Assembly Standing Committee on Utilities and Energy

Good afternoon, everybody. Welcome. Is this on? You can hear me all right? Okay. Yeah. Good.

We are convening the Assembly Committee on Utilities and Energy hearing. We do not have a quorum. We will hear bills as a committee.

I ask the sergeants, please to call the absent Members. We have a few of those. We're in session, folks, come on. We obviously will maintain decorum during the hearing, as is customary, in order to hear from the public within the limits of our time. We will not permit conduct that disrupts our hearing, and any individual who is disruptive may be removed from the room.

Assembly Members Holden and Calderon will be absent from today's hearing. Assembly Member Wood and Assembly Member Hart will be substituting. Thanks to both of you.

I thought I saw him in and out. Appreciate you joining us for that brief moment. We have six measures that are on consent.

Item one SB 38, Laird. Item Four SB 3119, Maguire. item seven SB 493, Min and SB 572, stern. SB 664, Stern and SB 619, Padilla. Yeah, we're in a Subcommittee, so I can't ask for a motion in a second on the consent calendar.

As soon as we get there, we'll move to our first author.

To begin with, We're going to hear item two, SB 233, Skinner, Electric vehicles and electric vehicle supply equipment MBi-directional capacity. And Senator Skinner, you can come forward now to present your Bill and you can invite your witnesses to the dais as well.

Thank you very much. Mr. Chair, Members. Pleased to present SB 233. And I'd like to start with that I am accepting the committee's amendments that add some specificity to the study.

I'm also taking the amendments that I asked for in the Transportation Committee or that we worked out together that exempt heavy-duty trucks. So exempt those vehicles that are outside of what are considered a passenger class. So it doesn't exempt, for example, the Ford 150 truck, which is considered in the passenger vehicle class.

I know there's lots of different classes of vehicles and I'm not using the correct term, but I just wanted to be clear that it's what vehicles would be exempted and whatnot. As I'm sure the committee is well aware, California has made a commitment to zero-emission vehicles. The Biden Administration has also proposed new rules to massively accelerate EV production. And both our state and the federal government offer rebates on the purchase of electric vehicles.

So we are seeing an increase in purchase and an increase in the models that are available and the manufacturers who are making them. Now, interestingly enough, and I should pull here I'll use this. So we're all very familiar that this device, that we call carry in our pockets, is an energy storage device because as we're utilizing it, we don't have it plugged in that's because it has a battery. Now, the EV is an energy storage device.

It is powered by that battery. Of course, yes, you have to charge it. But the power of that battery and that EV can be used for more than just powering the car.

And given that, on average, most people do not, many people use their cars for many, many miles and many hours a day. Other people do not. And that is the dominant use of vehicles, is not that many miles a day.

And so the capacity of that battery has the ability to be used, say, in an emergency, to power a home, or when there is a blackout or various other reasons, or to help you avoid the peak price of electricity and during the highest demand time for an hour or two, for example. And how a vehicle is able to do that is by something called bi-directional capability. Now, many of you may have seen the advertisement for the Ford 150 truck. And the Ford 150 truck, which has bi-directional capability.

The person driving drives up to the cabin, jumps out of the car, plugs the truck into the house, and turns the lights on in the house. The Nissan Leaf, which is the most affordable EV on the market, has always had bi-directional capability. So what this Bill does is ask that by the model year 2030, that the EVs that the Bill affects have that bi-directional capability, so that no consumer who buys an EV is at a disadvantage.

So that we don't reach a place where the EV manufacturers decide, oh, we're only going to put this in the high end vehicles and attract high end buyers. We want any buyer, regardless of that, whether it's a luxury EV or the more affordable EV, to have this capability because it is a benefit to the consumer. It also has grid benefits, but we can discuss that later.

So let me have my witnesses in support. We have Ellie Cohen from the Climate Center and Gregory Poilasne, who is the CEO of Nuvve. And I'm not sure if we want to start with who we'd like to start with. Whatever you prefer. Okay, Ellie, why don't you start and.

Then all right, thank you. Senator.

Senator Skinner, Two minutes for each.

Great. Wonderful.

Great. Thank you. Good afternoon, Committee Members. I'm Ellie Cohen, CEO of the Climate Center. SB 233 for bi-directional EV charging capabilities makes possible a much cleaner, cheaper, and more equitable electricity system and a chance to move past fossil fuels, as our core strategy for energy resilience and reliability. As everybody knows, last week was the hottest week globally in history.

This week, we're seeing record breaking flooding in the northeast, extreme heat in the south, and now that deadly heat wave is coming to us in California. We cannot afford to continue relying on outdated and polluting fossil technologies to keep our lights on and keep our grid from failing. Polluting gas, peaker plants and dirty diesel backup generators disproportionately, harm lower income and working class communities, exacerbating environmental injustices.

In the past few years, California has extended the life of fossil plants and invested in backup generators and other fossil fuel based energy. Recently, utilities have sent emails to customers encouraging them to purchase fossil fuel backup generators. We've invested billions of state dollars into these resources.

SB 233 provides the opportunity to tap into a cleaner and cheaper alternative EVs to provide the same benefits and more. We're just embarking now on massive, once-in-a-generation investments in EVs as California phases out gas vehicles by 2035. The question before the committee today is will we use these taxpayer investments to also build a cleaner and more reliable electricity grid? Right now, California has one and a half million EVs, an estimated 8 million by 2030 and 12 million by 2035.

If they're bi-directional. Per this Bill, just a tiny fraction of these vehicles will become the foundation for energy storage. For more resilient and reliable grid in California, SB 233 sends a critical market signal. It helps California leverage this massive EV energy capacity and the billions of federal and state dollars being invested in EVs right now. And it helps ensure that energy resilience is available to all Californians.

With over 200 environmental and justice groups and industry and local government organizations and support, I respectfully ask for your I vote.

Thank you, Chair and Assembly Committee Members. My name is Gregory Poilasne and I'm the CEO of Nuvve, a proud California company and world leader in vehicle to grid technology. Turning EV into mobile storage is critical to provide the flexibility our grid needs.

This strategy will then ensure that California has the energy storage it needs to manage a grid with predominantly wind and solid based generation. Bi-directional EVs are going to provide an extremely large source of energy storage and an edge against potential supply chain challenges and other factors that might impact the deployment of stationary storage. My company, Nuvve, has unmatched real-world expertise and experience in bi-directional charging.

Today in California, we have ten school districts that use vehicle to grid to reduce the cost of electrifying their fleets and giving them more money for student instruction while supporting clean transportation and renewable integration. These projects include vehicle-to-grid integration with three different school bus manufacturers so it can be done today in San Diego. During last year's historic ten-day heat wave, the Cahoon Valley Union School District used our V-to-G platform to help keep the lights on.

Now we have three V-to-G school bus fleets in San Diego County, providing nearly 1 mega-watt capacity for this summer emergency load reduction program. Nuvve is also in the process of deploying another 1.5 mega-watts in the city of Los Angeles, supporting a significant school bus electrification effort. In Europe, we have been doing V-2-G with Nissan Leaf for nearly seven years.

Each of these vehicle has generated an average of $3,000 per year. By providing essential grid services on a daily basis, reducing the total cost of ownership of those EVs by about 40% over the life of the vehicle. Let me repeat it.

Seven years of V-to-G without impacting the battery life. We see V-2-G as an essential technology to achieve EV deployment goals while keeping energy costs equitable. California must lead the bi-directional charging revolution and make sure the technology is available to everyone. Thank you very much.

Thank you. Appreciate that. We're going to move to public comment next. Oh, I'm sorry. We missed the primary opposition. Primary opposition? Please come forward and make room for them at the table. Thank you.

Good afternoon. My name is Curt Augustine. I'm Senior Director of State Affairs for the Alliance for Automotive Innovation.

We are the trade association that represents the auto manufacturers as well as many of the companies that provide the electric vehicle batteries and the technology for those vehicles. And I want to be clear, we are not against bi-directional charging. As the Senator has correctly pointed out, there are some vehicles in the marketplace that have bi-directional charging.

The issue that we have is the mandatory all vehicles must have it in a date that is relatively short time from now. Your committee analysis has done an excellent job of laying out the concerns regarding this. What we have tried to figure out with this Bill is it has gone through the process.

Everybody has been mandated to have some requirements, but they've all been called out except for one thing. All electric vehicles must have this. This is a problem. It's the cart before the horse. The bill's purpose is to lay out standards, make the study, and yet we're to comply with these standards before they're developed. Again, the analysis does lay out the challenges not only for automakers, but for the grid manufacturers, the chargers, et cetera.

So we are simply asking that our mandate be removed and rolled into the study of the Bill. That 99% of the Bill is. We believe that's appropriate. We've actually provided the committee's additional study information to beef up the study. And we simply ask that because it's going to, excuse me, at a time when we're trying to get more electric vehicles on the road we don't have a goal in the state.

We have a mandate, a mandate that starts ramping up effectively in 2026. We're going to have to double our sales from last year to then to 100% in 2035. Unfortunately, because of the warranty requirements that are coming, this Bill will increase those costs at a time when their vehicles are already more expensive than their gasoline powered alternatives.

We need all the incentives to have consumers buy more electric vehicles and not the disincentive. So again, we simply ask for us to be part of the study as every other entity that is involved in this whole vehicle to grid aspect is and I appreciate your time. Thank you, chair.

Any other witnesses? Primary witnesses in opposition. All right, we'll move to public comment. Do we have any witnesses in the hearing room? In support, please? State your name, organization and position, please.

Hi, Nicole Rivera bringing please vote yes on behalf of the Center for Biological Diversity Citizens Climate Lobby, the Religious Action Center, 350 B, area Action and Sustainable Rossmore, thank you.

Hi, I'm John Sarder with Decibel LLC in San Bruno, California. We make a North American-certified bi-directional EV charger that's available and affordable now, and we speak in strong support of the Bill. Thank you.

Good afternoon, Dwayne Camp with the California Alliance for Retired Americans, in strong support. Thank you.

Good afternoon. Lillian Marvis with MCE, California's first community choice aggregator, here in support. Thank you.

Ethan Nagler, on behalf of the city of Santa Rosa, in support.

Daniel Broad, on behalf of the Union of Concerned Scientists, in support. Also registering support for Sierra Club California. Thank you.

Cynthia Shallot for Indivisible California state strong with 80 chapters up and down the state and also for Sacramento Electric Vehicle Association in support. Good afternoon.

Sylvia Solicha, on behalf of the city of West Hollywood, in support. Thank you.

Jim Lindbergh, on behalf of the Friends Committee on Legislation in California, in support.

John Balor with Clean Earth 4 Kids in strong support.

Mr. Chairman and Members, Roger Dickinson on behalf of Civic Well, formerly the Local Government Commission, in support. Thank you.

Janet Cox for Climate Action California, Santa Cruz Climate Action Network, Indivisible, California Green Team and the Silicon Valley chapter of Climate Reality in strong support. Thank you.

Joshua Emmatong, on behalf of Environment California and Calperg, in strong support of this Bill. Thank you.

Now, do we have any witnesses in the hearing room? In opposition, please?

Yeah. Mr. Chair Members Julie Malinowski ball on behalf of the California Electric Transportation Coalition. Regretfully in opposition.

Good afternoon. Lizzie Kutzona, here on behalf of Tesla with a Tweener position. We are concerned that the mandate is premature and that the Bill should focus on further study. Thank you.

Good afternoon. Caitlin Johnson with political solutions on behalf of Honda in opposition.

Good afternoon, Elena Pierre, on behalf of Cal Start. Respectfully opposed unless amended. Thank you.

Chris Shimota, California Trucking Association. Just want to thank the author and staff for meeting with us. With the committee amendments, we will be removing opposition.

Thank you. Do we have any questions now from committee Members, please? Member Schiavo.

I wanted to thank you for bringing this forward. As a relatively new EV driver in the last year, I definitely was looking at cars that had bi-directional. Unfortunately, it's really kind of the big trucks, it seems like at this point, who mostly have those options. So it was an option for me.

My question is more around uptake. I right now could not plug my house into my car, even if it could do that. And so what are you seeing on the horizon or what is the future of this and how are we going to be making the modifications that we need to, to be able to take advantage of technology like this, certainly through the chair.

Appreciate the question. Actually, there are a few more models. Nissan Leaf has always had bi-directional capability.

Tesla, while they indicated they're a tweener, they have already announced that all of their models will be bi-directional by 2025. And they are the EV manufacturer that sells more EVs in California than any other. And interestingly enough, right now, any EV owner can basically convert their car in such a way and with an inverter on their house, use it to power their house.

Now, there's been many articles you can look up. New York Times featured an article about this about residents in Colorado and New Mexico who do this, use their Chevy bolts and such. But what I mean, that could do damage if you didn't know exactly what you were doing.

And so part of this interest and of course they were doing that because they were subjective to blackouts. So they thought we don't want to be subject to blackouts, so we're going to Jerry rig our thing. What I'm hoping is that we don't have to be in that situation and that we could have all models be available that way and then people can elect to use it that way or not.

And in terms of the impact on battery life and warranties, the two vehicles available to us now that have this capability they offer, for example, the Nissan Leaf has a warranty on the vehicle and the battery of ten years or 150,000 miles. And the Ford 150 has a warranty of eight years or 100,000 miles. So anyway, I just wanted to clarify those two things.

And then lastly, I do very much appreciate that no manufacturer likes us to put mandates. I think we all, every committee, we deal with this. But I want a level playing field.

I don't want any consumer to be disadvantaged. And I recall my experience with doing the Energy Storage Bill, which I did in 2010, and it was implemented in 2011. And we directed the PUC to figure out how much utility-grade energy storage utilities should buy when they purchase energy in anticipation that we are moving more and more to renewable energy and that if you have renewable energy, since it's not 24/7 electricity, you better have some storage capability.

So the PUC did their they put in a very modest mandate within two years, within two years, every utility had exceeded I failed to mention that at the point we did the Bill. Everyone laughed. They said, this is unavailable.

This is a technology that's never, it's not available. It's not not and within two years, California, every utility had exceeded their purchase of energy storage. And in the last heat wave in September, we put more energy storage capability on the grid than the Diablo Canyon power plant produces if you had two of them.

So anyway, just want to put that in a context that, yes, there maybe needs to be more advances, but we're sending the right market signal.

Can I just ask a couple so for the opposition, you said that this could be a disincentive for people to purchase. I don't understand how it would just.

Because the increased costs and as the Senator mentioned, there's warranties. Well, the warranty program under the new Advanced Clean Car, two regulations that start in model 26 do have a time and mileage warranty that has to be required by the companies, which again, that warranty doesn't start until 26. Our companies, based on their own studies, our battery manufacturer Members, independent labs around the country say that these mileage based warranties are going to put a strain the use of these against the mileage based warranties will put a strain on the batteries.

And our companies are going to have to increase the cost to cover those potential warranty issues that will be down the road. Again, because the regulations are based on mileage and if a car is just sitting there charging and discharging, it's obviously not putting any miles, we estimate that that could be several thousand dollars per vehicle. And those are again, additional costs that we think that the market should bear.

Again, we agree with bi directional charging. Sorry, when you're old you have to have an alarm to tell you to take your medicine. Sorry.

The we believe in this, and I've heard a few times about the market. Absolutely. And we believe that the promise of this technology is there.

The market will whether it's high end, Low end deals, our companies are in business to sell cars that people want. If they want this bi directional capability, they will have it. Again, our issue is not with bi directional charging, but it's with setting up mandates for putting it on a car before the standards are developed.

We just want to be in concert with the 99% of the rest of the Bill that lays it out, how this is going to be done, put onto the grid, put into homes, et cetera. It's really that simple.

A brief clarification. The recommended which have not been put in effect yet, but the recommended warranties that are being referenced are under the mileage warranties of the vehicles that I mentioned already.

So when you're estimating how it could reduce the life of the battery, what are the assumptions around use? Because right now most people can't plug their car into their house and charge their house. It seems like it would be a pretty limited use. And so having a huge impact on the life of the battery seems a little unlikely at this stage in the game at least.

Well, I would say if the promise of the Bill is that everybody wants to do this, the assumption that it's going to be limited. It either is going to be the best solution to solve our grid problems or it's going to be limited, as you're suggesting. So if the promise of the Bill comes to be, then people are going to convert their houses and so that's going to affect the batteries.

Right. I can see that happening over time. I think it's a cart in the horse situation where we have to make it available for people and incentivize them actually making these kinds of transitions in their daily lives, too. Thank you.

Member Hart. Then Member Connolly.

I want to thank the author for bringing this Bill forward. This is really innovative and forward thinking and the challenge, as the opposition has described, know how do we get from here to there? But we can't get there unless we start and ask the manufacturers to make the cars capable of doing this.

And there's so much benefit community wide, statewide from the scaled solution that we can't let the perfection get in the way of good. And by doing this Bill, I think we set the mark very high out there and then we'll have time to make the changes to the grid and to the homeownership incentive programs to make this realizable. There may be a point where the warranty issue has to be addressed and that maybe folks have a choice as to have a warranty that better protects them from driving versus using their car as a storage device.

But these are issues that won't even come up and won't be a challenge unless we set the bar today by asking the manufacturers to build the cars that are possible to do this.

Thank you. Largely to concur at this point. Really appreciate this Bill. It's an issue I've been long interested in. Glad to see one of my constituents here on behalf of the Climate Center supporting it. I think it accomplishes a couple goals. It moves us toward our Zero Emission Vehicle goal while also continuing to electrify our society and buildings and provide more storage. It's an innovative way to do that. It looks like the amendments look solid.

In terms of beefing up the report, I guess I would ask more point blank the opposition's concern about the 2030 deadline and feasibility, visa vis technology. In terms of meeting that, it sounds reasonable, but I thought I would give an opportunity to both sides. But certainly the proponent on solidifying the feasibility of that.

Our colleague who is in opposition...when you have the manufacturer who sells more EVs than anybody else already in the state of California already announcing they're going to have all of their models bi directional by 2025. You have the Nissan Leaf, always has always been bi directional. You have the Ford 150 being aggressively advertised by Ford for their bi directional capability.

I don't want to say I'm being naive, but it shows that there's a capability for this and that the warranties would indicate the way they already anticipated. Now, they already anticipated that the vehicle may be used for this purpose. Now, we've been talking a lot about the grid, but my objective here, if I was interested primarily in the grid overall in terms of, say, providing a large electricity source to the grid, I would be focused on trying to do this for fleets that large numbers.

What I'm really trying to do here, and I think that is something that should be done. And actually, I'm pretty confident that many of the large fleet owners will begin to demand it themselves because of the advantage to them. If you think about Amazon and their warehouses, they're going to want those vehicles that are sitting in the parking lot to be powering their warehouse rather than paying a high electricity Bill.

But independent of that. My objective here is that so the consumer who buys EVs as of 2030 is not put at a disadvantage and that we don't have a situation where, again, as I mentioned, it moves in the direction of only the highest end EVs. Offering this and trying to attract and then other consumers who will most suffer with their energy bills, electricity bills, and who will have to buy a much more affordable EV, would not be put at a disadvantage.

So that's very much my objective here.

Yes. Well, again, we support bi directional. We have been given no explanation of why 2030, again, the standards need to be developed and we keep hearing, oh, it's only going to be the most expensive vehicles, but yet in the testimony to the support of the Bill, it says it's in the cheapest one.

That's the future.

So it can't be both. It cannot be only for the most expensive. When the lowest cost vehicle is cited. Again, we believe let's just be part of the study. We're not against bi directional charging. We know that it's an important component in the future.

But let's wait till we're all on the same established report cycle and our companies will do it. And then again, if the promise of bi directional is really true, our customers are going to demand it and the companies will put it on. But again, it's quite simply, we don't know.

The date has never been explained to us in either time before, when it was 1st, 27 and then became 30, it's never been explained to us. We again just want to be part of the study to make sure that our vehicles are being developed in the same way that the rest of the grid and housing supply and et cetera. And it's not just us that has that concern.

I'd encourage you to take a look at the analysis. Those concerns are laid out quite better than I can say them today. And again, we simply would like to have the Bill be amended so that we are part of the study. Let's not have any predetermined outcomes before the study is done.

Yeah, just to follow up, I did read the analysis. At the same time, I am struck by the fact that we are leaping ahead in this marketplace. I mean, there's even some thought or a movement statewide to even move up to 100% Zev adoption before 2035, even as early as 2030.

So I hear you. I think what we can prognosticate based on what we're seeing already, the fact that there is a robust study in place, there's other features of, I think, where we're going as reflected in this Bill. I think at this point, I am comfortable in supporting it all and certainly would move for approval.

Member wood, please.

Yes, thank you. Appreciate you bringing this Bill forward. I plan to support the Bill today. I was a little surprised that Tesla hadn't already done this, quite frankly. Also even more puzzled that they were in opposition or Tweener.

Tweener.

Okay, well, if it's going to be yeah, if they're going to get it by 2025, I'm not sure why the Tweener there, but I am curious. Obviously, there's some technology involved. And so I know when I have an electric car and when I bought the car, actually, the charger, our CCA, actually, you're able to get the charger for free, but the installation cost was the sticker shock.

And so appreciate there's nothing really free, as the saying goes. But I am curious, with the bi directional technology in the car, what is the cost or what does the technology look like to actually do this for a house? Because I have solar panels, so this is really intriguing because at home, I can plug in, and I plug in at a time which when it's sunny, which it often is. But I am curious as what is the cost of the technology at the home level or the site where you would actually be doing that? Because while we're going to ask the capacity to be in the car, is it going to be affordable for the consumer to actually do this? If they choose to do that?

The articles on the do it yourselfers, they spent as little as $80. And that was even with vehicles that didn't have the capability. So they spent $80 to both do whatever they did to the vehicle and to their home. Now, again, I am not recommending that everyone do that. I would hope that we can do it in a more whatever, safer, assured way. And the type of inverter and charging things that you could put on your home, they're really about at the same cost as the type of charger you had to get for your house.

Now, there's not as many models available, but again, by 2030, if cars all have bi directional capability, there will be more. And since you mentioned CCAs, I would guess I. Would project that CCAs will start to market this also because they will see it, especially in areas like yours, Assembly Member would, where they know that there's going to be frequent blackouts.

They would be trying to utilize it in a way as a form of storage to be able to deal with demand, especially if we increase the requirements on demand management on various of our load servant entities. So, anyway, so that's a long winded answer, but it's one of those where there will be more of these charging models available and the inverters available again as the vehicles with capability are available.

Well, thank you through the Chair. Thank you. And I did note that in the analysis, it said that the charger for the F150 is like $1,300, but the charger for the Tesla is 550. So I'm guessing it's just maybe more based on the number that have been developed or whatever. But that's a big difference there. So you're going to have to want to use it, otherwise you probably won't use it when you start talking about that. Anyway, I support what you're doing here and I thank you for bringing the Bill forward.

Thank you. Senator, would you like to close?

I think we've had a good discussion. I asked for your aye vote.

Thank you. Appreciate that. We do not have a quorum. When we establish a quorum, then we will be taking up the votes. And I would like to ask the Sergeants to continue to try to call the absent Members, please.

Thank you.

Next up, Senator McGuire, please. SB 286.

All good to proceed, sir?

Yes, please.

Mr. Chair and Committee, just first and foremost, just want to say thank you for allowing me to be with you today and want to also appreciate the incredible work that the Chair put into this. Also to the staff and of course we'll be accepting the committee amendments today.

I also want to say thank you to Assembly Member Wood for being a coauthor on SB 286 and grateful for his tremendous partnership on all issues of offshore wind up in Humboldt County as well. I'll be quick and efficient. SB 286 requires the Coastal Commission to use its consolidated use permitting process for any new development, delivery and transmission of offshore wind energy projects.

The permitting process is expected to shave three to five years, three to five years off of the total permitting process. That's a game changer. SB 286 will also designate the State Lands Commission as the lead CEQA agency, as they are already the state agency staffed up to handle CEQA in state waters.

This bill will move the state forward to be able to meet our clean energy goals while protecting our environment and preserving those communities who are going to be dependent on this energy. With me today, I'm grateful to have Erin Lehane with the California State Building Trades Council and Sean Drake with the California Coastal Commission. It's good to see both of you. At the appropriate time would respectfully ask for an aye vote Mr. Chair.

Witnesses, two minutes apiece and you may proceed.

Good afternoon. Erin Lehane, proudly on behalf of the nearly half a million hardworking members of the State Building and Construction Trades Council in support of this bill. I don't think I need to tell everybody in this committee, certainly, that our power grid is overburdened as it is.

We need to move fast. Offshore wind presents a great potential for energy production in the state of California and great potential to the construction workers who will build the infrastructure and the turbines necessary to support the potential. We have been pleased to work with Senator McGuire on this bill.

I think we've been working for several years with the Senator on offshore wind development. We're excited to see what it will do in the north state and his district and around the state of California. And we would appreciate your support of this important bill. Thank you.

Good afternoon, members. I'm Sean Drake, Senior Legislative Analyst for the California Coastal Commission. The Coastal Commission supports SB 286.

In the interest of time, I'll just say that SB 286 preserves the integrity of the Coastal Act, while also providing an expedited pathway for permitting offshore wind projects that honors local policies. And we want to thank the Senator for his leadership. And I'm happy to answer any questions. Thank you.

And next, do we have primary witnesses in opposition, please? I don't see any.

Good afternoon, Mr. Vice Chair. Alex Jackson with the American Clean Power Association. On behalf of our diverse membership, including the five offshore wind leaseholder we had initially submitted a letter of concern, but we greatly appreciate extensive engagement with the author and his staff based on the most recent amendments we're going to retract that letter and move to support. Thank you.

Hello. Miho Ligare on behalf of the Surfrider Foundation in strong support. Thank you.

Mr. Chair, ,embers, Brian White on behalf of Offshore Wind California. We also had concerns about the previous version of the bill. The bill is much better now. We will also be moving to a support once we get that done. Appreciate the job.

Thank you. Melissa Cortez with Governmental Advocates on behalf of the California Wetfish Producers Association in support.

Mr. Chair Members. Joe Devine with Platinum Advisors on behalf of the Federation of Pacific Fishermen's Associations. Thank you.

Janet Cox for Climate Action California and the Santa Cruz Climate Action Network. Thanks.

And any witnesses, any witnesses here in the hearing room in opposition, please come forward.

Alright. Seeing none. Any questions from members? We'll get a quorum before we can do that. Senator, would you like to close, please?

Would respectfully ask for an aye vote. I greatly appreciate the partnership with the Coastal Commission, with the Building Trades Council, and I also want to say thank you to Chris Nielsen in the office for all of his work on this. It's been a long journey, so really appreciate it, Mr. Chair, and I again would respectfully ask for an aye vote at the most appropriate time.

And I'll note the presence of a quorum.

There we go, I like it. All right, thank you.

All right, up next, Senator Becker, item five, SB 410, please.

Good morning. Thank you, members of the committee. I first want to start out on SB 410 to say we're accepting all of the committee amendments.

Let'll talk a little bit about the bill. A core responsibility of our utilities is to connect things to the grid, things like new housing developments, home electrification upgrades, and EV chargers. Unfortunately, California's government granted electricity monopolies, particularly PG&E, are failing to perform these core responsibilities.

Californians are experiencing extreme delays in the time it takes for utilities to complete these energization projects. From six months, even up to one or two years. It should not take six months for utility to upgrade your distribution line.

It's time for this Legislature to hold PG&E accountable, and we believe this bill does that. In my district, I'm dealing with, like many of you, interconnection delay issues almost every week. ADUs that cannot be energized to resolve the housing crisis fast, charges that don't get installed for more than a year.

A hospital wing that wasn't connected for over a year was costing, they were losing a million dollars a month. And also, like many of you, I've been spending a lot of time on this issue. I did a bill my very first year in the Legislature, SB 68 attempted to deal with this issue.

This bill requires the PUC to plan and set guidance for how to accommodate these growing electricity grid connection requests in order to reduce current delays and preemptively prevent future delays. To do so, the PUC is required to set an average and maximum timeframe in which electrical utilities should connect customers to the grid. After setting these targets, the utilities are required to create a strategy to meet these targets, including ensuring sufficient workforce training and development, and creating annual standards on how to improve current delays.

If needed, the PUC is permitted to take remedial action to ensure compliance, and the PUC already has the authority to levy penalties against utilities if they don't comply. While through this bill, the PUC forces the utilities to plan and speed up to deal with a backlog. The inclusion of a temporary balancing count is unfortunate, but necessary.

We should be unhappy that PG&E failed to sufficiently plan for these distribution system upgrades. We should be mad that the commission has not held the utility's feet to the fire. But the customer shouldn't be punished by not being able to move into their new homes, by not being able to turn their lights on for a new business, or not being able to charge their new EV car at home.

This issue is about timing of the cost, not about the amount ratepayers will pay. And I think that's a very important point. The issue, and this may be echoed this issue is about, again, the timing of the costs, not about the amount ratepayers will pay.

These projects are either going to happen in the next few years if this bill passes, or they won't happen till after 2027. I want to thank the committee for working with us on substantial guardrails to protect ratepayers, including a few that I'll mention. Closing the balancing account provision after 2026, requiring the PUC to set an upfront cap on the one way balancing account.

Clarifying just and reasonable review of incurred costs by the PUC, preventing any costs from being recovered until the utility exceeds their forecasted energization projects in their general rate case and finally requiring using this data to better plan in their general rate cases in the future for increased energization project needs. Lastly, I want to make another point. It's brought to our attention yesterday that funds allocated from the Diablo Canyon Fund at SB 846 were permitted to be spent on a number of issues, one of which included accelerated interconnections.

If this money was envisioned to be spent on things like interconnections, and can feasibly cover some of these costs, it would make sense to me that it should. I do know there's an ongoing proceeding to PUC to determine how this money will be allocated and we're open to exploring this issue, particularly with TURN, who raised it with us going forward. In conclusion, the foresight planning and fixes from this bill will ensure that California electricity customers are provided with a timely and necessary electricity service to help the state meet our climate goals and housing needs.

And with us to meet today are Marc Joseph on behalf of our sponsor, Coalition of California Utility Employees, and Scott Wetch with IBEW.

To primary witnesses, two minutes each and we have a timer. Thank you.

Thank you, Mr. Vice Chair and members of the committee. My name is Marc Joseph on behalf of the Coalition of California Utility Employees. This committee is keenly aware of the frustration of many electric customers who can't get electric service for new homes, for EV, charging for new businesses.

We hear of wait times in the months or years. This is not okay. SB 410 is a pragmatic bill to actually try to solve this problem in four ways. First, it directs the PUC to set time targets for energizing customers and requires the utilities to report annually on how they're doing. If they fall short, the commission is required to impose remedial actions to meet the targets. Second, it requires the utilities to improve their planning.

There's no reason in the future for the utilities to be surprised by the requirements of their customers when we know that cars, trucks, buses and buildings will be electrified. Third, it requires the utilities to have adequate, qualified staffing to get the work done on time. As we electrify, we must have the people with all the needed skills to implement our plans.

And fourth, it authorizes the commission to adjust rates annually through this balancing account rather than every four years, when the amount of work needed to energize costs is greater than the forecast. Now, there are four important things about this provision. First, it would not give the utilities more money for this work than they otherwise would get.

They just get it sooner so we don't have a cash flow crunch between rate cases. Second, every expenditure still gets reviewed by the Commission and must be just and reasonable. This is only about timing.

Next, the amount will be capped by the Commission. Third, and this is good news by increasing electric usage, by selling more kilowatt hours, we spread the fixed costs over more kilowatt hours, which puts downward pressure on rates. We are already seeing this happening.

And finally, the Committee amendments add more guardrails to be sure that all ratepayer money is spent on clearing the energization backlog and nothing else. We urge your support for this pragmatic and important bill.

Mr. Wetch, we have a quorum. And let's call the roll and have the quorum.

Garcia? Patterson? Patterson, here. Bauer-Kahan? Carrillo? Chen? Connolly? Here. Connolly, here. Hart? Here. Mathis? Muratsuchi? Reyes? Reyes, here. Santiago? Schiavo? Schiavo, here. Ting? Ting, here. Wallis? Wood? Wood, here. That's a quorum. I'm sorry. I am so sorry. Carrillo? Carrillo, here.

And Mr. Wetch, you may proceed now. We do have a quorum, and we will be taking a vote on this.

Mr. Chairman and Member, Scott Wetcher, on behalf of the State Association of Electrical Workers, I'm going to throw my prepared statement out of the way. I think Mr. Joseph did a very fine job outlining the bill. I'd just like to make a couple straightforward points.

There's plenty in this Bill for the utilities not to like, believe me. I spent the last three weeks answering phone calls from utility executives not happy with our sponsorship of many components of this bill. And everything in this bill is justified because we do need to fix the problem that's out there.

But we can't be naive. The biggest factor here is not mismanagement, misapplication by the utilities, despite what the fact of our respected author would like to say. It's a capacity issue.

Okay? We didn't have, even ten years ago, electric vehicles in every third garage and six 65 inch TVs in every home and five computers. And all we have a load issue. We have a capacity issue.

And this bill, because of all the hard work of the author and the stakeholders who have participated, addresses it from a holistic perspective. But you cannot be haranguing the utilities to get this problem fixed if you don't address the issue that the current general rate case four year cycle does not provide for the availability of the funds on a time frame that leads to the most streamlined and efficient execution of this work. You can't have it both ways.

The balancing account has all of the protections that exist today, as Mr. Joseph described, ensuring that they have to go through a reasonableness review. They have to be just and reasonable. And frankly, rarely have I seen the PUC approve 100% of anything any utility has ever submitted for refund.

But that component is absolutely essential. I represent the 50 plus thousand members who are out doing this work every day, and they're not out working every day. And in large oftentimes it's because the work is there, but the resources aren't.

This is absolutely key component to addressing this problem. And so I would urge a very thoughtful consideration and an aye vote. Thank you.

Thank you. Primary witnesses in opposition are you here? Come to the table and you will have four minutes.

May not need all of it. Thank you. Thank you. Mr. Chair Members, Ignacio Hernandez on behalf of the Utility Reform Network, or TURN, and we have an opposed unless amended position, I want to thank the author, the author staff, for ongoing conversations. And if the bill moves forward, we'll obviously continue those conversations and hopefully they'll be very productive. One appreciate the author taking on this problem.

There is a problem that needs to be addressed. We understand that. Unfortunately, the problem with the backlog is occurring at the same time that there's a crisis of affordability. PG&E just raised the rates 15% over the past year.

Over the past four years, they raised their rates 53%. Just recently, the last couple of years, the Legislature allocated and actually spent about $500 $600 million to help ratepayers who were in arrears so that they wouldn't lose their service. And we just did a calculation recently that the top four IOUs in California, there's about $2.1 billion in arrears for utility customers.

So there's still a lot of problems that need to be addressed. So in creating something like this, we have to be very cautious and we have to take extraordinary steps, we think, to create something like this. So a few things, and the author did mention a couple of things we want to thank the committee as well for the amendments.

We think it moves it in the right direction. So we still have three or four issues that we'd like to see. One, we'd like to see that the I can't read my own writing here.

We would like to see that the CPUC has the discretion to approve the creation of the balancing account and not be automatic. We think that's critical. That is another way to check it on the front end as early as possible.

Two, we want to ensure that the commission has the authority to impose penalties if the utility does not meet the timelines or does not take remedial action. We want to make that very clear. We might want to make that even a little bit stronger.

We also want to limit, I think was mentioned by the author and might need clarification. I know there was a limit on the timeline in the committee amendments, but we want to make clear that the balancing counts that are created now are only for the current backlog, not for future problems. We want to keep that very narrow, and we want to make sure that we look at other options and other funding that's there, and in particular, Diablo Canyon funding that was raised.

We think that absolutely is, one, authorized under the plain language of the bill that was passed at the end of last year. And two, the opportunity is there. The commission is currently starting to accept testimony and comments and be working on what to do, and the plans will be put forth in the next year on how to spend the money on Diablo Canyon.

We've calculated about $450,000,000 over the truncated timeline of this bill, and some of that money could be used for those purposes. So we think that absolutely should be a part of this bill going forward. We think with those things that we might be able to remove our opposition.

But we think in light of the crisis that we've been talking about for years, we have to take extraordinary steps, just extra caution, extra accountability on the utilities, and ensure that we do this the right way. So for those reasons proposed of us amended and also again want to thank the author and look forward to further discussions.

You will now move to public comment. Do we have any witnesses here in the hearing room? In support please come forward. Your name, organization and position.

Thank you. Good afternoon, vice chair Members Hunter Stern with IBEW Local 1245 in very strong support.

Good afternoon, vice chair Members Rachel Shoemake with IBEW local 302. I'm here representing over 1300 electrical workers in Contra Costa County and we are in support.

Afternoon, vice Chairman Members, Vince Wiraatmadja with Schneider Electric in support.

Sylvia Solis Shaw, on behalf of Advanced Energy United and on behalf of Tesla, in support. Thank you.

Melissa Echeverria with IBEW Local 1245 in strong support.

Tamara Cacuyog, IBEW 1245 in strong support.

Good afternoon. Mike Tilden, proud, IBEW 1245 member, in strong support.

Good afternoon. Eileen Purcell, proud IBEW 1245 member, in strong support.

Good afternoon, Mr. Chairman. Chris Micheli, on behalf of Pioneer Community Energy, in support of the bill.

Junior Arnelis, Local 1245 in strong support.

Good afternoon, Brady Van Engelen, California Chamber of Commerce here in support. Thank you.

Good afternoon. Francisco Ferreyra, in strong support. IBEW 1245.

Janet Cox for Climate Action California and the Santa Cruz Climate Action Network in support. Thank you.

Good afternoon. Tyler Tratten on behalf of Environmental Defense Fund in support. Thank you.

Good afternoon. Nicole Brooks, IBEW 1245 in strong support. Thank you.

Good afternoon. Casey Barker, IBEW Local 1245 in strong support. Thank you.

Willy Garris, proud union electrician, IBEW 1245 in support. Thank you.

Marie Williams, IBEW 1245 in strong support. Thank you.

Good afternoon. Catherine Flores, on behalf of IBEW Local 1245 in strong support.

Good afternoon, Kayla Jones with IBEW 1245 in strong support.

Robert Delgado with Local 1245 IBEW and strong support.

Good afternoon. Good afternoon. Rey Mendoza, member of IBEW 1245 in strong support.

Mike Saner IBEW 1245, strong support.

Foster Goree, IBEW 1245 and strong support.

Good afternoon. Rafael Burgos, 1245 IBEW in strong support.

Good afternoon. Maria [unknown], IBEW 1245 in strong support.

Good afternoon. Keith Hopp, IBEW in strong support.

Good afternoon, Mark Wilson, IBEW Local 1245 in strong support.

Good afternoon, Mona McCarthy, IBEW 1245 in strong support.

Good afternoon. Emilio Sanchez, IBEW 1245 in support.

How are you doing? Donny Davis, IBEW 1245 in strong support. Thank you.

Todd Wooten IBW 1245 in strong support.

Kyle Whitman, IBEW 1245 in strong support.

Gerald Williams, IBEW Local 1245 in strong support.

Afternoon. Ryan Stewart, IBEW 1245. Strong support.

Ray Banfield, IBEW 1245. Strong support. Thank you.

Good afternoon. Phuong Tran, IBEW Local 1245 in strong support.

Ethan Stonecipher, IBEW 1245 in strong support.

Good afternoon. Ben Contreras IBEW 1245 in support.

Thank you. Dylan Gottfried, IBEW 1245, strong support.

Cruz Serna, IBEW 1245. Strong support.

Andrew Dawson, the California Housing Partnership, in support.

Jamie Minor on behalf of Cal-CCA, the California Community Choice Association, in support. Thank you.

Good afternoon. Elena Pierre, on behalf of CalStart and the Electric Vehicle Charging Association in support.

Good afternoon, Mr. Chairman and Members. P. Anthony Thomas, CBIA, California Building Industry Association, still feel that SB 410 is the better option among us and would urge you for an aye vote. Thank you.

Good afternoon. Catherine Brandenburg on behalf of Sonoma Clean Power in support.

Merrian Borgeson on behalf of NRDC, SPUR and RMI, in strong support.

Nicole Rivera on behalf of the Climate Center, in support.

Good afternoon. Charlotte Stevens, IBEW 1245, in strong support.

Good afternoon. Rene Cruz Martinez, proud IBEW 1245 member in strong support.

Good afternoon. Anthony Brown, proud, IBEW 1245 member in strong support.

Tim Neal, proud member 1245 member, strong support, please.

Rick Thompson, IBEW 1245 member, in strong support.

Mark Goodwin, IBEW 1245 member, in strong support.

Mona Garcia proud IBEW 1245 member. Strong support.

Bryan Carroll, IBEW 1245 member, respectfully requesting an aye vote.

Stephanie Estrada on behalf of the City of San Jose and San Jose Clean Energy in support.

Faith Conley with Weideman Group on behalf of ProLogis in support.

Ada Waelder, California State Association of Counties, in support.

Members of the committee, Paul Gonsalves, here today on behalf of the South Coast Air Quality Management District, in support.

Members, Dan Chia on behalf of Clean Power Alliance, the state's largest CCA, in support.

Jarrell Cook on behalf of Los Angeles Clean Tech Incubator, in support.

John Latimer on behalf of NextEra Energy Resources, in support.

Next, we'd like to ask anybody in the committee room in opposition, please come forward, state your name, organization and position on the bill. Thank you.

Good afternoon. James Thuerwachter with the California State Council of Labors. We submitted a late opposition. Our primary concern had to do with transport transparency as it related to energization costs. However, we feel that the committee's amendments address those concerns, so we anticipate removing our opposition to a neutral position. So thank you.

Do we have questions, comments from Members? Next, please. Any? Conolly.

Yeah, I want to thank the author for bringing this forward. I mean, this is a huge issue for our communities. This committee itself had a whole hearing on energization the challenges, the opportunities. Always, the issue is kind of effect on ratepayers. I think you have addressed that directly here in both taking the amendments and then the testimony today. So no need to reiterate, but appreciated your emphasis on the guardrails present for that. And I think there's a pretty broad coalition supporting it at this point. So happy to move for approval at the right time.

Any other Members? Member Wood first and Member Schiavo next.

Thank you. Thank you, Mr. Chair. First of all, thank you, Mr. Becker for working on this issue. I think, you know, this is a serious problem. We have items in I have a Bill related to Interconnection as well. We have some commonality there. Your Bill is significantly different than mine, and all this will play out as we go forward. So I have some questions through the chair, and I've got several, if it's okay. Thank you.

So we're asking the CPUC to create a balancing account here. So why did you choose a balancing account versus a memorandum account?

I'll give my perspective. I'll ask my witnesses to weigh in as well. We felt that this was the appropriate mechanism. We could put the guardrails on it and that it had the mechanism of having the approvals and such that we could require the PUC to set the upfront cap and clarify all the costs incurred. But let me turn over to Mark Joseph as well, his comment.

Thank you. The difference between a balancing account and a memo account is with the balancing account, according to the terms in the Bill, there would be an annual rate adjustment that would happen so that we would deal with the problem in the short term with a memo account that just allows the utility to keep track of the costs. It would then have to file an application with the commission after it's accumulated some costs.

And so if they accumulate costs in 2024, they file an application in 2025. It takes typically a year to resolve an application. That means we're at 2026 before any of the money actually is available to go to do the work.

So that sort of defeats the purpose of trying to get this done now and clear the backlog. Now if we go to a memo account and application process, we're practically at PG&E's next general rate case. And so we haven't really addressed the issue of right now we have a problem.

So are you asking for a specific cap on the balancing account? Is there a number you're after?

I know in the amendments we agree and require the CPUC to set the cap. I do not believe that we set it ourselves.

But you have a target I presume.

That's correct. We're leaving it to the Commission to weigh all the factors about what would the rate impact be, how much work could PG&E realistically get done, what is the appropriate amount to target that properly, given the resources PG&E has and the resources it would need? So we're leaving it to the Commission's discretion. It's a data heavy analysis which the author decided was more appropriate for the PUC to conduct.

Well, my understanding is there's like already about 100 balancing accounts at PG&E, and they're all relatively small, but this one potentially is in the billions, at least a billion, it sounds like. And those other balancing accounts are really specific storm event, something else. But this one's big. This one's really big. Let's say it's a billion. That's a billion dollars. Do we have any idea what the rate impact for customers is on an extra billion dollars?

Sure. So suppose PG&E made a billion dollars of investments in its distribution system. It would recover that typically over 30 years. So one 30th of a billion. You're talking 33 million in a revenue requirement of $8 billion, which is currently what PG&E's distribution revenue requirement is. 33 million. It's little more than noise in the data, but not much.

So because this will be recovered over such a long period of time, these are capital investments with 30 year recoveries. You only recover a little bit each year. So there's only a small rate impact in any particular year.

So you consider like an interconnection from somebody to somebody's house a capital investment then.

No. So this doesn't deal with the interconnect, somebody's individual thing. There are a specific set of rules, rule 15 and 16 at the PUC, which govern the cost sharing for that. The Bill doesn't address that. It doesn't change that there's a fixed allowance per customer. The Bill does not address that at all.

So obviously, I read the analysis, too and saw turns calculations that you've got based on the Diablo Canyon Bill from last year, the ability to get like up to $450,000,000. I think if you're going to have access, you already got access to that. Now you will have access to that through the rate making process.

Shouldn't you use that first before you go? And would the author entertain saying, let's use that 451st before we go to the balancing ask for more than the balancing count because you already have access to it.

Yeah. No, that's a great point about the Diablo Canyon Dollars. And I raised that in my opening because I think they sort of connected the dots on this relatively late.

But we've had now good discussions over the last 24 hours. But according to the deal that was made in the time of Diablo Canyon, they said that money could be used, which they estimate about 450,000,000 could be used for a number of things, of which this is one of those and in my mind, yeah, this is a crisis. They should use at least some of that money for this.

There is a and Marc can sort of comment more. There is an open proceeding right now at the PUC on exactly this, but in my opinion, yes, I think some of the money should be used for this.

So are you willing to is there some sort of amendment we could take? And I just saying I'm thinking about customers and I'm thinking about you've already know this is going to happen in the future as you do this balancing account, that's going to be a proceeding, too. So you've already got a proceeding going now, and so there's going to be access to that capital now or earlier, presumably then with the balancing account. So it wouldn't earlier, you can comment.

On the timing, but that money is not available till, like, November 2024. Remember that? That was a Diablo Canyon.

It was July, though. I thought it was July of 24.

It's when Diablo Canyon I believe it's when Diablo Canyon was supposed to stop operating. Right, Marc? Do you have that.

Thought? My understanding was it was earlier than that.

So the revenue requirement, my understanding, is tied to the time at which each of the two units at Diablo Canyon would otherwise have shut down. And I believe the first unit is November of 24, and the second unit is August of 25. So until really until you're under 25 and really in the latter part of 25, it's before there's any significant amount of money.

But I think the bigger point is there already exists in law everything that turn needs to make its case and get this money applied to that. Section 712.8 of the Public Utilities Code identifies the requirement that PG&E would submit to the commission every year its proposal for what it would do with the money. And then there's a proceeding, and the proceeding has started already, as Mr. Hernandez has acknowledged, and the law already provides that it could be used for this and says the commission shall ensure no double recovery in rates.

So if the commission decides that this is the highest priority use for some or all of the money, then the law already establishes what's necessary.

Okay.

I'm happy to look at this going forward.

I say this is a crisis. It's primary reason you're doing this Bill. I just feel like maybe we should be putting that money towards solving this crisis as a start. And then you've got the opportunity, presumably if the Bill passes, to continue to do that. But here's money up, here's money. Why don't we just use it and get going on this and help to help with customers? That's where I'm coming from.

I appreciate that. And I've said and I said this a turn over the last 24 hours, too. We've had these discussions. I'm open to keeping that conversation going about how we interface with that ongoing rate proceeding.

And I guess fundamentally for me, I support the majority of the Bill and I'm probably going to lay off today because one of the things I am concerned about is rates. I think that's what I hear over and over again from my constituents is our rates. I guess I want to understand what the implications are for rates for this additional count.

I'm pretty good with math, but I'd like to go back and understand what that is so I can understand I need to be able to explain to my constituents if I'm going to vote for something that's going to be a rate increase, why we're doing that and doing that. So I appreciate, like I said, there's many aspects of this Bill I'm very supportive of and the intent, but I think I'm going to lay off today because of some unanswered questions. Thank you.

Member Bauer can have next.

Thank you so much, Mr. Chair. Thank you. And thank you to the Senator for taking the time to really talk to us all about this, because I know that I think I share a lot of the remarks that our colleague made earlier, that this is really critical.

And that's what we're hearing from a lot of the support, is we need to do this interconnection work, and we need to do it faster, and we need more people to do it, and we have to get that done. And I think that is something that we all agree with, right? And the question is, how do we make that happen? Right? And I think that's where the challenge for some of us comes in. And I think that what you were hearing and I shared the concern around the Diablo Canyon money because that had a cap and this doesn't.

So I think that's why there's more comfort in that. And in addition, I think that what wasn't mentioned by my colleague, but I think is important to note is although you said that many of the other accounts are small, it's my understanding that there's about a billion dollars that's going to go to wildfire. That's in one of these balancing accounts that PG&E has.

So we're freeing up money on that end, right. Which currently is coming out of the General rate case. And I just think we continue to allow to say we want them to do things, so we're going to create these funds and rates are going to go up and that's okay because we want them to do these things.

And at the end of the day, I want them to do these things. But it's not clear to me that we need to raise rates to do that. And part of the reason I feel like we need to raise rates to do that is so they can maintain their 10% profit margin.

And at the end of the day, we also had a hearing in this room about rates and what is happening to our customers and how hard it is for Californians who every day fight to make ends meet and stay in their homes and pay their energy bills. And here we are again looking at a Bill, and we don't know the rate impact and we don't know how big it's going to be. And so, although I think this is critically important and I want our IOUs to do it, speaking as a PG&E customer, I think it's really critical that we find a way to have them do it in the confines of the astronomical rate that people are paying today.

And I think that's possible. Especially what we've done previously, is we're releasing some of the tension in the cost that they're having to pay for wildfire mitigation. And so although I agree with the goal of the Bill to get this interconnection done, I don't know that I agree that we need to do that piece of the Bill.

And it's unclear to me also how that will affect rates. And I know you use the term it's noise, but for our constituents who are one month's rent away from being homeless, it may not be noise, and it is them that we need to sit here and we need to represent and ensure they're heard. So I'm not going to go up either today, but I look forward if there's better clarification on exact impacts on rates in ways that I think we might feel comfortable with supporting in the future. Thank you.

I echo the need for this, and I know at this committee, and I personally have been incredibly frustrated at what I've been hearing from folks both in this committee and in my office about delays in interconnection and why that's not happening. We had a recent informational hearing where PG&E basically said that they're spending money elsewhere and that's why they're not doing it, because they don't have enough money left to do this work. And I think that's what you're trying to get to, which I appreciate, but at the same time, they're making billions of dollars in profit, and it just went up 7%.

And so my consistent frustration is that ratepayers are constantly asked to foot the Bill and pay more and more and more ratepayers who are your members and IBW Members and all union members coming out of the labor movement who are struggling also to make ends meet in a lot of ways. And the utility doesn't have skin in the game in terms of how they're not taking a hit. Right. Consumers are taking a hit, our constituents are taking a hit. Union Members are taking a hit. Everybody's taking a hit on the utility costs except for the utilities.

I know that's a larger issue, but it continues to be incredibly frustrating that the solutions before us are only charging people more who are struggling, instead of there being more investment by these utilities who are also being paid for interconnection. I mean, there are companies who are paying millions of dollars to get connected up to the grid and just sitting there and waiting. They're trying to give them money.

There are ways in which they are making money in a lot of different areas. It's just kind of a general frustration that I am expressing about this because I'm hearing this from constituents in our community all the time, right? And especially when they were hammered last year on gas prices and hammered earlier this year on natural gas prices and are just really feeling the pinch right when it comes to paying these bills every month. And so I wonder if you could talk a little bit more about the concerns raised by turn and why some of these are not being addressed.

It sounds like the amendments address some of their concerns, which appreciate you making that movement, but are there other ways in which you think we can put additional guardrails to make sure that we're really doing everything we can not to raise rates on folks, if at all possible?

I'm sure happy to trust. Listen, like I said, I've been working on this issue for three years since I got in the Legislature. So if I thought there was any other way to do this, I would do it.

But I came here to get things done and ultimately everyone agrees, and that's the thing that's we got such a wide coalition here is that this work has to get done. And I became convinced that this is the best way to do it with the guardrails that we put in. I mean, a couple of comments on rates. Rates are very high. One of the reasons is because we stuff a lot of things into rates, right, all the wildfire costs.

There's a proposal last year that was considered by this body to take all that out, say great, let's put that in the general fund, let's not put all this into rates, right? I forget what the estimate, but if you listen to the of the, say 24 or plus cents, I think he said it's the eight to move stuff around the state and everything else is all these other costs that we pile into rates. So I think we absolutely should look at rates and look at how we can take some of that stuff out of rates. Because again, those the wildflower costs, all the stuff that we put in to rates that make them very high and that hurts our electrification, right? Other states don't have that.

Actually, it's cheaper to electrify here sometimes it cost always doesn't work out because electricity rates are so high. I think, as Marc said, and our point is that this is really about the timing of costs, not about the amount of rate pairs we'll pay. Like, this is these are 30 years, as he said, and this works has to get done.

These are distribution upgrades, right? So they're either going to happen after 2027, we believe, I believe certainly if this Bill doesn't pass, it won't happen until after 27, or they're going to happen now. And that's where the one 30th math comes in, because, like, okay, we're still paying for the same thing, but we're starting a little earlier. And when you do the one, you know, we can do a better job of spelling that out, what we think the impact of rates will be, and we'll commit to doing that to you.

But Marc just kind of went through that math and happy to have him do it again, but we'll also do a better job of sort of writing that up, and we do have to do more for repairs. Rearranges as I mentioned, we do have the Care Account, which is about $4 billion a year program statewide. That also goes into rates, by the way.

But I think, again, those are all things that we need to look at more broadly. But the impact that this is going to have, we think will be very small for the reasons that we mentioned. These are 30 year projects, and again, we're taking a very small slice of that up front.

Again, at the end of the day, I think it does come back to capacity, as our other witness said, and the fact that PG underestimated the cost for energization projects by at least 200 million. And that is in part because, as our other witness said from IBW, the Bay Area is one of the most aggressive in population growth and one of the most aggressive in electrification. So to his point, especially when we ended net energy metering, there was a huge rush of people going in and hooking up.

So some of it was bad forecasting, I think, by PG&E, but some of it was just this massive increase in demand that we've seen specifically on the turnpoints on the cap that was raised relatively late to us. We're having discussions, we're open to putting a cap, but ultimately decided that the PUC should do that work. But that's a discussion open to.

Going forward. On the penalties, again, we believe that the PUC already clearly has that right authority to levy penalties against utilities if they don't comply, and our Bill does nothing to change that. So I think that's very clear.

On the Chalamet issue, we just felt like if we think this has to happen, it should happen. So that's why we made that decision. But again, we did that in conjunction with putting on all those guardrails that were mentioned.

And certainly I do want to see this address the backlog first. That's sort of the point of this. And I think there's just so much work over the next three years that's all they're going to focus on, and then Diablo Canyon, we already discussed that point and open to having that come.

I do appreciate some of you raising that and being on top of that and that's significant amount of money. Again, it's supposed to go to many things, but this is one of them. And I think some of them of this money should go to that. I personally believe that and happy to look at that going forward. So that would be my reaction.

Okay, thank you. So. Yes, I am. Surprise. Chair over here. I'm going to move Mr. Ting.

Thank you, Madam Chair. Senator, you mentioned that there were other options you looked at before looking at rate increases. Perhaps you could just give us a brief description as to some of the things you also contemplated looking at.

Yeah, I appreciate that. Again, ultimately it gets to the capacity, right? How do we build the workforce, as was mentioned? Could we do it? My first Bill was just timelines and penalties. Right.

That wasn't very successful politically. But also, I think, practically when we looked at it and we kind of came back and this was my Bill from three years ago. A lot of that just didn't take into account a lot of the factors that are actually going the supply chain and all the other factors that are going into this.

And that's why the main part of this Bill has really been this sort of holistic nature. I think that was referred to why, again, why we have such a broad coalition is we really bring everyone to the table, say what has to happen, and then make it happen. In the balancing account scenario, we looked at the memo account, other things, I think the CPU is sitting on $5 billion or so in memo accounts that hasn't quite approved.

So for the reasons I mentioned, that just doesn't seem like a great option if we're going to move forward. And that's why we settled on this. But again, only with really significant guardrails, and that's what we tried to do.

So just going back to the memo and the balancing accounts, you mentioned the PC sitting on 5 billion. They have yet to process $5 billion.

That's my understanding, right. That there's memo accounts sitting out there on the market? But, yeah, there's just a significant it just takes them but your point is that they have to process through it, right? It takes them a long time.

Yeah. So I think the issue, as I said before, it's timing. And we could do a memo account, but we wouldn't solve the problem because it will be two-plus years until any of the money exists to do the work. And by that point, we're at the next general rate case and people who've been sitting in the dark and with EV chargers and truck charging depots, not energized. And that doesn't solve the problem that we need to solve.

So you're saying that PG&E, even though they knew that they would get the money. At some point, neither PG&E or Edison or SDG&E would be willing to front that money to get reimbursed via the memo accounts.

Well, with a memo account, you don't know you're going to get the money. With a balancing account, you do. With a memo account, you have to file an application, and then the commission goes through a year long process to evaluate whether you should get the money. And that's not the level of certainty they need to be able to borrow the money to make the investment.

I'm just going to ask opposition to see if he could address because I know this is the main point of opposition's concerns, to see if you could address the difference.

Yeah, that's one of the things if I may, Madam Chair, please. Yeah, that's one of the things that was listed in the committee analysis that we had put forward as a memo account approach. For us, it's more about, as you described, Mr. Ting, is that the utility would put the money up and then could collect it.

There would be a process, and it'd be pretty clear in their ability to get that money back. So this approach essentially puts it on the ratepayers and then maybe refunded it so we think that they would get it back. I'm not sure why they would be concerned about them getting it back, because it seems to work out quite well for them either way.

Okay, so I'm getting two conflicting issues. Sorry, I was going to say, I.

Mean, can't have it both ways. They can't say, oh, do a memo account. They're sure to get the money, but don't give them the money. We want to have the opportunity to say they shouldn't get the money. That's the problem. That's exactly the situation right now. PG&E could spend the money right now and then put it in the next settle rate case, and maybe they'd get it and maybe they wouldn't, but that doesn't solve the problem.

So with the balancing account, they get the money up front, they get to spend the money up front, and then if there's an issue, they have to return the money.

Exactly. And according to the Bill, it would be an annual rate adjustment rather than waiting until 2027 to find out whether they get the money or not.

And then, I guess, in typical fashion, how long would a balancing account take to reconcile versus a memo account take to reconcile?

Many balancing accounts are annual, and that's why we modeled this as annual.

So annually it would get reconciled.

And there are billions in tract I confirm that in tract memo accounts and PG&E can't borrow. My understanding is they can't borrow the money to fund this because they are junk bond status. So I don't think that's an option. Right. So, again, we can talk through all.

Right.

The and then with the memo accounts, how come they're not reconciled every year? Why is there like 5 billion just lying around waiting to that's the difference.

Between a memo account and a balancing account. A memo account, you have to file an application and then maybe you get the money, maybe you don't. A memo account only allows you to keep track of what you are spending.

Mr. Wetch wants to jump in.

I mean, you can come sit up where you were sitting before if you'd like to.

Memo account, the term account is a misnomer. It's not an account, it's just basically a ledger where you're keeping track but it's not actually an account. And I think the point that needs to be reemphasized is that this doesn't require any rate increase whatsoever.

The committee analysis was crystal clear. The reasonableness review is exactly the same regardless if it's in the General rate case, if it's in they're evaluating a memo account or if it's in the balancing account, it still has to meet the just and reasonable requirements that the PUC is bound by.

At the PUC. Okay, thank you, appreciate it.

And then just to clarify, with a balancing account, that account is actually, in your words, an account.

That is actually an account

Ms. Carillo.

Thank you, Madam Chair. I think Mr. Wetch just addressed it, but I just wanted to clarify this doesn't include any rate increases, right?

No, there's a just and reasonableness review, as you mentioned, on all accounts and on the account overall.

Yes, in my example of the new distribution transformer that's needed, which will have a 30 year life and be paid for over 30 years, it's the same cost. It's just a question of when customers will be paying for this. And as they also mentioned, the good news is by selling more electricity we put downward pressure on rates.

The sooner we can get this stuff in the ground and processing and selling electricity, the sooner we get the downward pressure on rates. If you increase the number of kilowatt hours by 20% and your costs only go up a few percent, rates going to go down and the sooner we do it the better. That's the real rate impact here.

So it's really just an issue of timing.

Exactly, it is just an issue of timing.

I find that really fascinating. I think this committee and the Legislature in general has a lot of goals, a lot of objectives. We have to do a lot of work related to how do we improve the grid and we're trying to figure out ways in which we are proactive-future thinking without this idea of fear which comes into account quite a bit.

And so I'm curious as to just we can set the goals, but the detailed work on how we get there is the most complicated part and I think sometimes we get caught in between. Like what does that look like? What is the implementation of that? How do we ensure that consumers are receiving the best. Positive impact to the work that we're trying to do? How do we ensure that the workers have stability in their jobs and ensure that we have a viable and stable economy? And so I want to thank the author.

I think this is an incredibly complicated space to work in, but given the continued conversations and the desires to achieve, the method and how we get there is the critical point. And so as long as there's an understanding this does not necessarily increase rates, ratepayers are already going to be part of the solution to this. It's an issue of know. I think we can avoid various different parts of the confusion. Thank you. That's all.

Thank you.

Mr. Wood.

I Apologize, I know. I just wanted to follow up there. I heard a couple of times you say, Mr. Joseph, you said downward pressure on rates. That doesn't mean lower rates. That just means rates not going up as fast. Or did you actually mean that we're talking about lower rates? Because I've never seen lower rates. I'm just curious.

Sure. So let me explain a little more detail. And this is something we have actual data on. And NRDC that testified in support commissioned a study that looked at all of the costs that have been spent statewide for electric vehicle infrastructure from 2013 through 2021, and then compared the increased revenue that came from all of the car charging.

And they found that over that period, $1.7 billion in excess was collected as compared to what was spent. That $1.7 billion automatically flows through to ratepayers. Now, does it mean an absolute decrease in rates? Probably not.

There are too many other upward pressures with wildfire costs and things like that, but rates are $1.7 billion lower than they otherwise would be. And that's just with sort of the beginning levels of electric vehicle electrification, electrification of transportation.

And then the final. Because I just want to be clear that I understand this. This balancing account, I think you said will not lead to rate increases. Is that what I understand you said? Because my understanding is that it will lead to rate increases. You're just saying it would be small. I think it was noise you used. So I'm confused because she asked you, and she just I just wanted I'm truly just truly trying to understand if this balancing account, which is spending money to do things, ultimately leads to rate increases. Really? I'm honestly just trying to understand.

The 30 year transformer will be paid for either way. If expenditure on that transformer was just unreasonable, the only thing this Bill does is say do it sooner and start the payment for that sooner. The total amount cost, the total effect on rates, no change. Still the same transformer, still just unreasonable. The only thing that changes is the timing of when we pay for it.

... No problem. Okay. Any other questions?

This is a really good discussion. I think an important clarification and obviously the underlying issues of getting the work done, but really being mindful of impacts on ratepayers. If it comes to be that there is a negative impact on ratepayers, is there a way to strengthen guardrails in the future or address that issue?

Well, I think the longer term way to address all of this is through general rate case reform. Right? And the problem is the rate case, the previous rate case, there was some combination and I wasn't around for it, but some combination of bad forecasting, some combination of unforeseen demand and other things. But also they were able to basically take that money and make the case for it, but really spend it how they wanted. So I think that's one of the great things this bill is going to do. As I mentioned when I kind of went through the guardrails -- actually the data from this bill is going to be used to plan the next general rate case, to plan for the future increased energization project needs, basically. So I think that's a long-term solution. I mean, we're going to have a general rate case. The next rate case is when?

PG&E's next rate case will be starting for the year 2027.

Yeah, starting for the -- for January. For the year, correct. So there's a general rate case coming up and that's really the time to address all this and say, "Hey, great, how do we want to do this better going forward?" And we will all have an opportunity to weigh in on that, and we all should, with the PUC. This is really saying there's this massive backlog right now that we all hear about all the time, and, you know, mostly Bay Area legislators talking here because we all know the issue. We're saying there's a massive backlog. There's this problem. We need more person power. We need more resources. We got to get everybody together, address all the supply chain issues, figure out what the timeline should be, put penalties in place if they don't hit that timeline, and let's provide them some resources, with guardrails, to meet that right now.

Thank you very much. I had to go over to the swing space and add on to GO. We're still here, so I'm out of breath and you are still on this bill.

We wanted to wait for you.

Thank you. Do you want to close? Do you want to close? I think no other members wish-

Yeah, I mean, I think that was probably part of my close. I don't want to restate too much. But again, we all know the need for -- we all know the problem. And I think we all agree on the problem. We all agree that there have to be clear timelines, average and maximum time frame in which the utility should connect, customers, targets, width penalties. I think we all agree on all of that. And the point about rates, and I did try to say it here -- but the point is about timing, not about the amount. And I think -- I thought it was clear, maybe the Assembly didn't feel as clear. But the point is this transformer is going to be needed. We're either going to buy it in 2027 or we're going to buy it now. And so it's the same amount, we're just starting that a little bit earlier. And that's really the goal of this, to get the work that we know needs to get done now.

Get it done now. I've been working on this again for many years and I think this is the way to do it. I think it is the right balance. And again, I thank the committee for a lot of significant guardrails that were put in place. We took a lot of turns, amendments, and on the other ones I mentioned, on most of the other ones, we're going to keep conversations going. And with that, I respectfully ask for my vote.

Thank you. I just wanted to mention, first of all, I appreciate the bill. Looked at it long and hard, had the determination of weighing the cost versus the necessity. And I have come down on the side of the necessity. And so I will be voting aye. And our chair has an aye recommendation. And we have a first from Member Connolly and a second from Member Hart. Secretary, please call the roll.

Item number 5, SB 410. The motion is due pass as amended to Appropriations. Garcia. Patterson. Aye. Bauer-Kahan. Not voting. Carrillo. Aye. Chen. Connolly. Aye. Hart. Aye. Mathis. Not voting. Muratsuchi. Reyes. Santiago. Schiavo. Aye. Ting. Aye. Wallace. Aye. Wood. Not voting. We'll keep that roll open.

I think I got another bill. Are you my witness? Josh ... show.

But we still need people to add.

That's one vote short and we are waiting for other members to come to add on. So we will leave the roll open and we'll do consent. Yeah, let's do the consent calendar.

Do you have a motion for the consent calendar? Please move by Member mathis. Moved by Member Ting. Call the roll, please.

Item number one, SB 38. The motion is due pass to Appropriations. Item number four, SB 319. The motion is due pass to Appropriations. Item number seven, SB 493. The motion is due pass to Appropriations. Item number eight, SB 572. The motion is due pass to Appropriations. Item number nine, SB 664. The motion is due pass to Appropriations. Item number eleven SB 619. The motion is due pass as amended to Appropriations.

Garcia. Patterson. Patterson. Aye. Bauer-Kahan. Bauer-Kahan. Aye. Carrillo. Carrillo. Aye Chen. Connolly connolly. Aye heart. Aye Mathis. Mathis. Aye Muratsuchi Rayes. Santiago. Shiavo. Shiavo. Aye ting. Ting. Aye wallace. Wallace. Aye wood. Wood Aye. We'll keep the roll open for the consent file. I'm going to do item number two.

We're going to do add ons. Yes, Members are going to do the add ons. For those that have missed the I'm sorry.

We need a motion on SB 233.

We need a motion on SB 23, please.

Item number two, SB 23. The motion is due pass as amended to Appropriations. Garcia. Patterson. Patterson. No. Bauer-Kahan, Bauer-Kahan. Aye Carrillo Carrillo Aye, Chen Connolly. Connolly Aye. Heart Heart Aye. Mathis. Mathis No. Muratsuchi Rayes. Santiago Schiavo. Schiavo. Aye. Ting Ting Aye Wallace Wallace No. Wood. Wood Aye.

We'll keep the roll open. Item number three, we need a motion to SB. What? Motion by mathis. Second by Tang. Item number three, SB 286. The motion is due pass as amended to Appropriations.

Garcia Patterson. Aye. Patterson. Aye. Bauer-Kahan. Bauer-Kahan Aye. Carrillo. Carrillo. Aye. Chen Connolly. Connolly, Aye. Heart. Heart Aye Mathis. Mathis. Aye Muratsuchi Rayes. Santiago, Schiavo Schiavo. Aye Ting Ting. Aye Wallace. Wallace. Aye Wood. Wood. Aye. We will keep the roll open.

Need a motion to second. Press B. 420.

No, we're going to present.

Oh, one more. So we're doing 420? Yes, go ahead and present, Senator. Thank you.

Okay, we're back in motion to move 422nd.

Thank you. We'll take that as you're close.

Yeah, it's the Josh and Mark show again. And plus Alex. Okay, thank you. This has got another get things done, Bill. I have a colleague on the other side of the aisle in the Senate who always says, you guys pass big goals, but how are you going to get things done? So this is going to be a get things done Bill, and basically, to meet our goals, we're going to have to build transmission and distribution lines faster to ensure generated clean energy is getting to its destination, despite California's need to accelerate the buildout. One inconsistently applied permit requirement, unnecessarily delays, small low voltage sub-transmission lines.

I'll let my witnesses talk more about this, but basically, this creates a consistent fast track approvals for low impact upgrades and new small transmission lines under 138 kilovolts needed to connect new renewable generation and energize customers by reverting this existing exemption threshold back to what it used to be. And with that, I'll turn it over to Mark Josephs and Alex Jackson.

Thank you, Mr. Chair and Members, Mark Joseph for the Coalition of California Utility Employees. As we have all heard, to meet our climate goals, we need a lot of work to upgrade the grid. And with all the new uses coming, our regulatory process, while perhaps okay for a prior world, is simply not adapted for a current or future world. SB 420 addresses a small slice of that problem.

First, some history. Prior to 1994, distribution, subtransmission, and transmission up to 200 kilovolts did not require any permits from the PUC. In 1994, the PUC lowered the threshold to 50 kilovolts, what we think of as the distribution system. So for the distribution system now, no permits are needed, and so, for all the challenges the utilities are having, modernizing the distribution system, permitting is not one of them.

SB 420 would swing the pendulum part way back up so that some low impact projects between 50 and 138 kilovolts, the sub-transmission, would be treated like distribution: no permits would be needed from the PUC. But only some projects, only the low impact projects, projects on previously distributed land, projects in an urbanized area, projects that have already been part of a sequel review for a larger project, and not on wetlands, hazardous waste sites, or in critical habitats. The larger projects or projects that don't meet these criteria would continue to get the permits as they do today.

Now, we recognize this requires some balancing of competing interests. We've tried to carve out the low impact projects that are fundamentally the same as the distribution projects for which they already require no permits. And after all, there really is nothing environmentally different between building a substation with a 50 kilovolt transformer and building a substation with a 66 kilovolt transformer. I, for one, certainly couldn't tell the difference by looking.

Yet one of these requires no permits, and the other requires full SQL compliance. This modest, limited step in this Bill would help speed some of the critical upgrades to the grid that we need to reduce the huge climate impacts and air pollution impacts from things like heavy duty trucking with all of its diesel emissions. Thank you, and I'll be available for questions.

Good afternoon, Mr. Vice Chair and Members. Alex Jackson with the American Clean Power Association. We are a trade group representing developers of utility scale renewable energy projects across multiple technologies. But we are united in our focus and conviction in that California needs to build transmission at a pace and scale alongside new clean capacity, if we're serious about meeting our clean energy goals and supporting reliability,

I first want to commend this committee for the important work it has done to shine a spotlight on the many challenges and complexities with transmission development in this state, and in recognizing that addressing them will require a suite of solutions that will entail longer term planning, new approaches to financing, mechanisms for workforce development, holding utilities accountable for project deadlines, and streamlined environmental and judicial review, which was the focus of the Governor's infrastructure package. But it also means addressing permitting, which can add years to a project timeline, often through needless and duplicative reviews.

So this Bill, as Senator Becker and Mr. Joseph outlined, takes aim at one small issue, and that is a straightforward solution to treat low impact projects at the sub-transmission level. And for the nerds out there, this is rated below 138 KV, like distribution projects which are exempt from permitting under the PUC's current rules, and those are rated below 50 KV. That would move closer again, as Mr. Joseph outlined, to the permitting regime that was in place until 1994, when projects rated below 200 KV did not require a permit.

Again, it's important to note that this kind of fast lane would only be open to a slice of low impact projects. For example, if it was part of a facility that's already undergone SQL review, not if it's located in a sensitive ecosystem. But it's in those instances where we don't see a compelling reason to require extensive additional analysis as part of lengthy permitting reviews, when today it is the costs of inaction and delay that pose our greatest environmental threats.

So, again, while limited, we believe this Bill will alleviate substantial delays for projects such as substations and sub-transmission lines that are critical to connect new renewable generation and prepare the grid for widespread electrification. And we ask for your are vote.

And we'll open this now to public comment. And we are asking any witnesses here in the hearing room in support. Please come forward. Name? Position?

Mr. Chairman and Members. Scott Wetch, on behalf of the State. Association of Electrical Workers, the California State Pipe Trades Council, and the Western States. Council of Sheet Metal Workers, in support. Thank you.

Adam Smith, Southern California Edison. Strong support.

Dan Chauffeur. Clean Power Alliance. In support.

Leah Barros, on behalf of the Independent Energy Producers Association. In support.

Genesis Tang, on behalf of Clean Air Task Force, in strong support.

Stephanie Estrada, on behalf of San Jose Clean Energy, in support. Thank you.

Brandon Ebeck, on behalf of Pacific Gas and Electric. In support. Thanks.

Nico Molina, on behalf of the Silicon Valley Leadership Group. In support. Thank you.

Yeah. Julee Malinowski-Ball on behalf of the California Electric Transportation Coalition, in support.

Melissa Cortez, on behalf of the California Wind Energy Association, in support.

Jaime Minor, on behalf of the California Community Choice Association, in support.

Lizzie Cootsona, on behalf of Advanced Energy United, in support. Thank you.

Cara Martinson, on behalf of the Large Scale Solar Association, in support.

Nicole Rivera, on behalf of the Climate Center, in support.

Tyler Tratten on behalf of Environmental Defense Fund and California Environmental Voters in support. Thank you.

Janet Cox, on behalf of Climate Action California, the Santa Cruz Climate Action Network, and the Silicon Valley chapter of Climate Reality Project. In support. Thank you.

And now, do we have anyone in our committee room in opposition? Please come forward. Any opposition? Seeing none, we'll bring it back here to Members. Do you have questions or comments, please? Anyone? It's all yours. Want to close?

Respectfully ask for an aye vote.

Thank you. I'm going to need a motion and a second. Oh, you got that already, Mathis and Wallis. Got it. Okay.

Item number six, SB 420. The motion is due passed to Appropriations. Garcia? Patterson? Aye. Patterson, aye. Bauer-Kahan? Carillo? Aye. Carillo, aye. Chen? Connolly? Aye. Connolly, aye. Hart? Aye. Hart, aye. Mathis? Aye. Mathis, aye. Muratsuchi? Reyes? Santiago? Schiavo? Aye Schiavo, aye. Ting? Wallis? Aye. Wallis, aye. Wood? Aye. Wood, aye. We'll keep that roll open.

We got one more to hear.

Item number 10781, and.

Senator Stern. AB 781, you may present.

All right. On your last Bill here. Okay, I'll try to last one. Make this brief and hopefully straightforward. Thanks for taking a moment to consider this legislation. This really has to do with the natural gas that we mostly import. Spend a lot of time talking about clean energy, but we are the largest gas consuming state in the country, and we burn a lot of it in our power plants and our stoves and everywhere else. This bill's not really about the technologies that may replace gas, but more so about how we deal with the gas supply coming in and its carbon intensity.

Right now, not a lot of states have the same strictures that California has on the wellhead sites. Folks are out there flaring, and leak detection is hard to come by in some places. So, when you end up getting the gas down to that power plant, it's essentially like burning coal when you look at the full lifecycle of emissions. Now, I'll look forward to comment on that one.

But the standard show, if you have a really high leakage rate, essentially you're going to have the same greenhouse gas intensity. So we may have got past coal, but our gas supply is still lagging. So what we want to do is just try to create a market based incentive for folks outside our state to step up. And we think it's starting to happen. We've seen some exciting work in the private sector in a number of states that we don't often offer incentives to. But the big gas producer in this country we think can hit a higher standard.

The EPA is already pushing them to do so, and there's a lot of money in the IRA to do that. We think the oil and gas industry is actually willing to step up to the plate on this front, and we want to be a market for any leadership in this space. So this bill's hopefully something that doesn't look so much like a mandate, but more a certification standard that will bring more this supply in as we make the bigger transitions in our energy system.

So I've got here with me two great advocates on this issue, Howard Penn with Planning Conservation League, as well as Michelle Applegate, Project Canary. No amends from the committee, but happy to talk through any technical details going forward. Howard--

You want to remind to the witnesses two minutes each, please. Thank you.

Sure.

Good afternoon, Members. My name is Howard Penn, Executive Director of the Planning and Conservation League. I'm a sponsor of this Bill and also testifying on behalf of Rocky Mountain Institute, who's been an integral partner of this process. With 781, California has a historic opportunity to take real and significant climate action for the benefit of the state and the world addressing these three critical issues.

One, methane is a high potent greenhouse gas with over 80 times the warming impact of carbon dioxide. Near term. Two, our methane leakage problem is getting worse. And three, methane has accounted for at least 30% of the planet's warming to date. However, the industry has rapidly developed the tools and capacity to cut methane leaks in the oil and gas sector, and California, as a leader, has the unique ability to accelerate this trend. When methane is not leaked, it has economic value as natural gas. By stopping methane leaks, consumers and producers can more efficiently use this energy source and fight climate change.

Curbing methane leaks is also profitable in most cases. The International Energy Agency has assessed that 80% of the methane leaks from oil and gas can be fixed either at a profit or zero net cost. Although we don't believe that certified natural gas would necessarily increase consumer costs at the end of the supply chain, we are cautious in our approach with this Bill and therefore have not asked for any procurement requirements.

This is where California comes in: With its unmatched market power, by supporting the purchase of certified low methane gas, California can be the catalyst to drive change all the way up the value chain. We must act now because the cost of inaction is staggering. We estimate the annual cost of the direct climate damage to California is over $500 per person. By mid century, this cost will double or triple on current trends. By acting on methane today through 781, California can take a big step in preventing the worst case scenario. I respectfully ask for your aye vote. Thank you.

Mr. Chairman. Members of the committee. My name is Michelle Moormon Applegate. I'm the Senior Director of Policy for Project Canary. We are an emissions data management company. The passage and enactment of SB 781 California can take a new and significant impact in the battle against climate change.

And you do this by prioritizing methane reduction in the procurement of low emission natural gas. Material reduction in greenhouse gas emissions are accomplished by stopping the intermittent operation and fugitive methane leaks that occur in the energy supply chain. Stopping these leaks in the energy production sector is some of the lowest hanging fruit in the battle against climate change.

In fact, adopting this Bill and the representing standards that come from it, represent the single most cost effective carbon mitigation action available to the state at less than twenty cents per month per residential customer for both of the state's two largest utilities at current commodity prices. Even in a worst case scenario, if the commodity price was the same as the LCFS carbon offset model, you'd still be looking at about $1 per month per customer.

In addition to the low cost, the environmental benefits are significant. If the imported gas consumed in California was produced with a methane intensity of 0.2% instead of the 1.38% that EDF estimates it actually is, we could abate the equivalent of 36 million metric tons of CO2 per year. That's the same as taking 8 million cars off of our roadways. This level of emissions reduction is attainable today, and it can be done at a relatively low cost.

Until we no longer use natural gas, we can accelerate the decarbonization of this fuel source and eliminate millions of metric tons of CO2 equivalent from our atmosphere years ahead of the state's goal for eliminating fossil fuel use. I'm available for questions. We appreciate Senator Stern introducing this very important Bill, and we respectfully ask for your support. Thank you.

Members of the audience, if you want to come forward with your support, you may do so now. Name, organization, and position, please.

Nicole Rivera with the Climate Center. Aye, please.

Janet Cox for Climate Action California and the Santa Cruz Climate Action Network in support. Thanks, Senator Stern.

Now turn to any Members in the audience here in opposition. Come forward. Seeing none, we'll come back here moved by Member Reyes and seconded by Member Bauer-Kahan. Any questions or comments from Members before we call the vote? Secretary, call the vote, please.

Respectfully ask for your aye vote.

Okay. Wonderful close. Thank you.

Item number ten, SB 781. The motion is due past appropriations. Garcia? Patterson? Not voting. Patterson, not voting. Buer-Kahan? Aye. Bauer-Kahan, aye. Carillo? Aye. Carillo, aye. Chen? Not voting. Chen, not voting. Connolly? Aye. Connolly, aye. Hrt? Aye. Hart, aye. Mathis? Not voting. Mathis, not voting. Muratsuchi? Reyes? Aye. Reyes, aye. Santiago? Schiavo? Aye. Schiavo, aye. Ting? Wallis? Wood? Aye. Wood, aye.

We'll keep that roll open.

Thank you.

Okay.

You're welcome.

All right, we're going to open the roll for add ons and we'll leave it open, what, 15 minutes? 20 minutes. What do you normally do? 15 or 20 minutes for other Members to come in.

Okay, this is a consent file. Chen? Aye. Chen, aye. Muratsuchi? Reyes? Aye. Reyes, aye. Santiago? Item number two SB 233, due pass is amended to appropriations. Garcia? Chen? No. Chen, no. Muratsuchi? Reyes? Aye. Reyes, aye. Santiago? We'll keep that roll open. Item number three, SB 286 due pass is amended to appropriations. Garcia? Chen? Aye. Chen, aye. Muratsuchi? Reyes? Aye. Reyes, aye. Santiago?

Item number six, SB 420, do pass Appropriations. Garcia? Chen? Aye. Chen, aye. Muratsuchi? Reyes? Aye. Reyes, aye. Santiago? Ting? Item number ten, SB 781, do pass to appropriations. Muratsuchi? Santiago? Ting? Wallis?

All right, we will hold the roll open for other Members for 15 minutes. And thank you, everyone, for allowing me to chair this for a little while. It's kind of fun. And we will now adjourn, except we will have the roll open and I just wanted to do. I can't do this. Oh, come on. That's the fun part.

You have to wait for all those absent Members. The other fun part of here.

We're going to open the roll for Mr. Muratsuchi.

This is a consent file. Muratsuchi? Aye. Muratsuchi, aye. Item number two SB 233 do pass as amended to appropriations. Muratsuchi? Aye. Muratsuchi, aye. Item number three, SB 286, due pass a amended to Appropriations. Muratsuchi? Aye. Muratsuchi, aye. Item number five, SB 410 do pass as amended to appropriations. Muratsuchi?Aye. Muratsuchi, aye. Item number six, SB 420 do pass to Appropriations. Muratsuchi? Aye. Muratsuchi, aye. Item number ten SB 781, do pass to Appropriations. Muratsuchi? Aye. Muratsuchi, aye. Thank you.

For Mr. Santiago.

It this is the consent file. Santiago? Aye. Santiago, aye. Item number two, SB 233, do pass as amended to appropriations. Santiago? Yeah. SB 233 Skinner. Aye. Santiago, aye. Item number three, SB 286 do pass as amended to appropriations. Santiago? Aye. Santiago, aye. Item number five, SB 410. Do pass as amended to appropriations. Aye. Santiago, aye. Item number six SB 420. Do pass to Appropriations. Santiago? Aye. Santiago, aye. Item number ten SB 781. Do pass to Appropriations. Santiago? Aye. Santiago, aye.

Want to say it one more time?

Okay. Testing, 1212. Okay, we will open the roll for Member Ting.

Item number six, SB 420. do pass to Appropriations. Ting? Aye. Ting, aye. Item number ten, SB 781, do pass to Appropriations. Ting? Aye Ting, aye.

Thank you. Appreciate it. Thank you.

Open I'm going to open the roll.

Item number one, SB 38. The final vote is 14-0.

That Bill is out.

I'm sorry. The consent file. The final vote is 14-0.

Consent file consent file is out.

Item number two SB 233. The final vote is 10-4.

That Bill is out.

Item number three, SB 286

that Bill is out.

The final vote is 14-0.

That Bill is out.

Item number five, SB 410. The final vote is 11-0.

That Bill is out.

Item number six, SB 420. The final vote is 13-0.

That Bill is out.

Item number ten, SB 781, the final vote is 10-0.

That Bill is out. And we are adjourned.