Senate Standing Committee on Energy, Utilities and Communications

The Senate Committee on Energy Utilities and Communications will come to order. I will say that again. We will come to order. Good afternoon. The Senate continues to welcome the public in person and via the teleconference services for individuals wishing to provide public comment for today's. Uh Well, today's participant code number is 877 2268163. That's 8772268163. And access code is 3339998. That's 3339998.

We are holding our Committee hearing here in the Oak Street building. I ask all Members of the Committee to be present in room 1200 so we can establish a quorum and begin. We have seven bills on the docket today. However, AB 1349 by Assembly Member Irwin has been pulled from the today's agenda. Before we hear our first presentation from our author. Let's establish a quarum. Please call the roll

[Roll Call]

Thank you members.

We have a qu that means we can hear from our first author. I see Assembly Member Wood is here and ready to go.

He's presenting AB 50 Assemblyman. When you're ready, you may begin.

Good afternoon, Mr Chair and members. I want to thank you Mr Bradford, Mr Chair and your staff for working closely with us. And I'm accepting the Committee amendments. If you told me last year, that I would be investing this much time discussing the challenges of electrifying our grid.

I wouldn't have believed you. It all started last October when I began getting calls from constituents who had just been informed that more than half of Humboldt County had completely run out of energy capacity, meaning the electric grid in the region had been entirely tapped out and it would take years and tens of millions of dollars before the grid could support a single new customer to the 70 customers who were waiting for power at the time.

This was devastating news. This included local businesses, a transitional housing provider and a hospital. And more than that 40 customers would have to wait more than 10 years a decade for power. And as shocking as this news was, we soon learn that Humboldt County was just the tip of the iceberg.

Let me mention just a few alarming delays that we are aware of in Northern California, affordable housing projects are being delayed, jeopardizing millions of taxpayer dollars in the central valley. Homeowners are living in hotels for months as they wait for their new homes to be energized. And in Southern California, we are beginning to hear about commercial developments that have been impacted by delays.

California is facing some serious challenges in the transition to a fully electric grid and one that must be overcome to meet our fight against climate change. After spending months of identifying the obstacles and discussing solutions with rate payer advocates labor the business community, local governments, housing developers and yes, the utilities AB 50 proposes three common sense solutions.

First, it establishes improvement metrics for underperforming utilities to promote accountability as they work to address severe backlogs of customers waiting for power. We have worked closely with this Committee to craft the definition of underperforming utility and while I'm accepting the proposed definition today, it's important to note that some provisions of the bill will not apply to all utilities and I remain concerned about all utilities abilities to meet future demand.

Second AB 50 requires utilities to talk with local governments about capacity restraints on the grid. Much of the failures in forecasting and planning, it turns out stem from a lack of communication between the utilities that oversee the grid and local governments that often know more about the potential demand for growth and are responsible for approving new and upgraded projects most of the time without having information on electric capacity limitations.

Again, I thank the Committee staff for working on amendments that clarify the rights of local governments to request data. And third and lastly, a 50 is proactive requires the CPC to establish long term energy expectations and guidelines for investor owned utilities. With me today to provide testimony is Ben Schwartz from the Clean Coalition and John Kennedy from Rural County Representatives of California.

Your two primary witnesses are here. You each will have two minutes for your testimony again right there right there.

Hi, my name is Ben Schwartz. I'm the policy manager with the Clean Coalition. The Clean Coalition is a nonprofit dedicated to accelerating the transition to renewable energy in a modern grid through technical policy and project development expertise. We strongly support AB 50 to start.

Let's consider that the 2022 carb scoping plan projected that overall energy demand will increase by 68% if we are to reach our 2045 energy goals, necessitating an unprecedented rate of deployment, an efficient and predictable process to deploy new facilities and to conduct upgrades as loads increase is needed, slow existing processes if not addressed today will become significant impediments to progress in the future. A 50 will better codify the process for facilities seeking new or increased service and for governments conducting residential economic and resilience planning.

The bill will implement a first of its kind CPUC proceeding to determine reasonable timelines for all types of energizations. For example, the CPC recently approved an interim timeline of 125 days for energizations of EV chargers. However, interim timelines only provide a temporary respite. A final timeline is necessary for EV chargers as well as other facilities.

AB 50 provides the CPUC with a strong legislative mandate to create specific and reasonable timelines for energizations without prescribing specific solutions. The public process will be driven by stakeholder feedback and utility data.

As energizations backlogs are dealt with any party seeking to deploy a facility. Knows that the process having process certainty is invaluable which is why AB 50 has such wide ranging support.

Ratepayers need accurate timelines. Governments need transparent and actionable information about the existing grid for planning purposes, existing capacity maps called ICA maps do not provide sufficiently accurate or granular information the utilities have and rely on better information. A 50 will enable and enhance essential two way discussions between utilities and governments about planning and forecasting for the coming years for these reasons. I strongly support A 50. Thank you.

Good afternoon, John Kennedy with RCRC. We represent 40 of the state's 58 counties. We appreciate the author bringing this bill up in many areas. Applicants are told it will take 2 to 5 years before utilities can provide electricity to new development. In some areas. It could take even longer seven plus years.

This is for housing, for vehicle chargers for essential community services, for food processing facilities. It runs the gamut and these time frames really aren't acceptable when utilities have a monopoly on the provision of electricity. These delays and excessive time frames predate COVID and supply chain disruptions. They've often throttled local economic development and growth opportunities in many areas of the state.

These declines in energy reliability and delays in the provision of service are really frustrating for local governments and frustrating our ability to meet local and state electrification and decarbonisation goals. So we're pleased to be here today to support AB 50 as part of the solution.

It charges the CPUC with establishing time frames for energization organization. It improves distribution planning by increasing coordination with local governments to ensure that development plans are more closely able to meet local needs. Some IOUs are already doing really well on this. Others have room for improvement.

The bill also facilitates information sharing as you heard between utilities and locals on where capacity exists, where capacity can hopefully easily be added or where capacity will be added. This will help us develop, implement housing and economic development plans.

AB 50 is a strong step in the right direction to improve planning and expedite project delivery. There's more work that needs to be done both on the CPUC side, on the utility side and we're happy to look at the local side as well and be partners in this for these reasons. We're pleased to support AB 50 today. Thank you.

Thank you. Are there additional witnesses and support here in the room to state your name and your organization, please?

Good afternoon, Mr Chair and members, Karen Lange, on behalf of the Board of Supervisors in the counties of Solano, Butte, and Sonoma in support today. Thank you.

Good afternoon, Alyssa, still on behalf of the cities of Mountain View, Belmont and Santa Rosa also in support. Thank you.

Thank you next witness.

Thank you, Mr Chair Mark Fenstermaker on behalf of Valley Clean Energy CCA serving Yolo County, Woodland, Winters, and Davis in support.

Sarah Bridge on behalf of Santa Clara Valley Water Valley Water in support.

Damon Conklin on behalf of the League of California cities and strong support.

Andrew Dawson from the California Housing Partnership in support.

Jeff Neel on behalf of San Benito County in support.

Good afternoon members, Rob Spiegel, California Manufacturers and Technology Association and support.

Thank you. Are there any additional witnesses? Yes, she's coming. You don't need to run.

Thank you, Katherine Brandenburg, on behalf of Sonoma Clean Power and support.

Thank you. Are there any additional witnesses in support? Now let's go to witnesses in opposition. Is there primary witnesses in opposition? Are you a primary witness in opposition? No, just state your name.

Good afternoon. Brandon Ebeck with Pacific Gas and Electric. We formally had an opposed position but been working with the author for several months and committees of both houses. We with the amendments in the analysis, we will move to neutral.

Thank you. Appreciate it. Next witness.

Good afternoon, Laura Parra. On behalf of Southern California Edison, we will also be removing our opposition and going to neutral based on the amendments. Thank you.

Thank you. See no further witnesses in the room in support or opposition moderator. Let's go to our phone lines and see if there are individuals wishing to testify either in support or opposition of AB 50.

Thank you. As he stated. If you're in support or opposition to AB 50 please press 1 0 at this time. 10 at this time to place yourself. Thank you one moment, please. We do have one with an operator. Anybody else go ahead and hit 10. I am 37. Please go ahead

Audra Hartmann on behalf of the California Large Energy Consumers Association in support

And Mr Chair, nobody else did queue up?

Ok. We'll bring it back to the Committee. Do we have any questions or concerns by Committee Members? Senator Becker.

First of all, I thank the author for work in this. The, the situation, as you mentioned is untenable and unacceptable. And a number of us have realized that I think that that the number of bills that are on this uh topic. Um, but I appreciate your effort and we have a subsequent bill on this today.

I'll be supporting both and look forward to go forward in the space. So I think it's very complimentary and appreciate your, I think your bill does a really good job also speeding things up in the near term, which is really important. And again, I just want to thank you for tackling this, as you heard from many of the uh folks just just spoke were in my area and it's been just a huge issue. So thank you.

Thank you any further discussion today? Senator Stern? We have a motion by Senator Stern. We have a due pass as amended to the Committee on Appropriations. And I too want to thank the author for your work on this measure and working with the Committee staff and coming to an agreement.

I clearly agree with where you're trying to go and I know it's not always, you know, a perfect situation, but I appreciate the cooperation that we were able to demonstrate here today on that. So that being said we have, you can close. Would you like to close?

Just respectfully ask for your aye vote.

Thank you, consultant. Please call the role on AB 50.

We have a due pass to as amended to the corporations Committee [Roll Call]

The measure has 13 votes. You're out successfully.

So, congratulations. And I know you are presenting now for Senator, I mean, Assembly Member Irwin AB 1293. Would you like to do it now?

Yes, thank you. Thank you, Mr Chair. Once again, thank you, Mr Chair. I'm pleased to present AB 1293 on behalf of Assembly Member Irwin. Today, she accepts the amendments proposed by the Committee on page four of the analysis for customers to energize buildings, ev chargers or other large projects. They must go through a process to review and approval by their local investor owned utility.

A time to go through queue whatever for these projects. I never know how to say that word. Does anybody know how to thank you? OK. ... for these to go through these projects to connect the grid has increased on a national scale. A recent industry article stated that bottlenecks and interconnection have delayed projects anywhere from six months to well over a year in California.

One commonly cited reason for the lengthy approval process is the first in first out structure, the utilities of the utilities, interconnections, uh Q whatever. Um I didn't have enough lunch today. I don't think that's my problem. So customers complain that interconnection requests that are not ready and act as placeholders can clog the queue for financed shovel ready projects.

California will not be able to meet its clean energy and climate change goals if customers cannot connect solar projects and ev structure infrastructure to the grid in a timely fashion. A 1293 will help address interconnection delays by directing the CPUC to provide guidance to investor owned utilities.

Regarding the prioritization of interconnection projects including that the project is in the final stage prior to construction as determined by the Commission by January 1st 2025. The bill has had no, no votes has bipartisan support and no registered opposition. Thank you. On behalf of Assembly Member Irwin, I respectfully ask for an I vote. Thank you.

Do we have any witnesses in support of this measure? Any witnesses? All right. Seeing none. Do we have witnesses in opposition? Ok. Seeing none moderator. Let's go to our phone lines and see if there's witnesses, individuals wishing to testify either in support or opposition to AB 12 93.

And ladies and gentlemen, if you wish to speak of support or opposition, please press 1 and 0 at this time. Commission chair, we have no one queuing up, wishing to speak.

Ok, we'll bring it back to the Committee. Is there any questions or concerns regarding this measure by Committee Members?

We have a motion by Senator Eggman. We have a do pass as amended to the Committee on Appropriations Assembly Member. What would you like to close?

Just respectfully ask for your aye vote.

Ok. So we have a due pass as amended to simply state we replace the words shovel ready with projects that are in the final stage before construction. Consultant, please call the roll

[Roll Call]

We have 12 to 0. We'll leave the roll out open for our absent members to add on and congratulations.

Uh next up is AB 678 by Assembly Member Alvarez. He is here and prepared when you're ready. You may begin.

Thank you, Mr Chair. Appreciate the opportunity to come before the Committee and I'd like to start by thanking the Committee's staff for their work on this. And I would like to accept the Committee amendments that are proposed. Colleagues in 2018. The Legislature authorized the CPUC the California Public Utilities Commission to consider adopting biomethane procurement targets or goals for utility companies.

Recognizing the importance that biomet can play in the state's net zero emission goals. Since then, the CPUC has set procurement standards for gas utilities which will display some of the fossil fuel natural gas that utilities currently supply to their customers.

As many of you know, bio-methane is a biogas produced from biomass waste such as decaying organic matter, like wastewater treatment, sludge, food waste, animal manure, landfill gas and dead trees, which can all be used to create renewable energy. Importantly, bio-methane can be used interchangeably with conventional natural gas without the need to change the transmission and distribution infrastructure for the end user.

However, the procurement requirements from 2018 when the Legislature authorized this did not extend to core transport agents which are non utility gas suppliers that purchase gas on behalf of residential and small commercial and use customers similar to CCA or Community Choice Aggregators for electronic users or consumers at its core. This bill supports the state's net zero emission goals and levels the playing field by requiring the CPUC to also consider biomethane procurement standards in core transport agents, not just for utilities.

I appreciate your time and I respectfully ask for your aye vote. And with that, I'd like to introduce two witnesses who are here in support Lourdes Ayon and Julia Levin.

Your two primary witnesses have two minutes for your testimony. Thank you.

Thank you Chair Members. Good afternoon. This is Lourdes Ayon. How are you? with SOCAL gas in support of AB 678 as Assembly Member, Alvarez so eloquently put it. Yes, this bill is out to level the playing field to ensure that all gas providers are adhering to the same renewable gas standard. As stated for SB 1440 Hueso bill. we appreciate your support in this bill and we'll bring Julia. I I think that it's a pretty self um not explanatory. I'm sorry, it's a very uh clear bill and um I'll bring Julia up as well to present. Sorry. Thank you.

Thank you next witness.

Good afternoon Julia Levin with the Bioenergy Association of California. This bill will help California to meet its single most urgent climate priority, which is the reduction of short lived climate pollutants in California, methane and black carbon overwhelmingly are emitted by organic waste, organic waste, going to landfills dairies and the open burning of agricultural and forest waste.

And this, this bill will help to provide a beneficial alternative. It's also the way that we can get to carbon neutrality because bioenergy is one of the few ways to produce carbon negative emissions and it's one of the most cost effective ways that we can address our climate or meet our climate priorities. So we respectfully ask for your aye vote on this bill. Thank you.

Thank you there if there is more witnesses in support state, your name and your organization.

Leah Barros is on behalf of NRG. NRG is a core transport agent. On behalf of Zoom Energy and Direct Energy. There are our subsidiaries and we want to thank the author's office, Committee staff and sponsor for working with us on concerns that we had early on in the bill as we move forward, we look forward to making sure that we're able to go to a more formal support position as we have a chance to review the amendments.

Thank you, additional witnesses support hearing and seeing none. Now will go to opposition as his primary witness in opposition. You have two minutes,

Mr Chair and members Beth Olhasso on behalf of the Agricultural Energy Consumers Association, Ag and business interests have a few concerns with this bill. We're working with the author and the sponsor. We think we can get close to the next Committee. We just want to make sure that um the core transport agents are only allocated a proportional share of the existing bucket of biome that is required to be procured at the moment. We're not adding a new procurement target to the existing bucket.

So I think we have seen some language that we would be really comfortable with. We'd love to see that go in the bill and if the author is comfortable with that, we would be willing to remove our opposition. Thank you.

Thank you. Lets go witnesses in opposition.

Thank you, Mr Chair Carlos Gutierrez, on behalf of the California Fresh Food Association, the Western AG Processors Association, the opposition.

Thank you and good afternoon, Mr Chair members Rob Spiegel, senior policy Director of California Manufacturers and Technology Association. Just wanted to align my comments with Beth and encourage the continuation of working on the amendments to address our concerns. Thank you.

Thank you. Any additional witnesses in opposition here in room 1200. See none mode. Let's go to our phone lines and see if there are individuals wishing to testify either in support or opposition of AB 678.

Thank you Mr Chair. And if you wish to speak in support or opposition of a 678 please press one than zero at this time. Just one Mr Chair. We have one queuing up.

And we'll go to line 43. Please go ahead.

This is Jake ... on behalf of the Los Angeles County Sanitation District in support.

Mr Chair We have no one else. Can he actually sorry?

All right, we're going to bring it back to the Committee. Are there any questions or concern in regard to this measure? Hearing and seeing none. Assembly Member Would you like to close?

Thank you, I want to recognize the comments from members of the public. We are looking to make those amendments to remove the opposition. Again. I want to thank your staff for working with us on that and respectfully ask for an aye vote.

I and I'll just reiterate, you know, given the need for further discussion among the parties, we did not address those. I know you guys would continue to work. So we expect the author to, to continue the work with our Committee staff and the opposition and addressing these issues as they evolve. So thank you for your absolute standing. We're seeking a motion for this measure. It's been moved by Senator Wilke again. We have a due pass as amended to Appropriations. Consultant please call the roll on AB 678

[Roll Call]

The measure has eight votes. We'll leave it on call for absent members to add on. Thank you.

Now we're moving on to file item three AB 841 by Assemblyman Berman. When you're ready, you may begin.

Thank you, Mr Chair and Senators. First. I really want to thank Committee staff for their work on this bill and the Committee chair for the conversations that we had about the bill. I will be accepting the Committee's suggested amendments. Industrial emissions are the second largest source of greenhouse gas emissions in California.

While the state continues to be a leader in transitioning from combustion to zero emission technologies in the electricity and transportation sectors, industrial emissions have largely remained unaddressed. Therefore, we must identify the low hanging fruit in industrial electrification that can help California meet its carbon neutrality goals while also improving our air quality to better the health of our communities.

If we don't start planning, now we risk a disorderly expensive and last minute effort to reduce industrial emissions to meet our climate goals. AB 841 is a key first step for California to push the transition of our industrial sectors to zero emission by tasking the California Energy Commission preparing an industrial heat electrification road map on or before January 1st 2025. This report will provide critical information for the state to continue in our efforts to reduce our emissions. I respectfully ask for your aye vote. And with me today are the bill's sponsors, Mark Fenstermaker on behalf of Earth Justice and Elena Pieri on behalf of industrial labs.

Ok. You have two minutes. You may begin.

Thank you very much, Mr Chair, Committee Members, Mark Fenstermaker for Earth Justice. Proud co sponsor of AB 841. Want to echo the Assembly members. Gratitude towards you and Committee staff working late on a Friday with us. California's industrial sector is a critical component of the state's economy but many industrial processes rely on the combustion of fossil fuels, emitting criteria pollutants and reducing air quality. At the same time, the industrial sector also represents 23% of greenhouse gas emissions.

Some industrial processes require heat at very high temperatures while a number of others operate at temperatures that are ripe for electrification and other non combustion applications. Food processors and paper mills are industrial sub sectors operating at lower heat temperatures that can utilize industrial heat pumps or electric furnaces.

We're already seeing some companies across the world adopt these technologies in the Netherlands. Mars Inc is making chocolate bars while Colorado Based New Belgian brewing is making beer both utilizing heat pumps. But the transition to electrify these industrial processes is in its infancy. And we need to dig in on how to bring these technologies to California's industries.

Where appropriate, we need to better understand the barriers to electrification like operating costs and potential reliability concerns. And we also need to work on potential solutions to make it easier for industrial facilities to adopt these technologies.

And that's where AB 841 comes in putting the Energy Commission at the lead or producing a road map on industrial electrification. The Energy Commission has the programs and personnel that can be leveraged to research, develop and implement electrification for our industries and ensure that California continues to advance an economy that leads the way on reducing greenhouse gas emissions and improving the air and health of our vulnerable communities.

We know electrification is a key strategy to reduce GHG and criteria pollutants from the industrial sector and a 48 41 will help us flesh out that strategy in a meaningful way. We are grateful to Assembly Member Berman for offering AB 841 and we respectfully ask for your vote today.

Thank you next witness.

Good afternoon chair and members Elena Pieri on behalf of Industrious labs, an organization leading efforts to decarbonise the global industrial sector by 2045. As Mark mentioned, we know that electrifying the industrial sector is critical to tackling the climate crisis and improving air quality.

California is the leader in manufacturing critically. We have a host of industries like food, manufacturing, apparel, production, paper and glass that have simple clean energy based solutions to reducing emissions. Despite this, the state does not have a road map on how to strategically electrify low heat portions of this sector. The US Department of Energy is allocating approximately $6 billion in funding to accelerate the decarbonisation of energy intensive industries.

And additionally, California plans to invest at least 90 million of its own dollars towards decarbonising the industrial sector without an electrification road map and current data to help guide this funding moving forward. California will miss an opportunity to access these federal funds and strategically invest dollars in the most cost effective ways.

AB 841 is critical to guiding the investments and strategy necessary to decarbonise our entire economy for these reasons. We respectfully urge your aye vote. Thank you.

Thank you additional witnesses and support state your name and your organization please.

Good afternoon, Mr Chair members, Rod Brewer from Southern California Edison here in support of AB 841 and I want to thank the Assembly Member Berman for his leadership.

Good afternoon, Ben Schwartz from the Clean Coalition in support.

Thank you. Any additional witnesses in support. Now let's move to opposition. Are there witnesses here in the room in opposition to this measure?

Good afternoon, Mr Chair and members Rob Spiegel again, senior policy director for the California Manufacturers and Technology Association. I want to start by saying we deeply appreciate the conversations we have had with the members staff as well as Committee staff on trying to address what is the key issue and what are the issues that manufacturing or the industrial sector of California has with the bill?

And to be very brief, the unfortunate reality with AB 841 is that it is picking and choosing one pathway as to what industry would call decarbonisation. An electrification pathway is one of those tools but in terms of cost effectiveness, energy efficiency is an equally apt particular solution for industry as well. Electrification can certainly be part of that. The procurement and introduction of low carbon fuels is part of that as well.

In addition to carbon capture sequestration and carbon dioxide removal or CDR. Holistically, those four elements are what CMTA and our member colleagues have been discussing at the US Department of Energy at the PUC and at CARB.

The real challenge though with what AB 841 portrays and carries forward for the State of California is a separate and distinct pathway over what was established by the Air Resources Board 2022 scoping plan update. A lot of the research, a lot of the investigation to identifying the facilities, the challenges and the barriers for industrial electrification or decarbonization is holistically already included in that document.

We believe that 841 is an important consideration in terms of addressing electrification, but it is not simple. It is often overstated is often oversimplified as to what industry can do to be able to electrify and without the various rates here in California that can be addressed for industrial customers as well as tariffs, as well as the interconnection and energization requirements that are going to be needed for it.

We have real concerns about putting forward a policy in a direction that is only looking at one of those tools in the toolbox as opposed to expanding it holistically across all of the sectors and all of the tools necessary for the state to achieve its carbon neutrality goals with that. I thank you for your time. Members happy to answer any questions but for CMTA and our coalition members of CLEA and Cal Chamber, we are opposed unless amended on the bill.

Thank you. Any additional witnesses here in room 1200 in opposition, seeing none. Moderator? Let's go to our phone lines and see if there's any individuals wishing to testify in support and or opposition to AB 841.

Thank you Mr Chair. And if you wish to speak in support or opposition, please press 1 and 0 at this time and we'll go to line 37. Please go ahead.

Hi Audra Hartmann. On behalf of California Large Energy Consumers Association, we are with the CMTA and have a opposed must amended position on the bill.

Thank you.

Hey Mr Chair, we have no one else queuing up wishing to speak.

All right, we'll bring it back to the Committee. Are there any questions Senator Min?

Yeah, I just was curious if you wanted to respond to the opposition and I would say I applaud the goals of this bill but is electrification, solely electrification, the right approach for this. I don't pretend in all the vagaries of manufacturing, but it strikes me that you're taking one a very narrow approach and certainly want to electrify where we can.

But you know, there may be other types of storage or energy that we could look to that could also decarbonise. I guess the question I have for you is why, why electrification and why not just decarbonisation?

It's a great question. I appreciate it and appreciate the concerns of the opposition. One thing that I want to overemphasize is that this is a report that's meant to identify where electrification could work and where electrification could not work. And so this is not us setting a policy, this is us trying to get the information that we need to determine what the policies should be.

And so we have reports of recent legislation that's focused on, on other technologies such as specifically centered on analyzing hydrogen, as well as programs solely created to evaluate carbon capture, carbon capture utilization and storage. Those are SB 905 SB 1075 and currently SB 414.

But one of the things that we also really want to focus on is on the poor air quality created by industrial emissions. And so that's where electrification really could come in as a possible piece of the pie. So I'm not trying to claim at all that electrification is the the sole solution. But this is a report to really dive into it and identify where it might not work.

Great answer and I would move the bill.

Thank you, Senator Becker.

I want to thank the author as well. I think this is an excellent area to be focused on industrial mission is around 25% of our total emissions and we've made very little progress. And so I think this, I think this approach, I appreciate the opposition's concern and your response that this is looking at this as one pathway.

But what is the opportunity here? But, I think especially for relatively low temperature use cases like this bill, talks about is focusing on this is really important. So I'd like to be add as a co-author and appreciate your work. Thank you, Senator.

Any additional questions or concerns Senator Stern?

I'd like to move the bill. Ask to be added as a co-author. Sorry. All right. I like the second, but I'm gonna take you as a co author, please. I'll take that part. I appreciate that. Thank you,

Yes, thank you. You know, industrial emissions are really important in particular parts of our neighborhoods and our communities. I know my area right next to East L A County is a very industrial area. And you can't say, well, the pollutants don't, don't cross lines. But if you could just on a short way, summarize the particular impact as to why you're focused on electrification, especially as it affects poor community.

Absolutely. Thank you for the question.

And, and so one of the central purpose of the bill is to address the health equity issues like you alluded to that result from the poor air quality created by industrial emissions. And so that's why the intent of the bill is centered on air quality and, and that's why it's focused on electrification and and zero emission technology and reducing combustion from the industrial energy sector and systems. So that's, that's the main focus.

Senator Newman

I just need a little clarification from CMTA, it is now a study bill, making it a study bill. Does that satisfy the oppositions concerns or not.

I guess I need a little clarification is that the study bill in itself is examining only one approach to industrial decarbonisation or industrial emissions. That is the challenge what we are trying to do in the industrial sector is look at a holistic approach across all technologies and with the concerns over energy utilization and electrification of our processes.

In addition to energy efficiency, carbon capture and low carbon fuels. We want all of those to be treated as equal as part of that discussion and not put an overall emphasis on something that has been demonstrated to be not cost effective and achievable even as part of the 2022 scoping plan to clarify. So, thank you.

And so through the chair to Mr Berman, you know, I guess Senator Min to, why not expand the scope of the study bill to address those concerns and answer those questions?

So, so my understanding, I know one of my lead witnesses can, can help add more details, but is that recent legislation focuses specifically on other technologies and and so those those studies are already happening. This seems like a good opportunity to also evaluate and analyze electrification and the pros and cons. But I'll let Mr Fenstermaker provide more.

Yeah, I would go back to the scoping plan that the opposition just referenced. And in the scoping plan, it discusses that at lower heat temperatures, it really is electrification that we're going to utilize to decarbonise to reduce our criteria pollutants.

If you're talking about small facilities, they're not going to be utilizing CCS. They're not, we don't want to be talking about a small manufacturer continuing to use technologies that are going to rely on combustion and pollute our air if there are opportunities and cost effective opportunities to electrify because that is going to move us away from these problems.

And so the scoping plan points out that we need to dig in to electrification. So we're really taking one aspect of what the scoping plan is looking for and trying to study it further, trying to come up with a strategy to really implement that. While as Mr Berman has pointed out, we have other legislation from last year that is currently being implemented at the Air Resources Board to explore and figure out these other technological processes.

Thank you. I would hope all of this study would be incorporated into a larger context. I appreciate the clarification.

Thank you. Any other questions, Senator Rubio,

I won't take too much of your time, but thank you, Mr Chair and uh to the author. I think I'm just going to line my, my comments with the Senator from Orange County or full full in that. I know it just seems sort of like pieces of a puzzle instead of looking at a comprehensive uh you know, sort of study. But just with that in mind, it just does worry me that we're doing many different things instead of trying to be cohesively understanding, you know, what works. So just those thoughts, nothing else.

Thank you and appreciate the concerns. And I, I really, I strong, I had a chance to be in a meeting with the United States Energy Secretary about a month ago and she described, you know, when it comes to solutions, it needs to be everything everywhere, all at once we need to have an open minded solutions, but we also have to identify which solutions make the most sense for which applications.

And so that's my hope with this bill. And then as these studies and reports come out, we take a look at it holistically and make sure that we're very open minded in terms of the solutions that we implement.

Thank you. And I want to thank the author because we spent quite a bit of time on Friday discussing this measure and raising some of the same concerns that have been raised here. And uh as stated, this is part of a bigger picture. We're not just doing a little silo. There are different studies that are already underway in the various other energy sectors.

So this is just complementing what's already being doing, being done by Carb and let me just state what our amendments state. So we can be clear, it will remove the requirements of the CEC to quantify emissions and air quality impacts.

And instead authorize the CEC to include any data car may provide because carbon are doing a lot of these things already remove requirements of CEC to analyze specific technologies, uh utility interconnection practices and energy market bidding changes and make other technical and clarifying changes. Am I correct?

Thank you, Mr Chair. Yes.

So that being stated, we have a motion by Senator Min. Again, we do do pass to the Committee on Environmental Quality consultant. Please call the role on AB 841. Oh, I'm sorry, you shall close Thank you very much, Mr Chair consultant. Please call the roll. I'm sorry for not at all.

The motion is do pass as amended and we refer to the Senate Committee on Environmental Quality [Roll Call]

That vote has 11 to 2. Congratulations. We'll leave the role open for absent members to add on. Thank you. Thank you, Mr Berman for your time and your patience.

Next up is Assembly Member Valencia and he has AB 1068 when you're ready. You may begin.

Thank you, Mr Chair and good afternoon Senators. The recommended Committee amendments will be incorporated into AB 1068. I'd also like to thank the chair and the Committee team for their due diligence on this bill. And then also give a shout out to our Legislative Director Taran who has been taking the lead on this bill.

Also, AB 1068 will provide greater accountability and transparency to the CPUC decision making process by ensuring all interested stakeholders are able to participate. A 1068 allows export communication to take place during the three day, quiet period of a rate setting case or catastrophic wildfire proceeding.

It is not uncommon for proposed decisions to be modified as close to as three days up to a voting meeting in these instances when ex parte communication is prohibited, which is current law, there is no opportunity for an interested party or person to actually comment on that. Prohibiting communication is a disservice to all affected rate taxpayers.

The CPUC and their staff should be able to take into, into consideration the comments and concerns of stakeholders and consider those points leading up to a voting meeting if can succeed, will create an opportunity for all interested entities to weigh and provide comment before the final decision is issued which will benefit all affected parties and ratepayers with me to provide testimony. I have Ms Lourdes Ayon, Government Affairs Manager at SDG&E and SOCAL Gas.

You have two minutes.

Thank you, Chair and Members. I appreciate the time today. Yes, I'm Lourdes Ayon with Gas and Electric and SOCAL Gas today. We serve over 24 million Southern California businesses and residents um providing energy, safe, reliable energy to all those folks down in the southernmost part of California. Both utilities are both parties to and monitor various and multiple proceedings before the PUC.

And therefore, if the PUC were to make any modifications to proceedings um prior during the three day, quiet period um we would not have an opportunity to weigh in on any, any of the changes that they've made before or during that time, what a lot of these proceedings sometimes take months there in, in the background, folks and stakeholders working on this for months and sometimes even a year or two years.

And when it comes before the PUC, if they make these last minute changes during those three, during those, during the quiet period, it makes it, I think difficult for us to be able to weigh in and provide all the information that PUC commissioners need so that they can make more of an informed decision. So we want to respect the quiet period and at the very least be able to provide written communication to the commissioners so that they have more information to look at during that during that time. Also, we feel it's good governance. It would be similar to the 72 hour rule here within the Legislature.

If there was any changes to those measures and you would not allow interested parties and stakeholders to comment on the changes. It just would be the process wouldn't be as fair. So we feel that before the PUC requesting a fair process is I think it's just logical and good governance on our, on our end. So we asked for your support and aye vote of this bill. Thank you.

Thank you. Any other witnesses in support of this measure, state, your name and your organization, please.

Good afternoon, Ashley Johnson on behalf of Pacific Gas and Electric Company and support.

Hello, Laura Parra, on behalf of Southern California Edison, we're a late supporter for this bill.

Thank you.

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

Thank you. Any additional witnesses in support? See, none. Let's move to opposition witnesses in opposition for your primary. You have two minutes.

Thank you, Mr Chair members Ignacio Hernandez on behalf of the Utility Reform Network or TURN the, the primary concern that we have with the bill and my understanding is that it is going to be addressed going forward. So I just want to clarify what what the intention is that last year we supported SB 599 which addressed a discrepancy in interpretation of the law in statute and the rule of CPUC.

Whether or not a quiet period means exactly that a quiet period or where is there some allowance for some ex part communication? 599, last year, made clear that a quiet period is exactly that just a quiet period. No exparte communication and we were supportive of that. The bill as drafted, makes changes to that.

My understanding is that that piece of the bill is going to be narrowed so that the that written ex parte communication would only be allowed if a proposed decision has been amended or modified during that period. And then there would be written ex parte communication.

If that's the only opportunity for a non quiet period or to kind of break the quiet period, then we are willing to have discussions on that and try to work out the details on that because that would address the rest of our concerns of opening up the quiet period across the board for wildfire and for other things, we don't want that, but we would, we would be willing to work out as expressed to the sponsors and the authors to work out just in that narrow circumstance. As long as, as long as that's clarified, then we will look forward to working with the author and the sponsors on that.

Thank you. Any additional witnesses in opposition here in room 1200. Seeing none, Moderator Let's go to our phone lines and see if there's anyone wishing to testify and support or in opposition of AB 1068.

Thank you Mr Chair. and just a moment, Mr Chair, we have one queuing up.

Ok, we're going to bring it back to the Committee. Any questions Senator Becker.

I want to think through this bill. This exact thing just happened with the resource adequacy demand response decision and you know, the CPUC came as something within the two days basically right before the decision and then people couldn't comment on it. So this exactly just happened. So I appreciate it.

I think that little question was how it, how it was sort of altered since, but I think, you know, I pretty much appreciate what we're trying to do and we should require the CPUC to publish decisions with adequate time for public review and accept written comments after that. So anyway, I appreciate what we're trying to do and I will be supporting the bill here today.

Thank you, Senator Gonzalez.

Thank you. I can't support the bill today because I do hear what the opposition is saying here. So can you address their the language that they're putting forward in terms of the you know, to ensure that there's, if there's modifications needed or amendments needed to clarify that piece. And then secondly, I'm wondering why rate setting because the wildfire catastrophic events, I understand that. But the rate setting to me also seems to be something that I have trouble supporting.

I'll address the second part of your comments first. The intent of the bill is for anyone, not just utility companies to provide input to the point, it's extremely difficult to get to these liens to begin with. So the intent is to have an opportunity for individuals, whether it's a private citizen or a utility company, an entity to provide comment on decisions made by the CPUC during that window. So it's not specific, just two rates, but that is what in part, what the bill is also addressing in this context and to the other component.

Happy to have a conversation with TURN as well regarding that amendment, it would be great to get to the point where after those conversations they do drop their opposition and that would be the best case. So we look forward to those conversations as well.

So you will be willing to continue conversations with them, which I think we've had with them since the Assembly. Ok. That's awesome. Well, thank you very much for that.

I thank you, I also share the concerns about rate setting and I understand the answer, but it still seems like something where we know that the utilities are going to have a much more voice in that quiet period than advocates, right? And so this clearly favors one side or the other, I guess to the point that I was not super aware of the quiet periods, but reading some of the analysis looking into the quiet periods, I mean, there's a point to this, right?

And so I guess what I'm wondering is going at the heart of the amendments. Why do you need both prongs because you're getting rid of the ex parte communication, prohibition. But you're also saying that modifications have to be moved to the following business meeting. Why isn't that second piece enough to address the problem?

I get the problem. You're trying to address the problem you're trying to address is that, you know, if PUC pops a new decision on you and you don't have time to really respond to it, that's not fair. And that seems reasonable to me whether it's rate setting or wildfires. But why is it not enough to just be forced to punt that to the next meeting?

Why do you also need to get rid of the prohibition on Ex parte communications? Again, the intent of the bill is to ensure that there's an opportunity for people to provide comment on those decisions. That's not to say the PUC has to listen to those comments, but it's to document a perspective.

But the point, the problem you're trying to solve, as I understand it is that, you know, the PUC has made some last minute modifications, right? And it's not fair to not be able to comment on those.

But if you're moving, you have two parts of this bill, one part moves it back to the next meeting and then presumably you can comment on that because it's no longer the quiet period. So, but right now, the part of the bill that I don't like that I can't support is the pro we're getting rid of the prohibition on ex parte communications because that does give one side a lot more leverage to be able to lobby the PUC than the other. Right? So I don't know if your witness wants to answer that, but

Yes, Senator Min with respect to your question about moving the proceeding to the next meeting. That would just mean additional delays.

And quite frankly, if I may PUC operates in a delay mode, that's how things are, are done. Just commonly, there's tons of delays.

And so adding a delay on top of a delay would create additional operational issues for us and it would not benefit rate payers in the long run permission to follow up with you. But your bill does this already, right?

Your bill says specifically that if the PUC, if it does a modification in a rate setting or catastrophic wildfire case in the three business days prior to a meeting that they would then be forced to push over to the next meeting.

We struck that part.

I'm sorry that I didn't see the revised analysis. Ok. All right. Well, I, I think that piece would be one. I just have concerns about the, the, the quiet period and getting rid of that because I presume there's a good reason for it. One that's pretty thoughtful and you know, just have some concerns. I think I will be laying off this bill today and you listen to conversations.

If I may just address the second piece that we are working with, turn to address the concern that has to do with keeping the quiet period quiet. And so they were amendable and open to further amending the bill to clarify. That comments would be made during as a trigger. If there's any changes within that proceeding, then we can make some comments to that proceeding so that we can go on record to state the work that has been done prior to.

And so that the commissioners can have more information, uh, moving forward on a, on a proceeding is sounded, um, like the conversations that we had with, with and, um, the author that this is something that we could all positively work towards. So hopefully, we can have your support once that, once that is there. Thank you, sir.

Thank you. Any further comments or questions from Committee Senator Durazo?

I'm concerned that this was passed just last year and now we're coming back so soon to change it and I don't know what triggered that. And I know that on paper it looks like, ok, everybody is open to using the time period and or at the last minute, if a change is made, a, decision is modified, but frankly in the real world, resources are not equal.

And so a regular human being who doesn't have resources doesn't have the same ability to comment and to stay on top of it. Having said all of that I would support with the opposition amendment. I would support the bill. Thank you.

Thank you. Any further questions or concerns the bill has been moved by Senator Dahle. Would you like to close?

I appreciate all your time and respectfully ask for yes vote members.

We do have a do pass as amended to the Committee on Appropriations. And the amendment simply states strikes the language that requires the CPUC to delay voting on a proposed decision in the next voting meeting when a decision is modified. So that's the amendment you've taken to this point.

Correct and again, happy to have that conversation. Our intent is to reach that middle ground. I just want to make sure that the language is specific to what the intent is, but you all have my commitment to continue those conversations. Make sure that we get there.

Thank you. And we have a due pass. So consult me, whoever it would you would you would you like to close?

Thank you for your time. Respectfully ask for a yes vote.

Consultant, please call the role on AB 1068.

[Roll Call]

That measure has 10 to 1 10 votes aye, one no, we'll leave the role open for absent members to add on. Congratulations. Thank you. And I would ask that we notify members who are not in the Committee. We are at our last uh item, our last bill. So I would ask the members who are not here in the Committee to make their way to room 1200.

And now we have our final author file item six AB 1614, Gabriel.

Thank you, Mr Chair and colleagues. I want to start today by accepting the Committee amendments. I want to thank you and your staff for the thoughtful feedback and assistance. This bill is introduced based on the premise that we are, we have committed to electrify our transportation system to meet our climate goals.

Unfortunately, I think as all of us know, we are nowhere where we need to be in terms of our electric vehicle charging infrastructure. So I introduced a number of bills at the beginning of this year to work on that to help build up our infrastructure. This was a small piece of that package and it is basically premised on the idea that as we electrify our transportation system, the need for gasoline stations is going to greatly decline. We have about 8,000 gas stations in the State of California.

And as we project forward into the future, we're going to need to think about how we repurpose all of them. So this ask the CEC to take a look at that to think about what we might do with that real estate. It's a lot of real estate up and down the State of California to think about what incentives we might provide to turn some of those gas stations into EV charging infrastructure as appropriate to think about what the regulatory barriers might be preventing that. And generally just to help us plan for the future under the idea that when you have more information, you can come up with a better plan and have a smoother transition.

So that's the premise of this bill. We think it will be an important part of providing the Legislature and policy makers and also the private sector with information, local governments and others with information about what to think about what we might do in terms of transitioning that real estate. So happy to answer any questions, but I appreciate the work here. Happy to accept the amendments and respectfully request and aye vote.

Thank you. You have witnesses and support here. Do we have any primary witnesses or me toos seeing none witnesses in opposition primary opposition?

Thank you, Mr Chair, Members, John Winger here on behalf of the California Fuels and Convenience Alliance. We do have an opposed unless amended position but appreciate the conversations with the author's office and as the analysis points out our industry sorry, California Fuels and Convenience Alliance is the majority of gas stations and convenience stores in the state.

And uh a lot of our our members are trying to deploy EV there's a lot of barriers to entry and so we definitely appreciate the state taking a look at that and looking at what barriers we could remove moving forward. We do just want to make sure that the language doesn't talk about getting rid of gas stations or phasing them out in an arbitrary way. And so we appreciate the analysis. We appreciate the amendments.

We haven't seen any language, but we'll be reviewing that and circling back with the author's office and continuing the conversation, but we have had good conversations thus far, but currently do have an oppose unless amended position. Thank you.

Thank you. Any additional witnesses in opposition here in room 1200. Seeing none. Moderator let's go to our phone lines and see if there are individuals wishing to testify either in support or in opposition of AB 1614.

Thank you, Mr Chair. If you wish to speak in support or opposition of AB 1614, please press 1 and 0 at this time. And Mr Chair, we have no one queuing up wishing to speak at this time.

Great, bringing it back to the Committee. Are there any questions concerns in regards to this measure? It's been moved by Senator Eggman. We have a question by Senator Newman.

Thank you. And I think Mr Winger left Mr Winger. Yes, he just walked out, he just walked out. So they must have very mild uh concerns. But I'm sorry, I just want to say Happy Fourth of July. No, I do want to hear. So, you know, a good bill, I think necessary in the larger context of California's ambitious goals. But I wanted to hear a little bit from the opposition about your, I don't know, it doesn't have to be specific but the spirit of the amendments you're seeking taking into account.

I think as we all know that even if we hit our very ambitious goals, we are going to have internal combustion engines in California for quite some time. So it is important to think about how do we create a process for either incentivizing or otherwise instructing gas stations to shift into other businesses and make sure we do that in a way without unduly, penalizing those people who have yet to convert. So, if you wouldn't mind.

Yeah. Sure. I think what we've talked about in our amendments. Well, for one is just not having the words of a phase out or anything like that to where our gas stations can, even when they're deploying EV can also be trying to adopt other things such as alternative fuels. There's a lot of alternative fuels out there that can be utilized and not having an arbitrary date.

So fuel can continue to be sold. But on the EV side, we do have a lot of barriers to entry on deployment. We have a lot of permitting issues at the local level. We also have a return on investment issue with how the electricity is actually how it's charged. On our side. If we had, if we had four evs being charged at one time, that demand peak rate would basically wipe out any ROI that you could potentially have.

So there's some rate issues there. There's just connectivity issues, there's um ADA compliance issues.

We have some stations that are too small to even deploy EV based on ADA compliance. And so um there's just a lot of things to I think work through and look at and then um also need to look at what do you do with those stations that can't deploy EV and so we, we kind of worked on some language to just list out a few things that the CEC should, should consider as we go through this transition because it is going to be a long, a long transition.

And there's a lot of variables in there. And so we just wanted to, you know, ensure that it's not just, you know, everything has to be EV you, that's all you can do or you're going out of business right there should, there should be a little bit of flexibility there. And I think the analysis talks about that and sort of seems like it's getting there. We just haven't seen any language.

I appreciate it. One of my colleagues gave me that I have to catch a plane kind of body language. So I'll try to be quick but to the to the author knowing you to be a thoughtful author. Where do alternative fuels fit into this larger question? The second question is, have you given any thought including go-biz as part of this effort because this goes beyond simply feasibility and energy goals. It has to do with, you know, the fates of somewhere on the order of 8000 small businesses as well.

Yeah. No, it's a great point and I think opposition will be very happy with the amendments that specifically talks about that. So I think it addresses that concern in a thoughtful way and to the larger point here. And I just want to say thank you to the opposition for having the opportunity to meet with some of their members to understand where they're coming from.

There are real challenges for all this. It's also not clear that all of these gas stations, even if they could physically accommodate EV charging structures, that that's the highest and best use, right? Or that it's going to make sense. A lot of folks want to charge while they're, you know, at the mall or at a movie theater or something else.

So thinking about which are the thinking thoughtfully, which are the stations up and down the state, maybe along major transportation corridors on highway five or 99. That really makes sense to go all in for all this and then for the others as demand for gasoline diminishes, you know, what are they going to do with their real estate?

What's the future of those small businesses? So just trying to approach this in a thoughtful way, not prejudging the outcome, but also trying to understand if we do want to meet our clean energy goals, how do we get ahead of this? How do we think thoughtfully, what are the things that we need to do?

So, I appreciate that and I do appreciate one point that the words do matter, especially for the signals he sent. And so maybe it is worth taking phasing out as the explicit goal and framing it in some way. It's about the transition and feasibility of these 8000 something businesses.

And I think transition is the right word here thinking about how do we transition to our clean energy future.

Thank you. I appreciate the Committee amendments, especially nesting this within the CEC I think will be valuable, especially as they start to look at the competitiveness of our current gasoline market and the small margins that the folks that Mr Winger represents are making on gasoline right now when you're making a cent out of every dollar on the actual the gasoline and then 99% just goes upstream to the wholesaler.

So I think there's a bigger issue. So I'd love to be added as a co author. I think it's smart to get ahead of this, do this advanced planning. Happy to move the bill at the appropriate time.

All right, it's been moved. And I would just echo some of the concerns that Senator Newman voiced as it relates to the stations. And that's why we moved the reference to stations in the bill. And I can understand the concerns, but yes, we still know that fossil fuels are going to be here for quite some time until we can implement, you know, all of these charging stations that we need. And I don't think stated all of these facilities will be best suited for EV charging, you know, because of some of the environmental issues that are going to be involved with gas stations.

We see plenty of them that have been abandoned for now 20 years and they still sit empty and just in my district this weekend we did a ribbon cutting on a hamburger stand. They used to be a gas station but it sat there for years with nothing there. So it's going to take some time. So, and Gabriel would you like to close?

I appreciate the discussion. Respectfully request an aye vote.

Members we have do pass as amended to transportation. We have a motion by Senator Stern consultant. Please call the role.

[Roll Call]

Congratulations. Now, members will go back to those measures still on call. So we'll allow our absent members to add on at this time.

We'll start back at the top of the order and start with five item one AB 50. Do pass as amended to the Committee on appropriations.

[Roll Call]

Now moving on to file item two AB 678 due pass is amended to Committee on appropriations current vote. 82 chair voting.

[Roll Call]

That measures out 11 to 2. du pass is amended to the Committee on Environmental Quality. Current vote, 11 2 chair voting. I Vice Chair voting. 13 to 2. That measures out 13 2.

Now move on to file item four AB 1068. Do you pass as amended? And we refer to the Committee on Appropriations current vote. 10-1 Chair and Vice Chair voting aye.

[Roll Call]

Now moving on to file item five AB 12, 93. Do pass is amended and we refer to the Committee on Appropriations current vote 12 0.

[Roll Call]

Now our final measure AB 1614. Do pass to the Committee on Transportation where it will be amended Current vote 12-1.

[Roll Call]

That measures out 12-1. Member that concludes our items today. I want to thank everyone for your participation at today's hearing. The Senate Committee on Energy Utilities and Communications is now adjourned the.