Joint Legislative Committee on Climate Change Policies

The Joint Legislative Committee on Climate Change Policies will come to order. Good morning. The Senate continues to welcome the public and has provided access both in person and teleconference participation for public comment. Just want to lay out some ground rules for that. If you wish to participate in this public comment via teleconference service, the toll free number is 877-226-8163 and the access code is 161-8051. We'll have public comment at the end of today's informational hearing.

For today's hearing, we'll be hearing all the panels of the witnesses on the agenda prior to taking that public comment. And then once we've heard all the witnesses, we're going to have public comment period for those who wish to participate. So we have a robust discussion ahead of us here this morning. We're going to get started, but I just want to say at the outset, this committee's mandate is to look ahead on climate change.

There are a lot of committees of jurisdiction in this area, but the Joint Legislative Committee emerged out of negotiations in the past. That said, it's essentially the legislature's job not to just be a passenger on this journey, but to really drive the issue. And I'm proud to say that this is the first hearing we'll be having in the California Legislature exploring what the Inflation Reduction Act can do to supercharge California's climate change mitigation efforts in the state.

There have been some concerning remarks made in recent months about our ability to meet those targets that we've set out for ourselves in 2030. I don't share the anxiety per se, but I think we have important choices here in the next seven years on our pathway to our statewide emissions goals that can either yield a very jobs rich and forward looking, capital intensive period of time or a time of basically accounting our way to 2030.

And what I want to see is that we build here in California. There are a lot of different ways to build and there are a lot of different ways to go forward. I think our Governor is owed a debt of gratitude for his leadership on insisting on building. And the hard parts of that work too.

When it comes to coordinating between government agencies, when it comes to permitting, when it comes to dealing even with laws that I've held dear over the years and defended, whether it's Environmental Quality Act or protections for species, all the values that we hold should be squarable with this period of rapid growth. But it's going to take effort and it's going to take partnership.

And I view this hearing really as it's part oversight, but it's really also part exploratory when it comes to the partnerships that we should be engaging. And you look across this country at how America's benefiting from the IRA and you really see private sector leadership driving it and there's government work around it. But unless we lay conditions here in the state that private capital wants to bring their dollars here, not just to innovate, but to go beyond that innovation into actually building that.

We're going to have to lead in some ways by following. And it's a different role. It's not necessarily policy first always, but this Administration has sort of understood that thesis and put some, I think, noteworthy partnerships, collaborations together that are worth exploring deeper today. And I hope that we can find pathways to continue that work with our federal partners going forward.

I want to win the IRA race in order for us to achieve our climate goals faster and in a way that benefits both frontline communities, organized labor, and our economy as a whole. So that's the purpose of this hearing today. I want to turn over my esteemed Vice chair and then we'll get started.

Thank you, Senator Stern. Well put. And good morning, everyone. Thrilled to be part of what's going to be a great discussion this morning. Just a few opening thoughts. While California has been a trailblazer in the climate space, many of our efforts are stifled, as we know, by the lack of resources and funding. The funding available in the Inflation Reduction Act represents tremendous opportunities to double down on our work to accelerate building clean and renewable energy, achieving carbon neutrality, and building climate resilience, along with other efforts.

As we look at all the impressive opportunities, I think we should also explore how to improve upon the less exciting but necessary aspects that need to happen in order to streamline and deploy climate projects faster, as Senator Stern mentioned, such as better planning, staffing up agencies, earlier outreach, and engagement opportunities for our communities. A recent report by the Roosevelt Institute delves into this and makes a number of recommendations on how to do permitting better and faster to address our energy and climate needs.

Apropos to today's discussion, I want to share that the state was able to secure $155,000,000 grant from the Federal Infrastructure Investment and Jobs Act to elevate a key section of State Route 37 in my district to guard against future flooding. And thank you very much to Senator McGuire for being instrumental in that. State route 37 is a vital regional corridor that connects Marin, Sonoma, Napa and Solano counties and enhances habitat connectivity for the San Pablo Bay.

This funding would also help restore the Sonoma Baylands as part of a larger restoration and climate resilience effort. I hope our discussions today will also include efforts on maximizing green infrastructure like wildlife corridors and climate restoration and resilience. I look forward to hearing all the ways we can maximize the billions of dollars available through these federal sources. Thank you.

Thank you. Okay, we'll get started with our first panel. Senator Padilla has been gracious enough to just say, let's get going and get to the work. So, without further ado, I want to invite up Rachel ailers with the LAO, Ms.. Gail Miller with Department of Finance, as well as Tyson Eckerley with the Governor's Office of Business and Economic Development. And then a very special welcome to our federal partner and ally here, Arnab Paul with U. S. Department of Energy.

He's been a leader out the gates on this issue and is a very special guest to us here in California. So we appreciate you being here. So I think we're going to get started first with the Legislative Analyst Office, if that's all right with you, Ms.. Ehlers. Sort of lay some groundwork, and then we can delve into the other witnesses. So, without further ado, thank you, Mr.

Chair and Members. Good morning. Rachel Ehlers with The Legislative Analyst Office. Thanks for inviting us to participate. I will be speaking from a handout, which hopefully you all have. It's also available on our website, I think on the committee website, and I think out in the hallway for those who are here.

So I think my role here is to set the stage for what the state has done thus far, and specifically what you all in the Legislature have done thus far to try and leverage some of these federal funds. That will be the topic for the hearing and that my fellow panelists will get into more detail on the federal side.

So, turning to page one of the handout, first to talk about some policy changes that the Legislature made recently in partnership with the Governor as part of this infrastructure package that I think everyone is familiar with, that was a big topic of discussion back in June.

There were six bills that were part of that package, but I highlight four here that were specifically, I think, oriented around trying to leverage some of this federal funding and make the state more competitive to not only attaining some of the funding, but also getting projects done more quickly. So just quick highlight, SB 124 authorizes the state, if it does secure some federal funding, for the Ibank, to be able to spend it.

The Legislature did add some components to that proposal to make sure that those expenditures are consistent with state law and the Scoping plan for achieving carbon neutrality. Second, SB 149 made some changes around Sequa and specifically judicial streamlining and records of proceedings, again trying to with the goal of trying to get projects moving more quickly, shortening the timeline for appeals if projects meet specific requirements, including for clean energy projects, and then also what types of materials are included in the administrative record.

SB 147 made some changes around fully protected species, and specifically the incidental take requirements around those in response to some concerns that those were making it more difficult for certain projects to move forward more quickly, trying to balance both protection of species, but also the ability to get some of these projects done. And then finally, SB 150 added some requirements around high road construction, careers programs, and community benefit provisions.

Again, not only to achieve some of our workforce goals, but also around federal funding and making us more competitive. So, turning to page two, these are some oversight questions from a report that our office put out last month around how you all can oversee this package of legislation. I will just highlight the top four for you, which I think are most pertinent to today's hearing. Is this legislation doing what you intended? And are there additional steps you might want to take to achieve your goals?

I think those are key questions today. We're just getting started with this process, but as we move along in the next months and years, are we moving as quickly as we want to with the projects that we have laid out as meeting our important climate goals? Are we being successful at attaining and leveraging more federal funding?

Those are questions you're going to want to check in on many years from now, but probably also a few months from now to check the progress and see if there are any course corrections or additional steps you might want to take. So you could do that through oversight hearings like today.

There were several reporting requirements included in some of this legislation, but I think this is probably an area of focus that you all in the Legislature are going to want to keep your aye on over the coming months and years to ensure we're meeting our goals on this front.

Turning to page three, it's not just been policy changes that the Legislature has undertaken in the past few months and couple of years, but also significant funding enabled by our budget surplus to focus on greenhouse gas reduction activities in several different categories.

We highlight this in the context of today's discussion, both because it's not just federal funding that's going to help us enable our goals, but also state funding, but also because this can potentially help leverage some federal funding as matching funds or as seed money that then federal funds could add to. So certainly very significant investment in zero emission vehicles, both passenger vehicles, as well as trucks, as well as buses in many different categories scheduled for over six years.

Even with the General Fund reductions that had to be taken in this year's budget, this was a real area of priority to backfill with greenhouse gas reduction funds to try and keep that package largely whole. Also quite a bit of funding for energy activities to try and pursue our clean energy goals in various different categories. Funding around sustainable community, both for development of housing infill development, trying to achieve some of our goals for reducing vehicle miles traveled and density, as well as transformative climate communities.

I think that's probably a program you'll hear about where the state really developed this program and the federal government has developed a similar program, really mirrored off of California. So that perfect opportunity to leverage our expertise and project development here in the state for that new federal program. And then finally funding around agriculture as well, which is, of course, as you know, a source of greenhouse gas emissions.

Turning to the final page here, staff asked us to put together an overview of some of the legislative bond measures that the Legislature is debating right now around climate. There are five. Two of them focus primarily on water related activities, which isn't the focus of today's hearing. As you all know, we at the LAO don't take positions on bills.

So this is not intended to be any kind of endorsement or highlighting of merits, but rather in response to Steph's request, just to highlight what some of the components of these bills are that focus on the topic of today's hearing and greenhouse gas reduction activities. Apologies to authors if this is not comprehensive. There's a lot in these bills, but we tried to pull out some features just to highlight for you what some of the discussions are before you on these topics.

Again, of course, this funding could potentially be used to leverage some federal funds as well. And with that, Mr. Chair, happy to answer questions after my fellow panelists have concluded.

Great. Thank you so much. Let's turn then to who I view as the go to person this Administration on getting things done on the IRA. We appreciate you being here, Ms.. Miller. Excited to hear your testimony.

Thank you, Senators and Assembly Members, and truly grateful to be here today in partnership. Last time I was in this room, we were talking a lot about potential to build faster, build more, and really meet the goals that you spoke to. I do think what you said that's so important is we are kind of traversing this gap now.

We have the opportunity, and California has done an amazing job with that, with this 2045 goal and all these incremental steps, including fleet and transportation and the mandates about clean air, and we actually have this incredible funding opportunity. But I still think what we started working on was what I call kind of the gap, which is building faster with equity and workforce in mind, like you said.

And so it really is a pleasure to be here today to really begin to think about how you're going to hold the Administration accountable in turn, how we can hold the US. Department of Energy and our federal partners accountable, and how we are going to work together to really rebuild the state of California. So just grateful to be here today. I'm Gayle Miller. I'm the senior counselor to the Governor on infrastructure and clean energy finance.

And I think I just want to kind of recap why we're here. You all know this. I think everyone knows this. Secretary Crowfoot calls it weather whiplash. So we have 6 million Californians. 15% of our state has faced water rationing. We have scores of communities that ran out of water. We have catastrophic flooding. I don't think anyone expected this hurricane. And what we saw in the desert, Senator Padilla.

Obviously we care a lot about everything that happened there and thank God we could be prepared for that. So as we go kind of from the driest and then to the wettest time in our 172 year history, I do think we are at the forefront of climate change. We all agree on that. We know that there is this epic opportunity with these federal opportunities, but we really have to figure out how we're going to get there.

So we are going to continue to work together and see what we can do. And I think to Ms.. Ehler's point, I do think California leads the way. And to your team and the folks that put together the background, I think it's some really incredible information as to how and what we're going to do. That cough is probably from climate change, Senator. It's way too dry in here. I think in partnership as well, and I know these things have come fast and furiously.

We had a huge package this year about the how. Your package that you worked collaboratively with the Administration last year was really the why. So we have these incredibly ambitious goals and we all know how incredibly challenging it's going to get to get there to meet those goals. So no later than 2045, we're looking for carbon neutrality, 90% clean energy. By 2035, we have new setback measures protecting communities from oil drilling. And we're doing all of this as we really increase our economic output.

California is neck and neck with Germany in terms of becoming the fourth largest economy in the world. And so when California is acting, we're not acting as a state in the country, we are acting as almost our very own country in and of itself. So we do hear often where California goes, so everyone follows, and it is incumbent upon us to set that example.

A huge challenge, and I think all of you have been super aware of this, is that we need eight gigawatts of energy every year over the next 20 years. And now we know we have a plan from the California Independent System Operator. You're all considering a Bill on energy and procurement, what centralized procurement will look like. You're all really working with us collaboratively, actually in another hearing right now on issues you really care about.

What gets fired up, when, how do we keep the lights on while making sure that we're really balancing our commitment to clean energy and keeping the lights on. So just on federal funding, quickly, there's a couple of slides in your deck that lay out this public private opportunity in terms of the total $180,000,000,000 opportunity over the next decade that California has. And it's absolutely transformative. This is not just about climate and climate change.

This is about an industrial revolution, but one that really acknowledges equity and workforce and making sure that we don't leave communities behind. So I just want to talk a little bit about kind of this all of government approach. Obviously with the leadership of the federal government, we had an opportunity to first do an Executive order which preceded all of the pieces of the permitting reform package.

And as the Governor said, that package itself was just a down payment and appreciate the willingness to continue to work on those issues. So we have this strike team and we offered when we were testifying before you this summer to really get input.

What you'll start to see is this strike team is agency secretaries from Transportation, Natural Resources, Business, Consumer Services and Housing, Agriculture, Labor, Environmental Protection, Government Operations, and obviously in partnership with our partners at the Governor's Office of Business Development and Tyson Eckerley, who knows so much about this, is tracking all of these different and potential opportunities. And I hope you'll ask him lots and lots of questions.

It really is this all of government approach and we are constantly collaborating to see where the challenges are, what we can do better, how we can partner better with you. In that spirit, we'll be launching a dashboard, hopefully before you adjourn. So you'll really start to be able to see what and how we're tracking and hopefully that will be a model for what other states are doing around the so obviously our goals, as you know, are we're going to secure all this formula funding.

A lot of that happens through CalSTA. So a lot of that formula funding is transportation based. So what we're talking about and we can go back and forth on this then in some ways formula funding are the tax credits. And we have some folks in the audience that are the developers and the creators that are really figuring out how these tax credits are going to drive the market. Some folks are saying those tax credits are built in. I don't think that's accurate.

I think there's huge opportunities to see how we create these capital stacks, tax credits, grants, first loss programs. We'll hear about the loan program office at USDOE and how we really create this opportunity to drive more investment in this state and make California the state of choice in that way. So we continue to really maximize that funding and make sure that all of that funding continues to meet California's goals, which is clean, safe, reliable, resilient, equitable, carbon neutral, zero emission.

So you'll continue to sort of see what we're doing. And in the deck that Tyson provided, you'll see a smart sheet that helps maintain alignment and you'll continue to see all the ways in which California is either applying for or partnering with our private sector to make sure that we're maximizing all of the funding available. And for those of you that have folks, especially in the audience, this is how we make this work is through this collaboration. This has to be private and public sector.

This is not sort of the tech boom. I think Senator Stern said this, this isn't like tech which is happening and we didn't have as big a part in it. This has to be done in partnership because the funding is following the policies and California is at the forefront of policies. California does consume the most clean energy in the country. We are not developing the most clean energy in the country.

And so just a couple examples and I'll wrap up because I'd rather get to your questions is we have a few of our current federal funding efforts. Ibank again in collaboration has submitted for the state's notice of intent to participate in the $7 billion solar for all funding opportunity. And we're happy to give you any more information you want on all of this. That's one of the many opportunities out of the Greenhouse Gas Reduction Fund. I actually think your graphics are better. I mean, they're amazing.

Mr. Eckley has been an incredible leader in this arches like we're going to knock on wood and whatever your tradition is that California remains competitive, there's all out press to really see if so much of the IRA is focusing on this green hydrogen opportunity. California is doing absolutely everything we can to create one of these hubs. That is an $8 billion opportunity. The applications just opened for the funding, the $8.5 billion Home Energy Rebate Program.

I know that's a big interest of Jigger Shaws at the loan Program office, along with the virtual power plants you'll hear from Ohm Connect today. So that's all about we have an opportunity not only in this big bold, how do we reshape our system and transmission lines, but how do we really work with consumers to make sure that like everything else Mike Philip from Senses here today as well.

Are there software solutions from some of the ways in which we can actually reduce energy by relying on consumers? For example, not all of us have to charge our cars at the same time. Is there a way to do that better? And Mr. DeVries will talk hopefully about what it means when you can sort of borrow and take energy and create a more efficient grid. So then you're doing capacity matching, transmission building, growing our grid and figuring out how to maximize all those efficiencies.

So again, incredible opportunities. The California Air Resources Board had public workshops for the $5 billion Climate Pollution Reduction Grants program. Why do we make everything such a complicated title? And so this is again, I think Miss Ehlers pointed out that this is building on California's work. So we should be really proud of all the work we've done in terms of equity in communities and really making sure that the federal government is building on that. So that should give us these remarkable opportunities.

And Kalsta, I know we talk a lot about transportation. Transportation is sort of the backbone. It supports all of this to make sure that we're actually delivering these goals and cleaning the air. The reason the transportation sector went first in terms of cleaning up these clean fleets is because of what was happening in our communities with the highest rates of asthma, the dirtiest air in the country in many cases.

So just a couple more things on what GoBiz does, although I encourage you to look at the deck and ask, Mr. Eckerly. There's a crowdsourcing website we're helping with funding. We have Atlas's Public Policies Climate Change portal, and we've been awarded about 2.5 billion in competitive and formula funded climate programs. Again, that will continue to grow. That number is a little bit misleading when you compare it to the 180,000,000,000. Just like us, the federal government is really working so incredibly fast.

It doesn't always feel incredibly fast because of how much time it takes to get these programs out the door. So just to wrap up, I think there are at least a dozen federal funding grant opportunities available now. It is the reason we really put so much pressure and worked in such incredible partnership with you, Mr. Connolly, to your point, to make sure that we were restoring wetlands and protecting wildlife while really saying California is committed to this transition. We're no longer just talking about not Go.

I won't belabor the point of why this is so important, but again, I think the partnership with the Legislature and especially the folks on this committee has been extraordinary. And what we do now as we start to hear from what we can do in partnership with the private sector, I think will be imperative. So happy to answer any questions, thrilled to be back and really figuring it out how we continue to work together on this. Thank you.

Thank you so much. Mr. Eckley, I have a chart here that I think is what your brain must feel like every day. It's in 8.0 or two point font. But do you want to start to sort of unwrap some of that for us, or do you want to move to Doe? Do you want to maybe give a little bit of testimony up front and then maybe we can ask you some deeper questions? Or would you rather just come back.

And just for the Q and A, however you want? I mean, I can just at some.

Okay. So why don't you do some opening? Sure. But be brief. And then we'll start to dig into.

Your map of so part of that, there's a few slides in there. One of them is just to show the constellation of programs that we're trying to track. And then what those spreadsheets are. There's over 300 programs we're tracking. We can't humanly manage all of it. Oh, yeah. There we go. Does this.

Okay, so we'll follow along with you here. Here's your deck. So perfect. There we go.

Okay, so this is magnitude of funding. I mean, Gail kind of hit on this. We don't have to labor the point. There's a bunch of different you have the Bipartisan law and this we can show you this if you're interested. But it's a constellation of all the programs and how they relate into the different agencies. And so you imagine if you're the federal government this is insane amount of work to manage.

Then we're just trying to make sure that we're making the most of it. So the point there is just to stress everybody out and then show that we have it mildly under control. But in reality it's kind of like all this stuff. There is a master plan to it and you can map know. I think Gail mentioned some of these kind of the magnitude of the funding but maybe just for the sake of brevity.

So this is just an overview and we have a public version of this that you can scroll through. It's actually linked I think on the slide deck itself. And so you can kind of like at a high level you look okay, the green stuff, like in that second column, there's kind of a plan in place. Yellow is like a plan is forming and some we don't know. Right? And so that's kind of where the way we've stratified it is.

Like okay, the really important programs are over a billion dollars nationally and meet a bunch of our climate goals, kind of multiple things. Then we start to, okay, well if it's less than a billion but it still meets multiple goals like into carbon neutrality or zero emission transportation or equity, that's still really important. We kind of ratchet it down from there. Maybe it's less than 500 million. So it's not a perfect science. So that's how we've prioritized this. And then it's all based on dates.

And then as an Administration we get together regularly all the deputies for climate and just go, okay, this one's falling behind. We got to make sure who's got a plan, who's the lead, and we identify the clear lead and then let them run with it. And that's really the only way we can do it. There's also a lot of benefit in bringing in external help because locals can apply, regions can apply. We don't know what we don't know.

And that's part of the challenge because there are applications that go in that we aren't aware of and we're doing the best we can so that's I think a good place where we can coordinate too. As you're learning for things, don't assume that we know because we only know what people tell us or what our relationships have out there.

Big programs like we have a really good idea like the hydrogen hub or the direct air capture hubs but the smaller ones, there's still a lot of opportunity out there, and so you can kind of scroll through. And then the other things as far as helping stakeholders, all the resources that we pull on are on this website, and there's a lot there. Gail mentioned the Atlas public policy. We're partnering with them on this, and they're doing a ton of work.

You guys can get accounts as well. And they do a great job of visualizing how the funding is flowing. And it looks nice because California is the darkest, meaning we've gotten the most funding so far in the country, so that feels good. But so that stuff is there, and they do a great job with it. And then we also have the tax credit, all the tax credit information there. So just at least all in one spot.

And then the last one I wanted to show this is a link, and you can click on it. And we haven't publicized this a bunch, but it's kind of more a public facing one where it's like, here's all the programs we're tracking, you can see whether or not not we are aware. So there's a green dot. If there's a plan in place, if there's something that's either yellow, red, or empty and you know of something, please let us know, because that helps.

I guess the big point, there is a ton of opportunity, more than we can humanly track effectively. So it really is a collaborative approach that we have to working across all the stakeholders to maximize this. But the more people can get focused on it and the more leads we can identify, the better off we're going to be as a state.

That works for now. Did you have a few more? You want to keep going? We'll come back to you. And started to start to drill down. I think you had a crowd. Yeah, that was your crowd.

That's it. Yeah, the crowdsourced part of it. But you can click on the link there and actually it goes into our smartsheet, and then you can put in stakeholders can put in information related to the programs, and it'll feed into an automated spreadsheet. So that helps us.

Okay, I know you've now probably triggered 15 questions from my colleagues here, so I want to get back to you. But I do want to make sure we got time, at least at the outset, from U. S. Department of Energy. Mr. Paul, you've been essentially embedded, if that's fair to say, as someone from Department of Energy, from this Administration, specifically under Mr. Shaw, who has innovated and got a mandate to transform this entire economy essentially out of the Department of Energy.

So we appreciate you spending time and shaping just I'm hoping you can give us some initial remarks. I hope that your mind map and crowdsource map are even more advanced than Tyson's, but I don't know how either of you hold it all in your head. I know you're not responsible for all programs there, but that General vision would be appreciated. It's an embarrassment of riches, but we also know it can be fleeting and it's competitive, at least part of it. So your insight on how we can better compete would be much appreciated.

Thank you. And thank you for having me here today. I will start this process off by saying that I am not involved in the hydrogen hub proposal at all. But I've heard great things, but I want to specifically talk about what's that? Oh, don't quote me on that.

You but no, my focus is really on the Loan Program's Office. So what I figured I'd do is give just a really brief overview of that and really touch on some of the things that have been previously said about state federal partnership, how we can leverage some of the state funds with federal funds and sort of how we're developing an industrial strategy across the country that really needs state, local, federal coordination and input and really just leadership from the private sector as well.

So since I'm the new person, just a little bit of my background. I'm a principal consultant to the Department of Energy Loan Programs office. And Director Shaw, yes, he has tasked me with working with California. So I'm a double agent of sorts, if you want to call it. And I'm also native Californian, so I'm very proud to be working with all of you here. Prior to my role at Doe, I was senior staffer in the United States Senate.

So I negotiated many of the key provisions in the IRA. And a lot of what we're doing here today is very near and dear to my heart. And we spent a year and a half, day and night trying to get it across the finish line. So it makes me feel really good to know how hard and how focused you guys all are on executing on this. So thank you all for that. This is not easy. So if it sounds hard, it's because it's hard.

So the Loan Programs Office really works with the private sector to finance the deployment and scale up of innovative clean energy technologies, build infrastructure and domestic supply chains, and basically create jobs and reduce emissions across communities in the country. Our tagline, I think it's very fitting for this hearing is we are government enabled and private sector led, and that is the mentality we take across the board.

Where we sort of fit in the spectrum is if you think about Department of Energy, we have research programs in the know, one of which here is in California, Lawrence Berkeley, we then, you know, have from research we move to development and deployment. And a lot of the stuff in Osed is what we call deployment stuff that's ready to test and then there's what's commercial. So we are sort of the beginning, the first frontier of what's commercial.

So if you look at solar and wind today, those projects generally aren't financed by us, because banks are very comfortable financing solar and wind projects. Whereas there could be green hydrogen projects, there could be critical minerals projects, electric vehicle battery manufacturing projects, all of which are technology viable, but no one in the private sector has really financed them in mass scale. So there's still some hesitation in the financing community. That's where we sort of step in to bridge the gap.

And that's sort of been LPO's sweet spot. And that's sort of where we've been working now in the context of where we sort of fit into the IRA. The IRA, the Bill and the chips are really what we call as broad industrial strategy. And we've really been trying to work with organizations in DC to think through, like, what is industrial strategy?

How does a loan program play a role in you know, we've worked closely with the professor, Andrew Riemer, who sort of describes industrial strategy as the efficient use of public and private resources to establish reliable supply chains, a transition to a clean energy economy while maintaining affordability and reliability and equitable distributions of benefits and burdens. And I think that's just a perfusorial way to basically say what these folks have just told us in terms of what our goals are.

But that's what we sort of see as like a clean energy industrial strategy. And really for this strategy is not new. It's been done throughout American history in various other forms, whether it's the railroads in the 1860s, the National Highway System in the 1950s, and really our LPO's authority from the Bipartisan infrastructure law and the Inflation Reduction Act has really led to investments that exemplify this industrial strategy and is leading the transition to a clean energy economy.

So just a couple of examples in terms of what we've doing, what we've done since the IRA's passed, we have given out 13.5 billion in conditional commitments across blue, oval, core, cell link, lifecycle, redwood materials. These projects work across electric vehicles, stationary storage, supply batteries, and they're all sort of important steps towards onshoring and reshoring next generation zero emissions manufacturing in the United States.

And those are the types of projects that we're looking to work with now in California specifically, we think there's an opportunity to partner both here and in states across the you know, as a part of industrial strategy in it. To be successful, it needs to be developed and implemented collaboratively across governments, the private sector and nonprofits. And that's sort of what we're doing here today. Now, our example of that collaboration is a program that we call the State Energy Financing Institution program.

And before I go into it, your colleagues here at the state have been phenomenal to work with. And over the past few months, we've really been working hard to stand up state energy financing institutions in California and across the country. So we're working in Alaska, in the Northeast, in the Midwest, to really establish these all across the country.

Now, what the State Energy Financing Institution program does is state agencies that are identified as state energy financing institutions are able to basically have the authority where when a project developer uses money from these Cephis is what we call them, and then they apply for a loan in our program. It waives one of our most onerous requirements, which is the innovation requirement.

So we have many project developers that want to use our program, but their project may not be considered, quote unquote, innovative enough, but still important for infrastructure decarbonization goals, equity goals that we all talk about. So for example, if a project developer was like, we want to build large scale distributed storage and we have a grant from the CEC, they can then come to us with that grant and be like, we have this grant from the CEC. We don't have to go through your innovation process.

We can get a loan from the LPO and then someone, they can go get equity from either their company or a private investor, and they can build a capital stack for a project. It's a little wonky, but from a project finance perspective, it's really powerful and it's an ideal way where sort of the state and federal government can partner together.

So part of why I'm here today and why I've been sort of working with you all here in California is really to find places both at the state level and with developers, where we can find those types of projects and really allow developers in the state to access that capital. In terms of action for California, first off, I think the state is taking all the steps needed to engage in the Cephe process to really work with project developers and to find these project opportunities.

And we're going to continue to need to do that coordination over the next twelve to 18 to 24 months as the programs ramp up, as people start to use the tax credits, and if there are specific pots of money that the state wants to identify that can work. Specifically with our programs, we're always open to having that discussion and figuring out what works and what doesn't work. And there are other states that are pondering very similar approaches.

So I think there's a lot of opportunity for us to work together. And I think our program is very unique in that a lot of the programs are up and running. We've been around for almost two decades now, so we have a pipeline of applications. We have over $130,000,000,000 in applications in our pipeline and over 150 applications as of July. So we sort of see what's coming down the pipeline and we sort of have our processes in place to get projects approved.

So since we're up and running, our message is we're open for business and we're here to work with you all. So again, thank you to everyone in the state. Gail, Tyson, governor's office team has been great. You guys in the Legislature have engaged. CARB CEC, Ibank, Street Growth Council, Housing Services, Treasurer's office. We've really like all across the board, everyone's been working closely with us, so it's going to take some time to get there all the way. Part of it's know we're the federal government. We're developing guidance as we move across. So we're going to do our best to be as quick as possible here. But yeah, thank you for the opportunity and I'm looking forward to the discussion.

Thank you very much. I'll turn over to Members. Sound like Senator Blakespear might have an initial question. Welcome.

Okay, thank you. Well, first I want to thank the chair and vice chair for having this committee and this is the only climate related committee that I'm on and so I was grateful to be invited to participate and I think it's very important. And so I just want to say thank you for hosting this today and then specifically thank you to all of you for coming and speaking about your particular areas.

There is a lot to cover and so I just want to make two main points and questions and some of the things maybe I won't touch on at all, but they are very valuable and I'm glad that you came and shared them. So the first one is that I would really like us to and have been promoting the idea of us being more conscious about our footprint at the state capitol itself.

So in the Legislature and the Governor, when we're thinking about all of these very ambitious goals that we have, which we have set, and we expect the private and public sector to get to us, looking at specifically, like, our fleet and the emissions that come from our fleet. And we look at our compliance with SB 1383 and the organics, the need for us to be managing our food waste and our green waste.

We look at our recycling goals and the realities that we have conference rooms in this building that don't have any recycling containers in them at all. And we look at our own energy use in our buildings here and our single use plastics, even like at a climate hearing that we would have single use plastic that takes more than a thousand years to degrade.

I would like us to have a culture where we bring our reusable coffee mugs and that that's something that we're messaging as a value because essentially it's us walking our talk. And so I think it's important, Ms.. Miller, that you did know, where California goes, everyone follows. And what we're showing by how our practices are, we're really not walking our talk right now. And as a new legislator here, just for eight months, I have found that to be discouraging.

And I've been talking about it and trying to socialize it, but it's not kind of happening organically. But I think what's important to note is that there are a lot of examples of government sector and private companies that are already doing this. They're owning their environmental message and talking about it and having a climate action ambassador, a Green team, any number of things that can provide leadership for this at the state level.

So I'd really like to have us think about doing better when it comes to our own state capital footprint. And I think of that as the Senate, the Assembly and the governor's office ideally all working together to say this is a value and we're going to live it and we're going to message it and we're going to tell you why it's important.

And I also just say that there are always these issues about General services and oh, we are complying with the law like our gas leaf blowers that we use at the Capitol, we can continue using those until they die. But the private market has provided very good alternatives that are cost effective and that do not create the pollution that using gas does, as we know, for air quality purposes and every purpose.

And in some ways it just takes a little bit of that will to say we know that we could keep doing this under the law for another two years, but we're going to make the transition now. And the same thing I think should be happening with our fleets because there are cars that are being replaced at all times and we are asking the public and private sector to do it. We should do it ourselves. So I just want to put that out there.

I'm happy to have any responses if anyone wants to say anything.

Yeah, I think those are all great points. I'd love to get back to you on the idea. Some of as you point out, especially the footprint of this building is Assembly and Senate rules and we are tenants of your buildings and grateful for that. So would love to talk a little bit more about how to really create that type of collaboration. And in terms of you're right, I think the state does comply.

How and when we get farther ahead is something that we would have to get back to you on. Some of that. For example, the clean fleets, we were programmed to do that faster and then with the budget shortfall, that was one of the negotiated changes within the Legislature that is going to be a little bit more delayed as other priorities came up with a little bit of a deficit.

So I think there's absolutely I agree that we could set a better example and do more on that and would sincerely like to collaborate on that. I think the Governor has been very committed to talking the talk and walking the walk.

Yeah. Did you want to say anything? It's okay. And then my second point was, you mentioned the transportation strike network and I think we know that's the largest generator of emissions and so the reality of our climate policies being very much related to land use policies, housing and transportation go together.

And so investing in our transit and particularly our train network I think is so important and in many ways we have so many priorities up here at the Capitol and it can be hard to elevate any one over others at times. But I'm running a Subcommittee on the Low San rail corridor which is the existing 350 miles that goes from San Luis Obispo to San Diego along the coast.

A lot of it along the coast, not exclusively, but the sections along the coast parts of them are vulnerable to sea level rise and bluff failure and other climate related things. But we have invested billions of dollars in this rail corridor and when you look at other places like in Europe and in Japan and even other places like the Northeast corridor that are really doing transit better, California could be a leader in this area, but it takes that will.

And so I just want to put out there that there's so much potential for growth in transit and there's a hunger for it. People want to be able to take a train and go the places they need to go, but we have to make those investments in the infrastructure. So I know there's a lot of leveraging of the federal money that's available and I hope that we're positioning ourselves around particularly transit and our train network to access that for California. So those are my two comments. Vice chair. Thank you.

Thank you. A few comments and welcome to Senator Allen. We'll turn it to you next as we look to maximize use of the IRA, does the Administration have a single point of contact that folks can access for the IRA.

Within the state government? I'm the point of contact, although again, this is really an all of government approach. So as hopefully, you know, from our conversations when I'm contacted, I'll get you an answer, I will not have every answer because you can see the level of complication.

Hopefully what you'll start to see is multifold in terms of when these dashboards are up, for example, that Govops is working on to make sure that you can see what we're doing more in real time, you should start to have some of your questions more readily answered.

I think what Mr. Eckerle talked about in terms of really all of obviously the state opportunities, we're clearer on it's, some of these other opportunities where we can collaborate with local governments that we probably do need some support from you on just to make sure that we're accessing those and supporting your local communities. Rail is a good example of that. So that's our goal and my goal is to make sure that we really get your questions answered.

But again, practically every state agency is working on this in some way. So we'll just need a little bit of patience to make sure we get the answers. But you'll also start to see some bigger proof points in terms of how the funding is flowing.

Great. Is the Administration currently conducting outreach activities to spread the word on the IRA tax credits?

We are and we're not; I think that's a really great question for your next panel. We do think that we know and the federal government treasury are tracking everyone that is eligible. I think that the direct pay tax credits and the ability to sell them now, I think they've made some changes at the federal level that make them more accessible. Mr. O'Connor from Wilson Sincini, not to put you on the spot, but I think knows a lot about the tax credits.

So I'm not sure we have done. Certainly we think that's the responsibility of the federal government in some ways we have a lot of opportunities to collaborate and work with people, but it's not something that the state has any ability even to answer questions on. So early on, we worked with John Podesta and his team and Jenny Ellen and her team in terms of what a more efficient tax credit would look like.

And we worked with companies in California on this example of direct pay and transferability and saleability. So those are the pieces that we're really working with. But we do rely this is a perfect example where we rely on the private sector to be able take advantage of those.

Yeah, and just a related question, so maybe we can also follow up would be aside from outreach, what else can we be doing to maximize.

Use of these tax credits.

Again, I think the thing we can do better and this is where I think this three legged stool, so the tax credits are the first step. But then I think the Cephe program that Mr. Paul was referring to, where if you have a tax credit and any type of first loss program money from the state, whether that's from a grant or a loan from the California Energy Commission or the Treasurer's office or even the Ibank, so that's money then from the state.

So now we have two pieces of that capital stack plus the private investment. And then the third piece should be a more seamless opportunity at the loan Program office. So that's really where we're digging in. We're going through and anyone that's received state funding because it unlocks the loan program office, we're trying to encourage them to go through their underwriting program in order to qualify for federal financing. Because that's where we think the biggest opportunity is, rather than just the private sector.

The other piece of this that's super important when we talk about clean fleets, for example, there's a drainage company, so they've unlocked all this Low carbon fuel standard funding to try and clean up drainage in the state, which reduces their costs by 70%. So part of what we're trying to do at the Loan Program office is ask questions about which parts of the financial incentives in the state qualify to unlock the federal funding.

So that's where we see our role as most effective, is leveraging what we're doing at the state with the federal government. And we're assuming that's on top of the tax credits, but again, open to feedback on that, but that's been our operating assumption on that.

Yeah, let's keep in touch on that. Final question for now, given all the funding available with the IRA, how does this change the administration's approach to, for example, accelerating EV adoption, building renewable grid, et cetera? Are there perceived gaps within the IRA funding that the Administration is focusing your efforts on?

We're not accelerating any more than we have in terms of our goals are among the most ambitious in the country. We are very focused now on what it takes to build out our grid to meet the EV goals. We are really creating many economies for every one of these pieces. So clean fleets, for example, the EVs, EV infrastructure. So we are focusing on the implementation and what it takes in terms of the gaps.

I think next door or downstairs, they are talking about these very issues on energy production and reliability for the first time really ever in California. So just 30 seconds on we have FERC at the federal level, and then Kaiso, the California Independent System Operator, who really relies on these tariffs in order to figure out what their queue is and where those interconnections are that everyone needs.

And then the PUC that procures power and sets rates and then the CEC and I hate talking in acronyms, I apologize the Energy Commission, who really is funding some of that. So for the first time ever, we have for the last two and a half years had a memorandum of understanding between three really independent agencies and how now we can bring that entire system together so it's not separate. So what you'll start to see is obviously greater procurement coming from the PUC.

You'll start to see a lot of different rate. What that? What does it look like to build the infrastructure. And I think those are challenges that are not unique to California, but are certainly challenges we see in terms of implementing and maximizing the IRA. I think some of the biggest obstacles will be our grid and then will also be the piece I think we're doing really well at is transportation.

And that, I think, is a piece that we're trying to match up so that there are no other barriers to entry for folks to get into this state. And then our final challenge and as the Governor said, the permitting reform, as challenging as that was, was just a down payment. We will have to continue to build faster in California, mindful of everything. Mr. Connolly, you spoke about wildlife protection, wetland restoration, making sure that we keep California's principles in terms of sequa intact.

Right. Thanks. Senator Allen.

Yeah. First of all, thank you. And obviously, we all had lots of intense discussions in the course of the.

I know you missed my opening, where I was so happy to be here in partnership.

I know, and I apologize. I apologize. Look, obviously, it was a crazy process, happened very quickly, and got some pushback from some of my colleagues for that reason. But we did it because we want to make sure that we're able to access the funds. And obviously, I appreciate the robust discussion we've been having so far, and I think we're just all really hopeful that this will make a difference. We did make some significant changes to some bedrock environmental law, and we did it for a reason.

Whatever we can do to make sure that we're supporting you and in getting this federal money to get these good projects online, we certainly want to be a part of it. I know that's something we're all working on. One thing I'd love to ask you about is water infrastructure. Where does that fit into the mix? I apologize if you talked about it while I was out of the room, but where is that in the conversation right now with Washington? Because it was certainly part of our infrastructure discussion.

Yeah, it's a big piece of, obviously all just all infrastructure. I think what you'll see in California, for example, are quickly you'll start to see some of our water supply, water storage updates to that program. And the Governor has set a whole bunch of goals.

You'll see more and more about what we're going to do and accomplish those, including some applications through the Office of OPR Planning and Research to make sure that for the certification, that 270 day certification, you'll likely see water projects coming first in terms of getting that certification to get them built faster.

Some of the for example, there are examples of climate tech in terms of DeCell, which if we have any oil wells that have been retired, what we can do with a process that's not disruptive to actually create DeCell within the oceans. Now, that's not a big plant. So you'll start to see more and more in terms of where climate tech and infrastructure meet. And those are the places that we're really working. So I think it's twofold.

One is how do we implement all of the state's goals, which include projects like sites? And that was an SB One project that's really kind of morphed now into part of some of the support from the IRA, and then also in terms of supply and clean drinking water.

You'll see more and more about I don't know if you saw just this morning about how we're losing all our groundwater more and more about how California can support the technologies that are working to provide that more efficiently for recharge for groundwater. Okay.

Because I was seeing a document that talked a lot about lead pipe service line replacement, that sort of thing. So I assume that's also part of the story too.

Yeah. Rachel Ehlers with LAO just to note, Ms. Miller is talking a lot about some of the competitive grants available through the two laws, but we also, through IIJA in particular, are receiving quite a bit more formula funding for certain categories. Transportation is one big one, but drinking water is another. And there were also some carve outs there, including for lead pipes and PFAS, some certain emerging contaminants of emerging concern that we're going to get us formula increases.

So we're kind of guaranteed as a state to get some increases there in addition to some of these competitive grants. So in the IIja, not the IRA, water was one kind of big area of infrastructure emphasis.

Sure. Okay. I appreciate it. I'm certainly interested in dialogue on this and so many other topics.

Likewise, and I just can't emphasize enough that to Mr. Eckerle's point and Mr. Paul's point, this has to be a partnership in order to really we don't remake our entire economy by 2035 and then 2045 unless we're doing it all together. So really grateful for everything you did together to this point. Thank you.

Thank you. Come on back.

I guess just from the biggest perspective, I wonder if you feel that the streamlining that was done, that was just done this year was effective at being able to position us for success. And I'll just say, from the outside of watching it from within my own, it seemed to me like it was much less ambitious than there had been the original hope for it to be.

And I wonder if that is a perspective that you have or do you feel like what did happen was important and will make a big difference?

It absolutely makes a difference. I think it was made better with the conversations with the Legislature. I think we have created systems that will endure and we have sent a signal that we now hear from the federal government that the fact that California was among the first states in the nation to take this on was really significant. So some of it obviously is actually building faster. And I think to Ms.. Ehler's points, those are the questions you should keep asking us over the next decade.

And some of it really was to signal to the federal government as we go through this process that we really are serious about building faster. I mean, I don't know Mr. Eckerley, if you can talk about some of the questions on the hydrogen hub, for example, but it really helps for folks to know that California is committed to building.

Just the biggest question is can we get the projects in the ground, from the federal government perspective. I think, you know, you asked about the Maximizing IRA Tax Credits. The best thing we can do is enable projects to get in the ground to capture that funding. Right? And so it does have a huge impact both symbolic and effectively on the ground. And really what we're talking about is investor certainty in the permitting. We hear that a lot at GoBiz.

Kind of like we need certainty that we can get these projects. A yes or no is fine, but it's the uncertainty that really kills. Right? That was a first step. This 3 million package really helped there.

I'll wrap up with just two questions and then I know you're very busy people, so appreciate your time here today and sort of digging deep. Boring one, I guess, but important one. Not at sort of maybe legislative changes or on the streamlining or infrastructure side, but what internally do you all need to go do your jobs better? I mean, you sort of alluded to at GoBiz. It's almost too much to track, but we need you to catch up somehow and get ahead of this.

It sounds like you're going sort of with an agency lead designee model. But what I've noticed, at least on my end, between my colleagues here and my congressional counterparts who I try to stay in close communication with, is often we don't feel like we're in a position to be the cheerleaders or coordinators or conveners that can help you.

And also I think that the extra time it would take you to do some of that interface almost feels inefficient on your end because it's like you just have to go and get going and you can't think about all that. But often I think it's the coalition behind some of these asks that actually ultimately will get guidance magically going faster.

I mean, if there's any formula I've seen from Washington that isn't sort of in the math of, say, the IIJA or the IRA, it's that the conditions themselves feel right to go big and the industry partner feels that confidence. Building that sort of collective confidence in major multi billion dollar projects is hard work, and often it does involve that sort of soft part of things, the politics of it, right?

But I guess what more can we do on a very internal level, make some of that clear so that we know how to map the billions over our districts, so that Members actually know what could be possible if they got together with their federal counterparts and worked at it. We just saw us. Senator Padilla yesterday in our chambers and welcomed him, and, I mean, he's our guy now. So how do we coordinate then, but really just an administrative capacity level?

I would love your recommendations or suggestions as to what is needed just from a capacity perspective. Is it things that you want to see? Does GoBiz need to be built out further? I know you're adding capacity on the energy side. You used to just do transportation and zeb stuff. Now you've sort of made new hires and added folks, but just curious.

For our selfish purposes, sort of unlocking the coalition side, if you will, and not making that just your burden to solve, but kind of letting us help with that and then just for throughput: what's missing?

Yeah, we think we have sufficient resources from within what we have. Appreciate that question, though, sincerely. And we'll have to see what comes through between now and January in terms of budget change proposals, the GoBiz does have, and I'll let Mr. Eckerly speak to their entire new unit, the Ted Task Force, and how we're tracking there. And then in addition.

So everything that Mr. Eckerle just went through will feed into the eight large categories that we're tracking as part of the Strike Team transportation, energy, ZEVs, hydrogen, among others, water, and make sure that we're starting to show you and map for you where things are in your districts. And that's how we'll really begin to build those coalitions. But that will be iterative. You'll see the beginning of that, hopefully before you adjourn, and then you'll continue to iterate on that.

And that's when we're going to come to you for partnership and see what you're hearing in your districts and how we can do better at really those soft pieces of making sure that we get requests. But for example, we have a huge request for high speed rail. Many of you really helped with that and participated in terms of the application to the Federal Transportation Agency. Same for a few storage projects that we're seeing.

So right now I think your question is how do we create more organization around that right now it's more serendipitous. But I think what we can do once these dashboards come out is talk about how to be a little bit more coordinated and deliberate with you and making sure that we have that support when we're applying for funds.

And we know your boss, this Governor, is very into sort of performance indicators and very tactician in sort of that element. Is that the kind of stuff we're going to see then in this dashboard of those key performance indicators or whatever? The new sort of way of measuring that? Are we going to see? I mean, LAO had sort of talked about I forget the phrasing, but it was sort of project delivery, timelines, things like that.

Is there an intent to sort of hold yourself to some, like, put some goals out there and then give us things that we can help hold you to and say, we need to hit that? That's sort of what we should anticipate coming down the pike, you think, with that dashboard? Or is that a little bit different?

Yeah, you should definitely expect that. Again, we'll be iterative. So you'll see the first almost a beta, but making sure that you can see it, you'll give us input and we'll continue to iterate and improve on it. I don't know, Ms. Ehlers, if you have good advice for us too.

Well, I just would highlight one. I'm certainly not here to advocate for more state staff right now, but I think especially in a budget deficit context, but I do think one kind of benchmark or data point you're going to want to keep an aye on is the permitting timelines and taking a look at are there bottlenecks that are occurring in certain departments? Because we do have a lot of environmental protections that are very important that we want to be sure are maintained. But sometimes there could be capacity issues at particular departments.

Not necessarily even environmental. Right. I mean, you're talking local building inspectors, the fire marshals certification of a charging station being compliant with whatever the local fire safety code is. State architect interfaces with school districts on shade structures, I mean, all kinds of...

And the local ones will certainly be harder for you all to get involved in, but the state ones are under your purview. So is it Fish and Wildlife? Is it coastal Commission? Is it local Regional Water Board, which is a state agency. So just kind of keeping an aye there. If there are bottlenecks or synergies or efficiencies that maybe you could help enable.

That's a great point. And we actually have done a mapping exercise of permitting that we'll share with this committee just so you can start to see where we are in terms of that question. I think another question, and I don't know if we don't know how to figure out the answer, but is folks that are not applying redwood materials is a good example of this. They were choosing between California and Nevada. They were done with their Nevada permit.

This is not what California should do in 24 hours. So that's an example of a company that located in Nevada that never even got in a process in California because of how long it took. So that would be the other measurement where the bottlenecks in state government and what can we do better without statutory changes. And then the flip side is kind of the but for California's. Certain parts of California we would have located here.

I mean I think the question will be whether our commitment, say, to the environment, to equity and to jobs, right? Is sort of just there's a bigger bottom line than just that. Will we be recognized at a federal level as competitive even if, say, next door neighbors can undercut us and go very fast and we have right to work states right on our border. We have all kinds of quote unquote efficiencies that actually leave people behind.

And so my hope is that we can show an example of how we do it the right way. We'll talk about that a little more in the next panel. I'd be remiss not to ask you all, though, before we wrap this one, I guess hypothetically, but when it comes to more investment from bond financing so the clean energy pieces of the bond, there's water in it. A lot of the topics we've discussed, you're sitting here with joint authors of the Senate Bond.

We're very excited about the measure. We are hoping the Administration can keep encouraging the process. Just how much more if we're not just relying on General Fund and we can leverage public dollars, are there more strategic ways that we can look at that and sort of in right organize it in a way that we know our partners at the LPO office here at Doe?

Or we can show taxpayers, in other words, and the fiscal hawks who need to be out there looking at debt capacity, does the math change? In other words, if a $2 billion clean energy Fund is really not a $2 billion clean energy Fund, but instead a $50 billion clean energy Fund that has a different payback period because you've leveraged, say, federal tax credit, private capital and how does that adjust? Or inform? I guess your math and thinking about how big we can go with this thing.

Honestly, I have to get back to you on that. It's a great question. I think some of the question for us in terms of the question of leverage, our biggest leverage opportunity is with the Cephe program at the LPO.

Not to put Mr. Pal under, but some of it is what will exactly will qualify once we know that precisely in addition to grants and what percentage so how much state funds in order to leverage how much at the federal level, once we have a better idea of that, we could get back to you on leverage. The only other true leverage opportunity currently in the state of California is the California Debt Limit Allocation Committee.

A lot of that has been devoted to housing recently, but those are all tax exempt bonds for large scale projects. So that would be the other question, where leverage could be a big piece of it.

So at a high level, it's fair to say that bond funding could be a source for leveraging more federal capital. What that multiplier effect is or how it affects precisely the fiscal, we don't quite know yet.

Quite know in part because we're still waiting for some guidance and to make sure that when we get that guidance, we will have a better sense. So, for example, does $5 million in state funds unlock a billion dollars in federal funds? Those are the types of questions we don't know yet. And again, they're working as fast as they can in collaboration with us.

And I would just to wrap the panel, bring the spotlight back to you, Mr. Pal, on that note, and say if you have insight on that now, we'd appreciate it. But certainly moving forward in the coming months, we want to be attentive and not just do policymaking in a vacuum here.

So if there are design principles or sort of structures of the funding that you think as you develop, these guidelines are going to be get us more bang for our buck, that's something that will ultimately help us make a better case to voters that this is something worth getting behind. And I think give hopefully our Governor and our legislative leaders the inspiration to go big here and that it's going to pay itself back differently.

So not to put the stakes too high, but I think some of those decisions will hinge on and some of our math will hinge on what you guys kicking the tires on how our structures are looking and are there things we need to change? Right. Is there feedback informally even, that says you should actually be designing? Be clear that it needs to be in the Ibank here. The CEC needs the right kind of mechanism to do their clean energy reliability funding or whatever it may be.

So they're pretty flexible categories right now, but we don't want to sort of just do bond drafting and policy making in a vacuum, right? We want to line it up with you. So I'll let you close this one out.

Yeah. And thank you. I'd say two things. One, we're working on the guidance of what we think meaningfulness would be, and I do think there will be some project specific determinations. Like meaningfulness may be something different for a different project. But I think there will be some General guidelines so you'll be able to really know what to expect in terms of a capital stack, in terms of actually designing programs.

We are more than happy to have a detailed discussion with all of you on what we think is where we think can be most helpful, what we're seeing in other states. But I think the General principle is flexibility, and specifically technology flexibility. And that our pot of financing funds really goes across 13 different technologies, I believe, off the top of my head.

So having funds available to work with our project finance tools that go across those technologies, I think will give you guys the most opportunity for impact. And I think if we were to canvass the state, I'm sure there's places that there's programs like that, but I think that would be like a General principle to start with. But we're also happy to have the discussion of where we think projects will work best with state financing and bring our potential applicants and applicants into the conversation.

And you can hear from them more so than even us. So that's a lot of what our power is. We have so many private sector voices that are a part of our program.

That's a perfect transition for our next panel. We have some of those very people here with us today. So thank you for teeing us up for doing the diligence and we appreciate you all being here. Thank you, Mr. Vice Chair. I know you have a prior engagement, so we do appreciate your input here.

So calling up, why don't we just all we can do this all at once here and we do have a hard stop at noon, so we're going to have to be efficient with our time. But Marion Borgeson with Natural Resource Defense Council, cisco DeVries with ohm, connect Hudson Gilmer with Line Vision, jeremy Smith with the state building trades, and Zach Liu with the California Green new deal coalition. We want to welcome you all and I'll let you all get settled for just a quick second here.

And I guess I should take another interim moment to thank the rest of my team too, especially Anne, for giving us beautiful imagery and graphics. And actually, if the DOE and GoBiz are complimenting you on your charts, you know you've done something right. So thank you guys. All right. Ms. Borgeson. Welcome.

Thank you. Thank you for having me today. Merrian Borgeson, California Director for Climate and Energy at Natural Resources Defense Council it's my pleasure to be here today to discuss the biggest opportunity in a generation to build on and leverage federal dollars. A lot of discussion has already been had about the different pots of money. The details of those, there's a great briefing, so I'm not going to go into those today. I think we've talked enough about that.

I think the main thing is just to remember at a very high level, there's a bunch of formula grants. Our staff at the state seem to be very on top of getting those funds. But there's huge opportunities in terms of loans, tax credits, which are largely unlimited. And in California, on the consumer side, there are incentives for energy efficiency, for electrification, solar, electric vehicles that could sum to more than $15,000 per home, plus all of the other business tax credits. And there's competitive grants.

So those are the opportunities for more and better and getting more money to come to California. I'll also add that New York and other blue states are putting up more money per capita than California to support applications, and about two thirds of the IRA loan dollars are going to red states. So there is opportunity and a need for action here in addition to what we've already heard.

I'm just going to go through four areas where I really see opportunity to ramp up, get access to, and build on this opportunity with IRA. So the first thing I just want to emphasize, which is already sort of hinted at directly and indirectly at the last panel, is the need to resource the agencies, the local governments and community based organizations to pursue and make best use of these funds.

This could include funds and technical assistance for environmental justice communities and tribes who need resources in order to just to apply for this funding. It requires a lot of capacity to get those applications in. There's often also a delay between getting awarded something and then actually having the cash. And there's actually a financing that's needed for that. So there's a lot of work to make sure this money gets to the nonprofits, the local organizations and the local governments that can make use of it.

We should also be considering extra positions and support for proposal development to submit applications and then state budgets for match funds which has been discussed. So that's number one, just to resource the folks who need to get this funding. The second is that we need to build on the foundation that we have in California.

And happily, we do have a very solid foundation and I think for every single dollar that's coming into the state, we need to first ask how we can build on what's already here. Just as one example in the building decarbonization space, we already have a statewide program tech Clean California for heat pump incentives for single family and multifamily homes. And the CEC right now is developing a Low income direct install program. Literally as we speak.

These programs can be leveraged to use the almost $600 million in funds that we'll see coming to California, as well as the unlimited tax credits of $2,000 per heat pump that are already available in California this year. There's also a great opportunity provided by the state budget that just passed. There was $10 million that went to the CEC to support technical assistance for federal tax credits and a public awareness campaign. Whoever got that in the budget was very smart. That's an excellent opportunity.

And we already have a statewide program marketing campaign on electric technologies. So the switch is on campaign which is part of Techcleancalifornia it's switcheson.org already has a database, over 200 incentives already available in California, and a directory of over 1000 vetted contractors. So even with something like that, we don't need to start from a blank slate.

There's actually a foundation here in California great that we have additional funding to really make sure we make use of those tax credits and we can sort of leverage what we have. Another great example is where the Strategic Growth Council has managed to procure funding to reach out to the Transformative Climate Community grantees from past and make sure that they are prepared to put in applications for the almost more than $3 billion in Environmental and Climate Justice program block grants.

So there's great opportunities where we've already nurtured communities and leaders and if we could use that as an experience to actually apply for these competitive grants, we'll be able to more likely to get that funding. The third area is to pass and Fund bills that will be a foundation for future success. So I'll just point out three bills that I think are worth looking at in this context. One is SB 794 gonzalez. This is master planning for sustainable climate resilient schools.

This will allow schools in our state to be ready both for federal funds and also for future bond funds. So they already have the plans and intentions in place to actually install renovate schools in a way that is responsive to climate resilience. This Bill has been doing well, but it doesn't have funding. So I'll just note that we need funding for a Bill, SB 794, I mean, sorry, 394.

The second Bill I'll point out is SB 795 Stern, which will enforce the permitting of HVAC and improve the efficiency of buildings. The last thing we need is billions of dollars going to HVAC in the state for unpermitted and poorly installed systems.

And the third Bill, I think that's really foundational is SB 410 Becker, which holds utilities accountable for the timely provision of power for things like buildings and electric vehicle charging for which there are loads of federal incentives, but we actually have to have power for these vehicles in a timely fashion. And then finally I'll just point out the opportunity for the bond which Senator Stern mentioned at the end there. We would like to see a climate resilience bond, if not now, next year.

We'd like to see at least $2 billion in that for clean energy. Some of the things that we think should be priorities are funding to upgrade public buildings and community buildings through the Strategic Growth Council's Community Resilience Center program, research to support the responsible deployment of offshore wind, funding for ports and good movement electrification and reliability investments that are really targeted to reduce dependence on aging gas power plants.

And so while the IRA is a massive investment and we've made really great investments in the state in the last two years, something like a climate bond can continue to nurture that momentum and really start to pave the way for the future that we need to 2000 and 32,045. So I'll stop there, but thank you so much for your time.

Well, thank you. I'm just filling in here for the chair, but we appreciate your comments and we'll just move on to the next. Person now, so Mr. DeVries.

You got it, thank you. Thank you very much for having me here today. Members of the committee. My name is Cisco DeVries. I'm the chief Executive officer of Ohm Connect.

We are a free service for residential customers that allows people to helps people reduce their energy use and then pays them rewards them for reducing their energy use at key times when the grid is dirty, expensive and congested, then our customers not only receive the benefit on their Bill, but they receive some extra rewards as well.

And that is sort of what I wanted to sort of talk a little bit about how we're going to bring the virtual power plant and use the IRA and all the tools in front of us to bring this down very quickly to be a benefit to the customers and residents of California.

For the last hundred years or so, we have run the grid in one way, which is we have large power plants that generate power and that power is then distributed to folks like us that use it. That whenever there is an increase in demand, we increase supply and vice versa. We're about to turn all that on its head.

So with extreme weather, with the extreme load increases we're seeing because of weather and electrification, EVs and whatnot, and the increase of renewables, we actually need now to make it very different. This is where VPP's virtual power plants come in. What we need to do is have individual residential customers and commercial customers of the energy become part of the generation and load flexibility that's necessary for the grid to go forward. Historically, we used peaker power plants. These are natural gas.

I don't know what's going on there. It is fine. Thank you. Leave that one up. These are traditionally natural gas power plants that are turned on only three to 5% of the time, and they tend to be in really beautiful spots like Redondo Beach or in people's neighborhoods and backyards where they're horribly polluting. We need to stop using those, and we need alternatives. That's where batteries are great, but virtual power plants are even better.

Virtual power plants can be a network of individual homes and businesses where each one of those reduces their energy use at key times in order to manage the grid's supply and demand and keep things in equilibrium. These are cheaper and faster to install because we're just engaging individual customers and are much cheaper to operate. And they're zero carbon.

In California, Om Connect has 200,000 plus of homes and over 300,000 appliances and devices that we control directly, allowing us to flex up to 200 load and eliminate the need for peaker power plants to turn on hundreds of times a year. One year ago, we faced a giant heat wave, as you recall, and the grid got really near the edge of rolling blackouts. During that few days of the heat wave, our customers reduced 1.5 gigawatt hours of electricity, for which we paid them $2.7 million.

That's a virtual power plant that stepped up as a network of homes to save the grid when the grid was really in need. And it's the kind of thing that we need to build tremendously upon.

So from there, we can just look at each home and every device and appliance in the home, whether that's something that generates power like solar or has power in it, like a battery, or just appliances like refrigerators and heat pumps and lights, all of those can be part of a virtual power plant. We can engage individually with those customers, and those devices help flex that load as necessary in order to adjust for grid conditions, and the customers are rewarded for their participation.

Today we have, as I mentioned, across the state, over about 300,000 of these that range from smart plugs all the way to EV chargers. And we're increasingly working with folks like LG and carrier SunPower and Google Nest to control an expanded set of devices and appliances in homes. To date, we've already flexed those devices over 40 million times so last, the IRA. I want to point to two things that are really important about the IRA that often go unmentioned.

We talk a lot about the tax credits and other exciting bits. We're really excited about those the large scale construction that's possible. But I want to mention the $9 billion that in the hope for homes efficiency rebates and the 4.5 billion home electrification and appliance rebates. These are two ones that directly impact residential customers in California today. The Homes rebate program provides a direct incentive for homes that reduce their energy use by 15% to 20% or more.

And the Home Electrification and Appliance rebate program provides lower and moderate income homes a direct incentive for electrifying their houses. These together can provide for millions of upgraded homes, more efficient homes, and homes with electrified equipment. We can add the grid services benefits to that and create gigawatts of flexible virtual power plants virtually overnight within a couple of years, using these tools. These tools now or go to the California Energy Commission will develop the rules based on Doe guidelines, which is guidance that has been issued.

And this really important piece that will roll out over the course of about the next year will enable everybody, Low to moderate income, everybody else, to participate quickly in the transition to clean energy and to receive direct benefits from it. The IRA is a huge stepping stone to get us to where we need to go. So the last thing that I'd mentioned then is there's lots we can do about this.

But there's one big goal that we recommend, and that is set a demand response procurement goal for load serving entities. Previously, the State of California has done amazing things with utility scale solar and the Renewable portfolio standard, with the California Solar Initiative and a million solar homes, and more recently with the battery storage mandate from AB 20514. All of those helped create large scale investment in clean energy.

Next, let's do the same for virtual power plants by setting a procurement target so that virtual power plants and demand flexibility become part of the mix the same way that solar batteries and other renewables have. Thank you.

Thank you, Mr. DeVries, and I apologize for missing the beginning of your testimony. I was attempting to ask the Public Utilities Commission exactly why we're going to gas as the default as opposed to looking to your work. Have not yet got that opportunity to ask the question.

So if I'm in and out, it's because I'm in a queue where I am hoping to ask that question of our state's energy regulators as we look to refire a gas fired future as an alternative or actually as the primary strategy, it seems. Speaking of efficiencies and doing more with less, Mr. Gilmer, LineVision. Very excited to have you here today and hear your vision.

Thank you so much. It's a real honor to be here. So my name is Hudson Gilmer, CEO of LineVision and what I'd like to talk about today is the important role of grid enhancing technologies in relieving grid bottlenecks.

So we heard from Ms. Miller in the earlier panel about the fact that bottlenecks to California's grid represent probably the biggest obstacle to achieving the clean energy goals of the state, but also to really capturing a fair or even outsized share of the benefits, the jobs and the funding that come from the Inflationary Reduction Act. If we think about California, it's always been a leader in clean energy and has perhaps the boldest clean energy and net zero goal of all states in the country.

And so on the surface, it would seem that California would be exceptionally well positioned to benefit from the funding opportunities in the Inflation Reduction Act. But the challenge is if we dig in a little deeper and look at how we get to net zero, really the grid constraints represent a bottleneck to those funding opportunities because after all, this is really private capital that's looking to go wherever these projects can be built.

And if we think about the steps of net zero decarbonizing generation so this is tax credits in the IRA that are funding renewable wind and solar projects, but they can only go where there is grid capacity to build. Secondly, if we look to the right, this is electrifying transportation, electrifying buildings, electrifying industrial loads. Again, huge role, exciting role for the funding opportunity in the IRA, but that brings additional loads that come onto the grid.

So really what's often overlooked is that third step in the middle, which is expanding grid capacity. Experts say that between now and 2035, we'll need to double grid capacity in the state of California and nationwide, and we'll need to triple it by 2050. And California, if we look at where it's positioned right now, already is experiencing massive grid bottlenecks. I'll give you a couple of examples. So right now, grid congestion is at record levels in the state.

And just in 2022 there was $647,000,000 at retail rates of curtailments due to grid bottlenecks. So this is basically wasted wind and solar generation. And a second example is that California unfortunately stands dead last among all states in terms of the percentage of wind and solar projects that make it through that interconnection process and actually get completed. So this is missed opportunities for jobs, it's missed opportunities for funding, particularly with the advent of the IRA.

So it would seem like there's a simple solution why don't we just build more grid capacity? But of course, we know the challenges that come with that. The permitting challenges, the time it takes to go from project design to completion. And these are typically five year processes or more. So really where Line Vision comes in is that we represent a new model for how we build grid capacity, how we build grid infrastructure, not with poles and wires, but using technology using advanced sensors.

And this if I go into a little bit of detail, what line Vision does is use non contact sensors that mount on the tower and provide real time data on the conductors and help utilities take advantage of the fact that even a little bit of wind cooling the line allows them to safely put up to 40% more power through those existing lines. So we've done projects across the country and around the world. Six of the largest utilities in the US. Are clients of ours.

This is a proven technology. And actually, some of you may have seen there's a project here with SMUD not more than 5 miles away from us that was featured in a recent NPR release just a week or so ago. So the advantage of this grid enhancing technology, or dynamic line ratings approach is that it is significantly cheaper and significantly faster than the traditional approaches to building grid capacity. We estimate it can be done at less than 5% of the unit cost of building new transmission.

And perhaps even more importantly, it can be done in a matter of two or three months as opposed to the five or more years that it takes to build new transmission. But I want to be clear, this is not a silver bullet. In order to double or even triple grid capacity, we'll need a range of solutions, including grid enhancing technologies, including reconductoring existing lines, including building a record amount of new lines. But these are complementary to each other.

And I won't go into detail, but there's a recent study that was done by the Brattle Group that showed some of the benefits of combining grid enhancing technologies with these other more traditional solutions. 40% or more reduction in congestion before and during construction of these new projects.

And the way to think about this is really that grid enhancing technologies represent the Low hanging fruit that allows us to get a jump start and really buy ourselves time while those more traditional approaches of building new infrastructure get underway. So maybe moving to solutions, there's really kind of two categories. The first is reforming and incorporating grid enhancing technologies into both the grid planning, transmission planning and the interconnection processes.

So there's a concept called the preferred loading order that was really pioneered on the generation side that I think is applicable here to say, yes, we will need a range of solutions to support and speed up the interconnection process to think about how we scale grid capacity. But let's start by getting the most out of the existing wires and then the other set of recommendations. And my colleague Hilary Pearson, who heads our regulatory group, is available for the reception afterwards.

And we can go into much more detail, but this is really to take advantage of the funding opportunities at both the state and the federal level. One of the things we've seen in the state of New York is how catalytic funding from Nicerda was in really seeding some of those initial projects. And it's no coincidence that that's where the most projects that we have of any state are. And we see a similar role for California in terms of the Epic program and the CEC.

And then at the federal level, I know we've talked a lot about the IRA, but the IIja has about $14 billion in infrastructure funding, much of which is for grid technologies to improve both resilience and capacity of the grid. And you can really say this is kind of a multiplier where capturing those IIja dollars is positioning the state to better capture IRA dollars.

And there's even perhaps a second order multiplier of saying that once those renewable projects come online because we have the grid capacity, that can also reduce energy prices because you've simply got more supply on the grid. So, in closing, I'm here today because I'm so impressed with the role that California has had in leading on climate, in leading on clean energy.

And I think this is really another opportunity for California to lean in on grid enhancing technologies as a way of overcoming those grid obstacles and really maximizing the opportunity with funding and jobs from the IRA. Thank you.

Thank you so much for your comments. We have limited time left, so we'll come to you, Mr. Smith, and we'll finish with you, Mr. Luke.

I'm going to start right off. Thank you, Mr. Chair. Jeremy Smith here on behalf of the State Building Construction Trades Council of California. Our Members have already built the vast majority of the utility scale solar, wind, and geothermal projects. We are already part of the solution, and we want to be more part of the solution as we build out more of these technologies, like other clean alternative fuels such as offshore wind, battery storage, and hydrogen.

We want to build these projects with the highest trained and skilled workers in the construction industry in the whole country. And I would be remiss if I didn't add carbon capture sequestration also in that list. But on behalf of nearly half a million skilled and trained Members, we urge you to be expansive in your policies to embrace all of the technologies that stand before us and create space for California's innovators to come up with the next generation of climate technology.

Limiting our ability to develop climate saving energy will not only hurt California as it continues to struggle with meeting power demands, it will also hurt blue collar Californians who are struggling to afford the costs of living here and powering their homes. We urge this Legislature to embrace technologies that are already being used elsewhere and that are being incentivized by the federal government as described today, including hydrogen, offshore wind, and carbon capture. Unfortunately, these are being burdened in California by ongoing politicking.

We need to create space and opportunity for these projects to happen, including non negotiable labor standards for our skilled and trained workforce before we lose out on federal incentives to other states that do not share California's commitment to working families or the environment. We need to fix impediments to carbon capture technology, a tool that even CARB has recognized as necessary to even approach our aggressive climate goals.

We need to create a stable market to develop the $50 billion offshore wind industry that is projected to create 8000 direct jobs annually and 9000 jobs to upgrade port infrastructure, which, we are told by our friends in the wind industry, over $10 billion is needed and the thousands of other jobs that will support these massive construction projects.

We're hoping that the climate Bill, SBH 67 can be amended to perhaps create a down payment of sorts for these wind projects, these infrastructure port projects that are needed to support these massive wind turbines. And we need to position quickly so that California can become a hydrogen hub. We want California to be a designated hub.

And that is why President Hannon, the President of the State Building Trades, took a leadership role in establishing the Arches program to position California and the building trades as at the forefront of this investment. But if we don't move to empower the hydrogen conversion if we don't move to empower the hydrogen conversion infrastructure, we are going to miss out. Finally, we need to get these projects, these types of projects, going.

And we need to ensure that we do this not only with our environment in mind, but also with our local workforce in mind, so that our Members will keep working. We talk a lot about in this building, about the just transition, a term we don't use. We want our Members to work one place one day and then go to someplace else the next day and have that be the transition. We don't want government handouts.

We don't want the government to step in and give us money to meet our living wages. Let's figure out a way to go from one type of energy production procurement to another and let our workers keep working. And we want to make sure there are two labor standards as set forth in our priority Bill, SB 740. California will truly be able to transition in a way that is responsible, equitable, and affordable, and most importantly, doable.

I truncated my comments today so we can meet our time deadline. So I'm happy to answer any questions you may have.

Thank you. Appreciate that, Mr. Lou.

Thank you and good morning. My name is Zach Lou. I'm the coalition Director for the California Green New Deal Coalition, which is a statewide alliance of over 80 environmental, justice, Labor, community, and climate organizations. Over the past several years, we've engaged our Members and their communities on the need for California to take an equity and justice centered approach to the funding made available through the IIja and the IRA in 2022.

Our coalition was one of the lead co sponsors of AB 20419, the California Justice 40 act, authored by Assembly Member Isaac Bryan, which sought to align California with the justice 40 Initiative. Justice 40 is a federal effort that set a goal to deliver at least 40% of the overall benefits from federal investments in climate, infrastructure and clean energy to disadvantaged communities. And while the justice 40 Initiative is a strong federal goal, states will ultimately determine how and where these investments are made.

And California currently lacks a comprehensive equity framework for investments. According to the State's own findings and a report by the Department of Water Resources, the State has a wide range of inconsistent, imprecise and misaligned definitions and frameworks used to target communities for investment that, quote, do not always accurately represent the communities they are trying to target. End quote. Although AB 20419 did not pass, the need for a state commitment to equity has not gone away and in fact, has only become more urgent.

You're good here. As federal investments became available, the State faces two connected challenges. One, disadvantage and historically underresourced communities often lack the capacity to access federal funds. And two, as previously mentioned, the State does not have a comprehensive equity framework. So at the same time, the State has made it a clear priority to streamline, deploy and build infrastructure as fast as possible.

And while we recognize the urgent need to rapidly build out climate, resilient and clean energy infrastructure, if this is done without a simultaneous commitment to equity, the State runs the risk of, one, continuing the legacy of inequitable infrastructure development. Two, ineffectively deploying investments by overlooking projects that could have the greatest impact, and three, leaving the state and local communities less competitive for federal funding opportunities.

So our suggestion is not to slow down infrastructure development, but if we're going to prioritize building as fast as possible, we must also set aside state capacity and resources that are committed to directing investments to disadvantaged communities and getting projects in those communities ready for funding as fast as possible. And to be clear, our local governments and community organizations are not prepared for this funding right now. They either don't know about it, don't have the capacity to apply and administer funding, or both.

So without real assistance, these communities will lose out, and we will perpetuate the inequities we live with today. So at a high level, our recommendation is simple the State should make a direct and mandated commitment to justice 40 and a commitment to equity as a driving feature of climate and infrastructure investments. There are a number of ways the State can do this. One is through dedicated state resources and capacity. Senator Stern asked about adding administrative capacity earlier.

So this could be some kind of centralized state Office of justice 40 or just committed staff that can work across agencies and departments to coordinate a whole of government approach to justice 40 and Equitable implementation. It could also serve as sort. Of central hub or point of contact for community groups and local governments to bring project ideas and disadvantage in Low income communities.

To put a finer point on this, we would anticipate this modest allocation would pay for itself many times over, even if it would cost, say, a million dollars for the state to set up. If it could facilitate even receiving just one IRA grant that we wouldn't have won otherwise. Given the average size of those grants, this single funding allocation alone would likely exceed the million dollar price tag. Secondly, we could have structures for community accountability and oversight.

One way to do this is through a transparent accounting of how the state is investing these funds. We have also not seen a robust stakeholder engagement process from state agencies on many of the grant funding opportunities that fall under justice 40. We have also called for the creation of a justice 40 Advisory Committee made up of key stakeholders that could support implementation of this.

And thirdly, as was proposed in AB 20419, the state could develop an investment framework that requires state agencies to direct this funding to disadvantaged and Low income communities. There were some positive steps made by SB 150, which was a good start, but we know labor standards alone are not enough. We also need investments actually going into those communities. So we encourage the Legislature to take the next step after SB 150 commit to delivering those benefits to places that need them.

So, just to conclude, we really think this should be a springboard to think bigger and develop a gold standard here in California. We know that ultimately, the state needs a comprehensive equity framework across all climate and infrastructure investments, not just those from the federal government. This is a moment for us to initiate that urgently needed dialogue and look forward to ongoing conversations on this. Thank you.

Thank you very much for your insight. I want to give a brief moment for Members to ask any follow up questions before we wrap this and turn to public comment. I know we're a little compressed with time, but we do have a minute. We got a little extension from Sergeants here. So we're going to start public comment in about, we'll do 15 minutes. Public comment starting at noon. So we've got five more minutes to wrap this panel.

Yeah, you guys can take off, but I'll stay for public comment. My only observation here is just a symbolic one. I really appreciated watching our friends at the building trades help our friends in the environmental justice community just get through the PowerPoint presentation. And if we can help each other click the button and move each other's agendas along and find those places in the Venn diagram where we can agree, I think really big things are possible.

So may this PowerPoint exercise yield greater partnership in the future. We're going to be drilling down further on a lot of the topics you all mentioned today. I think, as you mentioned, Mr. Lou SB 150 framework to start building out; we're going to need not just PLAs, but community benefits agreements alongside those to make these projects go, especially when they're tough issues.

The line vision part of the world is in some ways the easiest kind of lift because it's not new builds and doesn't have the same impacts and may not even be something so big to get our heads around. But when we look at things like green hydrogen, we know there are tensions in those spaces. I think these are tensions we've got to work through and find those places where we can actually land things and charge ahead.

I think the same is true in that sort of mutual support on the resilience side, where we know there's mutual areas of overlap. So I'm hoping that's a good framework for going forward. I do want to applaud Ms.. Borgeson for not just your testimony here, but also the input on our bond discussions and starting to think creatively about that leverage opportunity. I heed also Mr. Smith's input there as well on the offshore context.

I know we also have some partners from the industry side here, from the offshore wind industry that were very keen to be helping. And then the bad news for Mr. DeVries didn't get an opportunity to ask my question. I will go ask it on some social media platform instead, and we'll see how it lands.

But I guess my bottom line point is that you can get a lot more out of a virtual power plant that actually connects existing resources as opposed to having to default to assets that we don't even know will work. They're basically the left behinds of the fleet that even our friends in the trades, the generators themselves, say, you know what, let's move on to new technology.

And so when the state is sort of using the resources at the bottom of the barrel, we know we've got an issue. So I think you're in a position to uplift us. And through a clean energy reliability investment plan that's truly robust, I think we can actually put megawatts and megawatts in the ground everywhere, and I think we're on track to do it. One of my conclusions is agency empowerment here too, and not having too many chefs.

And so if you can, say, give someone like the Energy Commission more direct authority to sort of see through projects, or if it's the Ibank in another context, just heeding that, I think, will be an important conclusion going forward. I would commend to you all the background paper. It's an excellent compendium of some of these issues, but we will be following up in the weeks ahead. I'll stop talking now and turn it over. Any final comments you want to turn to? Public comment? You alright?

Okay. So we'll wrap the second panel. Really appreciate you all being here and invite public comment. I should make an announcement at the outset. We'll start with those in the hearing room, and then we'll turn to the phone lines if anyone wishes to testify that way. Thank you all very much for making time.

And I'm so sorry I'm going to run off the caucus, but what a good discussion and so much more to do, and I want to follow up with several of you individually.

All right, thanks.

Thank you. Can I start? Thank you, chair Members. My name is Olivia Seidman with Leadership Council for justice and Accountability, based in the San Joaquin and East Coachella Valleys. We urge the Legislature to ensure that California uses the unprecedented opportunity of IRA investments to maximize benefits for disadvantaged and Low income communities. All projects should abide by a do no harm principle, ensuring that investments don't negatively impact the most vulnerable communities in California.

This includes investments in technologies like direct air capture, hydrogen recharge, and carbon capture projects that have the potential to extend the life of fossil fuel infrastructure while not addressing copollutants from emissions. The Legislature must ensure that all efforts to obtain IRA funding and all state infrastructure projects in General center the needs of environmental justice communities and prioritize direct emissions reductions that do not perpetuate or exacerbate air, water, or other pollution or have other negative impacts on disadvantaged communities.

We should not be building faster when doing so has the potential to harm communities or without direct participation from communities in decision making. Thank you.

Really appreciate your comments.

Thank you, Senator Stern. Raquel Mason with the California Environmental Justice Alliance. I want to echo the comments shared by Zach and the California Green New Deal Coalition and just say that the state should commit to a justice 40 model, either in an office or having justice 40 staff dedicated to supporting communities accessing these funds. During today's hearing and since the passage of this funding, so much emphasis and focus has been taken up by hydrogen.

And you mentioned that this is an area where there is a lot of tension. Our communities have been clear that we have concerns with hydrogen and the unchecked harms they could bring to Low income communities of color. Instead, we ask that the same energy and enthusiasm be given to programs where there is agreement and there isn't tension. We look at things like the solar for all funding and the potential for it to go to community solar and storage. This is incredibly timely.

Right now, applications are happening in about a month, and a competitive application will bring critical reliability and affordability improvements, as well as local siding providing an opportunity to retire OTC gas plants and environmental justice communities. We also want to uplift transformative climate communities. It's super exciting to see it serve as a model for a federal program, but disappointing to see it not get any funding from our state budget.

It's not reflected in either bond proposal right now, and we're not certain how competitive California will be for this program. Our program is much more expansive than what's being promoted federally and so want to see TCC be funded not only in the federal funding, but in the state of California as well. So we ask that we focus on and give energy and attention to community led and community benefiting programs.

Thank you very much. Excellent insight.

Hello. I'm Andrew Dawson. The California Housing Partnership. We work on creating more sustainable and affordable homes for Low income Californians. I'll just keep it brief. I'll just keep it brief. We have a lot of building decarbonization programs within the state. We would like some of these programs in the IRA to be leveraged or layered with these programs in whatever way possible and fit within that structure, including the affordable housing finance space. Thank you.

Short but important. Thank you for the comment.

Thank you so much. Senator Stern.

Thank you, Ross, really appreciate this forum. And I just want to lift up. A couple of things I heard. I want to lift up our colleague Zach Lou's comments about justice 40. Absolutely important that we invest in this and that we coordinate those policies to make sure they happen statewide. And also ditto for my colleague from Seha talking about transforming climate know, we really do need to put our investments where our ideals are. And those are two very important places. The last thing I want to mention is Cisco DeVries mentioned this Brattle Group report. Very important report.

Welcome.

That report looks at what we could save by using virtual power plants in California. It estimates a 60% cost reduction over grid resources. So by using distributed energy resources, we could save 60. And that's over utility scale storage or gas peaker plants. Just to give you a number to put on, that a $35 to $55 billion saving over ten years for a 400 megawatt resource reliability resource. Huge amount. And that's just a fraction of what California needs.

So we're talking about in the hundreds of billions of dollars over a decade. So the reason I want to bring that up is it's really easy to think of infrastructure as the big stuff. And we do need to do that. We totally agree. But this is a way we can buy time and save California's money. Thank you.

Thank you very much.

Hi chair. My name is Teresa Bui with Pacific Environment. Thank you so much for hosting this hearing. Just want to echo the comments from the Leadership Counsel in terms of making sure the funding doesn't go to the wrong project, such as fossil fuel projects or liquefied natural gas, and that it's going to projects that center around environmental. Justice also wanted to highlight the need for funding for transitioning ships to zero emission shipping is one of the worst polluters in California, surpassing locomotives and heavy duty trucks.

And right now there's a huge opportunity with the US EPA $3 billion grant for ports that we want to make sure California is able to tap into and help our port communities breathe easier and help the shipping companies transition to zero emission. Thank you so much.

Thank you for your comments.

Good day, Senator Stern. Thank you. My name is David Bolog. I work at Los Angeles Department of Water and Power. I am here on my own time. I've taken time off work today the reason I took time off work today was to reach out to our Los Angeles Department of Water and Power Board of Commissioners to encourage them to bring staff up here to find out what's going on with legislation and policy that's being set. My understanding right now is that Los Angeles has not had any input into what is happening.

None of our staff comes up here to hear what's happening. We just have to react after. And I've watched our engineers scramble to figure out what to do. The reason I'm addressing you right now is what I was going to do is encourage the board to have staff come up here and to be more involved. I myself have been on personal levels, have come up here and lobbied on different legislation that has happened. And I'm watching this happen.

Their insight and I don't know if other public utilities have the same situation where they're just having to react to whatever the state does is not healthy for them. They have the experience of real world, of actually providing I provide electricity to the city of Los Angeles. That's my job.

So my request to you is to reach out to the mayor of Los Angeles, who's a former Assembly Member here, a former speaker, and to encourage her to send our employees to Sacramento to understand what's happening in the put input. Thank you.

Thank you so much. Seeing no others in the hearing room, we'll turn to the phone lines. Moderator do we have anyone in queue on the phone lines that wishes to speak?

If you would like to register a comment, please press one, then zero. On your telephone keypad, you'll hear an indication you've been placed into queue. An IT specialist will provide you with your line number by which you'll be identified. If you're using a speakerphone, we ask that you please pick up your handset and make certain that your phone is unmuted before pressing any buttons. One moment, please, for our first question or comment.

Mr. Chair, we have no one queuing up at this time.

Very good. Thank you so much. Okay, well, we really appreciate everyone being here today. I want to thank, again, staff, a lot of the legwork and a lot of the insight is actually not done during these hearing moments, but in the preparation for it and the outreach and the relationship building that we're stitching together. I think this hearing is a great example of that. So I want to thank our principal consultant and my team again for being here. We'll be following up over not just the offseason, but I think the next few weeks of this legislative session are an important time to bolster your advocacy efforts.

And a lot of the comments I heard during the panels but also during public comment, really show the need to get focused here and try to have some big climate wins down the home stretch here in this session, especially when it comes to these investment opportunities where there are obvious win wins for things that have fallen off the table. And my editorial comment is that we can't be satisfied with slowing down here when it comes to investment.

The thought of our climate change bond getting second or third in the order and getting pushed out and sort of being an afterthought is not what our frontline communities and our workforce expects from us. I think the same goes for our investment strategy when it comes to the resources we currently have in our budget and how we can leverage those more intelligently to get these resources online is everything.

Unfortunately, the two and a half billion dollars that have come out of the state for, say, clean energy in recent years actually has gone to natural gas. And they're proposing today, later this week actually, to refire gas plants in disadvantaged communities, to double the capacity of Aliso Canyon and to put other stresses on our system for, in my mind, what isn't going to deliver either reliability or climate emissions reductions that we need so much.

So I really appreciate seeing sort of a pathway here from the coalitions that are present and I think this committee is going to continue to go do the behind the scenes work to get that done. So I know Ross is on hand here for anyone who wishes to continue the conversation as I run off to caucus, but in the meantime, sincerely appreciate your input. And with that, this hearing is adjourned.