a different solution.

And again, we'll determine that. Turn to the PUC to have them determine that through their proceeding so that there is public engagement and transparency with the load serving entities as they provide feedback on what they're seeing in terms of procurement and development. But again, if there is a need for central procurement, then DWR stands out. They're ready to support the state in that effort.

So the LAO's office suggests that we, well let me preface this before I, last year was probably like the perfect storm, and I think that we need to take that into consideration. We had a drought and we had a West-wide heat wave that typically is not the norm. And in our many years of doing this, we had pressures on the grid in places like Nevada and Oregon and Washington where we actually get load from. So this year will be totally different. We have a lot of water, not only in California, but in the west.

And I represent Shasta, which is completely full. It's awesome. I've never seen it quite that full. And it's staying full because the rest of the system is we're getting a lot of snowmelt at the same time, so it's not like it's even dropping, it's staying full. And we're meeting our environmental, and our agriculture, and our urban needs for water. So for sure this year we are not going to see any reduction in hydro, which is a huge player in being able to shift our loads. We can actually ratchet those down when solar is up and we can turn them back on when solar is down. So I want to start with that.

But as the LAO noted, to do this procurement process, or Central Procurement was what we're really talking about here is a long-term purchaser of power and it's the state agency, which is something we don't have right now. And I think that that is very concerning and because if you look at what really is happening here in the broad picture is we're going to be able to have that Central Procurement Agency, whether it's DWR or somebody else, buying power from those wind generators to actually encourage the development of them. That's really the long term play here, which the public is not aware of because we're talking about in different buckets and I think the public and more unlikely this will be coming through, there's no bill that I'm aware of that addresses this.

So it's going to be in a trailer bill, which means this is the only time we have the opportunity is to talk about it is here. So that's not a question for you. But the urgency is not here. There's not going to be a shortage of power this year. We have a whole different scenario than we had last year. And this is dedicating a lot of resources that we don't have, quite frankly. So what's the justification, I guess, in doing it right today and not putting it off until we actually get more information as we're going through the process with offshore wind and demonstrating what would be the best place or the best agency to do it.

I'm not convinced that we don't do a good job already. Last year was, again, a spike in the system and we got through it, but I don't think we're going to see that type again in the near future. So what's the urgency, I guess is the question.

Thank you for the question. So I'll answer it in a couple of different regards. I won't debate you on the conditions for this year, though I think coming from DWR, maybe I'll speak for my colleagues a little bit on the water side, which is it wasn't too long ago that we were talking about droughts and now we are talking about floods. So I think what climate change has brought to us is not only an urgency, but a new volatility and a new state of play that we all have to get used to.

In terms of the way this is structured is that the conversation will have to happen at the CPUC. So the authorization for DWR is simply so that we can be that backstop option if the CPUC determines so, but that doesn't presuppose that DWR will be the actual entity. So there is an entire stakeholder process that is still yet to occur. And those conversations with load serving entities, with developers, with environmental group, it set everyone in as a party to the CPUC proceeding, which will also itself take some time.

But also the assets that we are talking about are those that are fairly large in investment, in scope and scale, potentially fairly difficult to either build or have transmission connected, et cetera. And as you noted, Senator, those are all difficult questions, but take an additional amount of time. So while the need for essential procurement isn't to build an asset in this year or next year, by the time we do need those assets to hit our RPS goals or even to reach 2045 for SB 100, we wouldn't want to find ourselves in a position where we're behind in the planning and we're behind in understanding what we need to get there.

And again, the offshore wind discussion right before this panel really speaks to the urgency of getting, at minimum, the planning together, to getting our options together so that we can move forward in the timescale that we need to. So I would agree with you that the Central Procurement discussion is not to procure resources for this year or next year, but in order to have those discussions, I think it is important that we at least have the option to move forward. So that's what we're here to do today is for DWR to be at minimum part of the discussion as a backstop option for the CPUC to ultimately consider with parties and stakeholders through their transparent proceeding.

Thank you. And I know you. I think you worked at the ISO before, right? I don't want to debate you. I think you're probably a heck of a lot smarter than I am about how the system works. But I do want to point out that so $32 million to get the process started and we'll bring the stakeholders in later is what I'm hearing you say, which I think is the wrong approach. And again, as somebody who thinks we should have more storage projects, which we don't ever get to because that's not a priority for whoever around here, the people that are in control.

It's, it's always stakeholders first and then we'll figure out how to do it. In this process, we're going to tell you what we're going to do and then we'll bring you in later and let you know how we're going to do it. That is exactly what's happening on offshore and that is what's happening with procurement, because that's where the governor and the party in control wants to go. And I'm pushing back on that because I think it's wrong. And this is not directed at you folks. I know you're doing your job and I appreciate you, but the ratepayer and the environment are going to suffer through this type of a process.

And I think it's unfair to the public to do these types of trailer bills with. The Governor does a main revision, tells you where he's going to go, and then he jams it through and who loses? The lady that calls my office whose rate bill keeps going up. Thirty cents a kilowatt is not a deal, is not a bargain for offshore wind, and it's going to work its way down to $0.20. That's the estimate. And typically our estimates are never right. It's usually a lot higher than that. And we heard in the last panel about the environment and what the unknowns we don't know about.

I mean, come on. I can't believe that we're hearing this. And I just want to let the Chairman know I will be bringing this stuff up on the floor when these trailer bills come through because I think it's unfortunate for the public who doesn't understand all this stuff. I've been here ten years and I don't understand it all exactly, but I understand how policy gets worked around here and I understand politics, and that is exactly what's happening to us. We're going to get a central procurement, which is going to be DWR, because that's what the Governor wants.

He's going to fund it with $32 million and then he's going to come back later and bring the stakeholders in and say, well, what do you think? Well, it's too late. The train's already left the station and that's where we're going. So not directed towards you. I want to shift gears and go to the augmentation part of the extreme events, and I have some questions. DSGS received 200 million previously in 23-24 budget process, and additional 95 million. Is that correct? I don't know who answers. I think was it CEC or..

Can you repeat your question? I'm sorry.

DSGS, which stands for Demand Side Grid Support. There's so many acronyms here, I can't keep up either. Received 200 million in the 23-24 budget and has proposed additional 95 million. Is that correct in this budget? LAO is saying yes, so I'm hoping we're right.

Yes. Senator, the DSGS program received 200 million in the 21-22 budget and is being hushed up with an additional 95 million.

Okay, then has that 200 million been spent?

The 200 million has not currently been spent. We're still working through some of the costs from last summer to identify the full extent of the cost from last summer while we're expanding the program and doubling it over this next summer.

So, and we're going to add another $95 million to that over the next three years. Do you think that that's the kind of funding or maybe we should be asking the LAO the kind of funding we need right now, even though we know that we're not going to see we have a lot of water and spikes and so we're adding another 95 million when we haven't spent the original 200 million. So maybe the LAO's office could answer that.

Yes, I think those numbers are correct from our understanding, and I think that's part of what's kind of underlying our comments about recommending that you consider revisiting some of these proposals in a future year, especially given how much is still remaining in the balance, recognizing that there are still some outstanding expenses for DSGS last summer. But from our understanding, only 14 million has gone out the door for DSGS so far.

If I may add. So we did an analysis for this summer. So since we're talking about summer reliability and you're correct, if we have an average summer, we have enough resources to get through the summer without any potential impacts to the grid. If we have a condition like we had in a heat event like in 2020, in September, say, or one like we had in last year, then there is a potential that we may not have enough resources to be able to ride through those events without having the strategic reserve available to support us during those events.

And so we do feel that even though, yes, we have more hydro and as Director Hou mentioned, there is a lot more hydro to be provided this summer, they also have a substantial amount of water to move. And so their pumping load is much larger. And so if you look at the comparison of hydro availability versus pumping, last year versus this year, proportionally, as I understand, it's about the same. Just because we have a lot of water to move. I believe that DWR is the largest load in California, if I recall correctly.

I do want to caution, I think that we do need to be prepared for these emergency events or these extreme events. And while this summer is currently looking good, at least predictions from NOAA and others through August are looking positive. It is still unclear what September will look like if El Nino comes in and affects us. And so we feel that having those resources available in the event of those situations is valuable. And again, we don't know what will happen next year and so don't want to make our investments this year predicated on just the conditions this year under the belief that next year could be very different.

Thank you. I appreciate that. And I'm glad we're moving water around. It's awesome to have. I want to just touch also on the DEBA, which stands for the Distributed Electricity Backup Assets program, which received 550,000,000, and it's slated to get another 100,000,000 in 23-24. How much of that funding has been spent? The LAO or whoever can answer that, please.

So we are still in the process after receiving that funding last year, of working through guidelines. We've gone through an extensive stakeholder process to receive feedback on the best way to our options for supporting and utilizing that funding. Guidelines will be finalized shortly and we anticipate having grant funding opportunities going out for the summer.

How much of it's been spent?

I don't know the specific number. It's been in administration at this point so far. We can get back to you on that.

Okay. I think Senator Becker actually asked a few of the cost sharing things that I had on my list. And I think that wraps up. I really appreciate all your expertise and patience with me. I appreciate that. Thank you.

Excellent. Well, thank you all for your testimony here today and very grateful for as we're having discussion. It's like you get a little bit like PTSD from last summer. It's thanks to the work of everyone here and the work that was done with demand response, but in all areas that we were able to survive last summer. So hope knock on wood, that's better this summer. But I know next two, three years are especially critical, and we know the strategic reserve is going to help us get there. So thanks to all of you. With that, we'll move to public comment. And I'll make a note here again that the number is 877-226-8163, access code 694-8930. We will start with the room. Go ahead.

Thank you, Mr. Chair, Members. Dan Chom on behalf of the Port of Long Beach. The Port strongly supports giving all relevant state agencies, especially the Coastal Commission, adequate resources commensurate with reliably meeting the offshore wind development goals set forth by the Governor and the CEC. The port expects significant interagency coordination, review, and approvals by the Coastal Commission, among other agencies relevant to offshore wind development.

If they don't staff it sufficiently, particularly at the beginning, when we are all still trying to determine potential impacts in mitigation, then we fear the timeline for development will be delayed and the goals will be missed. As a side note, we encourage this committee and the legislature to recognize the permitting and development role that the ports will play in partnership with the state. I almost feel like we should have been at the table today. For example, the Port of Long Beach strongly prefers to retain its CEQA lead agency authority over any offshore wind related port development.

We're working on with Senator McGuire on this in his relevant bill. This, we think, will alleviate state agency staffing needs and costs. I also want to convey the urgency for all regulatory entities to expedite the planning and the review processes, especially supporting more flexibility. And this goes to the APA exemption issue for the $45 million that Mr. Chair, you asked the CEC about. We strongly support that added flexibility. At the risk of stating the obvious, without port infrastructures port infrastructure, there's no offshore wind. Right?

We need the infrastructure first and then the wind development follows. The port recently released a conceptual design and cost study a few weeks ago for ultimately a 400 acre offshore wind terminal. We dub it Pure Wind, developed in two phases which will have the flexibility to serve any of the offshore wind industry needs staging, integration, foundation fabrication, component manufacturing, maintenance, et cetera. We believe that no other port in California has the physical capabilities, the deep water, the elimination or lack of height restrictions to provide this support.

To help meet 25-2045 deployment targets. The schedule for this project is critical and must be delivered on an aggressive timeline to be ready for the industry. The study considered a, quote, aggressive schedule scenario, assuming the contractor receives notice to proceed on January 1, 2027, phase one would be complete by Q three of 2031. Phase two complete by 2035. So just just to emphasize very, very aggressive timelines needed to meet the 25, 40, 45 goals.

So I encourage you to sort of work backwards and think about everything that's necessary. Obviously, the ports can't do it alone. This is a whole of government approach. The cost study estimated almost $5 billion. Separate discussion regarding bonds, but just want to emphasize the need for urgency in everything we do regarding offshore wind development. Thank you.

Thank you, certainly ports have an important role to play and let you finish your comment there, because you waited through the hearing to testify, so we appreciate that. Next up.

Good morning, Chair Becker and Budget Committee members. My name is Allison Hilliard on behalf of Reimagined Power and the Microgrid Resources Coalition. Thank you for your efforts to maintain strong investments in clean energy resources for reliability despite the current Budget Committee or environment. While the MRC is very grateful that the State is proposing future investments in distributed energy resources through the CERIP program, we respectfully oppose the admins budget proposal to claw back 100 million in DEBA funding, as outlined in May 12th's finance letter.

DEBA's funding was allocated last year in AB 205 for new clean energy resources that can meet grid reliability needs. Diva already represents a small fraction of the Strategic Reliability Reserve and is meant to incentivize clean DERs that can perform important reliability services during emergencies. The State should not be taking any funds from DEBA to reimburse utilities for unspecified capacity imports as currently proposed. We request that the DEBA program remain fully funded so that new clean resources like microgrids can be deployed widely across the state to meet system reliability needs and demonstrate their value to the grid. Thank you.

Thank you very much. We appreciate that. We'll move now to a public comment via the telecommunication line. Moderator, please tee up anyone waiting to testify.

Thank you. For those on the phone lines to provide public comment, please press one zero at this time. We'll go to the line of 27. Your line is open.

Good morning, Chair and Members. Elise Fondrick from Trenton Price Consulting on behalf of American Clean Power. We're a member organization of clean energy developers across the west and is calling in support of Central Procurement and the state's efforts to facilitate the development of offshore wind. Specifically, while ACP appreciates the proposal to increase staffing for agencies to prepare for offshore wind permitting, there are many outstanding questions about how the offshore wind permitting process will ultimately work. With a number of permitting agencies and entities involved, ACP is urging the State, either through the legislature or the governor, to assign a lead coordinator for offshore wind permitting who has the authority to manage timelines and sequencing, ensure all permitting agencies meet their milestones, and coordinate requests and analyses.

This crucial step hasn't happened yet, and without it, the process will be expensive and inefficient, putting at risk the ability for offshore wind to come online in early 2030. Without a lead coordinator and accompanying ability to move forward with a more coordinated permitting approach, it may be premature to assign specific staff roles to each agency. So in the interim, ACP supports some increase to the budget for each agency to prepare for offshore wind permitting, particularly the Coastal Commission.

But the budgeting and assignment of staff should closely align with a complete permitting strategy for offshore wind. Staffing and resource needs will very much depend on who serves as lead coordinator and how different components of environmental review are sequenced and the overall approach taken, for example, programmatic review or joint processes with the federal government. Therefore, ACP supports continued funding to state agencies, but implores the legislature and agencies to develop a comprehensive and detailed roadmap for offshore wind permitting that will identify, efficiencies and ensure an effective and coordinated process moving forward. Thank you.

Thank you very much. Next caller.

Thank you. That will come from the line of 30. Line 30, your line is open.

Morning. This is Tiffany Fan on behalf of the California Efficiency and Demand Management Council. Regarding issue one, we appreciate inclusion of funding for the demand side, grid support and Distributed Energy Backup Assets program in CERIP. These programs are referred to as GS and DEBA. But like a previous caller, we wanted to raise concerns related to another administration proposal that would shift $100 million away from DEBA and instead shift that money to DWR. So we are concerned about the delay in the deployment of these resources, but we continue to review the proposal and discuss with committee and staff and administration. Thank you.

Thank you. Next caller.

We'll go to the line of 13. Line 13, your line is open.

Hi. My name is Susan Harvey. I'm the Conservation Chair of the San Lucia chapter of the Sierra Club, representing the Sierra Club's members in San Luis Obispo County, which, as you know, is a coastal county. We strongly support the comments of Senator McGuire and others who spoke today regarding sufficient funding for the Coastal Commission to do the job you're asking it to do. The state's embarking on totally a tremendous effort to bring wind energy to California and the United States, and to try to do that without sufficient resources for the agencies is folly.

Please give full funding they need to do their job. The Coastal Commission is one of the contact points between an important contact point between the public and Sacramento. And it's really important that they are in a position to uphold the Coastal Act and continue to do the marvelous work that they do in protecting the coast. Thank you very much.

We're going to end up with potential environmental mess that's going to cost even more to fix. Please do not cut funding for the Coastal Commission and be sure that there's sufficient funding for them to do the job that you're asking them to do. Not only are you piling on more work with this, they still have the regular work that they have to do. California would look very different today if not for the Coastal Commission.

Thank you very much. Appreciate that. Next caller.

We'll go to the line of 26. Line 26, your line is open.

Mr. Chairman, members Theo Pahos representing the Alliance for Retail Energy Markets. Our member energy service providers provide about 15% of the state CPUC jurisdictional load. So our members are out there buying electricity every day, almost exclusively for commercial industrial load. Relative to the Central Procurement Entity proposal by the Administration, we do believe that a Central Procurement Entity could work and could be necessary, particularly for offshore wind and geothermal resources. But the proposal before you is broad and wide open to really any type of resources.

We believe that guardrails and restrictions need to be part of this proposal. We support what the assembly did on this budget item when they took this item and put it into a separate bill AB 1373 that got off of assembly appropriations with this type of limiting language that put real guard rails on the program and then provided a sunset by 2030 and a review. So that's our position on the Central Procurement Entity. Thank you.

Thank you very much. Next caller.

Thank you. We'll go to the line of 32. Line 32, your line is open.

Sorry, did you say 32?

Yes, your line is open.

Great, thank you so much. Sorry about that. Hi, thanks so much for your time. My name is Alexis and I'm a resident of Sacramento. I'm here to speak on asking the state to invest at least 400 million in equitable community solar and storage access. Definitely really relevant and prime spot for the CERIP pot of funding. California is really far behind other states in ensuring equitable access to community solar and storage when we really should be leading on this.

And we've yet to set up a viable program or dedicate sufficient resources to it to be competitive for federal funds. So it's great hearing that there is some thinking going on and there's an open proceeding which a lot of environmental justice advocates are deeply engaged on, but definitely want to see more action from the state to really prioritize this investment. Knowing that community solar and storage is a really key opportunity to retire polluting gas plants who have in low income and disadvantaged communities, if we can strategically cite them in local reliability areas and also knowing that this is one of the only opportunities to actually tailor Bill savings at a really difficult time for so many of our community members, given the accessibility of community solar and storage.

Low-income and environmental justice communities have long faced disproportionate impacts of air pollution, wildfires power outages, and economic insecurity while being locked out of the solar savings that they can get from distributed clean energy. So for these reasons, just really hoping and urging the state to prioritize investment in community solar and storage. Thanks so much.

Thank you very much. Next caller.

We'll go to the line of 33. Line 33, your line is open.

Hi, thank you so much. My name is Danette Abbott Wicker. I live in Orange, California, Southern California, and I'm also with Climate Action California, and I'm seeking to ask the state to invest at least 400 million in equitable community solar and storage access. There is an unprecedented opportunity for California to apply for and secure funds from the US Inflation Reduction Act that would help us scale up equitable community solar and storage. In fact, there is $7 billion that is earmarked for expanding the number of low 0ncome and disadvantaged communities that are primed for investment in residential and community solar.

Without a clear investment, however, California is at risk of not being competitive and securing any funds that could help us be a later in this space. As the previous caller mentioned, we are way behind other states in instituting widespread solar usage. We need to catch up. Increasing numbers of low income and environmental justice communities are experiencing rising energy debt and energy burden. We need to make sure this is equitable as well so everyone can afford rooftop solar. Thank you.

Thank you very much. Next caller.

We'll go to the line of 34. Line 34, your line is open.

Hello Senate subcommittee members. My name is Stephanie Doyle and I'm the Regulatory Director for California at Boat Solar, and I'm calling today to also ask for the state to invest at least 400 million for community solar and storage from CERIP. As mentioned before, California lags behind more than 20 states currently on community solar and storage. And we have an incredible opportunity right now, thanks to AB 2316 to lead on this, provided that the right resources are made available. Community solar and storage is a needed part of our clean energy transition, particularly because it can bring much needed bill savings to our low income communities and renters who have been left out when it comes to solar savings.

Community solar and storage can also provide needed local reliability, as we've heard a lot about today. There's an opportunity to secure funds from the IRA for community solar and storage, but California really needs to show state investment in order to be competitive for that 7 billion. For this reason, I urge the state to invest 400 million for community solar and storage and appreciate your time today. Thank you.

Thank you very much. Moderator, are there any further callers?

Yes, we'll go to the line of 35. Line 35, your line is open.

Hi, my name is Laura Walsh calling in on behalf of the Surfrider Foundation, Environmental Defense Center, and California Coastal Protection Network. We want to support staffing for the natural resources agencies you heard from today to do their jobs, to responsibly and swiftly prepare for offshore wind in California. I just want to thank Senator McGuire for your comments this morning and understanding of the urgency for the upfront work here. And also Senator Dalhe with respect to your concerns about the trailer bill process. Thank you.

Thank you very much. Next caller.

We'll go to the line of 37. Line 37, your line is open.

Thank you. Good morning. My name is Zach Lou. I'm the Coalition Manager for the California Green New Deal Coalition, calling also in support of the request for $400 million in funding to support community solar and storage programs. This funding could go to advance a number of crucial potential equity benefits from these projects, things that other folks have already mentioned, including enhanced bill savings, targeted location and disadvantaged communities, and community ownership.

And as others have noted, this is an especially urgent and pressing issue right now with the opportunity surrounding the Inflation Reduction Act, including over $7 billion that have been earmarked for expanding community solar programs and residential solar programs without clear investment. Been made clear from the federal guidelines that the states are going to be less competitive for securing any of those funds, which would significantly hamper the state's ability to rapidly deploy community solar and storage projects. So this is especially timely issue, and we ask for the state to consider using already secured funds through CERIP to advance community solar projects. Thank you.

Thank you very much. Next caller.

We'll go to the line of 36. Line 36, your line is open.

Thank you, Mr. Chair and Members. This is Victoria Rome with Natural Resources Defense Council, NRDC, calling in to support the $20 million for offshore wind and interagency coordination and the funding for Ocean Protection Council, Coastal Commission, Energy Commission to evaluate offshore wind and its impacts. And then second, to support investing 400 million for community solar and storage. We were one of the strong supporters of the legislation last year to begin this process and start developing community solar throughout the state. And we think it's really important to develop community solar to bring people bill savings at a time when low income communities and renters have been locked out of solar savings. Finally, we are supporting concept of the central procurement idea and look forward to continuing to work on that. Thank you.

Thank you very much.

We have no further public comments in queue. Please continue.

Okay, well, thank you all. I want to thank everyone who testified either in person or who called in. If you did not get the chance to call in, or if you'd like to comment further in writing, you can get your comments to us, to the Budget and Fiscal Review Committee or visit our website. Your comments are important to us. And would include your testimony in the official hearing records. Thank you. We appreciate your participation. Thanks to all of our panelists today for participating in the discussion. And thank you everyone, for your patience and cooperation. We've concluded the agenda for today's hearing. Senate Budget Subcommittee Number Two is adjourned.