Assembly Standing Committee on Utilities and Energy

Good afternoon, everyone. I'd like to call to order this hearing of the Assembly Committee on Utilities and Energy. We're here for an informational hearing to discuss electric distribution planning. Before we begin as typical, we have some housekeeping to go over. I would like to thank the Assembly Member Wood, who will eventually be here and joining us as a guest here to the Committee. Mr. Wood participated in our prior hearing as well, and be prepared because he's got a long list of questions, again.

There will be no phone testimony, so public comment will either be in-person or submitted via the email on our Committee website. Additionally, we will maintain decorum as we accustomed to. We will not permit conduct that disrupts our meeting, and any individual who is disruptive will be removed from the room. Over the past few years, our Committee has heard the growing frustration throughout the state with utilities ability to interconnect resources and energize customers.

But the concerns reached an all time high last winter, especially in PG&E's territory, with some customers being told it may take five to seven years to receive a service. Connecting customers is Utility Service 101, so such delays are very concerning as to how the utilities are managing their systems today. Moreover, such delays raise significant concerns with how ready the utilities are to meet the state's ambitious decarbonization goals, which greatly rely on electrification.

This Committee has examined interconnection issues from the transmission level and has evaluated resource needs and build out to meet our climate goals. But we have yet to fully evaluate the impacts of customer load growth on the disruption on the distribution grid. Given the growing frustration around these issues, a number of my colleagues introduced Bill this session to try to generate some consensus around solutions and elevate these issues.

This hearing seeks to provide a forum to examine these issues more fully, as much of our climate work will be dependent on modernizing our distribution system and, of course, quite costly. With that, I'll ask my colleague to my right or to my left, if she has any opening remarks before we ask the panelists to come forward to the dais.

Thank you, Mr. Chair. On this informational hearing, every time we have these informational hearings, I'm reminded of how interconnected our clean energy, clean transportation, and reliability efforts are. If we have delays in one area, we have delays in the other parts of our emission reduction efforts. In the past, we've talked about the demand needed to meet our climate goals just in terms of generation, which is a separate issue.

But if we're successful in generating that much power, we can't get that energy, and we can't get that energy on the grid and then into people's homes. We're not going to succeed in reducing emissions. One of my biggest concerns regarding delays in interconnection and energization is how much of our decarbonization strategies rely on there being enough electricity to power our vehicles, our buildings, our equipment, et cetera. We're asking large parts of our economy to electrify.

Still, it's not clear that the interconnection and energization timelines for all these electrification efforts will line up with our goal dates. I don't want us to back away from our transportation and climate efforts, but I don't want to set the state up for failure either. I'm curious to hear from our panelists on how to address the overall barriers to electrification so that we can have a clean green energy sector. Thank you.

Thank you, Assembly Member. We'll ask our panelists to please come forward. We will begin the presentations in the order that the agenda has outlined. We'll reserve our questions till after the final panelist is concluding or concludes their remarks. Welcome again and thank you for making the time to being here with us today. You may begin when you're ready.

Thank you, Chair, my name is David Erne. I am Deputy Director of the Energy Assessments Division within the California Energy Commission. I'll be talking today about the California electricity demand forecast as well as some additional programs that we were working on in collaboration with CPUC that address the topic that we're talking about today. So if we can go to the first slide. So let me put some in perspective as kind of a starting point for the distribution planning, which is the forecast.

CEC creates the forecast annually. The forecast looks at has in the past looked at a 10-year period. Now we're expanding that to a 15-year period starting this year and it provides a forecast of load on an hourly basis for each day of all of those years. We provide that by planning area, which is shown in the map here. You can see the different planning areas that we provide that for. It's a system-wide look.

It's developed in collaboration with the CPUC, Cal ISO, and stakeholder input, including from the utilities. It is used by CPUC, Cal ISO, and the utilities for planning purposes, for resource adequacy planning, resource planning for the CPUC and for transmission planning by Cal ISO as well as overall planning by the utilities. So it becomes a foundational part of all of our resource and infrastructure, both transmission distribution planning in the state. Each year we look at a variety of forecast options and different scenarios.

Those scenarios look at different levels of building electrification, transportation electrification, energy efficiency, and then we also incorporate any changes in policy that occur each year. So for example, in last year's demand forecast, we incorporated CARB's regulations related to zero-emission vehicles and incorporated that into our planning processes. So we had a high transportation electrification increase that showed up last year and I'll show you that graph in just a second. The scenarios that we develop.

We work collaboratively with CPUC and Cal ISO to establish the planning scenarios that they'll be using for their planning processes. On the distribution side, we put out a variety of scenarios and then the utilities have the ability to select from the different scenarios on the ones that they want to use for their planning processes.

They collaborate together to identify which combination they would like to use for their planning processes, and then they go to the CPUC to get approval to use that combination of scenarios for their planning processes. So that's how the overall process works for the demand forecast. Next slide, just to give you a little more insight into the scenarios, we produce quite a few scenarios. As you can see, in addition to the baseline, we have multiple energy efficiency scenarios, building electrification, and transportation electrification scenarios.

We put out quite a few options, and as you can see in the right hand side, this gives you an example of a couple of different scenarios that happened in our demand forecast last year. So if you look at the dashed lines, those were referred to as the mid-mid and the mid-low scenarios. Last year we changed that title to a planning and a local reliability scenario. So our terminology has got a little bit better in terms of those processes.

And the planning scenario is used by CPUC and Cal ISO, and the IOUS chose the local reliability last year for their grid needs assessment planning for 24-25. And you can see the difference between the 2021 demand forecast and the 2022 demand forecast. And it's a little hard to see on this graph, but if you look at the dashed lines, those represent the planning and local reliability in 2021, and the solid lines represent 2022.

And I'm just wanting to point out the difference, particularly in that upper green line, which is the local reliability forecast, which takes into account both that and the blue line take into account CARB's new regulations, right? So it's greater transportation electrification, so it gives you an illustration of how policies are incorporated in the demand forecast and what those policies then mean to that forecast moving forward. You can see a tremendous amount of demand expected from those scenarios. Next slide.

Want to give you some perspective on information that we have on interconnections to give you a representation of the trends. So again, kind of hard to see, but up until 2021, those are actually green. It's actually a green line. Then beyond 2021, it's a blue line. And this represents information that we have on interconnections that have occurred up to 2021 and our projections beyond that, up through 2035. And that's for PV on the left on the distribution system, and it's for energy storage on the right.

You can see we have quite a bit more interconnections, obviously of PV than we have of energy storage, but they're both growing and they're expected to grow substantially. We estimate approximately up to 2021 about one and a half million interconnections. We're working on getting those numbers right statewide, but it is a large number and it's going to continue to grow with all of our implementation of these technologies. Next slide gives you an example of the transportation. So it's not quite the same.

We don't have interconnection, but we do have expected purchase of electric vehicles or zero-emission vehicles. And this represents on the left the number of vehicles that are expected to be purchased and be on the road operating in all classes between now and 2035. And on the right is the energy demand that we're projecting for charging those vehicles.

And you can see substantial change between prior to the CARB's new ruling and after CARB's new ruling in terms of what we anticipate, in terms of number of vehicles and the energy that's going to be required to charge them. Let me transition to a slightly different topic now that I've covered our forecast, and that is other initiatives that CEC has going on in collaboration with CPUC to really help with our distribution system in the future. So we can go to the next slide.

And that's the load flexibility ecosystem that we are developing jointly to try to ensure that we have take advantage of the opportunity to control devices remotely and be able to do that seamlessly in collaboration with customers and aggregators.

So in the upper right hand corner you'll see we have CEC's Load Management Standards and CPUC's California Flexible United Signal for Energy CalFUSE, which are both helping to establish time varying rates for electricity at the utilities to enable hourly rates and therefore a market signal that can help be utilized in controlling different devices.

CEC has also developed the Market Inform Demand Automation Server Midas, which is a database which will capture all this information from all of the utilities and provide that information out to either smart appliances directly or through service providers through aggregators who can then take that information working with our customers and be able to aggregate those resources over time and be able to provide net peak benefit, customer savings, et cetera.

And hopefully in collaboration with customers that it'll be seamless to them, but it'll provide the benefits to them and the financial rewards. Next slide. Although we've talked about this to the Assembly before, I just want to reiterate we have put in for the Clean Energy Reliability Investment Plan a substantial amount of funding for that $1 billion to go to demand side resources.

Scaling demand side resources is something we consider to be very important and that's almost half of the $1 billion that was identified for the Clean Energy Reliability Investment Plan.

And those funds are really intended to expand demand side solutions, including providing greater opportunities for load flexibility, providing additional resources to disadvantaged communities who might need help with things like panel upgrades or possibly for distribution system upgrades that are necessary in association with supporting communities that are being supported by CPUC programs to help in those disadvantaged communities be able to implement distributed energy resources in a more affordable way. And so we've identified funding in there for programs such as that.

We had substantial support from stakeholders for those demand side resources. And so we feel that that's a very important program to continue pursuing. I won't go into the final side, which is just the dollar values. But I do want to say one other thing that CEC is working on this year is as part of the Integrated Energy Policy Report, we are incorporating or covering interconnection both of the transmission and the distribution system.

And we'll be providing our IEPR report this year, which will go through the overview of interconnection challenges and opportunities and lay that out for the public. So that'll conclude my comments.

Just waiting for my slides. There they are. Okay. Good afternoon, Chair Garcia and honorable members of the committee. My name is Leuwam Tesfai, and I serve as the Deputy Executive Director for Energy and Climate Policy at the California Public Utilities Commission. Thank you for the opportunity to appear before you today in this hearing on electric distribution system planning. Next slide, please. So, I wanted to start my presentation by briefly giving an overview of different types of connections to the electric distribution system.

The slides illustrate the differences between the distribution interconnection process and the energization process. In green, at the top of the slide, you'll see interconnection. This work is governed principally by two different tariffs. For those not familiar with tariffs, they are like the rules of engagement between a utility and other entities like their customers.

So first we have rule 21, which is a CPUC jurisdictional tariff and includes projects like behind-the-meter generation, like rooftop solar or storage, and most recently, even rules related to vehicle-to-grid integration. And Rule 21 is a long-established tariff, but has seen much development over the course of several years in a robust stakeholder process, which established rules for transparency and safety.

The other tariff in green is the Wholesale Distribution Access Tariff, or WDAT, for distribution interconnections, which is a Federal Energy Regulatory Commission tariff. This tariff governs wholesale, in front of the meter, projects that connect to the distribution system. Now, shifting to the bottom of the slide in blue, we have a different aspect of distribution system planning, which is energization or service connection. These types of projects are called customer loads, like new housing or a new business.

They can even include new customer loads like electric vehicle charging, though there are tariffs for these processes. Each customer comes to the utility with a unique set of circumstances for the utility to address, because developers and businesses develop unique projects at unique locations. But I also have the different tariff rules listed on the slide. The CPUC is addressing energization timelines through a combination of short, medium and long term strategies to improve distribution planning processes. Next slide, please.

So, looking at the short term, and some of you may have heard me mention these in other hearings, but I appreciate the opportunity to go into more detail given the subject of the hearing. So, in the short term so first, the CPUC has pulled together a staff task force to respond to requests from communities and customers on challenges to investor owned utility energization. We call this a special task force because this is traditionally the responsibility of the investor owned utilities.

The CPUC sets the regulations, and the investor-owned utilities manage the business to meet these regulations. Given the emerging concerns raised by the legislature and community members, we have pulled together key staff who have been troubleshooting issues with customers individually and liaising with the utilities to find short-term fixes and get projects energized. This has included second looks at the load needs of a customer, which sometimes can be adjusted, or identifying smaller engineering fixes to energize a project more quickly.

Through this team, we've also been trying to prioritize energizing housing and public safety projects and have received very positive feedback for our work. Second on the slide is new electric vehicle energization rules. The CPUC last year adopted an interim 125 day business service energization on average for projects taking service under rule 29 and 45, which I had listed on the other slide.

On the other slide under energization. The timeline is an average, meaning some projects may take longer, some may take less than the 125 days to energize. This average excludes projects above 2 megawatts, excludes projects under rule 16 and 15, which may require a whole new distribution line or whole new service connection, and those that might require a whole new substation upgrade due to the complexity.

in early 2024, based on that one-year implementation data, the CPUC will assess this pilot and assess the progress towards implementation and assess any potential changes as well. And then third on this slide are the load integration capacity maps. This is a publicly available mapping tool that identifies areas on the utility grid that can or cannot accommodate load growth at a given time. The maps are currently also being updated.

We do recognize that some entities do not have the flexibility to move their projects, but these maps are important so that project developers understand the realities of the grid as they make site acquisition decisions. As you all know, big infrastructure projects take several years of planning, and electric grid capacity is a factor in that planning. Like many others that must be taken into consideration, we are creating greater transparency with these tools to allow for that. Next slide, please.

So this slide is going into the medium term, which are the general rate cases. As many of you know, the general rate case is the regulatory proceeding used to address the costs of operating and maintaining the utility system and the allocation of those costs among the customer classes. The proceedings propose billions of dollars of proposed investments in the distribution system utilities file GRCs at a staggered term of every four years.

And this slide illustrates where the PG&E rate case is, where the SDG&E rate case is, and the Southern California Edison rate cases. The GRCs rely on the CEC's IEPR demand forecast for projecting load growth within their service territory. As you just heard from my colleague at the CEC. Transportation, electrification, and building electrification had not historically been a large part of the IEPR forecast.

But due to all of the changes in policy direction, the CEC has been incorporating that data into their demand forecast in order to help support the IOUs in their investment planning. Another key reason that the GRC is part of our medium-term solution. For example, for PG&E is that we are expecting their general rate case to be concluding this summer and so they will be getting their new allocations for their budgets at that time. Next slide, please.

So we've talked about the short term and the medium term, and now we're shifting to the long term. This slide highlights our long term strategies to improve utility distribution planning, which will include interconnection and energization, as well as part of an open CPUC proceeding called the High DER or Distributed Energy Resources Proceeding. Some of the objectives of the proceeding include improving electric distribution planning, including electric vehicle charging, infrastructure forecasting to support cost effective and widespread electrification of the transportation and building sector.

The proceeding is also targeting to optimize electric system infrastructure investments by facilitating community input about planned developments, DER sighting plans and resiliency needs. The main point of the slide is to highlight the current stakeholder process that will lead to a proposed decision that makes significant distribution planning improvements. This work is being done pursuant to this first track of this proceeding.

Some of the steps in the proceeding include that the CPUC has issued a ruling that directed the investor-owned utilities to file an overview of their current distribution planning processes to give all stakeholders a thorough understanding of the current process. Following that ruling, the CPUC posed several questions to all of the stakeholders in the proceeding regarding their thoughts on potential improvements that should be made to distribution planning.

This is going to allow us to create a staff proposal on new rules of engagement between the utilities and local governments, tribes, planning entities, for example, to better inform their distribution planning process and address all of these concerns of the speakers that we're going to be hearing from today, as well as enhancing how the IOUs use data to inform distribution planning.

Of course, that staff proposal will go out to stakeholders for their final input to make sure that we have incorporated their feedback accurately, ensuring a robust process and real change. Next slide, please. This is my last slide and highlights a part of the energization and distribution planning process of high concern transportation electrification. On Monday of this week, the CPUC publicly launched a new interagency initiative on freight infrastructure planning. We've been working hard this year to get this process off the ground given all of the concerns that we've been hearing.

And we have received very positive feedback from Monday's webinar. The Freight Infrastructure Planning Framework, or FIP, is a state interagency initiative which includes the California Air Resources Board, the California Independent System Operator, the California Energy Commission and the California Transportation Commission to plan for medium and long lead time medium and heavy duty electrical vehicle loads. Specifically for utility-side infrastructure, which includes at the distribution level, substation and even transmission level.

We're focusing on medium and heavy duty freight in the implementation assessment due to the significant localized impacts on electric infrastructure and the significant air pollution burden impacting disadvantaged communities. And to ensure the success of the CARB regulations. CPUC is coordinating with stakeholders to identify other vehicle classes and types that are dependent on long lead time infrastructure as well. So we'll also be leveraging a process like this for light duty, fast charging, fuel cell, electric vehicles, et cetera. Final slide.

I don't need this slide, actually, so I'll just conclude there and turn it over to the next speaker. Thank you.

Thank you, Mr. Chair, members of the committee. I'm Satvir Nagra, Pacific Gas and Electric Company Director of Asset Planning. On behalf of PG&E, we appreciate the invitation to provide the IOU perspective on the very important topic the committee is covering today. Also with me today to help with any technical questions is Matt Ventura, PG&E Senior Director of Service Planning and Design.

I'd like to begin by acknowledging that we have work to do to meet current and future customer needs for new service connections and electric system capacity upgrades. We understand the real world impacts, delays or uncertainty about our ability to connect can have on our customers. I can speak for all utilities when I say we strive to serve our customers and potential customers safely and as fast as we can.

At PG&E, we've already begun fixing these issues and customers already are experiencing improvement. To respond to growing demand, we've nearly doubled our investment in new service connections in the last five years and have spent more in this area than our rate case funded. We're meeting with customers, construction trades, stakeholders, lawmakers and regulators to hear their concerns and work together on solutions to accelerate new service connections.

Late in 2022, we launched two committees in partnership with California Building Industry Association, including a technical advisory committee comprised of builders, contractors and other leaders in the development space to jointly work on solutions and help us prioritize areas of improvement.

We're leveraging new lean operating and waste elimination systems to drive better, quicker outcomes for customers, including dedicating a full time team to creating a more streamlined process, reducing our estimating time for projects, and finding new efficiencies to reduce time from customer application to connection by almost half by the end of this year alone. We are committed to meeting our customers growing energy demand, and we're equally committed to supporting the state's bold affordable housing, economic development and decarbonization goals.

And we know that we play a critical role in achieving these goals. In recent years, at the direction of the legislature and CPUC, we have been laser-focused on ensuring our energy system is safe and climate resilient. Climate change has altered the physical environment in which we operate our system. We've invested unparalleled resources toward wildfire prevention and safety, which we all agree is the right thing to do for our communities.

It's also important to understand that the unprecedented wildfire and safety work and investment has come at a time when we're experiencing load growth for the first time in decades. Load growth began in 2018, driven by state legalization of cannabis and increase in water pumping for agricultural purposes due to persistent drought conditions.

Grew larger in 2020 with the impact of the COVID Pandemic in data center expansion and Internet shipping center growth, and has continued to increase as a result of economic development and bold state policies on affordable housing and decarbonization. In addition to the nearly 1 billion annually on connecting new customers to the grid, PG&E has invested nearly 1 billion in upgrading our electric capacity between 2015 and 2021.

In fact, we're spending more on capacity than ever before, including planned investments of 15 billion in capacity and asset health over the next decade and beyond. At PG&E, we're creating and adopting a new integrated grid planning approach to meet the multidimensional needs of customers and communities. Given $1 of spend must go to many purposes and to support the state's affordable housing, economic development and decarbonization goals.

This stable multiyear plan will give our teams and community visibility into what work we will do when, which will enable more advanced resource planning, help customers understand when they can expect new connections and upgrades in their areas, and support rapid electrification growth. We're exploring new and innovative solutions to meet our customers' demand, and we're seeking creative and alternative ways to fund these investments.

For example, in Humboldt County, we partnered with Shelter Cove Resort Improvement District One, which applied for a Department of Energy Grid Resilience and Innovation Partnership grant for the Shelter Cove Microgrid project. This community in a remote area of North Coast faces grid challenges, including earthquakes and severe winter storms. Together, we're creating an innovative microgrid project to reduce the effects of seismic and climate-driven events. The microgrid will be based on the highly successful Redwood Coast Airport Microgrid.

The project will increase safety and resiliency, enable economic growth through increased reliability, meet current and future energy demand at a lower cost to customers. We'll continue to explore alternative ways to fund more work like the DOE grant program. In closing, many have asked us what needs to happen to make this work go faster to meet growing customer demand and support state policy goals.

We need the support of this body and our regulator to be able to add and continue making improvements to the electric grid to meet customer demand and state policy goals. Our CPUC regulators can support the need for additional investment through timely rate case decisions that fund the level of need we are seeing today and allow predictable cost recovery and stable cost of capital. The state's general rate case process is designed to be a slow and steady long-term planning process.

It requires utilities to forecast load investment needs years in advance. However, we are now facing emergent needs from customers and new ambitious state goal policy goals while continue to make needed safety investments. Customer demand is not always known that far in advance and evolving state policies affect load growth. The current cost recovery model isn't keeping up with these changes.

We need to work quickly to update our utility funding mechanisms to address these emerging needs and look forward to working with lawmakers and regulators to ensure the state has the most effective policies to meet our customers' energy needs and to support the state's housing, economic and climate policy goals. Thank you.

Thank you.

Good afternoon, Chair Garcia, Vice Chair Patterson and committee members. I am Dan Beans, the Electric Utility Director for Roseville Electric Utility. Roseville is a growing community of over 150,000 residents with approximately 67,000 residential and commercial customers. We are located in Northern California, about 20 miles northeast of Sacramento. Given our close proximity to Sacramento, I welcome visitors to come tour Roseville and see the impacts that our utility has on our community.

I'm also President of CMUA, the California Municipal Utilities Association, which, in addition to over 50 public water agencies, we represent over 40 public power utilities that provide safe, reliable electricity to over 25% of the state. While I'm speaking on behalf of the public-owned utilities, the POU perspective, each POU represents communities of different sizes, economic and geographic profiles, and priorities. In each POU, tailors planning to reflect their specific community characteristics and needs. Importantly, though, we are all community-owned.

To start, I thought I would give a quick overview of how Roseville looks at distribution planning, improvements and expansions on our system. Overall, the distribution system in Roseville is either already constructed or detailed designs have been prepared for undeveloped portions of our city based on zoning and large lot maps. We prepare a multiyear forecast of electricity needs for each distribution circuit and model that need in our distribution system modeling software.

The forecast is prepared in consultation with the development community to determine expected timelines for construction of new residential and commercial projects. Projected energy needs are estimated for new homes and commercial projects based on expected service sizes, field data, and experience. Residential electric vehicle adoption has been included in our forecast as well. We also perform contingency analysis, which is the ability to continue to serve all customers after the failure of equipment to determine if any upgrades are required.

This analysis helps us determine stress on our electric system. This process incorporates all known projects and future development. We prepare our own forecast for use in the design of the deposition system, which is based on historical data, discussions with developers, projected new construction and EV adoption data from a recent EV study we commissioned. Roseville is not reliant on investor owned utilities to make upgrades. To support our upgrades, Roseville owns its own distribution system and interconnects with the Western Area Power Administration WAPA.

At the bulk transmission level in Roseville, we are in the Balancing Area of Northern California or BANC. We participate in the Western energy imbalance market and are not located in the CAISO. These are important distinctions in how we operate that may differ from other POU's. As I mentioned earlier, Roseville is a growing community and growth is a consideration that we have had to factor into our planning in new ways.

More recently, Roseville has had to modify how we interact with our building community related to planning for and purchasing equipment. While electric utilities have broadly been experiencing supply chain delays across all major electric system equipment, distribution transformers seem to be having the longest lead times and are a priority for us in terms of supporting new development. Prior to COVID-19, the lead times on distribution transformers were 10 to 12 weeks. Now they are an estimated 72 weeks.

These long lead times on the equipment necessary to do our business has put an enormous burden on proper planning, and we have to procure items well in advance. The lack of firm delivery dates from many of the suppliers makes this planning an even more challenging endeavor. So what have we done about this?

Aside from working tirelessly to procure equipment and exhausting all options outside our normal routine, including rationing transformers and sourcing equipment from new suppliers, we recognized that we needed to create partnerships with our building community to ensure the utility was not the source of meaningful development delays. We began to approach the development projects based on site readiness. We shifted our approach on growth to make sure we had enough equipment available to meet immediate needs, such as replacement of failed equipment in existing neighborhoods.

We have instituted certain milestones that must be met before equipment is installed. This includes a cooperative effort with other City of Roseville departments, including the Development Services Department. Essentially, the normal channels for planning and procuring equipment became too slow and problematic, so we had to rethink how to address development growth as well as restoration of electric service to customers. This was the only way that we were going to be able to keep up with growth in our community in the wake of supply chain challenges.

As a positive outcome of these efforts, I now serve on the board of our local Building Industry Association. The North State BIA and I have worked with this group to lobby at the federal level for supply chain solutions. A collaborative approach on material procurement may be an opportunity for utilities to explore. We have seen firsthand procurement challenges for necessary equipment to support growth and restoration of service. This is problematic for small to midsize utilities throughout the state and for that matter, the country.

Small utilities have a harder time entering the market and accessing necessary materials under supply chain constraints, and there may be some value in utilities collaborating on these efforts. There may also be an opportunity for large and small utilities, IOUs, and POUs to coordinate better in this area. This would be a beneficial outcome for everyone involved instead of competing for the same resources at the same time with the same goals in mind.

In addition, the state can help by recognizing that supply chain issues are real world barriers, so some flexibility is needed while we continue to work under these constraints, publicly owned utilities plan to meet or exceed the targeted state policies and goals related to renewable energy, climate change, and transportation electrification as we take on electrifying other sectors of the economy. Again, flexibility will be important.

Electrifying the transportation sector will be no small task and will require us to continue to evaluate the electric system infrastructure and capacity needs to accommodate these targets on an ongoing basis. We are supportive of electric vehicle deployment as a means to support economic growth in our communities and to be responsive to the needs of our residents. While the state mandates are driving this transition, our customers are reinforcing these targets through their uptake of electric vehicles. Community-owned utilities respond directly to our city council and customers.

Therefore, it is in our interest to respond quickly and effectively on energization requests we hear directly from our community members if there are delays. Bosch recently announced that they are planning to invest 1.5 billion in Roseville at an existing facility in our community to make chips for electric vehicles. This is a real-world example of how electrification is driving investment in our community. We are planning now to ensure we have the right infrastructure in place to meet the expected needs before the demand arrives.

Predictability is necessary in state policies and goals so that utilities can plan. Flexibility in implementation is needed as fuel switching increases and renewable and zero emission energy targets simultaneously ratchet up. Our goal is to be a conduit to achieve these targets, not a barrier. Permit streamlining is also an admirable goal. However, depending on the project, the construction may still be confronted with supply chain challenges. Finally, I want to stress the importance of timely collaboration among IOUs, POUs, and developers.

Every tool will need to be is needed to ensure the state meets its goals on time. Collaboration between investor-owned and public-owned community is paramount as electricity needs grow and upgrades to our system are needed. Greenhouse gas emission reduction targets depend heavily on clean electricity and support for California's clean energy and emission reduction policies hinge on the utility's core mission of providing safe, reliable and affordable power. I would like to thank the committee for the opportunity to speak, and I'm happy to answer any questions.

Thank you, Rex Bohn, Humboldt County four-term supervisor up there, you guys, way up north. We're probably most well known for being the largest producer of redwood fencing in the world. I'm not here about cannabis. Chair, you said five to seven years. We're getting some customers hearing 10 years up in southern Humboldt County, and it is causing a big delay in both our construction and our forward planning.

I want to give kudos to PG&E. They're doing everything, or we feel they're doing everything we can, but the deliverables aren't there yet. And doing everything and deliverables is what's going to make the difference for us. We're trying to plan for climate adaptation as our population increases. We have some major things happening on our port international fish farm coming in, which is going to be a large power usage. We have offshore wind. We've sold two leases and we've heard it.

We're probably going to be the first ones out of the chute on that. We have a hospital in Southern California, I mean Southern Humboldt that just passed a bond because they couldn't meet seismic retrofit. They have bought their property. They want to move forward. They have been told, we'll get you power, but I don't think there's a guarantee on it. It's still a nervous thing and you can't start building until you get that Will Serve Letter.

And it's a small community on the southern part of our, most of our problems are coming on the southern end of our community. We're about 135,000 people stretched out over 2.7 million acres. So that becomes an issue getting the rural area served. I've passed chair of rural counties representing California, so we're hearing this from a lot of our rural counterparts. We have a local school. I'm just going to give you a few ideas.

We have a local school that did a bond approval for their school, did quite a few upgrades that were powered, but then they upgraded their cafeteria system. And they have just found out this week after a long delay that they will get power. It kept getting sent back to design and review. We need to set something up that there isn't a year between the application to the hookup because the delays and we're having people walk from projects.

We keep hearing that the demand for power and I appreciate the Shelter Cove project. I appreciate our airport grid project with that. We're very fortunate. Neither one of those would probably the airport for sure would not happen. We have a Schatz Energy Service, which is a world-renowned energy service at Cal Poly Humboldt, and they are turned to a lot from energy users all over. So we're lucky we have those right in our backyard at our Cal Poly.

We have one applicant and this is just one of more than 25 I could have brought forward. Most of my notes are sitting on my desk as I was getting everything ready this morning at 05:00 in Humboldt, and that's where they're still sitting. But we have a farm that was trying to get hooked up, runs off a generator, clean air. We wanted him off a generator. He got a Will Serve Letter.

They said, bring in do all your he did $245,000 worth of upgrades so he could get his power, paid his deposit, told he couldn't get served after he had got the Will Serve. Came back, paid his deposit, and then they went through that last bankruptcy, got his check back, check bounced, but they made that right.

Then they came back, said, we'll give you a Will Serve, wrote him another deposit check, set up two dates of days that we would be out there to hook him up, and his power hookup was 11ft away from the transformer pole. Now, with that being said, they never showed up either time. He had his electricians there ready to go. So there needs to be more communication with the consumer, more honesty with the consumer. I know they're trying very hard. I understand that.

I was telling my new friend from the PUC, we had Commissioner Houck up in Humboldt County. I want to say it was October or November. She spent 12 hours with me. We went everywhere. We met with the hospital administrator. We have a huge 78-acre mill complex that has been purchased.

And they are having trouble getting a Will Serve Letter, which means they're having trouble getting financing, which means they're having trouble building this, which means we're having trouble collecting any tax dollars off that piece of property as it sits dormant.

So we keep hearing that PG&E has something in the works, and I know they're working at that, but five to seven years will not in this economy for us in Humboldt County, and I'm saying Humboldt County, but this is happening in a lot of rural counties, as you guys well know. And you're hearing it, the PUC is hearing it and everything else. But we do need to get these services. We need to work on these services.

And I know PG&E has had a lot of troubles, but a lot of those troubles are self-serving maintenance issues. And we've got to get that straightened out. And I don't know how you guys are going to figure this out, but for the small counties that sometimes sit back in the dust and are the last ones to get served if we're going to stay healthy and provide the services you want, where you recreate, where you get a lot of your food, beef and things like that.

We're going to need this power and we're going to need a better partner than PG&E. They're a good partner. We need them to be a better partner so we can go into these situations with confidence that when somebody builds something, we have a couple of buildings setting up their brand new buildings that had Will Serve Letters that are still sitting empty because they can't get hooked up.

The investments made, everything's done, and they can't get hooked up. Somewhere in there, we need to get that figured out. And I don't mean to be hard on PG&E because 99.9% of the time when I get up in the middle of the night to do what I do, the light comes on. And during the recent earthquakes of December 20 we had, PG&E went out of their way to get people hooked up and they went out of their way to provide generators, hundreds of generators to people that they couldn't get to because during the storms and during that, we had a snowmageddon that we're not familiar with as other places are.

So they step up when they need to, but we need to plan ahead. And we keep hearing this planning ahead, but when you look at these things that are coming down the pike, the hospital bond in southern Humboldt, that was passed four years ago, five years ago.

So, you know, there's hospital coming. You need read your audience. So with that, I appreciate your time. I love coming down here and speaking to you guys, and I appreciate time. It was wonderful seeing my Assemblyman here. Jim Woods, he's heard all of this 100 times because I know I've been doing 100 meetings with them. And congratulations. Good to see you up there, Damon.

Thank you, guys.

Thank you.

Good afternoon, Chair, fellow committee members. Bill Webb. Bill Webb Holmes, Chico, California. Thank you for the opportunity to come here. And I'm just going to share my most recent story with PG&E Planning Services. Quick background on myself. I'm a third-generation builder in the Chico area. My family has been building single-family and multifamily developments for the last 50 plus years. Up there, we continue to own, operate, and manage quite a few properties.

The most recent project we started last year, it's a 220 lot subdivision. It's going to be phased in over several years. Market will dictate how many, but submitted my application with PG&E on March 4. Actually received my application deemed approved from PG&E on March 4. The next several months, with several emails, phone calls to their planning department and the local rep, we received some of the preliminary engineering work back. It's where my design consultant could start working on design.

It wasn't until July 20 that we were able to work on what PG&E calls a key sketch. It's just, I guess, a preliminary sketch of how we're going to serve power to the property. Another couple of months went by where that finally got approved. In September 6, we submitted our first design to PG&E. So that's six months from when our application was received. I had anticipated starting construction in July or mid-July that year.

Last year, obviously had to put that on hold, not even having a draft we could work off. So moving on from September 6, we received our first comments back October 7 with a few items that needed addressing. We resubmitted that the same day. It wasn't until December 6 we received our second round of comments. Part of the project was approved that month. The second half of the project, which was a little bit of betterment work on PG&E side and some WRO work.

I can't think of what that acronym stands for right now. That wasn't approved till later that month. So now we're in December. I decided to start building homes in December with the understanding I would have power by March. At least that's what was told to me. So. Okay. December. That gives me three months to get the houses up. We had several contracts at that point. So now we're five, six months delayed on our construction starts. We're moving through the winter. Everything's going fine.

Things are moving what I thought through PG&E system quite smoothly at that point. We get to March Eighth. Still no contracts. Approvals were received in February. And then after our approvals, it goes to costing. Fast forward. I just was fully energized this month, May 5. That's 14 months from when my application was received. During that time, we had maybe a half a dozen to eight homes completely constructed. Six of those, we had buyers ready to move in or getting ready to move in.

Back when we started in December, I looked at using generators to power the homes. Eventually, we pulled that idea. It just wasn't practical to ask people, move in and live off a generator for an unknown period of time. We did supply our sales office and model homes with generators just so we had something to show the folks. I'm kind of in the same boat as Rex over here. Something needs to be done.

I do hear from my design consultant that they meet monthly with representatives of PG&E on how to help maybe streamline the design process. I just reflect back to about 15 years ago when things were a little simpler. We didn't rely on the computer so much. We talked to people on the phone. We met with them in person. We had pre-engineering meetings where all the utilities would come.

And we'd hash out some of the details and get a lot of the questions answered in a two hour period. I don't know where we go to help. I'm a small builder. I build 40 to 50 homes a year. We build apartments here and there. I don't know how the big guys are doing it. I know we're not talking about equipment here today, but that's another issue. But something has to be done to where we're not waiting 14 months to energize a home or a project.

Thank you very much. Thank you to all who have presented. I know we have a handful of questions from our colleagues up here, so I'll look to my left first. I'll start with Eloise Reyes and then work our way down.

After all these informational hearings, PG&E is all.

It must be. And trying to find the person who makes the decision to take care of business is always the most difficult part. I will tell you, and I share this story in other committees that a little unrelated, but the idea is related, and that finding the person to be able to say, the buck stops here. This is the process, and this is what's going to happen, and this is who decides, and this is how we hold people accountable. Dr. Shirley Weber, our Secretary of State, when she took office, said, I need to know who's responsible for each aspect of this office so that I know that if there's an issue, I know who I'm going to go talk to to make sure that issue gets taken care of. And I've been on this Committee for my entire six years, and it seems that especially during the wildfires, it was a serious issue. So I hope that at some point, PG&E gets to the point where they have someone who says, the buck stops here. I am responsible, and I will find exactly who is going to take care of the issue. I won't ask a question because I know we can't get an answer. But I do have a question for PUC. In the background information from the Committee, it said that there was a recent CPUC report that estimated that $50 billion will need to be invested in just the distribution grid alone by 2035. So my question is, what is the Commission's strategy for reducing and managing those costs? How much are you assuming increased demand from electrification will reduce ratepayer costs, ratepayer cost pressures, and what is the certainty of those assumptions?

Thank you. Assembly Member Reyes. So you're correct. A consultant study was released, and we held a webinar on the 17th to present that draft study to our stakeholders. I do want to emphasize that it is a draft study. We already know that one, we're going to be getting many comments from stakeholders reflecting on the assumptions that you've mentioned that are in the study to make sure that the study was conducted in a way that everything we do is with stakeholders. So I do want to reflect there. We've also identified opportunities already for updating the study related to building electrification data and transportation electrification data that is newer, that has come in. So there's already been a couple of areas that we know that we want to update this draft study stakeholders as well as additional data. You are correct on the estimate that was listed on the study. I do want to actually point to something that was in my colleague's presentation, but it's something that the CPUC and the Energy Commission are working on together, which are load management standards and the adoption of advanced rates in order to help customers to mitigate costs using different automation opportunities to reflect real time grid conditions and help customers more efficiently use electricity. So that's just an example, a way that costs would be mitigated. And we'll be looking at other strategies as well. So part of the stakeholder comment process is going to be elevating ideas from stakeholders on how to mitigate those costs. So this is really just an initial draft study, and there's many steps to go further, but we thought it was very important to at least start on this study process and start getting some more concrete, detailed information about what these costs look like in the future. And an additional point that I do want to make is that we know that there is significant aging infrastructure on the system, aging infrastructure that we know is going to need to be replaced anyway. And so, something that we're looking at with the study is not replacing alike for alike, but replacing this aging infrastructure with more modern technologies in order to be able to support things like transportation, electrification, building electrification, bi directional charging, things of that nature. So this study is really just the beginning, but we did think it was very important to get the study conducted and start with that stakeholder process.

The second part is how much are you assuming the increased demand from electrification will reduce the rate peer cost?

That's still under studying as well. So we don't have that number just yet. We just have that initial number. But we'll make sure to keep you updated.

Thank you.

Yeah.

Thank you, Mr. Chairman.

Thank you, Mr. Patterson. And then Mr. Ting, followed by Mr. Wood.

Thank you, Mr. Chairman. I appreciate the opportunity. I guess we all have stories, don't we? Well, I'm going to tell you a few about Fresno, California. I was a mayor of Fresno for eight years, then up here for 10, and Vice Chair of this Committee for these 10 years. Fresno is exploding. Really good things are happening. Our zoo is becoming one of the attractions of the State of California. Our international airport has just exploded. We have broken ground on a substantially large improvement in our terminal also with respect to our international TSA and all of that. At the same time, our community college system is investing a lot in new campuses. Clovis Community College has a big C Tech program, and they're concerned that they cannot get energized. Fresno City College was delayed in a major improvement with respect to its parking issues because of the delay that PG and E. Our center community college district in West Fresno, which is an area that has been essentially, I think, ignored for far too long. And yet over the last 1015 years, there have been significant improvements there. And we now have a planned and financed campus that will be associated with Edison High School as a magnet, delayed by PG&E. Hundreds of new homes on the verge of falling out of escrow because they cannot get energized at the time of the closing. My guess is that PG&E has probably heard of the concerns that those of us in Fresno have with respect to Energizing. And yet we continue to get the same kind of you know, we're doing the best we can, we're trying really hard, and yet we still have these significant delays. We have substantial and significant investment with respect to major construction projects that are coming online. We have a lot of distribution operations. We have a lot of integrated operations with respect to our agriculture people and their processing, all delayed. And if I heard correctly that you think that one of the solutions here is to ask for large rate increases and have them approved faster. Isn't that what I heard? So we're the fifth largest city in the State of California. Our SMSA is a million and a half people, and yet we cannot get fundamental electricity services to a city that has this robust development, our community colleges, all of that. And so look, I'm interested to hear but I've heard it all before and the question is when is the electricity going to come on? I mean, with all due respect, this feels a lot like the sort of the emergence of a third world country problem. Not enough electricity. I traveled in the 1980s, early 90s to East Africa and actually spent some time in Ethiopia, checked into the Conrad Hilton Hotel in Addis Ababa and there was a sign that said water is available from nine in the morning until noon. Electricity is available from noon until whatever. Are we getting to a place where California's robust growth, cities like Fresno's robust growth, is going to be stymied and we're going to be told not yes, let's energize, but no, wait, maybe. I mean something has to happen here because our community and our leaders have worked diligently to convince our population, Fresno is almost 600,000 now, that we're the capital region of the fourth or fifth most important capital City of the most important region in the area. You've got LA, San Francisco. You've got San Diego, you've got Sacramento, but you've got Fresno, California, as well. And if you were to take interest in looking at what Fresno is becoming, you would be amazed and surprised at the construction. And it's not just the city limits. This is a regional issue. And so from everything from home ownership to education for our kids at community colleges, we've made commitments and we've asked people to support them with respect to bonds and self imposed taxes, we're a self help county with measure C. And what is the delay? What is the problem? We're all ready to go to work, roll up our sleeves and do what we do best. We cannot get electricity in California in the 21st century. That's got to change.

So I know, did you have a question that you want to direct to folks? We have two individuals here from PG&E to respond.

I've had lots of conversations with PG&E down through the line with their local folks and others up the chain. Unless we see Energizing taking place, we see these homes that get energized. We see these construction sites of community colleges in underserved areas, right. And our zoo, and our airport is going to be an immense project. It's in the pipeline, it's in the works. We need to have the electricity to make that happen. And I don't have a question, we have a demand.

Thank you, Mr. Ting.

Thank you Mr. Chair. I guess just going to both CPUC and the CEC. Sorry I missed your earlier presentations, but just I think we've heard a lot what the problems are. In your mind, what are the solutions in terms of really making sure that we are increasing our electricity load, really improving our transmission, this interconnection? We know that there was a major issue when we had this debate around energy last fall and making sure that we could actually procure more clean energy, making sure that we're getting to our clean energy goals. So I guess if you could just maybe succinctly just highlight what are the solutions that we have to go tackle.

I'll go first. So in my presentation, I did start by talking about some of the differences between distribution interconnection and energization. Distribution interconnection being related to connecting behind the meter loads like solar storage, some vehicle to integrate grid integration and the different tariffs there, but then also honing in on the issue of energization and the rules there and the challenges, which I think really has been the focus of this hearing so far. So talking about the short term, I highlighted that we have pulled together a staff task fore that has been doing troubleshooting with specific customers and in particular PG&E, but also available for other utilities. I did emphasize that this is really the job of the utility, but we have pulled together our staff to provide that work and some of the solutions that have come through that have been kind of right sizing projects and making sure the right load is there, but then also looking at short term engineering solutions and getting PG&E to do those. And we've received very positive feedback about that with a prioritization of housing as well as public safety.

But I guess based on your statement, you make it sound like these are individual situations. I think based on the panel, based on everything we've been looking at, this is a systemic problem. So I don't know how a task force at the CPUC can address the systemic issue. I guess what's the systemic solution?

I can turn to what was the long term strategy? Because that was the short term. I was just highlighting there was a medium term related to the general rate cases and then the long term. And there were two aspects that I highlighted in my presentation. So the first was our high DER proceeding. And so in that proceeding right now, we are looking at the systemic issue. So changing how the utilities are doing their distribution system planning. We put out a ruling that required the utilities to respond to inform all of the stakeholders about what the current distribution system process is. Then we had another ruling that allowed its stakeholders to provide feedback on changes that need to happen. So some things that we heard from those comments that just came in so far have been enhancing the communication between local governments, planning entities, and the utilities to make sure that the utilities are informed by what a local entity's plans are for housing, for other economic growth. In addition to that, also heard feedback about enhanced data sets for the utilities to be using. Just wanted to give you a snapshot of where we see that going. The next steps will be around putting together a staff proposal based on all of that stakeholder feedback. Of course, we'll allow stakeholders to also comment on that staff proposal so that the CPUC can put out a decision changing the way the utilities do their distribution system planning. I also highlighted there are some acute issues in relation to transportation, electrification. So I did highlight a new freight infrastructure planning framework that launched on Monday. There was a webinar that was held, this is actually an interagency work, so it's being led by the Public Utilities Commission, but the Air Resources Board, the Transportation Commission, the.

Okay, so you're doing a ruling, you're asking for feedback. I mean, do we really need a ruling to tell us this is a problem, I guess?

No, but we do want to- I'll let you finish.

I think what we're looking for are what are some of the solutions. So you're saying is it really that communication, I'm going to ask PG&E, is it really that communications with local government? Is that the problem?

If I may respond, just saying that local governments are telling us it is a problem.

That's fine, I'd like to hear from the utilities. And we have one representative from local government who I think said stated his opinion.

Yes, we have a planning process and part of that what we are doing is as our reps are reaching out to local governments, we're going to be seeking information from them on what plans do they have so that we can ensure that we incorporate them, right. We're going to take the IEPR forecast from the CEC and disaggregate it to come up with what are the needs on our system and have the plans to upgrade our system. But in addition to that, we want to get that local community input. We want to get input from other stakeholders to make sure that the forecast that we have does align with what's going on in those local communities. So yes, I think it's going to help better inform what we're forecasting. But we do have a forecast and we do forecast needs.

But again, what Mr. Patterson is saying about Fresno and what our supervisor is saying in Humboldt, these are not isolated incidents. This is happening all across your territory. So to me this is not, oh, we need to have a better relationship with the Fresno City Council and the Fresno mayor. What's happening to increase the capacity? Because I don't think, to me for the PUC to come and say hey number one, better communication with local government, it seems much, much bigger. It seems like is it that your planning process is broken? Is that you don't have the engineers to implement this? Is it a resource issue? Because to me this is a systemic problem. This is we're having some issues with Humboldt, maybe we got to have better communication with Humboldt or Fresno. I don't think that's the issue. We hear it all over the Bay Area too.

Yeah, I just want to isolate the two issues. The Fresno problem is more about energization and not capacity issues. That service connection. Whereas in Humboldt it was capacity issues.

Fair enough.

And we did have the forecast that told us what work we need to do. The work is underway. It's just that the type of work we're doing is going to take a few years to accomplish, very complex substation upgrades, transmission line upgrades, building out new feeders and that work just can't be done in six months or a year. It takes multi years to implement those plans. So we do have the plans. The work is currently underway so that we can serve these customers in Humboldt and I can have my colleague Matt talk about the energization issues we are having in Fresno. But I just wanted to separate the two. Fresno isn't a capacity issue, it's more of an energization issue. Humboldt, definitely, we know we have capacity issues that we're in the process of resolving.

Supervisor wanted to chime in.

To jump on what Patterson said, we have great relationships with our local people, that's our job. They talk to us, they meet with us, they tell us everything, they work with us very well. We actually had an opportunity when the PSPS started four years ago where you had a new President of operations and I wrote him a very stern letter that we were storing all your nuclear waste from your closed nuclear plant, give us some respect. He actually flew up because we'd built a new power plant and we were able to island and we haven't had to suffer a PSPS since because we were suffering PSPS that were happening over in Tahema because that's where our power line was coming from 135 miles away, and we were being shut down for four or five days. So we did get a response in. But you're exactly right on the local level, we're hearing all the right stuff. Problems are problems and we need them solved. But the thing is, and I think what's frustrating, these aren't new problems. He says it takes longer than six months. This is a problem that's been going on I've been in 12 years, and it's been an issue for 12 years, so hopefully something comes from it.

Mr. Ting, you have a follow up question.

I think going back to the Energy Commission, again, this is a much bigger issue. And again, I just want to push back on the PUC saying that it's a communication problem. It doesn't sound like it's a communication problem. I mean, maybe some local governments are having that particular issue. To me, this is an energy strategy problem. This seems like there's a lack of planning and there's a lack of foresight. And that's sort of what we saw when we got presented with a number of options that were not ideal last fall. Maybe the Energy Commission can do this. So what are we doing to make sure that we're doing a better job? Having a plan, but then having a plan that we can execute because for whatever reason, even if we do have a plan, we're having problems getting power to various customers.

So, assembly member Ting, thank you for the question. In my comments I noted that well, first of all, I go back to the oversight hearing where I feel like we talked about it all in. It takes all sorts of solutions to bring us to the right stage. I did want to point out that we are looking at, and we are building out between CEC and CPUC a structure by which we can have more automated control of loads so that we can help mitigate some of the expansion that is needed in the distribution system by smartly applying and smartly taking advantage of the loads that are out there. And as those loads grow, being able to control them and operate them appropriately. And that will be some amount of infrastructure that's set up a strategy from the load management standards and Cal Fuse. Setting up midas and smart appliances will be the other aspect. So I think creating that ecosystem is important. There are other technology strategies that we have proposed through the Clean Energy Reliability Investment Plan, such as trying some additional opportunities where as we're building out charging, be able to build out those chargers with energy storage to help reduce load. So there are a number of technological advancements that can be made to help mitigate those loads at the source. I realize that that doesn't necessarily address the speed with which energization or interconnection is happening, but I think it's a part of our overall state strategy that I think is critical to ensuring that we have a future where we're operating the system more efficiently.

No, I think it makes a lot of sense, right, because if we can be more efficient with our energy usage, that energy usage can be used by more people, but that still doesn't get us to why we're having such an issue around energization. So I think the PG and E representative was going to talk about that.

Is it on energization or the capacity issues?

Energization.

Okay. I can have my colleague Matt answer those questions. He's working on energization.

I'm happy to.

To answer the question, but I didn't follow what the question is at this point. And after the response.

Why are you having such difficulty energizing?

Yeah, let me say that--

is that the question? I guess let's look at the Committee.

Yeah, that's simple enough. Simple enough, but incredibly complex to answer. Let me say what can maybe more directly answer. An simpler response would be to the things that are going on in Fresno. And so we did make a real concerted effort there in Q four of last year, working with the college.

I think that the college we had shared issues on both sides of the fence, but what it took was sitting down and having a lot of conversations. As the gentleman mentioned, we are meeting like I have a meeting with the mayor on Tuesday to try and coordinate and set objectives specific for Fresno and make commitments that we'll follow through on.

And that's the problem, and that's the struggle here. So I'm hearing that we've got a planning issue and that's going to be resolved and a building issue that's going to be out by the end of 24. We should I guess the way I took that was we're going to be caught up. If I took that wrong, I apologize. But right now, you're meeting the deadlines, the timelines, 10% of the time.

And I guess, again, I don't want to take this away from my colleague from Fresno, let him follow up, but I guess just to use this as an example, once you have these conversations, what is stopping the interconnection from happening?

Yeah, I think it actually was in some of our comments, or we've shared it in public statements. And so we have over 30,000 applications and customers in queue at the moment, over 63, not over, but 63% of those applications will fall out at some point in time in our process. And so we do have a lot of folks that come clog up the works and then fall out. And then, so I saw the written comments that were provided to the Committee, right?

And so some of those folks are falling out because the timelines are too long. Others are just coming, looking and backing out. So that creates a very large queue that prevents us from working quickly through the ones that are actually real and actually needing to be done. And so what we're doing about it is implementing a lean operating model that has been underway now for about eight months of seeing great results.

Timelines are shrinking, commitments to customers are up quite a bit from where they were when we started. And so we've put some real meaningful meat from the enterprise behind correcting an issue that has really as, and I don't dispute it, it's been gone going for many, many years.

So the 30,000 folks in the queue, is that a staffing issue? Is it because you don't have enough staff to process this? The utility has every incentive to do it. The incentives are aligned because you get paid for your interconnection, you get paid to do the capital work. So I don't think it's a misalignment of financial incentives, is it that you don't have enough staff to process those?

No, I do think that it's not necessarily a misalignment with financial incentives. But I'd refer back to the comments of my colleague there. So we have been overspending. Our General rate case asks, we spent around $1.0 billion every year for the last five years in doing this work. And so we're moving at about the speed that we can that the Company can support in any given annual year.

I'm sorry, so when you're spending over your rate case, you're saying you're spending more than you had planned?

Yeah. So we get volume projections that give us a signal as to how much work should we plan for in any rate case cycle. We work with the Commission to secure that funding in that rate case cycle. And then when those volume projections prove not to be correct and let's say again, refer to my colleagues comments, is that low growth has been flat since 2018, or it was flat up to 2018 and is now growing at a rate that we haven't seen for decades. And so those projections were off and then backlogs form, and that's where we are right now.

But now that you've seen the increase, what are you doing? Are you hiring more people? Are you bringing on more resources? Are you going back to the PUC, saying, hey, we actually need more, whatever, more financial resources to do this, I guess, what's happening? So I understand because that happens in budget all the time. We have certain projections. We always know the projections are not going to be exact, but you make adjustments along the way. So what adjustments are you making?

All of the above of what you stated. So hiring more people, working with the Commission, filing advice, letters, improving our processes, eliminating waste and rework. And so all of those things are speeding us up, adding resources, trying to secure funding so every tool possible.

When do you anticipate getting through your backlog then?

We'll resolve our design backlog by the end of this year as our intention, and then the construction backlog will resolve in 2024 is what we're communicating and working with our stakeholders.

So based on your projections, you're assuming that by 2024, the issues that my colleague from Fresno is describing, the supervisor from Humboldt well, supervisors got different issues, but my colleague from Fresno is describing will no longer in 2025, if all things go as planned, you would anticipate those items will no longer be an issue.

Yeah, let me just restate: is that what we're aiming for is the primary concern or pain point that our customers feel is we take too long for energizations. And so, yes, that's what I'm saying, is that by the end of 2024, we expect that to be resolved.

Got it. If I'm an area like San Francisco, there's not a capacity issue, at least that we foresee right now. There should not be an energization issue by then.

Yeah. Intent is to meet most of our customers timelines again by the end of 2024.

Is there anything that we can do from our point of view to assist you? To assist everybody to kind of speed that up.

Yeah, let me say I'm not prepared to speak to that here at the Mic, but I think our teams can get back to you on that.

That'd be great. Thank you. Thank you, Mr. Chair.

Thank you very much. I know you had a follow up.

To one of the questions here. I just want to ask the fundamental question, given our plans and the growth and the construct, I mean, we're talking about an airport that is going to have major new demands: electricity. We broke ground. It's going to end up, we think, constructed and flying airplanes in and out by 2025. This is basically the fundamental question. Does PG & E have enough electricity to energize the growth of Fresno, California?

I would say that we are forecasting the growth in Fresno and in all of our communities. And if we are showing a need, and that includes the Fresno airport. I do live in Fresno and I agree with you. There is growth going on everywhere in Fresno and I'm fully aware of what's happening there just because I do live there. But at this point, I am not aware that we have a capacity issue to energize the airport.

But I will be sure to check and I can get back to our staff here in Sacramento who can get back with you to make sure that's not an issue. I am not aware of an issue with the Fresno airport.

Well, again, I think that the community colleges would have said the same thing and yet they were delayed. So it's one thing to say on paper it looks like this. It's another thing to say whether or not we actually get the electricity and it gets turned on. Look, I just want to put a marker down that Fresno, California, in my estimation, has oftentimes been just sort of kind of flown over. There are the regions in the state that have been treated like this, right?

But there's some things going on and you live in there. You know what the zoo is like. You know what that airport is mean. It's not just Fresno. You go across the San Joaquin River in the southern Madeira, sang or Selma Kingsburg, all these areas. And our transportation we're building highways, roads, all of those kinds of things. And so it's been very frustrating.

And look, I get the brunt of it too, being the former mayor and I know your colleague here is going to meet with Mayor Dyer. My guess is you're going to hear the same thing because I talked to Jerry at the airport groundbreaking. And there are still some concerns there. And I'll tell you why. It's because we've had promises made that haven't been kept. We've had dates that have been given that haven't been kept.

That's one thing for you to be talking to the people in Fresno about what they're doing with respect to growth and governance and all those kinds of things, right? That's all well and good. This should not be a big surprise that Fresno has in the pipeline substantial and significant electricity needs. Those have been on the front page of the paper. Listen to KMJ, right? Watch our TV stations, pay attention to what's going on. It's a remarkable set of circumstances and we're proud of all that.

But the slowdown in turning on the juice is really having folks just say we're trying hard, but the fundamentals just don't seem to be there. So I'm going to be looking forward to having communications because of my vice chairmanship of this Committee. I think I'd like to have some degree of participation in some of the discussions that you might be having at the city level.

And for eight years I was the mayor and sometimes the mayor hat is hard to take off when you're look, I understand you have issues and I understand that you've got planning and you understand you got all these kinds of things. But the fact remains that a significant region in California has huge programs that are successful. They're working out well. There's joint planning going across these communities. The county and the city work well together, all of that.

And the fundamental bottom line here is we can't get the fundamentals. Some of that is water, by the way. Some of that is electricity. And when electricity and water become scarce and are not readily available, you wonder what's gone wrong here.

Dr. Wood.

Thank you, Mr. Chair, especially for allowing me to sit on this Committee again today since I'm not a Member of the Committee. So I guess my first kind of statement questions are going to be for PG and E and kind of a preamble to that. This year there have been over 10 bills that were introduced in the Legislature related to interconnection and energization. There's only three left now, so kudos to the industry for killing off the other seven.

But there are three important bills left here and we've put forward numerous proposals to try to get to a resolution here, all of which have been opposed by the IOUS. And to my disappointment, it seems that the only solution that seems to be on the table is more money, which means that that's going to impact ratepayers at a time when economics in the state and people are really tired of paying more and more for the rate.

Now I hear also, well, we had to spend a lot of money on wildfire. Agreed, understood. Some of that probably should have been spent a long time ago. Maybe those fires wouldn't have happened. And there is an obligation to do that. The Legislature made sure of that back with SB 901 and some other bills in here to get that for that to get done. But the IOU also has an obligation to serve people. You have an obligation to do both, not just one.

So are you telling me that by the end of 24, you're going to be meeting these timelines 100% of the time or 80% of the time? You got a long ways to go here, and I'd kind of like to know what are our people in Humboldt County, what are our people in Fresno? What is the expectation when you say that the planning backlog is going to be done, the building backlog is going to be done? What does that mean operationally going forward?

Thank you, Assemblyman. Means 80% is what we're targeting, meeting customer timelines for whatever they request it to be. That's going to require us cutting our timelines more than 50% in order to do that. And I would extend the invite to you or to any of the Members of the Committee here. We can come and tour and show you the amount of work and effort that we're putting in here. To Mr. Patterson's comments. The promises that we've made in the past, I agree with you.

I think that we've been unable to fulfill them for many times. But in meeting with many developers and working with the CBIA, one of the quotes that I keep going back to is that something is different this time is from a builder and that we do intend to meet this commitment, and it's 80% by the end of next year.

Well, part of the build I'm proposing is actually timelines to try to keep your feet to the fire, all the utilities to the feet to the fire, to actually deliver on that. But what I'm getting is opposition to that. I'm going to get your word that you're going to do it, but historically, that's not been happening. That's the frustration. That's the frustration that I'm having. Obviously, the problems in different parts of the state are different. I understand that. I was in a homeless shelter.

It's bigger than that. There's a lot more to it than that. On Friday and took a tour and talked to people there and met with the building Superintendent on some adjacent apartments. And he was super excited because the 64 units got energized. He didn't know me from Adam, and I didn't say anything about what I've been working on. But he said, we are so happy that we got energized, because I'm telling you, a lot of people in our positions. Right.

Now are having a really hard time having to wait years to get their projects energized, which means that people can't get into their homes. That's the frustration here. People can't get into their homes because of this. And that's why there's so much interest here and that's why we're trying to get something there to compel and make sure that these timelines actually happen. And right now, just your word as an industry isn't enough. It's not enough or we wouldn't be here having these discussions.

And this just isn't an issue for my district. I'm hearing other areas of the state are struggling. I heard from Mishaibo at the oversight hearing, she's got issues in other parts of the state. Now, maybe they're more acute in my area, but there are issues with it. So the IOUS are in opposition, all in opposition to what we're trying to do here. And it is frustrating, and I appreciate that, and we've had conversations and I appreciate what you're doing, I really do.

But understand where we're coming from. We're reacting to our constituents who are saying we can't get the power turned on. We're having to wait years. And that's where the frustration is coming from. So is the only solution to this crisis more money? Because that's what I'm hearing. That's what I'm hearing here. Is the only solution to this crisis more money? I heard that the GRC is going to be approved this summer.

So I heard, been hearing for months that, well, we need the GRC because we need the money. If the money is there, does that mean that this all goes away? Is that what you're telling us?

So, I think. Thank you, Assemblyman. It goes back to what Matt said, right? We're improving our energization timelines by 50% by the end of this year and getting customer on time timelines down to--

50% or by 50?

No, by 50%, I believe this year. But by next year, we're going to be meeting customers timelines by 80% of the time. That's our goal by the end of the year. So the energization is one aspect, the capacity issues are the other aspect. Right? And in Humboldt, in southern Humboldt County, we have had those issues, but we have a number of projects that are underway. They're in construction today that will be coming online. One major one will be coming online in 2024.

A new substation transformer at Rio Dell substation that's going to increase capacity to be able to serve the loads that are waiting, plus the loads that may be coming in the future. Right? It's a big upgrade that we're doing in the tune of $25 million. The Kaisel also approved in this year's plan the reconductor of the Bridgeville's Garbill line on the transmission. We're going to be undertaking that as well in two phases.

Phase one, so we can get more customers quickly by 2027, to add the voltage support so we can bring in more load. And a second phase of the reconductor, because we know that's going to take a longer time. It's going to need a new right away. We're going to have to rebuild the line. It's through a heavily forested area.

We know that's going to take a little bit longer, but we're dividing that up into two phases and doing what we can up front on a Shorter timeline to make sure we can get the loads that might be waiting or might be coming online faster. So those are projects that are currently underway. We're also looking at an innovative solution on the 50 miles circuit where we got some customers waiting. We found a microgrid solution.

Right.

We're going to be working on installing that, testing it, and seeing if we can allow the customers that are waiting to come online. So that's in the works as well. So we've got a number of projects in that area that are actually happening now. It's just that the complexity of the projects are going to take time for the capacity.

Right.

The energization is different, but the capacity upgrades, unfortunately, when we talk about major upgrades like building transmission or upgrading substations, those timelines are longer.

Okay, I can appreciate that these are complicated, complicated projects. Just.

And I guess going back to Mr. Ting, his question was, is there other things that we can be doing as a Legislature to make this easier? And I'm not just talking about money. I'm talking about other things. I spent a long time yesterday or last week talking during our oversight here. And I don't need to relive that. I'm kind of relive that in my mind every day.

But hear what I'm kind of here is, the PUC is kind of waiting for other people to provide solutions here. We're waiting for the PUC to provide solutions. It feels like it's just the opposite. Maybe that's just my feeling. But it's like I don't sense this collaboration really. I don't sense any urgency. I guess that's really what I'm trying to get to. I don't sense a lot of urgency. Talk about these processes and these teams and these things that go together.

I just don't sense a lot of urgency. Meanwhile, you got people waiting for power. You got builders trying to get the demands of their Will Serve letter fulfilled. It just doesn't feel like a lot of urgency here. And the folks in our district feel the urgency. And so help me understand how long are these planning things going to take and when are we going to have some real results?

Thanks for that question. So I can respond for a CPUC, but I do want to recognize that CEC is also working on this issue along with us. And so I can give my colleague an opportunity to speak as well. I definitely say that there is a very large sense of urgency. We've already had over a dozen meetings with our staff, with local governments in order to get some of their feedback, in order to frame out the rest of the proceeding.

And so we were able to use that in order to come up with a structure for what we're going to be tackling this year. Our supervisor was--

With all due respect, last year we had hearings. This Committee had a hearing in August around the climate practice, around the extension of Diablo. And at that time, it was made really clear that we had challenges with interconnection and transmission. That's almost a year ago. And now we're just doing meetings.

I can speak to that. So that's actually a different issue. Those meetings were in relation to generator interconnection and transmission. The generator interconnection process is one that is managed by the California Independent System Operator and is speaking to the interconnection of generation like power plants or solar facilities or large scale utility storage and being able to get those projects online. And so for this hearing, my first slide, it was talking about interconnection. But it's not generator interconnection.

That's interconnection of customers that might have some rooftop solar or some behind the meter storage. So I do want to say that there have been enhancements in that process. At the hearing last week, the representative from the CISO did talk about some improvements that they've made with generator interconnection. So I did want to provide that distinction and see if my colleague from the Energy Commission wanted to share anything else.

Yeah, so I agree that the issues last year were large scale interconnection, and CalISO has an ongoing stakeholder process to improve their interconnection process and reduce the timelines for getting those systems interconnected. And also sorting through, as I think was mentioned on the distribution side, sorting through the difference between what's? A project that has real legs and those that don't.

Because I understand right now that a combination of projects come on the list and not all of them are real, and trying to sort through those to identify where you spend your time on the real ones as opposed to those that might not be coming through. So there's an ongoing process to address that issue at the large scale.

Also, on a project by project basis, we have a coordinated effort among the CEC, CPUC, CalISO and GoBiz to address individual projects through the Tracking Energy Development Task Force to look at those projects and try to understand what changes might need to happen to move those projects along for grid reliability. And so for those projects where it's an interconnection issue, it could be CalISO or CPUC that addresses those issues.

If it's a permitting issue, it might be GoBiz or CEC that tries to work through those issues, try to get those projects online on a project by project. So there's a systemic approach that Caliso is taking to improve those connections. And there's kind of the more project by project efforts that we're going through to ensure that those projects come online or as much as we can to support grid reliability.

So how much has that improved the system? What deliverable can you tell me? How much have you improved the system? How much has this eliminated some of the delays?

So I would have to defer to CalISO specifically for their estimates on how rapidly they can incorporate.

You all are talking together. That's what we heard last week. So all the efforts you're doing here, how much are you improving the system? How much are you speeding things up? How much do you project to speed things up? Because we heard just to build a transmission line in the state could take seven to 10 years. So what is your goal in eliminating that? In shortening, that what is your goal? And you talk about projects. So Mr. Beans over here talking about Roseville, part of NCPA.

I know NCPA because I live in Healdsburg. We're an NCPA city as well. They talk to projects all the time to know when they're coming online. So is CalISO, is everybody talking to all these folks on a regular basis? Is PG&E talking to people on a regular basis? Where are you in your project? When is that coming online? Is that kind of communication happening. It's certainly happening in Roseville, kudos to them. Happens in my hometown.

I know it does because I've never heard of an incident like this. So it doesn't take much to pick up the phone and call, hey, how's the project going? Are you guys still on your timeline? Are we going? This is kind of basic stuff, but it's kind of my level of frustration right now. Doesn't feel like some of that's happening.

I can speak to the question about communication. So we do. We meet with the Tracking Energy Development Task Force. Ted Task Force meets with developers on a regular basis. Sometimes it's bi monthly, sometimes it's monthly, and we have conversations with them about all their projects. They run through all of them, let us know which ones are on track, which ones are not on track.

For those that are not on track, the reason they're not on track, and whether they need any support to help those move forward, whether those are interconnection permitting or if they are being held up because of equipment delays or other issues that they're dealing with on their side. So we do have that constant communication on those large scale projects to ensure that they're moving along and trying to overcome those challenges.

And then the other forum that has been created is called the Transmission Development Forum and that actually occurs quarterly. It is hosted by the system operator, not by CPUC or CEC, though we do engage in that process. So CISO holds that meeting quarterly so that generators that are trying to interconnect to the system are getting very clear updates about upgrades that are occurring to the system where they are in the queue as well. And that was stood up last year in response to those meetings.

And so what is the goal as far as how much percentage or whatever? What is the goal in how you're going to make the pip process more efficient? What is the goal and where are you in that goal?

Yeah, so that is a question for the system operator and we can work with them to get some information.

But you all talk, apparently. So you guys haven't talked about what the goal is.

So we do talk about it every week. They are the ones that are tracking the cluster studies for all of the new projects that are coming online. So what was detailed in the hearing last week by our colleague from the Kaiso was that there are hundreds of projects that are in the interconnection queue. Some of those projects are never going to come to fruition, but they are still technically in the queue and are being studied.

And so they are going through those cluster study processes in order to bring those studies online, bring those projects online. In addition to that, there was a new memorandum of understanding that was signed between the agencies at the end of last year. And so something that I want to highlight there that's going to enhance the work of the Kaiso is that the Public Utilities Commission is the one who has the information about the PPAs or the Power purchase agreements.

So which of these projects are actually contracted with the load serving entities for Power to serve those customers? And so now those are confidential contracts, but now through the memorandum of Understanding, we're able to share the information on those contracts with the Kaiso so they know which are the projects that are the most viable, which are the projects that load serving entities are depending on to coming online.

And so they're able to incorporate more of that information into the studies that they're doing in order to make sure that the projects that are most viable, that customers are depending on are the ones that are able to get interconnected.

I guess I'm not going to get the answer to my question. So could somebody get back to us and say, what is the goal for improving efficiency by a percentage? Are we really going to continue to look at seven to 10 years for future transmission? What is the goal? You all are talking, you got your task force and all that. But what is the goal and how is that going to help an IOU who's out there trying to move projects along?

We have a huge amount the reason we extended Diablo was we have a huge amount of green energy that cannot get connected or interconnected or transmitted or whatever the hell it needs to go. I'm not on this Committee. But it's not working. It's not working. We've talked about some of this. So tell us, give us some timelines of what all this is going to do and how this is going to improve the process and make it more efficient. I'm just hearing you're meeting, but I'm not hearing that you have a goal.

Yeah. And so I'm happy to work with the consultant to get an answer for you from the CISO on the latest in there.

You guys have a goal. Don't you want this to be more efficient for them so they cost less money? So it costs like, ratepayers less money. Doesn't the CEC and PUC have a goal to make this more efficient, less costly for consumers?

Yes. Right now the CPUC's Integrated Resource Planning Process has ordered 18,800 procurement. So that is the procurement orders that we would like to have. That is our goal for getting those projects online. So it's 18,800. Last order that put that out there was issued in February for an additional 4000. MW. That's the number.

Is there a time frame?

Frame. Thank you, Mr. Chair.

Is there a goal that amount of megawatts on board by yes.

So we are working towards the 2045 goal.

Got you. Thank you. I apologize for getting worked up. You got worked up. In my business, we have expectations and I think it's our job to kind of put people's feet to the fire here. You're all working together and making improvements. We want to see the improvements. We want to know how long it's going to take.

We appreciate the questions. We appreciate the back and forth that's taking place. I think we will get follow up to some of the questions that aren't answered and we are getting some answers to some of the questions that we have. I have list of questions in front of me as well. My colleague to my right has some questions.

Thank you, Mr. Chair.

Thank you.

Thank you.

Thank you. We're all frustrated. I know everybody here is frustrated, and I appreciate everyone's work trying to figure it out. I think I share Assembly Member Wood's concerns about the urgency. And I think part of that is all of the ripple effects that are impacted by this, right? Because it means that our housing crisis, we're not getting housing online. It means that the green jobs that we want to be creating, we can't create because we can't get these projects done.

It means that there's energy providers, distributed energy resources that can't get connected up to the grid to give us the energy that we need and to be able to meet our goals that we're all working towards. And the IO user is such an integral and important part of being able to do.

You know, I've had folks and I've spoken about this before in my office, both talking about housing that was not able to get connected up as you raised today in Humboldt County, talking about having solar energy with batteries that cannot get connected or interconnected to the grid. And the solar companies have actually said to me, we will do the work if they will let us do it. It doesn't sound like it's a workforce issue.

It sounds like it's just the IOUS are really just not wanting to pay more workers to do it more quickly because of the cost. Just to put it bluntly. Are there ways, while people are just sitting here waiting online, how can we make sure that that is happening? I guess it's frustrating, right? People need jobs. These are good jobs. We want to get things connected more quickly.

And to the point that Assembly Member Wood made, I understand the challenges that PG&E specifically is facing right now around Wildfire Mitigation. It was a responsibility that they should have been doing for decades. And so now to say that that's costing so much money that now we don't have money over on this side to handle interconnection and energization, if that's a word. Is that a word? Yes. Good. It just is incredibly frustrating.

And there has to be realistic deadlines before 2045, because 2045 is when we already have to be there. We already have to be ready and done by then. So we can't really be talking about 2045. We have to be talking about much earlier than that.

I know we've been going around and round and round, and I don't want to ask the same questions that have already been asked, but we have to figure out something better than is happening right now with clear goals and clear deadlines and clear deliverables and all the pieces that need to be figured out. I've been asking questions about what is actually the problem, and I hear the money is the problem. We all heard that.

But I also hear there may be issues around electrical engineers that there's a big need for filling those jobs that are being vacated. Is there something there that needs to be happening? I just feel like we need to really do a clear assessment of what is actually the problem. We know that there needs to be upgrades to the grid. We know what is actually the problem.

And then for each of those challenges that we have around this issue, break down what is needed to be able to meet the goals, meet the needs of our community 80 or 90 even percent of the time, in a real way that won't take us years and years. I mean, Vice Chair Patterson is talking about hearing about this for 10 years already.

I feel like we need a follow up that this is we're continuing the conversation that's been happening for a long time, but we need a follow up of this conversation with a real clear, what are the problems, what are the things that are being put in place to address those problems and timelines associated with that? Because ultimately, I know it's nice not to have timelines because then you get kept to them.

But we can't have real accountability if we don't have real timelines, and we can't do planning in our communities if we don't have real timelines. And so it's really hamstringing all of our communities when we don't have more clarity around this. And hopefully through that process, we can more clearly figure out how we, as a legislative body, can be more supportive and help move things along.

Because I think there's so many pieces of this that are really important that we want to make sure we're supporting, and it's impossible to figure out how to do that if we don't have real timelines. We don't have real goals, and we don't have real standards set clearly for us.

I look forward to more conversation about this, more details, and more real timelines and deadlines so that we have clarity on how we're going to get there and how we're going to make sure that we meet our community's energy needs. So thank you.

Thank you, Mr. Muratsuchi.

Thank you. I feel like deja vu all over again in terms of a lot of attention being focused on PG&E. We've been through this with the Wildfires and other discussions. I was looking at this project, Lifecycle, that's in the staff analysis for Energization Lifecycle apparently provided an example provided by SDG&E. And it looks like most of the time is spent on the preliminary engineering and design and the final design. It's my understanding that is the utility's responsibility. Is that correct.

My colleague?

Thank you, sir. It's mixed. So the applicant has a choice. It can either be the utility's responsibility or the applicant can take that upon themselves.

So in terms of the, let's say, focusing on Mr. Webb's example of how it took 14 months to deliver electricity, who was responsible for that delay? Was it primarily in the engineering and design phase? And if so, was that the utility's responsibility or was that someone else's responsibility?

Let me say that so in Mr. Webb's situation, he utilized a designer that he chose. So it was his designer's responsibility to design the work. It was the utility's responsibility to approve that design. And that as he outlined, we went through four different rounds of approvals in order to get plans that were of sufficient quality to approve. So I think that we are not without fault in his situation, not in the least. But there are challenges there when a design takes four times to get.

I mean, as far as the utilities responsibility for this process, going back to Mr. Ting's question, is it a workload issue? Is it that you don't have enough staff to work with the private designer to process it more quickly?

No, I'm not sure I understand the question.

Why did it take so long? Is it a workload issue or is it something else?

For the design reviews is what you're asking?

For the preliminary engineering and design and the final design?

Let's say, so I don't have intimate knowledge of Mr. Webb's design review process. But what I can say, generally speaking, if we're going through four design reviews, so we prioritize the first and second design reviews, and then there are plenty of other folks that are in the queue that can get it right on the first or second try. So the third and fourth design reviews do end up taking longer. And so that could contribute to delays in that types of situations.

Okay, but is it generally mean, do you feel like PG&E has enough staffing to be able to expeditiously process these design applications?

Yes, if we resolve our backlog. And so that's the main problem. So the delay that he experienced is because he's in a long line. And so the amount of staff that we have is sufficient for the incoming volume that we are currently seeing. We're also hiring an additional 100 Estimators and design engineers, as you quote, to augment that and then doing efficiency plays to increase production, to do a catch up. And so we are currently over producing and we're on a trajectory to meet the commitment of eliminating that backlog by the end of the year.

Okay, I want to make sure I understand what you're saying. You're bringing on more people to address that backlog that you hope to meet, what is it, 80% of the time, the customer's timeline by the end of 2024.

But part of that plan is to eliminate the queue and the waiting. And that, for the design specifically, is the end of this year, 2023.

And how exactly are you working through that backlog? Is that with the additional staffing?

Okay. And the additional staffing, is that something that ultimately is paid for through a rate increase request submitted to the PUC?

Yes, sir.

Yeah. So there's a long line of financial papers there, but yes, ultimately it does flow back through the GRC request that we submit.

Okay. So in terms of this backlog, I mean, I understand that there are issues in terms of projects that are actually ready, like projects that are not ready, occupying space in the queue. But was this backlog? What was the cause of the backlog?

I don't know if I can cite just one thing. If you're specifically referring to the design backlog, the queue backlog. Yeah. So there's really not one thing.

Could you name the top three reasons?

Let me try. Give me just a second to collect my thoughts. Yeah. So I think we saw the largest increase, which occurred last year, as we had to pivot resources to support wildfire and other maintenance concerns that were compliance related items. And so that was an intentional slowdown that we believe, in hindsight, was a mistake. And so let me just stop there. That was, let's say, the most recent cause of the increase, and we've since since recovered and reversed that.

Okay. So the number one reason that comes to your mind now is the misallocation of staffing resources that may have contributed to the backlog. Did I hear that right?

Yes, you did.

Okay, so that is on the utility then. I don't come from PG&E territory, and so I don't feel the frustration that I've heard from some of my colleagues. But turning now to the regulators, it's the PUC that's primarily responsible for the oversight of the planning and building of the distribution grid, is that correct?

Yes.

Okay. And so does the PUC. What does the PUC do to try to oversee, in this case, PG E to make sure that they are on track, they're properly allocating their staffing resources to be able to meet the demands without creating a backlog such as we've been hearing exists.

So the day to day management of the utility, that is the responsibility of the utility through the rate case process, they put together proposals on how much staffing that they will need, how much that will cost in addition to capital costs. PG&E is in a four year rate case cycle, and we are on track to resolve that rate case this summer in accordance with that schedule.

I don't want to disagree with the last speaker, but it is a little bit concerning for me to hear them say that they allocated too many resources to Wildfire work. So that is an opinion from them. It's not one that I can necessarily agree with, just given the high degree of Wildfire risk. So I did want to say that.

So I mean does the PUC evaluate, you know, the reasonableness of how PG&E allocates the staffing so in.

Their individual rate cases they do have proposals know we need this many staff or resources for wildfire mitigation that'll be one business unit. This many staff and resources for distribution planning and we are the ones that do the approval for that. I will say that the utilities are able to shift resources around in particular to address safety issues.

They do have to report back to us through a safety and accountability process when they do shift those resources around, but they are allowed to shift around resources. So in this case, the speaker mentioned that we had provided them with resources and budgets and they reallocated those resources to wildfire.

But am I correct in understanding that it's the PUC's job to take the electricity needs assessment from the Energy Commission? Like for things like the Fresno Airport and the community college and the housing and oversee PG&E? To say, hey, PG&E, are you on track to meet all these electricity demands for mean? That is the PUC's job.

We have ordered the utilities to leverage the CEC's hyper demand forecast in order to create their investment proposals. Yes.

Okay, may I also chime in here? So for the demand forecast, our demand forecast is system wide. So it doesn't get down to the point of what does Fresno need? The needs of that localized area actually come from the utility. So they do the more granular analysis of the needs within their territory.

Okay, so it comes back to PG&E then. It was on PG&E to be aware of and to plan for the needs of.

Yes. And but per my presentation, we are looking at ways to enhance that because we do think there are improvements that need to be made. And so we are doing that in our high Der proceeding and that's in process at this time.

Um, I mean, this not only obviously raises concerns in terms of whether we're living in a third world state like condition like Mr. Patterson with talking about. But also I know that my concern is, as we discussed in our last hearing, whether our transmission and distribution grid is on track to meet our decarbonization and our climate goals. It doesn't inspire confidence when they can't deliver electricity to the housing project for 14 months. Are we on track to meet our SB 100 goals?

Yeah, I think that's a very important concern. I think I want to take a moment to take a step back and point out that the amount of changes that we are in a time of transition as we are working to address our greenhouse gas reduction goals as well as affordability, reliability and safety. Over the last 10 years, we have had more changes on the electricity grid than have occurred over the last 100 years.

Taking a look forward in the next two years, we're going to need to be able to do more than we did in the last 10 years. So that's what we're seeing the trajectory as, and that's why we are in the middle of enhancing our distribution system planning processes in order to meet those concerns. I definitely agree with you on that.

In terms of your recent study, recent report estimating over $50 billion in investments for distribution grid infrastructure needed by 2035. Is it the PUC's position that most of that 50 billion is to be paid for by ratepayers under the current process?

It is paid for by ratepayers. I do want to point out that it is a draft report. It was just released this month. We had a webinar on the 17th in order to help inform public and stakeholders on that report, and we'll be getting feedback from them on any changes that they think might need to happen to that report. But under the current framework, most of those costs will be paid for by ratepayers.

I say most because we are at a time where we have significant opportunities to leverage federal funds. And so the Public Utilities Commission did vote out a resolution in April requiring the utilities to be leveraging those federal funds, tracking them, reporting back to us on the federal funds that they are seeking. And that process started early last year with that direction.

That was part of the President Biden's Infrastructure Act.

Yes.

So basically, the more federal dollars that we can utilize for the transmission and distribution grid, the less impact on ratepayers.

Yes. And those funds have already started being sought, and so we have provided the direction to the utilities so that they can be able to proactively seek out those dollars and appropriately track them. So we understand the benefits that are coming to ratepayers as well.

The staff report focuses on supply issues. I think I heard one speaker talk about the supply issues, but I haven't heard supply issues being other than your testimony that I partially heard. I apologize. I haven't heard PG&E talking about supply issues being a cause or a reason for the backlog. Was that a significant part of the backlog?

We do have supply issues primarily with transformers. I think all of the IOUs do. Also, many applicant installers. So those are applicants that choose to purchase and supply their own materials. They're experiencing the same thing. I wouldn't cite it as a primary cause of the issues that we're experiencing in the energization front.

There's some acute issues that occurred last year and into this year as the scarcity arose. But let me say I think that that's transitory and it's not really at the root cause of the broad frustration that we have.

So it goes back to the bigger fundamental issue seems to be workforce staffing, the capacity to be able to expeditiously process applications.

I would go back to the speaker from the CPUC in that what we are seeing is a time of really not much growth to a time of significant growth. And so it's that inflection point on the growth curve that we're at. And that to me is more of a root cause as to why we're in the situation that we're in and then we're just not reacting as quickly as we all might like in the early years of that inflection curve.

And part of that increase is what is this 56% projected increase from 2025 to 2035 in the system level peak load?

That's not for me to answer, sir.

Can you repeat your question?

Yes. The staff report cites a Kavala study finding projecting a 56% increase on system level peak load from increase from 2025 to 2035.

Yes, and there might be a possibility that that might even increase as we are looking at opportunities to update the draft study with additional data related to both building electrification and transportation electrification.

Mmhmm. It seems like most of the delay or this backlog is because of the rapidly changing energy landscape combined with the understaffing or misallocation of staffing or the lack of staffing necessary to meet the demand. Is there any is.

I think that's a question for PG&E. If they're facing CEQA.

Energization that my colleague Matt was talking about, right? Those are just small upgrades we're doing closer to the customer premise that don't go through the CEQA review talking about CEQA. It's more transmission oriented.

Okay, so CEQA is more for transmission and less so not only for energization, but for distribution in general?

Majority of the distribution upgrades can happen without CEQA. There's other permitting that we have to get, but when CEQA comes into play is when we want to build new transmission, build a new substation that doesn't exist today. As long as we're making upgrades to existing substation or building distribution along franchise areas, the CEQA doesn't come into play there generally.

I think my last question is for the PUC. It's my understanding that Texas has dramatically increased its transmission and distribution grid within a span of 10 years from like mid 2000s to 2015. Part of that involves having a central transmission planning agency. Could you tell me whether I'm in the right ballpark, and if so, what, if any, lessons may the State of California have? We hate to admit that we have anything to learn from Texas, but do we have lessons to learn from Texas?

So I don't know if I can speak to the details of Texas, but I can speak to a couple of things about California. So we do have a central transmission planning entity with the California Independent System Operator. There are some permitting responsibilities for transmission that fall on the PUC, for example. But for transmission planning, CAISO is the hub for that. And then I also have to tout California. We've built immense amounts of transmission over the last 10 years.

We have different greenhouse gas reduction goals than Texas. So I think some of the conversation around that is that we have a lot more that we need to build. And that's because California is that leader with greenhouse gas reduction goals and growing our procurement of renewables significantly. So I do want to say that just share that California and as you know, we have built an immense amount of transmission over the last 15 years, but we have more to do. And you're right about that.

But am I correct in understanding that CAISO is the central transmission traffic cop? Basically, in terms of where and how the electricity comes from to meet the demand? I think what I was talking about was it's my understanding that Texas has a central transmission permitting agency.

Oh, permitting. I can't speak to Texas permitting. But I thought you had said planning. And CAISO is both the grid operator and the grid planner.

CAISO is the primary grid planner.

And operator.

And operator.

But for permitting, California does have its own system of permitting that know, CPUC does some permitting for CEQA, but some construction involves permitting from local entities. It's, as, you know, very complex.

If I might add, and they have expanded their planning horizon, now looking for a 20-year planning for transmission, which is expanding to look at the needs for the longer term for the 2045 goals. I will also mention that in our Integrated Energy Policy Report this year through interconnection, we're looking at both the utility scale and distribution system, and we are looking at other areas of the country for lessons learned that could be valuable for California. So that will be incorporated into our analysis.

And when is that report?

The report comes out at the end of the year.

End of the year, okay. Are you specifically looking at the state of Texas?

We are looking at all the balancing or, excuse me, all of the system operators in the country. Because there are a number of other entities in the country that have other opportunities that we have talked to that could be viable here as well. So not just Texas, but other system operators.

And while CAISO is the primary planner and operator, the permitting is done largely between the PUC and local government entities?

Yes, for transmission.

Okay. As well as distribution grid?

The permitting for distribution grid. Well, I think the representative from PG&E was talking about that you are working with local entities for that.

Yeah, most of when we're just building distribution lines and such right. Our enfranchised usually working with the local entities, Caltrans, railroads, those type of entities, to get the permits we need. They generally do not require CEQA. So we don't have to go to the PUC for that.

But you still need some permitting?

Oh, yeah. Anything you touch. Anything. You need some kind of local jurisdictional permitting.

Sure. Yes. Okay. Thank you.

Thank you. I know. Mr. Wood. Dr. Wood, you had a follow up.

Yeah and as I was sitting here listening help me get this right. So I understand part of the role of the CEC is overall load forecasting. Correct? Yet that I heard that the PUC asks each individual IOU to give them sort of their demand load forecast as well. Correct?

I'll clarify that we establish, working with the CPUC and Cal ISO and utilities, we develop the overall system wide forecast in a variety of scenarios for resource planning and for transmission. The CPUC and the Cal ISO and CEC work on which of those scenarios will utilize for those purposes. So statewide, we put out all of our scenarios, and the utilities have the opportunity to work and identify which of those scenarios are most applicable to them.

And the three IOUS collectively come together and decide on what load forecast that they want to use for their system planning. And as I understand, they use our local reliability, which is the highest demand forecast for their next iteration. So they basically use the highest forecast that we have for their planning purposes, and then they disaggregate it, if I understand correctly, within their own utility area.

Okay. All right. I appreciate that it sounds a little complicated, but.

Yes it is complicated.

You're right. Yes, you're right. It's very complicated.

How accurate are the forecasts? How accurate are they from your perspective as an IOU and from the CPU? How accurate are the forecasts?

You know, when we take a forecast that comes through the IEPR, right? We take that forecast that we get at a bus bar level, which means it's at certain transmission buses. We take that and we do a lot of propensity modeling to take that down to our substations, down to our feeders, right.

So we're taking those overall growth rates of not only load, but also DERs. What's energy efficiency doing? What's solar doing? What's EVs doing? We layer on all those load shapes so that we get a forecast. At the end of the day, that's a one in 10 forecast, right. Counting for temperature to make sure that we're planning for that system peak at the local level, right. Not at the system level.

We're taking this down that we need to make sure we're planning at the feeder and at the bank level. And I would say our forecasts are generally very accurate based on whether we had a one in two, one in five, or a one in 10 summer. Right. We're forecasting for one in 10. Last year with the heat wave we had. Yeah, we are at those one in 10 forecasts.

If we happen to have a very cool summer, we may be below those forecasts because we're forecasting it to a one in 10 level of temperature and heat during the summer months. So I would say the forecasts are very accurate. Now we are at an inflection point, right. A lot of transportation electrification coming online.

Very easy to model the EV growth that's going to happen at residential customers, a little harder to model what's going to happen along your highway corridors with DC fast charging and still a little harder to model what are the fleets going to do in the state? That's why we are going out and meeting with all the fleets to get their information. What's your load ramp? Is somebody running a fleet of 1000 vehicles going to have 1000 vehicles the first year? Probably not, right?

It's going to be over multiple years. We want to make sure that we get that accurate when we disaggregate and make those forecasts so that we're building for the time that they're going to need it. Right. The first year, they may only need a certain number of load, and we have it, we connect them. But as we go out further, five years from then, we may need to do some major infrastructure build and we want to make sure we plan for that.

So we're taking those forecasts, we're disaggregating them to the substation level, to the feeder level, and we're coming up with plans on what we have to do not tomorrow, five years from now, seven years from now, because that's what it's going to take for some of the large infrastructure projects.

And then the kind of the final follow up to that is so sounds like CEC is at the 50,000 foot level. Maybe that's gross exaggeration you're at the ground level. At the end of the day, how accurate is all this? Within a factor of what percentage wise? Roughly?

I would say probably within 10% accuracy of 90% accuracy, 10% variability. But remember, we're taking their top down. Then we have information more localized, right? We have historical loads. What are we seeing in the area? What kind of applications are we getting? What are different customers doing? What kind of businesses are we seeing come in?

So it's kind of a top down, bottom up approach to make sure we're getting as accurate as possible. That's why we are wanting to talk to the fleet operators. That's why we are wanting to talk to the local government agencies, the cities, the counties, to see what is going on, so we can get more accurate with those. Right. Which we go top down that we're coming bottom up and meeting and making sure that we have the most accurate forecasts that are there so we can plan for those projects that are needed five years now, seven years from now as this transportation electric vacation comes down the road as we know it is.

If I might add on from our perspective, So our demand forecast is utilized by the Public Utility Commission to establish the procurement necessary to basically maintain our one in 10 grid stability. The fact that we've looked at and modeled what that looks like moving forward, we're seeing that our demand forecast and the order being put forward by CPUC is going to achieve that.

If we have those basically normal planning situations, if we have a situation like last year, which was more like I think a one in 26 as opposed to one in 10, then we need additional resources because we don't procure for a one in 26, we procure for a one in 10. And so in those situations, we do have to have contingency resources.

And the Legislature established last year the Strategic Reliability Reserve, which is intended to provide some of that contingency or backstop support if we have those excessive heat waves that we don't procure for. But we need to know that we want to keep the grid operating during those periods and that's what that is for. So I would say our demand forecast and our procurement are working in construct to ensure that we have the grid reliability that we need looking forward.

Thank you. I do have a couple of questions. We've been talking a lot about the backlog and how that's kind of creating a significant challenge. I have question for utility representatives here in terms of how you prioritize these applications that come through, is there a methodology that you use? Is it first come, first serve?

Just put into better perspective in terms of how it is that a building developer comes in and has a significant large track map that needs to get online or is it some economic development circumstances such as the case of Fresno that was highlighted. Just interested in knowing from both utility representatives how is it that these applications are prioritized?

Thank you. So one of the things we've started doing to help keep us from getting a backlog for large projects is we're starting to charge an upfront fee. So if you're going to pay some money, then we're going to look at your stuff. But we prioritize it based on economic development. We have a department in the city that does that, so we actually work very closely with them, so we know what the City Council, what the community is looking for and what projects are coming. Obviously this Bosch project that's coming is very high priority for the city, so obviously that's going to be top of the list.

But we talk to the developers all the time on the board, as I mentioned, with the local BIA, and we just have constant communication. We have a key accounts person, people that go around and make sure they're touching base. You know they go to the auto mall and they find out what's their electrification plans. So that's one of the things we're doing to keep the queue manageable.

But also on the development side, as far as hitting rates, I just wanted to comment that our developers pay for the infrastructure for their subdivisions and so that does not go to the ratepayers. That's what they do to contribute. They're our partners and so we work together, so that's definitely a big help for us.

PG&E?

Yes sir. Thanks for the question. So historically it's been first in, first out. So we receive about, call it 400ish applications every single week for this type of work. And so that's been the way that we've done it. We are trying to pivot to my answers to Assemblyman Wood's questions around what our goals are over the course of the next two years. And so what that will require is a pivoting to need rather than first in, first out.

And so those that need it sooner, we intend to begin to try to prioritize it sooner.

Yeah, thank you. And I also ask in the context or perspective of how do we address the issues of energy reliability needs in poor communities, in communities that have unstable electric systems that perhaps are in substandard housing circumstances. Right? And so how they fit in. And that was kind of part of why the curiosity is what's the prioritization look like. But I think that's helpful to understand, do you think that there are other ways of going about it?

And maybe this is a question for our local government representative here, county supervisor, and or the builder that have any perspectives on how prioritization could help address the needs in the local community. Supervisor.

Well, then I'll go first you know and I think RCRC mentions it about how Southern Cal and how they do a different approach to what's coming in. And your part about Roseville, I think everywhere the developer pays for his own infrastructure on his site.

It's getting it to the site and then that's where it's picked up and then they pay for the hookup. I don't know exactly what would streamline it, but it's kind of nice that somebody's probably asking us and more importantly asking Mr. Webb, how would you think we could do it better because he's the customer being served. And it's something that I did 12 years ago.

I went into the Planning and Building Department and they were all nervous because I knew a lot of the developers, so they were all going to use my name, they thought a lot. And I went to them and I says they're not going to but the problem is it's customer service and just because we're the only ones providing the widgets, let's not act like we're the only ones. And that's what a lot of the time is.

You can get as mad as hell, but you're worried about that, you're going to upset them and maybe get put back farther. First in, first out. That's the first time it's in, 2nd, 3rd, 4th time it's when they get to it, it seems like. And that's what I hear from developers on our side of the mountain.

Yeah, I guess I can add a little more to that. First I wanted to give Assemblyman and I apologize if I don't get this right. Assemblyman Al. Yeah. To your question on what was the main cause for the delay in my project and to the comments we heard from PG&E, I would just want to back up and just say it wasn't my design consultant and our four submittals.

We had four submittals for a particular reason, which I'll get to that in a second, but it was the first four and a half to six months where we were waiting on PG&E to provide us the necessary information and one approval to where we can submit our initial design. And then from there things went rather routinely until there was a, I don't want to say mistake but a lack of awareness on the design engineer in PG&E on a portion of the work.

So we had to split the project in two and that's why we had the fourth submittal. So it wasn't on my design consultant who does hundreds if not thousands of these things, and a lot of them are all former PG&E employees. But to the question from Chair Garcia how to streamline this, you know my answer is the same as Rex. I don't know. I like the idea that PG&E is prioritizing kind of, you know, a little triage unit, if you will, because I know my project. When it got delayed and delayed, I was asking my local rep, his Boss, his Boss's Boss and his Boss's Boss's Boss to expedite it through.

I can't tell you if that was successful or not. I don't feel as it was because I never got the response I was looking for. Then I reached out to Assemblyman Gallagher, Assemblyman Patterson, and they did some work here. Whether or not that was fruitful, I don't know. I think eventually it just, through fruition, it came to the point to where we're 14 months into this and now we're energized.

I spoke to a local engineer up in Redding this morning on the way down. They have their own POU. If you don't know this process, that PG&E. Well, I don't know if PG&E outlined this, but this customer project cycle, they do that in about two months. I don't know what this adds up to, but it's a lot more than two months.

So my suggestion would reach out to Redding. I bet you Roseville's timeline is a lot shorter than this. The communication is a big one. The accessibility to talk to the individual that has your plans, a big one. Like we teach our children, if there's not consequences, is there going to be any action? Is anything going to change? I think that's a big one. Whoever can put the hammer on them needs to put the hammer on them. Because this is, as Assembly maintained, this is systemic.

And I have no confidence that by 2024 or 2025 it'll be resolved. I've been to meetings at the local Chico office when you can actually go in the office with the bigwigs and PG&E. They'd come up when our BIA chapter was complaining. This is back in the 2000s and nothing ever was resolved. So you've got your work cut out for you.

Well, we certainly empathize, given what we've heard today and we've heard last week and on a number of different occasions, that the inability to move quicker is really causing a lot of delays in a lot of fronts, and the housing crisis in California is certainly one of them. Right. I'm curious to get some perspective here and perhaps not from the CPUC or CC unless there is some to provide. Is the Governor last week announced an accelerated agenda as it relates to infrastructure investment.

And key points are infrastructure as it relates to transmission and interconnection and of course could spill over to other areas of moving processes a lot quicker. I'm wondering if we can kind of go around the table and just preliminary thoughts and perspectives and maybe weighing in on what areas could and should be a focus of that conversation given that it was dropped last week. Of course, it's a work in progress that the Administration has been exploring.

I know Dr. Wood mentioned there were a handful of bills introduced at the beginning of the session that try to achieve the same objectives, which is accelerating processes to get to the end goal. So I'm just wondering if there's any perspective given the recent announcement of where we want to go.

Well, any kind of speed up in those kind of processes is going to be great, but I want to reemphasize and I respectfully disagree with a former comment that this supply chain is transitory.

This is not toilet paper, these are transformers and we do not have steel capability in America. We do not have large transform manufacturing in America. So there's a real problem and the steel that's used in transformers competes with electric vehicles. So if you do the math, you realize this is not going to get better anytime soon. So all the process stuff is great. It should happen.

We need to keep moving these projects forward, but it's probably going to exasperate and show up more in supply chain over time.

Good point.

Yeah, I think supply chain, when I'm talking about supply chain, the larger equipment that we need, right, substation transformers, which used to be nine weeks are now two years, 230 KV breakers that are 100 weeks now. They used to be 48, 52 weeks.

So I think supply chain is an issue and with all the build we're going to need to do for transmission as well as for TE, right, building, expanding, substations, we're going to need a lot of those supplies. Steel is another issue. If you need a steel pole, timelines are going up and they're increasing every week. So I think supply chain is one of the issues as well as working through all the processes on the generator side, managing the queue.

What is real that's in the queue, PG&E alone has almost 50,000 MW in the queue on the transmission side. Our peak is only 22 right now. Right. So that's a big queue. So I think the CAISO is working on that. They've got an improvement effort underway and we support that. But I think we need to clean up the queue.

And on another route. As somebody's talking about the Bridgeville to Garberville line, you're going to have to come to some sort, send that memo from the Governor to the environmental groups at the same time too, because you're going to get sued from high heaven for everything.

And until we get an agreement with them, or at least have them at the table at the beginning and explain to them that 80% of everything that's going to go through it is green power, or whatever the case may be, that's going to be an issue, and that's going to be a big stalling point along with the supply line.

Thank you. I guess I could reframe the question. Right. Just based on the first responses to CPUC and CC are we considering in our timelines this supply chain interruption to add to the current circumstance of moving faster.

So I will chime in and reiterate some of the points that were made earlier about the other equipment. So previously we had heard solar and storage, particularly during COVID those were the things that were supply chain issues. And we're hearing a lot more from developers that that seems to be smoothing out to some extent. But what is not smoothing out are the transformers and other ancillary equipment that's necessary to put these projects into motion. And we actually had some conversation at the IEPR workshop.

Is there an opportunity for the state to get ahead of this? And would there be an opportunity and not necessarily a state function, but a combined function for bulk purchasing, get them cheaper, get them faster? I think that is a possibility. However, there is competition. If you've read in any of the papers, and I think New York Times did an article about two or three months ago, this is a problem around the nation.

And so as a state, we need to get ahead of it and think about how we collectively can work to overcome some of these challenges. And we don't have the answers yet, but I think we need to have some thinking like that in terms of overcoming these infrastructure issues and supply chain issues.

Nothing else to add. Thank you.

Yeah, I'd like to add just some disagreement on the transformer front and so just wanted to respond. Since those originated with me, I would say that the distribution level transformers. So again, the difference between Interconnection and Energization projects, so PG and E purchases over 40,000 transformers every single year. We made a move very early on in the pandemic to secure additional supply lines for the supply of PG&E customers.

And so I don't believe that we will be long in an issue of having transformers as a distribution, transformers as an impact to our project timelines. But again, this is all planning. We're building projects here, right? So those timelines are now known and can be incorporated and can be worked and mitigated. So that would just be the add I wanted to make.

Thank you for that response. I'm going to look to my colleagues to see if there are any other questions of any of the panelists. Yes, please, that's why I asked.

Thank you. I appreciate that. So this was a very different TAC question here. So understanding that the utilities have endorsed a proposal that would change the structure in which they receive money for energization, for customers.

So as I understand it, the proposal would allow utilities to spend more than the amount that they're allowed through the GRC and effectively then they're going to have to recoup that at some point. To me it feels a little like a credit card, and this may seem like a good short term fix, but ultimately ratepayers aren't ratepayers going to be responsible for that? They are. Okay, so how does the PUC feel about that? Because this effectively goes around the GRC.

I really appreciate that question. I'm prepared to answer it. So I do want to first say that I do not want to prejudge any kind of application for what you're describing as a balancing account structure. And I don't want to prejudge any balancing account that might come before our commissioners for a vote. But I did want to comment on a few things in relation to this.

So first, balancing accounts are currently used in a limited number of circumstances, and we keep those circumstances limited because of this issue that you were talking about, that there would be spending occurring that would be collected from customers with a lack of review. There would be an audit, perhaps at the back end to an extent, but they would be collecting from customers. And so we have used balancing accounts in some circumstances, but we've made them very limited for that reason.

There are a different type of account called a memorandum account. It is not as favored by utilities because it creates a pathway for cost recovery, but they are not allowed to recover those costs until there is a reasonableness review done through a formal stakeholder process and discovery and a deep dive into the reasonableness of those costs that were spent. So typically, again, I wouldn't want to prejudge, but more likely to use a memorandum account than a balancing account as you described, because of those concerns.

I did want to also mention that, as I said, the CPUC does use the balancing accounts in a very limited number of circumstances recently that has undergone some scrutiny from the Assembly, and an audit was ordered by the State Auditor to audit our limited use of those balancing accounts.

So at this time, I wouldn't feel comfortable endorsing an idea of being able to use something like that for them to just be able to continue to just keep spending this money and going ahead and collecting it from customers in order to help with, I don't know, just getting more cash flow or something like that. I would be very hesitant to endorse an idea like that at this time.

And then, you know, something else that I did want to point out is other utilities have not asked for this kind of treatment in order to get this work done. We have six general rate cases that are going on with our electric utilities right now, all at the same time. We try and stagger them, but at this time we have six. We had one. PG&E's is coming to a conclusion this summer, but we had SDG&E's filed last year. We had Edison's filed this month.

Other utilities have not asked for this kind of regulatory treatment to be able to spend in that way with limited oversight in order to get some of this work done. So. Again, I don't want to prejudge in case if a proposal like that comes to the Commission and is before the Commissioners, but at this time I have some concerns which I've shared.

Rose your hand. Wanted to chime in?

Yeah, thank you. Just wanted to respond. So we have 75 different balancing accounts that she's referencing at PG&E. I would say that dynamic funding in a time of dynamic change, even if it's in a limited term and not a forever solution, we would definitely be in favor of something like that.

The other thought I would provide to you along those lines is to encourage you to look at the discussions ongoing around gas and the elimination of the allowances for gas new services within the state. And so there is some discussions right now between the IOUS and the CPUC around collecting on actuals versus collecting on estimated costs of new service connections. And so there are some implications for disadvantaged communities and the socialization of the overages from an estimated cost to a new service connection.

So there might be some ideas you could explore there.

Thank you. Any other questions from my colleagues? I'll I guess conclude with saying thank you to the panelists who have participated with us today, enlightened us in some areas and in other areas, I guess just kind of adding to the level of intensity and frustration that unfortunately exist in this space of work that we're dealing with. Nonetheless, there are some takeaways, and so we appreciate you participating with us this afternoon. At this time, I will open it up for public comments.

Again, thank you again to the panelists. Public comments, if you'll please. State your name, your affiliation, and you've got just enough time to get your point across during public comments. Thank you.

Appreciate it. Mr. Chair, I'll keep it brief. Israel Solis with San Diego Gas and Electric. I guess first I want to thank the Committee for putting this hearing together and for your attention on this issue.

I guess I'll just begin by seconding the comments by our colleagues over at PG&E relative to the need for a more dynamic and a more nimble cost recovery process in between rate case cycles that is better able to respond and adapt to a customer driven distribution grid upgrades. We just believe that the current rate case process was not designed to respond to the needs of rapid but unpredictable transformation of the electric grid.

And just generally, while at SDG&E, we're not experiencing the same level of challenges on the energization front described today. We do have some concerns about our ability to keep pace as we see more electrification on the grid. So, again, just want to thank the Committee for this hearing today and looking forward to working with you on potential solutions. Thank you.

Good afternoon. John Kennedy with Rural Counties. Many of our locals have been having these problems for years. These problems predate COVID and these issues aren't transitory in nature. We've been having them for over a decade. The lack of being able to provide power in a timely manner has really chilled economic development, housing, and so many other things, and now the state's transition to clean energy and decarbonization. So appreciate the hearing. This is exactly what we need to do.

We need to have these discussions and figure out what we can do better. So what can we do? We can increase coordination. Not just to get people talking to another, because I think that is helpful, but to inform these distribution plans, to make sure that the distribution plans are far more accurate with respect to the actual local needs on the ground that is long, long, long overdue. And then sharing that information so we can appropriately plan, as locals, where those projects need to go.

We don't want to plan for an economic development project somewhere where you're never going to be able to get power to it. So we need to work together to resolve those issues. And I think we also need to retool and reimagine the distribution planning process and the application process to make sure they're much more nimble. It's not just nimbleness on the funding side, it's nimbleness on the planning and application side as well. So look forward to working with you all in the future.

Thank you, Mr. Wood, for your legislation. I think it's definitely a move in the right direction. Thank you.

Thank you. Chair and Members, Alicia Priego, and I'm here on behalf of Southport Financial, which is the developer of the Centennial Gardens affordable housing project in Santa Maria. And thank you for the thorough discussion here. And I don't think I need to underscore the urgency for needing to address existing delays in energization, but Centennial Gardens is a multifamily affordable housing complex with 160 units with a mix of 70, 60, and 30% AMI units in Santa Maria.

This project has been waiting communication for over seven months on a potential timeline for construction date for hookup, and tenants have been waiting since January to move in. We are just beginning conversations with PG&E and hope to have a timeline soon. But the cost exposure on this complex is over $100,000 every month that this project is offline. And, you know, the demand for affordable housing in California is far outpacing the supply of housing.

So definitely thank you for addressing and hopefully finding solutions to this critical issue.

Good afternoon, Chair Garcia and Committee Members. My name is Allison Hilliard on behalf of Reimagined Power and the Microgrid Resources Coalition. Thank you for hosting this oversight hearing on interconnection challenges and prioritizing the issue in the Legislature. We support all efforts to accelerate interconnection timelines and support the state making new investments in interconnection resources, both personnel and technology solutions that will help expedite the streamline the interconnection process for all.

We encourage the Legislature to look more closely in considering microgrids and onsite power resources as a solution to help meet immediate customer energy needs given the current interconnection timeline constraints and capacity limitations on the grid. Microgrids can be deployed quickly across the state to provide onsite power to customers so they do not have to wait months or years in the queue for electric service.

Microgrids can serve immediate power needs for customers while they go through the full interconnection process and can be integrated to provide other grid benefits to the system once interconnection is approved. Thank you for your consideration and your leadership on this important issue.

Mr. Chair and Members, Beth Olasso on behalf of the Agricultural Energy Consumers Association, appreciate the time and the hearing today. We appreciate how PG&E said they're going to connect everybody that's in the backlog by the end of the year, but that assumes that they have power there to connect. What we're seeing in the AG and food processing world is the power is not there.

They're saying, okay, you can run not from noon to six or noon to nine, or we can give you half the power, and in five years we can give you the rest of the power. Those are the kind of challenges that we're facing. And as we see, as we are being pushed to electrify forklifts and trucks, we can't get the power that we need right now. Where's the power going to come when we need to plug in, you know, 1 MW fast charger for one truck?

That's what we're looking at. We're not seeing the distribution planning being there to upgrade substations. PG&E in their distribution plan only has one new substation getting built. One in the whole territory, not just in the Central Valley. So those are the kind of things we're looking at, not just connecting when there is power. We hope the Committee can address some of these issues as we are trying to electrify the sector and figure out how we're going to do all of that.

And on top of this, throwing more money at it isn't the problem. We're looking at 45% rate increases being proposed for PG&E and Edison. So how are we going to do this and keep electricity affordable at the same time? We appreciate you guys are asking those questions and looking into those issues and look forward to that further conversation. Thank you.

Mr. Chair and Members Vince Wiraatmadja with Schneider Electric, who's also a Member of the Microgrid Resources Coalition.

I'd like to align ourselves with the comments that MRC put forward and also just look a little bit into the future and flag for the fact that as we look at spending all these bipartisan infrastructure dollars we want, to make sure that we're upgrading our grid to be digitized, to be able to communicate from the user to the IOUS and back down, and ensure that we are properly leveraging the software layers that are associated with these technologies in order to best optimize the grid. Thank you for the time for this hearing.

Thank you. See no one else lined up for public comments. I want to again thank the panelists, want to thank my colleagues for their participation and this meeting is adjourned.