Senate Standing Committee on Energy, Utilities and Communications

The Senate Committee on Energy, Utilities and Communications will come to order. Good morning. We're holding our Committee hearing in the O Street Building, and I'm asking all Members to come to Room 1200 so we can establish a quorum.

I'd also like to welcome everyone to the first bill hearing of the Committee of 2024. Today we have six bills on our agenda. We're lacking a quorum, but we can start as a Subcommittee. Senator Dodd, are you prepared? We can start as a Sub if you can be our first author. You're presenting SB 1003. Thank you.

Good morning, Mr. Chair and Members. I'm presenting SB 1003 pertaining to Wildfire Mitigation Plan review. Let me begin by accepting the amendments suggested on page seven of the Committee analysis. SB 1003 would direct the Office of Electrical Infrastructure Safety to consider the timelines and the cost-effectiveness of investor-owned utility electrical infrastructure upgrades when reviewing wildfire mitigation plans. This bill will help ensure the maximum amount of risk from utility sparked wildfires is reduced in the shortest amount of time at the most favorable cost to ratepayers.

I think everyone on this Committee is aware of the 13.5 billion dollar rate increase the CPUC approved for PG&E. That increase was looking forward for the upcoming four years. On top of that rate increase last November, the CPUC more recently approved an additional rate increase, allowing PG&E to recover past expenditures made in 2020 and 2022, a look backward, if you will. Together, these forward and backward looking rate increases will add more than 400 dollars annually to a typical PG&E bill.

I think it's fair to say that much of this rate increases are attributable wildfire prevention investment, and particularly the undergrounding of electric cable. Undergrounding costs three million dollars per mile, while alternatives such as covered conductor cost around 800,000 dollars a mile--dollars a mile, excuse me. I think that policymakers, regulators, and most importantly ratepayers want to know if the wildfire protection they are paying for in utility bills is being provided in the shortest amount of time at the most reasonable cost.

SB 1003 simply directs the IOUs perform that analysis when they update their wildfire mitigation plans every three years, and that the Office of Energy Infrastructure Safety evaluate those questions when they review the Utilities Mitigation Plan. SB 1003 is supported by TURN, the Planning and Conservation League, the California Farm Bureau, Pacific Forest Trust, and others, and I'm unaware at this point in time of any opposition. I respectfully ask for an aye vote, and here today with me is Professor Michael Wara and Katy Morsony to testify in support of the bill.

Are you two lead witnesses here? If so, you can go to the podium right there, microphone, and you have two minutes each.

Thank you, Chair Bradford. I come to speak in support of SB 1003, and I just want to make a few points about the context in which we're in with respect to wildfire mitigation from utilities, and I'll start with pointing out that we've had some very good luck over the last couple of years in terms of our fire seasons. Last year was one of the best or best wildfire seasons of the last quarter century, and that's buying us time, valuable time, because what we know also is that our luck will eventually run out.

We will have climate change, and combined with the challenges that you all are confronting, probably in other Committees related to the issues with fuels mitigation and better wildfire resilience, mean that there will come a day when we need to have our mitigation in place or we will face consequences.

This bill aims to correct a flaw in the Wildfire Mitigation Planning process that exists today in California for utilities by requiring that the utilities evaluate the timeliness with which mitigation will be put in place. It is simply not the same to evaluate a portfolio of mitigation options, covered conductor, undergrounding, operational changes where one portfolio will deliver a level of risk reduction in one to three years, and another portfolio of actions will deliver risk reductions that won't actually be completed for a decade.

From the perspective of a resident of California living in the Wildland Urban Interface, those two portfolios are not equivalent. Under the current mitigation planning processes put in place by AB 1054 however, they are considered to be equivalent.

This bill would serve to change that and to ensure that the utility planning processes around safety are aligned with the concerns of California residents that whatever we do, whatever we can afford to do in terms of utility wildfire mitigation is done as quickly as possible, and that the timeliness of that delivery of safety is part of the evaluation in the Wildfire Mitigation Planning process that OEIS conducts on an annual basis. Thank you very much.

Thank you. Next witness.

Good morning. My name is Katy Morsony, and I'm an attorney with the Utility Reform Network and a cosponsor of SB 1003. TURN advocates for California's residential ratepayers at the California Public Utilities Commission and believes that ratepayers do not need to sacrifice their safety or reliability of their service for affordable rates. Today, I want to talk a little bit about the affordability crisis and why I think Senator Dodd's bill provides much-needed ratepayer protections.

Ratepayer dollars are a scarce resource. Energy insecurity is growing, and customers are faced with a very real question of whether to pay rent, buy food, or pay their electric bill. A major driver of rate increases has been spending on wildfire mitigations. Given the scarcity of ratepayer dollars, we should ensure that utilities are pursuing the most cost-effective wildfire mitigations. Senator Dodd's bill directs that consideration of the Wildfire Mitigation Plan must consider the cost-effectiveness of potential mitigations in combinations of mitigations.

In particular, the bill will require a demonstration that where undergrounding is deployed, it is the most appropriate alternative for the location using cost-effectiveness analysis that has already been vetted by the CPUC. This will ensure that scarce resources and repair dollars are used for their most productive use. For example, PG&E requested six billion dollars for the installation of 2,000 miles of undergrounding in its 2023 General Rate Case.

After analyzing the cost-effectiveness of PG&E's undergrounding proposal, TURN recommended a 2.1 billion dollar program funding more limited undergrounding with more extensive reliance on covered conductor that would have reduced approximately the same amount of risk on PG&E system. Ultimately, the Commission adopted a 4.7 billion dollar hardening program for PG&E, and as a result of this decision, PG&E customers have seen an approximately 35 dollar increase in their monthly bills.

Other wildfire costs are still under consideration in a variety of cost recovery proceedings at the CPUC. Stronger protections are needed to ensure that each ratepayer dollar is put to its best use. The PG&E GRC demonstrates how reliance on existing CPUC cost-effectiveness measures can reveal whether utility spending provides benefits consistent with ratepayer cost. SB 1003 would provide those protections by requiring the consideration of cost-effectiveness and the timeliness of proposed wildfire mitigations. TURN is proud to support SB 1003. Thank you for your time.

Thank you. Now, are there additional witnesses in support here in the room? If so, just state your name and your organization.

Johnnie Carlson with the Planning and Conservation League, in support.

Thank you.

Good morning. Paul Mason with Pacific Forest Trust, also on behalf of Defenders of Wildlife and Sierra Forest Legacy, also in support.

Thank you. Any additional witnesses in support? Seeing and hearing none, now we'll move to opposition. Are there any lead witnesses in opposition of this measure? You have two minutes.

Brandon Ebeck, on behalf of Pacific Gas and Electric. We're not in opposition, we're in a tweener position. We've had some great conversations with the author when we have some technical concerns with what's in print currently. As the Committee analysis reflects, the current regulatory framework and steps of approval for our planned wildfire investments are complex, and rightfully so, to ensure that customers are protected.

PG&E shares the author's concerns about increasing customer bills, and we remain committed to no more than two to four percent annual bill growth. However, we must live within our regulators and legislative direction. The one-year delay in approval of our recent 2023 to 2026 GRC added more than ten dollars per month to this year and next year's bills that otherwise would have been paid last year.

Similarly, since SB 884 passed in 2022, we've been looking forward to guidance from OEIS so we can file our ten-year undergrounding plan with all the information that this bill essentially discusses. We're looking forward to that in Q2 of this year, and then we can have a public review of what we file.

With regards to speed, our two-year rollout of fast trip, what we call EPSS, combined with PSPS and other layers of protection, provide the more than 25,000 miles of line in high fire threat areas with a 95 percent risk reduction today, but that risk reduction comes with reliability concerns. We continue to believe that undergrounding the proposed 10,000 miles of line is the most cost-effective solution to those specific line miles when all other costs are included, most notably including the customer reliability impacts from fast trip outages and storm response.

Last year alone, we spent more than 750 million dollars rebuilding downlines during the climate change-driven winter storms. We also have modeling demonstrating our undergrounding plan will have secondary benefits of more than one billion dollars in reductions to the residential wildfire insurance policies. All that being said, we look forward to working with the author. Thank you much.

Thank you. Any additional witnesses in opposition? Seeing none, we'll bring it back to the Committee. Any questions for the Committee at this point? Well, we're yet to establish a quorum, so all right. Senator Dodd, would you like to close?

Respectfully ask your aye vote when that time comes. Thank you.

Thank you. Senator Wahab. Senator Wahab will be presenting SB 983.

All right, Chair and Members, I'll begin by accepting the Committee amendments. California lacks the infrastructure needed to make zero emissions alternative fuels a realistic option for consumers by 2050. In fact, that date needs to be pushed up even sooner. SB 983 will create the Alternative Fuels Infrastructure Task Force. This task force examines how we can preserve the competitive nature of gas station pricing and how we can integrate alternative fueling into existing gas station infrastructure.

Current investments into alternative fueling infrastructure are only half of what is needed to transition by 2050 or earlier. This task force will determine the most cost effective path forward for zero emission fuel alternatives while using our existing gasoline infrastructure to meet Governor Newsom's mandate to transition to vehicles to zero emission sources by 2035. SB 983 is a crucial step.

I would like to introduce two witnesses today, Beverly Yu, the State Building and Constructions Trade Council of California, and Teresa Cooke, Executive Director of California Hydrogen Coalition.

Before they start their testimony, let's establish the quorum. Secretary, please call the roll.

[Roll Call]

A quorum is present so you can continue. Beverly, you can begin your presentation. Thank you.

Thank you, Mr. Chair. Good morning. Beverly Yu on behalf of the State Building Construction Trades Council, representing 500,000 hardworking men and women, the construction trades, including 65,000 rolled in our state of the art apprenticeship programs. We would like to thank the author for bringing forward SB 983, and we are in strong support as sponsors of this bill.

We support all forms of energy and SB 983 as acknowledgment that alternative fields are and will continue to play a role in how Californians get from point A to B. The state goals are set, the executive orders are signed. But now comes the real challenge and the hard work to achieve what we as a state have set out to do. We're not going to achieve our goals with the status quo. Achieving our goals requires serious evaluation, investment in new infrastructure.

And just throwing money at an issue will not magically mean that the infrastructure will be built. We must evaluate consumer preference and understand the complexities of both state and local laws that could be barriers to deploying alternative fuel infrastructure. And this bill is an examination of how we build off of our existing fueling infrastructure that are convenient in almost every community.

This bill acknowledges there are many stakeholders that are critical to these conversations, including labor, fueling station owners, both urban and rural consumers, experts in EV charging, hydrogen fueling, local government representatives, land use experts, and electric utilities, both public and private. Our members can build any form of energy generation. We work hard to build these new renewable projects.

We support the deployment of alternative fuel infrastructure and believe the task force established in SB 983 will help facilitate and accelerate the deployment and construction of alternative fuels infrastructure. It's a very critical step, first step for creating jobs in this sector, and we want to thank Senator Wahab for her hard work and leadership in this sector on this bill. Thank you.

Thank you. Next witness. Two minutes please.

Good morning, Senators. Teresa Cooke, on behalf of the California Hydrogen Coalition. Our membership includes hydrogen fuel producers, station developers, and manufacturers of zero emission fuel cell electric vehicles. SB 983 will ensure we're doing the early troubleshooting to solve barriers to the transition of our current fueling network to a network that can support California's growing fleet of zero emission vehicles. Existing gas stations are actually perfectly positioned to support the fueling needs of zero emission fuel cell vehicles.

Much like combustion engines today, fuel cell vehicles fuel at hydrogen pumps at existing stations, taking anywhere between three to five minutes, and they're on your range for another three to 400 miles. As our friend Senator Newman well knows, it would take 1,000 hydrogen fueling stations strategically located throughout the State of California to provide fueling access to 94% of the geographic state and 96% of disadvantaged communities. For these reasons, we are exceptionally pleased to be here in support today and thank the Senator and author for her hard work on this important issue. Thank you.

Thank you. Additional witnesses in support. State your name and organization, please.

Mr. Chair, Members. Theo Pahos representing Ford in support.

Thank you, Mr. Chair. Jack Yanos on behalf of the California Fuels and Convenience Alliance in support.

Thank you. Any additional witnesses in support? Seeing none. Now, we'll move to opposition. Are there any lead witnesses in opposition of this measure? Seeing none, we'll bring it back to the Committee. Any questions or concerns by Committee Members? Senator Newman.

Just a quick comment and a thank you since Ms. Cooke called me out. I'm grateful for this bill, and this is an important step forward, and so thank you for bringing the bill.

There's a lot of additional work outside the scope of this particular measure to make sure that California does make the investments that make good use of these properties in ways that assist the transition to zero emissions vehicles. Glad to support it, and I'm happy to move it when the time is appropriate. Time is appropriate.

Senator Rubio.

Thank you, Mr. Chair. I also think it's an important bill. I think as we keep putting mandates on our state, we have to also grow with some of our mandates and infrastructure is going to be key not only to meet our goals, but I can see it's going to produce a lot of good paying jobs that are desperately needed in California. So I like to be added as an author when appropriate. And with that, I also say move the bill. Thank you.

Added as co-author? Added as a co-author? Okay. She said she wants to be the author.

Yes, if she'll let me, I'll be the author.

Vice Chair Dahle.

Thank you. I'm glad to hear that this is technology neutral, but I just want to point out to the Committee that this bill is going to ask the CEC, which is funded by electricity ratepayers. So this bill will drive up the cost of electricity because I'm on sub two. And when we talk about the CEC, they're asking for more increase in their budget, which the electricity ratepayers pay for. Electricity ratepayers are subsidizing gasoline and fuel studies. So I just wanted the record to show that electricity rates will go up because of this type of study being done by the CEC.

Thank you. Senator Durazo.

Thank you. Thank you. And I will be supportive, I know, just a little bit. And follow up with my colleague. Mention of jobs is--we've been working on this on a number of fronts, from SB 150 to other examples. And as I said before, we have a good track record or a decent or good track record when it comes to the construction jobs. But we are not doing enough to assure non-construction jobs get included with high road jobs policies and plans. So I would really like to see some version of that included in your bill.

Thank you. And just to address that concern, I do want to say that the task force members, one specific task force appointee, would be from a construction labor organization. So I want to make that very clear that they would have say as to how we can implement things moving forward. So I just want to be very clear about that.

Yeah, I understand that. That's why my specific suggestion is non-construction.

One hundred percent. So we have other appointees that are also, we have a very big state, and oftentimes, when we have these conversations, we're talking about Southern California, Northern California, rural and metro areas, and there are representatives that would cover all of these specific regions. So we're very hopeful, especially with the intention of what I'm trying to do is also make sure that we have good paying jobs across the board. Not necessarily you don't have to be in a union to be paid fairly and treated with dignity, too. So I fully support that.

Yeah. Again, we have some very good examples of the kind of language that this task force would include, and we're going through that process right now. So I really would like to see.

Stronger. Yeah, no, I get it.

Some explicit reference to those kinds of things. Otherwise, it'll just go out the window and it'll be lost.

Thank you. Senator Stern.

Thank you, Mr. Chair. Sorry I lost my voice last night. I'll be brief in that regard so you can't count on a long winded diatribe here. Lucky for everybody. My questions to you I think I mentioned to you previous to the hearing, Senator, two functions that already exist in government that I'm concerned about duplication or what's not working with those efforts.

The Clean Transportation Plan, which the CEC just put out their most recent iteration, that is open to stakeholders, and we know our labor unions and petroleum industry and others are invited to that table. It's a public process. So what's not working in your mind about that clean transportation plan that necessitates us to stand up a new ratepayer funded entity here that sort of isn't working through the existing channel. I'm hearing from the hydrogen folks that they're not satisfied because they want more.

So if that's what the bill is about, I get it, but I sort of am trying to understand that. And then the other pieces on the retail fueling front, the Department of Petroleum market oversight, we put a lot of effort over the last couple of years in SB 1X2 to stand that up. And we know there's an industry effort right now to tell them we don't want to share any of our data and we don't want to sort of participate in that process. So how does this not duplicate or override both the DPMO and then the Clean Transportation Plan?

Definitely. Well, first I just want to say that there was a bill similar to this, AB 1614 by Assembly Member Gabriel last year, which you were a co-author, that asked for much of the same that's in this bill. I have spoken to the Assembly Member as well. So we genuinely do not believe that this is duplicative. In fact, this is very narrow and very focused on what we need to do to take those additional steps.

So, for example, I personally drive a hybrid electric vehicle and I live in an apartment complex. Cannot charge the vehicle at all because my complex does not have a charging station. And that is what many working class Americans are dealing with and why there has been kind of a pushback on EV vehicles for the average person. But through the Chair, I would like for our witness to be able to answer any more technical questions.

Thank you, Senator. Sorry you lost your voice. Happy to respond to two interesting points. One that you bring up, Senator Stern. The Clean Transportation Program does have an Advisory Committee. That Advisory Committee serves to advise on the spending focus of the Clean Transportation Program. We don't have a think tank dedicated to trying to address barriers for building out the infrastructure and in particular taking advantage of the existing fuels network.

There isn't anybody in the convenience industry that sits on the Advisory Committee, and it really is outside of their scope. And it's important to note that when it comes to hydrogen fueling, while state support in these early days is especially critical, that is not the long term path for hydrogen.

And so we really want to make sure that as our private developers are building out this station infrastructure, not only are we thinking about ways to support hydrogen early on through the CTP Advisory Committee, but that we're actually doing the work of trying to figure out how to ease the path for private sector to just directly build and invest in these stations at these existing gas stations. Does that help answer the question a little bit?

It does. I mean, the current plan is not strong enough for the hydrogen fueling industry. It sounds like it doesn't have enough forward looking private sector facing direction in your mind, as opposed to the sort of public investment plan. Is that a fair summary?

I would say the AB eight report that the Air Resources Board does is maybe a little bit more geared to what some of that forward facing work could be done. But again, that's our brilliant friends at the airbord trying to sort of project what the future could be as opposed to bringing the right folks together, including labor, to figure out how we overcome some of the barriers.

Understood. My only thing is, just in a year, we're about to try to cut $17 billion out of the budget, just to try to find efficiencies. If there's an existing program that you can tweak or make sure stakeholders are there or not, anyway, it's food for thought as you go forward.

No, I appreciate that, Senator. And one of the things that I also just want to highlight is that we do have infrastructure in place. So instead of starting from scratch and spending even more money and more time and not working with tools that are already in place, with this we're trying to build on the infrastructure we have that people know they can just go to a gas station, charge their vehicle. It's safer, it's cleaner.

And, for example, a lot of the EV charging stations are in the most random spots you could think of. Right? So for a family or even a woman traveling at night, who needs to charge her vehicle, it is not necessarily safe. This, again, establishes the infrastructure we already have, but expands it and makes it cleaner.

Thank you. Senator Grove.

Thank you, Mr. Chair. My question was answered on the hydrogen piece, and thank you very much for bringing this bill forward. I know it focuses on gas stations and where you have charging and expanding charging stations, but I love that we're introducing the hydrogen technology into legislation regardless of who's at the table and all of that stuff, because the reason I say that is because in my district, in what we call the spaceport, because we got it recognized by the Federal Government as a spaceport, we're actually doing short term air travel, non personnel air travel to deliver packages.

And we've converted regular fuel engines into hydro engines. And we're recycling water and flying up to 300 miles to deliver this, which is reducing emissions. And the only reason we were able to do that is because we have a complete EIR and everything that goes there. So they don't need a whole lot of, I don't want to say state regulatory processes because it's under local control and it's really a cool project. And when you can minimize government's input into these projects, the private sector can thrive. And so thank you. And I appreciate you including hydrogen, because I think one day it will include my spaceport, which is doing hydrogen travel.

Great. Any additional questions or concerns by Committee Members? Senator Wahab. Senator Newman.

Here's the button. I just want to add a little bit to the discussion. So I remember last year's bill, and the bill had a bit of the feeling of looking to sunset gas stations.

So I appreciate that this takes a sort of a more open-minded approach, but to Ms. Cooke's points, and I appreciate the support on hydrogen, especially for rural areas, there are questions as to whether or not gas station footprints will support a business model that is profitable around charging, around EV charging. We know that this modality is easily converted to hydrogen fuel cell infrastructure.

And so as part of this larger effort, I think this Committee especially has to lean into supporting that effort to ensure that fuel cell electric vehicles are part of this equation, particularly in those areas that are hard to serve with electric vehicles, especially in rural areas. So appreciate that, but I think that we should remember this conversation as we move forward. Thank you.

Any further discussion on this item? Hearing and seeing none. Would you like to close?

I respectfully ask for an aye vote.

All right, Members, we have a do pass as amended to the Committee on Rules. Is there a motion? It's been moved by Senator Rubio. Secretary, please call the roll.

[Roll Call] Ten to zero, it has enough. Ten to zero it has enough votes.

That measure has 10 votes. That measure's out. Congratulations. We'll leave the role open for.

We leave it on call for absent Members.

Yeah, that's what I'm saying. We're going to leave the role open for absent Members to add on. Thank you. At this point, I'm going to turn over the gavel to our Vice Chair real quick because I got to run over to another Committee.

Next up, we have Senator Padilla.

All right, we're going to get something done now.

Good morning. Mr. Chairman and colleagues. I'm honored to present SB 139 which would direct the CEC, previously referenced in consultation with other state agencies, including the Governor's Office of Business and Economic Development and the California Workforce Development Board, to establish a lithium battery production council to conduct economic analysis on workforce development needs, infrastructure, sewage, wastewater treatment, and housing needs focused on lithium battery production.

Imperial County's Lithium Valley represents an enormous economic opportunity for our state. As many of you already well know, the Salton Sea has one of the largest reserves of lithium in the world, which could fulfill over one-third of global demand in 2023. A new report by Lawrence Berkeley National Lab estimated that deposits held more lithium than previously estimated, enough to support over 375,000,000 batteries for electric vehicles, more than the total number of vehicles currently on US roads.

Yet the region which surrounds these vast deposits has critical infrastructure gaps, including a lack of bridges and roads, a lack of communication infrastructure, or even the water and sewage infrastructure capable of supporting production and a substantial workforce. California continues to seek to power the future by producing lithium in a more sustainable and environmentally safer way than nearly anywhere else in the world.

But as we do so, it is critical that we have a comprehensive and integrated strategy, I note, one that we do not currently have, that secures California's global leadership in lithium manufacturing and which prepares our region and state to meet the demands of sustaining a global industry. I will remind members, as I think does your report, we've taken good steps in the Legislature. We provided resources through granting to help assist the development of resources. We established a short-term commission to identify next steps.

And now we need to focus on an integrated strategy focused on production and all the segments of the supply chain. SB 1309 will allow better coordination among different state agencies. It will lead to a cohesive and robust strategy to ensure that we foster that lithium battery supply chain in California and have successful production.

In April, I'll be convening a Budget Sub Four Committee hearing on this issue to investigate the state's efforts at building a comprehensive strategy, and that hearing will inform the further development of this bill as well. With me today to testify in support of the bill is Michelle Rubalcava, representing the County of Imperial.

Welcome. You have two minutes.

Good morning, Mr. Chair and Committee Members. I'm Michelle Rubalcava with Nielsen Merksamer. On behalf of the County of Imperial, we are very grateful to the author for bringing forward this bill. As all of you know, lithium is a vital mineral that's found in rechargeable batteries that consumers use in their portable computing devices, electric vehicles, and battery storage. Currently, 80% of the world's raw lithium is mined in Australia, Chile, and China.

And currently, China controls more than half the world's lithium processing and refining, and is refining three-fourths of the lithium ion battery megafactories in the world. The United States only has about 1% of global lithium being mined and processed. And so, as the author has mentioned, there is an enormous amount of opportunity in Imperial County. It's estimated that we hold as much as 15 million tons of lithium in Imperial County, which would take about 50 to 100 years to extract.

The mining of lithium, in addition to the geothermal power generation provided, provide the opportunity for California and the United States to have greater control over needed material in the supply chain for electric vehicles, consumer and commercial electronics, while providing greater stability to our energy supply. So we are very grateful to the author for bringing forward this bill. It does align with the county's goals, and the statewide focus is much appreciated.

And we look forward to continuing our conversations with the author on the refinement and expansion of members on the council. And with that, respectfully ask for an aye vote.

Further witnesses in support. Seeing none. We will go to witnesses in opposition.

Sorry, not a lead witness, but Sarah Pollo Moo, California Retailers Association in support.

Okay, anybody else in support of SB 13? Nine seeing none. Anyone wishing to speak in opposition? Seeing no opposition, we'll bring it back to the dais. Questions by members. Senator Dodd?

Yes, first of all, I support this bill. I think this is something that, these are things that need to be done. In response to the last question we had on the last bill, I think it was you, Senator Dahle.

I mean, at some point in time, is there a way, do we allow the CEC to say, okay, instead of maybe this specific. Let me get to the point here, if this is too expensive, because, look, we've really got to start looking at the things we're doing and not creating more and more impacts for our ratepayers. This should be something that we talk about on every single bill that comes up that has ratepayer impacts, because these rates are just going through the roof.

So, granted that we need this policy, that we need to move forward on, this is incredibly important. I wonder in the future, maybe not for this bill today, but we ought to be thinking about ways of putting some section of the bill that allows the CEC to move this into a committee that they already have or some program they already have so that we're not creating new infrastructure, new costs.

And I don't know if that's something that I know that in the staff reports on some of the bills today, this could have repayer impact. So that's why I bring that up. Mr. Chair.

Thank you. I know that Senator Caballero is up now. I want to address that issue because I brought it up on the last bill and I laid off that bill. This work definitely needs to be done. There's no doubt about it.

But on all these bills that we're punting things to the CEC. This is the wrong place to do it. This is wastewater treatment. This is housing. This is all things that really should be housed in the GoBiz, Department of the Governor's Office. That's where the funds for this particular work, in my opinion, should come from. So I'm not going to be supporting these bills that are driving up, driving up the cost of electricity payers on issues. This one actually has something to do with electricity. Thank God.

I like it a little better than the last one, but it's still driving up the have. I think GoBiz is the place where we should be funding these. So I just want to put that out there because the number one thing I'm hearing in my office, and I'm assuming other offices, too, is people can't afford their electricity rates, and we're just continuing to push those up.

So I agree with your points. I'm going to support this Bill today.

And I just think, Senator Padilla, maybe that is something. Look, if this is a direction we're going at the State of California, I understand with a $38 billion deficit, it's hard to put more things there. But if this is a policy of the State of California, maybe this should be a General Fund item. So all I would like you to do is to consider this GoBiz type of idea as you move this bill forward.

Senator Caballero

Thank you very much. Actually, I had the same ideas of both of them. And so my comment was just that at the hearing, maybe you could explore where this more appropriately might be handled. Ratepayers in my district are going crazy. They pay some of the highest electricity rates, and the increase on top of increase on top of increase is going to be unsustainable. And we're going to continue to hear about it. I don't care what good things we do. It's just outrageous.

You have some parts of your district that are very similar in terms of climate. This really is an economic interest. I wanted to also congratulate you on your ideas, and I think it's a great idea. I just do think it should be funded not by the ratepayers. As we're looking at the broader issue of what are the economic opportunities, I think it does rightfully belong somewhere like GoBiz. Thank you very much for bringing this forward, and I'll move the bill when we're ready.

Mr. Chairman, at some point, I'm happy to respond directly to questions or comments.

Yes, Senator Rubio.

Thank you and I just wanted to belabor the point. I mean, clearly none of us want our repairs paying more, so I'll put that aside. They pretty much cover that topic. But I do want to commend you on this. I know that it's important work that needs to be done, and I know that our colleague, as I remember, Eddie Garcia, has also done some work on this and we know the benefit that it will bring.

So I really commend you for trying to bring this forward, but it is worth exploring other funding sources, and I think you're going to address it again. And I know because I've had conversations with the other Assemblymember and just the impact, the economic impact and how healthy it's going to be to the region. And I think I heard you say it'll fill one-third of global demands. And it's a big issue that we need to tackle. So it's an important issue.

But I do agree that it's worth exploring other funding sources. So thank you for that.

Senator Durazo.

Thank you. I think this is, I commend the author. This is really important. This is one of those parts of the state that is both extremely poor economically, has been hit with environmental justice issues for years, for decades, and very little attention has ever been paid to this area. And now, voila, there is this extraordinary source of lithium that will create opportunities and to do it right, not just piecemeal.

And we've done things in the past, especially when it has to do with environmental issues, when they've been piecemeal, whatever might serve the environmental issue, but it serves wealthier communities. This is something from the get, establishes, we're going to put all those pieces together. And it deserves and needs a special attention because we have an economic opportunity, an environmental opportunity. I mean, it just fits so many pieces. So I think it deserves its own special.

I'm not sure, I didn't put it in my notes here what this extraordinary cost is going to be that folks are referring to, but I think it's really worth it. And I'm glad that finally there's a time when we can put all these pieces together and that poor communities can actually benefit. If you can just say a couple of words on, I think it's great, an economic analysis of the needs and the economic needs in the area. What's your view of that?

Mr. Chairman, Senator, thank you. To your point, I think first and foremost, I appreciate the recognition of the members that we lack an integrated, cohesive, kind of multidimensional, central clearinghouse for coordinating different departments and strategies. It is literally the Wild West out there right now, as many of you know. I mean, global concerns are investing billions of dollars as we speak. And our well and talented different departments of state government are engaged at different levels, in different places, at different times with different people.

And it's the Wild West. It's an opportunity, I think, not just as part of that economic analysis, to look at ways in which California can compete in setting the table here with superior environmental practices and standards, but also labor and community benefit standards, because that is very central to me personally. And as you might see in the analysis provided to the committee, the closing comment by the staff is spot on.

This part of our state is not only rural agricultural poor exploited and living literally in one of the worst slow-moving environmental justice disasters in this state, as we speak. But it has been, decade after decade, promised something new, a new shiny object every couple of decades that's going to lift them out of poverty, give them job opportunities, bring infrastructure. And what has typically occurred here is that people come in, make some money and leave, and people are exploited.

And I, as not just the Senator that represents this area, but I hope that all of us together would want to seek to avoid that exploitation in the future.

Senator Wilk.

Thank you, Mr. Chair. A couple of comments, and then I do have a question. Just as an aside, I agree with all the prior comments in terms of maybe taking a look at a different entity to fund this. I am going to support this today because it's very important.

One, I salute you for your efforts on this. There's an adage that geography is destiny, and this area has definitely suffered because of the geographical location. And this just has a phenomenal opportunity to transform the area. I had a presentation last fall from the Imperial County Economic Development Director, and I was so impressed with the vision. So that's one. Number two, lithium is a commodity that we need. I was down in Chile, I think, about six years ago.

I had a briefing by the US ambassador, who was concerned that China was buying up all the lithium in Chile. And as mentioned by your speakers, China, Chile, and Australia. So I think it's really important that we do this and we have it here for our people. The question I do have, though, because it seems to really aggressive. So, pass the bill, goes into effect January 1, and then this strategic plan is supposed to be completed by March 1.

So it's just a couple of months later. Are people already working on this? Why is it so aggressive? Or did I misread the date?

Let me get my technical just to go back, and I'll look at the link that I don't believe it was intended to be 90 days. And so let me go back.

I'm supportive. I just think that that's probably overly aggressive. Okay, that's fine. With that, happy to support the bill today.

Thank you, sir.

Senator Grove.

Thank you, Mr. Chair. Thank you for championing lithium. Right. I know that Kern County has lithium as well, and we've worked and talked about resources that come from those type of communities that are underserved and very poor communities. That resources could go back to those communities to benefit those people that are having that lithium extraction from their communities, right. It doesn't need to go to, I don't know, not picking on Santa Monica, but the beach area, let's just call it that.

We'd like it to stay in our communities. I appreciate the work that you do on lithium. I appreciate that you seek wisdom and direction, and so does your county, from our county planning director. And I'm just saying that I think she's extraordinary. She's an out-of-the-box thinker. And I actually just text her this information right now and asked her where she was on this bill, because I think that your county planning and our county planning working together on the same subject matters.

It works really well for the state and benefits the entire state and the nation, in this case, because of the lithium binds that we found in our districts. I do have the same concerns that my colleagues have expressed about the funding. I've had meetings with the CEC, the board of directors. There are several concerns that they're worried about at the cost of increases for energy in our state, electricity rates being absolutely, positively one of them.

I have a friend that lives in, has a house in Arizona on the river. He has 400 kilowatts in Arizona that he used last month. His bill was $99.43. He also still maintains his house in Taft, California, and he used 107 kilowatts, one-third of what he used in Arizona. And his bill was $220.84. So we do have an issue with utility rates and people being able to afford them.

The CEC is also very concerned about the 43-cent increase for California resources estimates on the increase for low carbon fuel standards, which is going to raise our gas prices again, $0.43 starting, I believe, July of this year. I flew out to Texas on Thursday, flew back yesterday, went and met number 11, my granddaughter, which was just a blessing. And it's $2.89 for gas. I get back here, it's almost $6. So we are doing something wrong and we need to fix that.

I like what you're doing with the lithium. So I'm not opposing the bill because of the content of it. I am opposing the bill because of my colleagues comments on the 90 days to implement everything that government.

I can almost 100% say that's not going to happen, but I am very concerned that it's going to affect ratepayers and have a more costly, negative impact on those that can afford it and those that can't afford it and the utility rates that we now pay in the State of California. So I do have those concerns. I text my contact, that is like I said, and you know her, your county has worked with her. You know, how would we address this and not have it affect the ratepayers?

I'm waiting for a response. If I do get it, I'd like to forward that to you because you've always been open and your county has always been open to what her ideas and how she makes things work. So I apologize, but I can't support the bill today. Thank you.

Okay. Any other members? So I won't want to miss anybody. Okay, I'm going to weigh in a little bit. I was actually going to vote no, but I'm going to lay off because I believe you've heard from the members that we're all concerned about the, and this bill focuses on the infrastructure needed to actually develop. So it's wastewater treatment, it's housing. Those are things that I think.

I've actually been to your county as well, toward the Salton Sea, saw the environmental issues that you're dealing with down there. And I want to support your community. And I think this is the shiny thing that may turn some things around and we need it. So I'm going to lay off and give you the opportunity to figure out, hopefully a different funding source between now and when you go through appropriations and where your bill goes from there. So would you like to close?

Yes. Thank you, Mr. Chairman. And colleagues, I have heard that input and will consider it and work with everyone in this fashion. Just a couple of comments in response. First, I would note that, in particular, this council that is proposed here in this bill language, sunsets in 2030, it is discrete, specific, and very specifically directed to produce specific outcomes. So it is not standing up a new eternal agency or Committee of State Government.

Second, I think it's important in a constrained budget scenario, which we're all having a wonderful time dealing with this session, is that we are strategic about the things which we give budget priority or support to, that have the higher probability of return on investment. I can't imagine something that has more potential to return investment to the State of California than sitting physically, literally, on top of more than a third of the world's global demand for lithium.

It is an economic opportunity, I would respectfully submit, that is unprecedented in California history. And the great irony, of course, is that it's sitting in the middle of one of the most exploited and neglected parts of our state, so there should be strategic focus.

I would also point out that the language, as it is now, directs that although it may be housed, whether CEC or somewhere else, which I am open to in terms of the funding sourcing, it does require that this committee be integrated and in consultation and collaboration with numerous other state departments, many of which the members of the committee have pointed out specifically. And so it does desire to bring all the relevant agencies of government together and not to seek to run off in a new direction.

And I am very much open to working on that so that we ultimately reside this in the appropriate place with the most appropriate funding source, and that it is integrated, focused and discreet.

Thank you. The bill has been moved by Senator Caballero. Was there amendments to the bill? No. Okay. All right, we will call the roll. This due pass to Appropriations.

[Roll Call] 10 to zero.

We'll leave it on call for the absent Members. Thank you, Senator. Thank you. Mr. Chairman and Members, we would like to call the role on Senator Dodd's Bill. It did not have a quorum at the time, which is SB 1003. Yes, I got a motion by Senator Caballero. It's due pass to.

Thank you.

Where is it going? Appropriations due pass as amended to appropriations. Go away. We're getting stuff done. Please call the roll.

To appropriations. [Roll Call] It has 14 votes.

14. That bills out.

No, we'll leave it open for absent Members.

We'll leave it open for those Members that are absent.

Thank you.

All right. We're now moving to SB 1182 by Senator Gonzalez. She's prepared. You may begin, Senator.

Thank you, Mr. Chair and Members. I'm here to present SB 1182, which will require cross agency collaboration and communication on how California can keep its schools safe in an era of extreme impacts for climate change. California maintains 125,000 acres of school grounds, 730,000,000 square feet of facility space, and 10,000 school facilities, of which 40% are at least 50 years old.

SB 1182 will establish a statewide plan that will better position California school districts to tackle the generational challenge of transitioning to climate resilient facilities, while also drawing down potentially federal funding through the Inflation Reduction Act, and, of course, will harmonize state and local bond spending with the state's climate goals. Testifying in support today, I have Kirk Anne Taylor, Executive Director for Climate Action Pathways for Schools, as well as Stephanie Seidmon, Program Director for Undaunted K12. I respectfully ask for an aye vote.

Thank you, Senator Gonzalez. Mr. Chair, Members of the Committee, I'm pleased to voice my support for SB 1182. I'm Kirk Anne Taylor. I'm the Executive Director of Climate Action Pathways for Schools. We're a nonprofit that works with school districts to reduce greenhouse gas emissions, help them save money while preparing students for college and their future careers. I'm also a parent who is concerned about the harm to children's academic progress that as a result from climate related disruptions to their schooling. We need climate resilient schools.

Climate resilient schools will prepare us. In the event of extreme weather, which forces local utilities to cut power, our schools can then remain open, powered by renewable energy that is generated and stored on site. And when wildfire smoke fills the air, school ventilation and systems provide clean, cool air, providing respite for students and for families. And when students struggle to make sense and find balance in the face of uncertainty, their schools can offer connection and competence and hope for the future.

So Climate Action Pathways for Schools has been in partnership with Porterville Unified School District in Tulare County for the last four years. We've been working with them to reduce their greenhouse gas emissions, and to date, the school district has achieved over 28% reduction in their greenhouse gas emissions. They've also produced over $880,000 in energy cost savings as a result of the facilities plans that they've put in place.

In addition, they've been able to leverage over $15 million in state and federal dollars for climate infrastructure projects and workforce development. This has truly been a win-win for the local community, for students, and the school district's bottom line. We need to ensure that every school in the state gets on a path like Porterville, and the need for the master plan is great.

It will help us align national and state investments with school infrastructure, with also the goals for decarbonization, climate resilience, environmental justice, and educational equity. This master plan will create a roadmap for schools that will help them benefit from the cost savings that will come along with decarbonization while also creating healthier school communities. I respectfully ask that you vote aye on SB 1182. Thank you.

Great. Any additional witnesses in support?

Good morning, Mr. Chair and Members of the Committee. And thank you, Senate Majority Leader Gonzalez. My name is Stephanie Seidmon. I'm a former California public school teacher and school administrator, and I'm here today as the Program Director at Undaunted K12. Last year, we coauthored a call to Action Report Climate Resilient California Schools with the UC Berkeley Center for Cities and Schools and Stanford University.

The report's central recommendation is for California to develop a master plan to ensure a coordinated response to adapt our school buildings and grounds to the impacts of climate change. We need a plan to keep students healthy and learning during extreme heat, wildfires, and other extreme weather, which negatively and inequitably impact student physical health, mental health, and learning. A statewide master plan will help us ensure four critical outcomes.

First, a master plan will ensure that the 7 billion local and state dollars we already spend every year on school facilities in California is aligned to our decarbonization and extreme heat goals. Second, a master plan will ensure that our schools can take advantage of new incentives for clean energy technologies in the federal Inflation Reduction Act, money that California might otherwise leave on the table.

These investment tax credits are unlimited, meaning that our schools will only bring in as many federal dollars as the projects that we do. Maximizing these dollars and these projects requires thoughtful and large scale planning. Third, SB 1182 will ensure that the 730,000,000 square feet of California school buildings are part of the solution to reach our statewide greenhouse gas reduction targets.

And fourth, a master plan will ensure that the schools and communities most vulnerable to the impacts of climate change and least resourced to adapt to these impacts, have what they need to make smart investments that keep students safe, healthy, and learning. I'm here to respectfully ask that you vote aye on SB 1182. The cost of inaction will be far greater than the $10 million investment needed to modernize our schools and maximize federal dollars. Thank you so much.

Great. Any additional witnesses and support? State your name and organization.

Mr. Chairman, Members. Mike West, on behalf of the State Building and Construction Trades Council of California. Thank you.

Nora Lynn on behalf of Children Now in support.

Kai Cooper, registering support for the Building Decarbonization Coalition, 10 Strands, and the New Buildings Institute.

Thank you, Mr. Chair, Members, and staff. Mitch Steiger with CFT, proud to co-sponsor this bill. Urge your support.

Good morning. Vince Yura on behalf of Sheet Metal Workers Local union number 104 in support.

Santiago Rodriguez with California Environmental Voters in support.

Thank you. Any additional witnesses in support? Seeing none. Now we'll go to opposition. Are there any lead witnesses in opposition to SB 1182? Seeing none. Okay, we'll bring it back to the Committee. Senator Wilk.

Thank you, Mr. Chair. Even if California were to reach all of our carbon emission goals, the fact of the matter is we only produce 1% of all carbon emissions for the world. So on a global level, we are not going to hit those targets. I really think this is smart public policy because obviously we need to reduce that, but we also need to take the necessary mitigation measures to adapt to climate change. So this is a great bill and thank you for doing it. I will be supporting it today.

Thank you.

Thank you. Senator Min.

Thank you, Mr. Chair. As Kermit the Frog once said, it's not easy being green, but this bill helps for that cause. It's a great bill. Would like to be added as a co-author at the appropriate time and would move the bill.

Great.

Bill has been moved by Senator Min. Senator Dodd.

Nearly the exact same bill was vetoed by the Governor last time. I voted on it last time. I intend to vote for it today. But again, I think we need to bring up if, in fact, it is true that these mandates that were given the CEC to do on a wide range of things, I think you ought to be looking at as this moves through the Assembly, perhaps if there's another area. I think we just got to be very circumspect on what we're asking our ratepayers to pay.

And I know this is a lousy time to be thinking about that with the budget the way it is, but it's just something that we have to do for the benefit of the ratepayers throughout the entire state of California.

Thank you Senator Rubio.

Thank you, Mr. Chair. And I was a co-author to the original bill, which I'm sad that it was vetoed. But when we think of our schools, and also as a former teacher for 20 years and administrator at a school, I think it's time that we take a look at some of the infrastructure that we have. And I think someone pointed it out in terms of, it really is about equity, and some of our schools need to be really honed in on.

So I commend you for bringing it back. I think it's important not only because it's needed, but also in terms of leaving funding on the table where we can draw down from Federal Government. And I think this is the time to do it since there's funding available that will complement what we can do here. So with that, too, I would like to be added as a co-author on this one as well. So thank you for your efforts, and with that, I will move it. But I think someone already did. So thank you.

Yes. Senator Vice Chair Dahle.

So we saw support, I think, I don't know if anybody that didn't support your bill last year, but what indications do you have that the Governor is going to sign this in a year where we have actually more challenges? I'm kind of interested in what your thoughts are.

Yeah. I mean, thank you, Senator Dahle. Through the Chair, it's a great question, and we're continuing to just noodle through all of the different dynamics, but we do have different scenarios in terms of one time costs. Last year we had a $10 million--that would be the whole master plan. Obviously, CEC, we want them to do the coordination along with Natural Resources, the State Architect, kind of defer a lot of the expertise to these other state agencies.

So we're hoping that could be a little helpful. But the one time costs from the appropriations analysis from last year stated a $1.5 million and 10 limited term positions to develop the master plan. Another one time cost potentially of $5 million to fund the work of the non-governmental agency contractor. So there's different minor costs like startup capital, I see it as. But what I would say, and similar to what Senator Rubio said, is that it does provide us leverage for the IRA and IIJA funding.

So, for example, the Federal Inflation Reduction Act contains a renewable electricity investment tax credit that could be provided for clean energy investments for these schools. As an example, if a school district wants to purchase and install a 500 kilowatt solar system at a cost of $1 million, it would receive a direct payment between $300 and $500,000 back from the IRA.

So I do think that this bill, of course, this one time startup capital, even in a really tight budget scenario, would still provide us some opportunity back for these schools to be retrofitted in a green way. So that's the hope. I know it's probably not the perfect answer, but I think we are leaving money on the table. Absolutely.

Great. Any further discussion or debate on this item from Committee Members?Hearing, seeing none. We have a motion from Senator Min. We have a do pass recommendation. Senator, would you like to close?

Just want to say thank you to our witnesses. We'll continue pressing on, and I thank our co-authors as well. Thank you.

Okay, Secretary, we do pass to Committee on Education. Secretary, please call the roll.

[Roll Call]

That measures out. 13 to 0 we will leave the role open for absent Members to add on. Senator Dahle, I'm going to hand the gavel over to you and I'll go present mine.

We have Senator Bradford, SB 1177. Looks like he's prepared and ready to go.

Not prepared, but I'll go. Thank you. Good morning, Mr. Chair and Members. I start by stating I'll take the Committee amendments and I appreciate their work on this Bill. SB 117 updates California utility supplier diversity law to better understand spin concentration, promote diverse company growth, and foster more diverse workforce. As we know, in 1986, the late Assembly Member Gwen Moore established a first supply diversity statue in California, better known as Junior Order 156. At the time, utilities regulated utilities here in California were spending less than $500,000 per year with diverse businesses. In 2022, utilities aggregated direct diverse spending exceeded $14 billion, with an additional $2.8 billion spent on diverse subcontractors.

California Utility supplier Diversity law is one of the larger engines of socioeconomic mobility for historically disadvantaged people in the state. However, some gaps still remain in the program. Utilities report on supplier diversity spending does not include information to identify the extent of which they are helping grow economic opportunities for new businesses. SB 1177 aims to obtain more annual information regarding the workforce diversity of contractors and subcontractors, as well as standardizing the instate economic benefits of Junior Order 156 in 2022.

Annual report to PUC noted that growing the number of new contractors with project experience while retaining relationships with long standing diverse suppliers remains a substantial challenge for the supplier diversity program. SB 1177 will clarify that diverse businesses certification status is retained until its normal expiration date in the event that they are acquired by another enterprise. Additionally, this Bill requires utilities to file diversity, equity and inclusion plans with short and long term goals to promote diversity at all levels of employment.

Many investor owned utilities and public utilities have already adopted diversity, equity and inclusion plans or programs, but there's still much work to be done in this area. SB 1177 will help standardize the data across utilities and more clearly measure the goals and objectives I respectfully ask for your aye vote.

I have no primary witnesses with me today.

Do you have any primary witnesses?

Okay. Anyone wishing to comment or support on support of the Bill? Seeing none.

Anyone here in 1200 wish to speak in opposition to the Bill? Seeing none, we will bring it back to the dais. We have a motion by Senator Stern. I do have any questions?

I do have a question. Senator Bradford, on the time that they give up, there's a grace period in there of a disadvantaged women, minority, disabled veterans and LGBT business entrepreneurs. There's a time that if they switch from one to the other, how does that look in the legislation? I'm confused.

They can be switched from one to the other, correct? Yeah. I don't have that right in front of me. I'm sorry, but there is a grace period. How are we going to know in that gap period if they actually meet the criteria to be a disadvantaged business entrepreneur? I would think they maintain that status and over that period, they would still be qualified as a disadvantaged business. But once it's acquired, I'm trying to see.

I should have had that in my notes and I don't have that. I'm sorry. We would still follow the protocols and guidance that we have right now and making sure that they comply with the disadvantaged business status. So I'm not quite clear on your question.

Well, the way I understand it is there's a transition time. And in that transition time from one business to the next, I just want to make sure that there's not somebody that's getting the DBE or the ability to be able to bid on projects that's not qualified, that's what my concern is.

Okay, so the follow-up question is then I'm concerned that if you did it one year and then they had four years left on there and somebody else took it over, how do we know that those people meet the criteria in the remaining four years?

I agree, and that's some of the things that we're working on this Bill to make sure that those oversights are there, because what we have seen, just like you're stating, is business that did qualify as disadvantaged and then get acquired by another business, and it's no longer that status. So we don't want them to maintain that. So we're looking at that as we move forward as well. That is a concern.

Thank you. Any other questions? Seeing none. We have a motion by Senator Stern, and it is do pass as amended to Appropriations. I will be not voting on the Bill today until I see that language change, Senator. Thank you.

No problem. Thank you.

Okay. SB 1177, do pass as amended to Appropriations. [Roll call]. 11 to zero. It has enough.

That has enough votes but.

11 to zero. We'll leave it on call for the absent Members. You also have item SB 1130?

Yes.

Would you like to present that?

Thank you, Mr. Chair. SB 1130 would expand eligibility criteria for the Family Electric Rate Assistance, better known as FERA Program, and require the state three largest investor-owned utilities to report on their efforts to enroll customers for the FERA Program. California investor-owned utilities have two low-income subsidy programs currently available. As you know, the CARE Program, California Alternate Rate for Energy Program, which is available to about individuals 200% under the federal poverty level and provides a discount on gas and electric.

And the second program is the FERA Program, and it was created in 2005 in order to provide utility bill relief to customers in larger households who are not eligible for the CARE Program. The FERA customers receive an 18% discount on their monthly electric Bill. Unlike the CARE Program, FERA is historically under-enrolled. In 2023, PG&E estimated enrollment in their service territory to be only at 23%.

In the same year, San Diego Gas and Electric and Southern California Edison reported their enrollment rates at 24% and 14%, respectively. With California energy bills trending higher and higher and the potential for income-based fixed charge to be tiered, using the FERA enrollment as one of the benchmarks, now it's the perfect time to give this important program much-needed boost in intention and enrollment.

Testifying today with me in support is Katy Morsony, representing The Utility Reform Network better known as TURN and I respectfully ask for your Aye vote.

Thank you. You may proceed.

Thank you and good morning, and thank you for having me back. My name is Katy Morsony. I'm an attorney at TURN. TRUN advocates for residential ratepayers in California and particularly for low-income ratepayers in California. I am here today to support 1130. Chair Bradford's Bill would enable and encourage expanded reliance on the FERA Program. Electric rates for all of the major IOUS have either doubled or almost doubled over the last decade. As a result of these rate increases, energy insecurity has grown among customers.

More and more Californians are feeling the squeeze of high rates and facing the heat-or-eat dilemma, and this situation is most dire for our lower-income Californians. There is a lot to be done to address utility rate affordability. There are, however, existing programs that will help California's low-income customers.

The CARE Program or the California Alternate Rates for Energy provides the 30% to 35% discount on electric bills and 20% on gas bills for income-qualified households at 200% of the federal poverty level, and FERA is available for customers with household income between 200 and 250% of the federal poverty level. FERA is currently available for households of three or more people and offers an 18% discount on electric bills.

In 2023, CARE enrollment was at 100% of eligible participants for PG&E, SDG&E, and 90% of eligible participants for SCE. FERA enrollment lagged behind as noted by Chair Bradford. SB 1130 would remove the requirements of a three-person household for participation in FERA. This would expand the availability of assistance programs for Californians that are not otherwise eligible for CARE. Further, the Bill would require a report on utility efforts to expand participation in the program and identify next steps if this enrollment doesn't increase.

Utilities have struggled to expand enrollment. Reducing the household number requirement would provide another tool for expanding enrollment in FERA. TURN supports SB 1130 and expanding eligibility for FERA as it provides an avenue of support for customer assistance for all Californians. Thank you for your time.

Thank you. Any other witnesses in support?

Good morning. Kim Stone, Stone Advocacy, on behalf of the California Solar and Storage Association in enthusiastic support.

Rebecca Gonzalez with the Western Center on Law and Poverty in support.

Emily Pappas on behalf of Niemela Pappas and Associates for MCE in support.

David Azevedo, AARP California, in support.

Thank you. Anyone wishing to speak in opposition of SB 1130? Hearing none. We will bring it back to the dias. Senator Dodd?

Yes, same issue, different Bill. We've got to figure out what we're going to do. This is going to hit ratepayers. Although, right now we've heard about how many people aren't paying their bills at all. So maybe if we're discounting those bills and we get 85% of the money, maybe that's why some of the utilities aren't here in opposition to this. So maybe it does help.

But I think in the context of what we've said on the previous bills, it's important for us to again try to find some way that these programs don't adversely affect ratepayers.

Anybody else? I do have a question, Senator Bradford. So somebody else has to pay if we give a subsidy to the lower income. And so my concern is, or maybe I want to understand better. Obviously, 200% to 250% below the poverty rate is low. And so this Bill basically changed it from a three-person household to, could go to a one-person household.

But when that cost shift gets shifted, say they were able to take the advantage of the 18%, somebody else has to pick up that 18% that is a ratepayer. In the category, everybody above the 250% has to pay, even people that have solar?

I mean, we've been subsidizing solar since day one. So I understand you're concerned about cost shifts. So by hopefully increasing the enrollment on these cost-saving programs, it's going to bring those consumers' bills down, and overall costs will go down as well.

So I'm supportive of the Bill. I think you're trying to narrow in on the poor, of the poor. And that's where I want to go too, because they're the ones that are getting really, for lack of a better term, screwed by the people that have solar. And I've been very outspoken about it, and I don't think it's right. But the people that have solar, they still aren't going to pay this bill.

It's the people that don't have solar that are above 250 are going to pay this Bill, right?

That's true. I mean, that's what we're working on trying to fix that. But you're right, it's no getting around that.

At some point we have to, I mean, I'm going to support your Bill today, but at some point we have to take into consideration that the people that have solar are getting subsidized by very poor people.

True.

And they don't pay for the infrastructure, and they get basically their electricity at a better rate and have been subsidized by tax credits and a whole host of.

Rebates. All up.

Yes, rebates, tax credits. And we've been talking about the CEC. We've been talking about rates going up. So my concern with this is we're going to get the lowest of the low, but the intermediate people who don't have solar, their rates are going to go up even more because they have to pay for this subsidy for somebody else. So I will be supporting your Bill. I know where you're trying to go. I just want the public to understand what's really happening here.

At the end of the day, the very wealthy are being subsidized by the middle and the very poor. Sorry. Senator Skinner.

I'm supporting the Senator's Bill today, but I just think it's... we've had informational hearings. We probably should have another one again, about rates. But I just want to put some, I appreciate that you are trying to put out your perspective on the record for the public to understand. However, I think it's also very important to indicate that many of the bills we had before us today that are passing this Committee are going to add ratepayer pressure. They are.

So all our wildfire work, any number of things, right? And again, not indicating a pro or con about it, just the fact that we have a lot of things that we're confronting right now with, as we electrify. But when the issue around solar, we've already seen the CEC make many adjustments to solar customers.

And if we wanted to really get into what were all the different ratepayer pressures, while that one was a legitimate one to look at and there were corrections made, there are many many many programs that we have enacted, or PUC has enacted that create ratepayer pressure. And we are seeing high rates right now. And we know that legitimately the public is reacting, and those high rates could affect our goals to electrify.

But to nail one particular source as the cause for the ratepayer pressure that we are experiencing is inaccurate. And that's what I wanted to just lay on the record. And we also, as Members, have to think about as we introduce bills, because there's a whole lot of stuff that I want to introduce this year but that we really can't afford right now to be putting on bills that would create more ratepayer pressure.

Senator Durazo. No?

For the record. Senator Skinner, almost every single Bill that we've had today, we've talked about it in that context. And I think you're right. I don't think we need to pick on the solar industry. They've done a really good job of pioneering this. But I think we all know that the shortcomings of that program, and it looks like it's under continuous review at the CPUC.

I just want to thank the Senator for bringing this Bill. I was just trying to articulate, because I was actually here when it was only him and I left at this Committee hearing, and we heard from the ratepayer groups and we heard about low-income, all the Members left. It was just the Senator and myself. And we were trying to address the issue of the very least people that are able to pay in California are subsidizing the very wealthy people. That's the point.

And I voted against many of those bills, most of those bills, all the way through. And we need to have a longer conversation about. I thank the Senator for bringing this Bill forward because he's trying to address an issue that is real. Poor people are struggling, and they're calling my office and his office as well. So I will be supporting your Bill.

I love to give you the opportunity to close, and we do need to have a larger conversation with all the Members here, not just a few of us, trying to figure out how to get where we need to go. So, Senator, if you'd like to close, thank you.

And I hear loud and clear where our concerns are. We all know there's no free lunch in America, so someone pays for just about everything that we legislate here in this Committee and pretty much whatever the subject matter is, and that's the reality, but trying to contain it, and that's what we're trying to do, is provide those poor of the poor, with the FERA Program, a way to reduce their monthly Bill in some fashion, because we know it's hitting them in their pocketbook every day.

As you said, we hear from our constituents all the time about rates going up. We're dealing right now with the fixed charts that's going to go forward. A lot of concern regarding that as well. So I think rates are at the forefront of everything that we do. We're mindful of that, and we're truly looking out after the consumer. And this is just another way. But again, we won't fix that problem here today.

But it's something that we definitely need to take a better look at, because there are subsidies and cost shifts that folks are paying for, and it's no way of getting around that. But with that being said, I respectfully ask for an Aye vote.

Thank you, Senator. It's been moved by Senator Stern, I believe, and it is do pass to Appropriations. Let's call the roll.

[Roll call]. 13 to zero.

13 to zero. We'll leave that Bill on call for absent Members.

Okay. Should we open the roll for absent Members right now that weren't here earlier? We'll start with File Item One: SB 983. Secretary, please call the roll. The absent Members.

Do pass as amended to the Rules Committee. Current vote: ten/zero. [Roll Call]. Okay. It has 12 votes right now.

I intended to stay off. Apologies. Can't do it now?

Okay. So what's our count?

Twelve to zero.

Twelve to zero. Are we expecting those other Members that are absent?

I don't know if Becker--

All right. So we'll continue moving on through the list. Now moving SB 1309. Please call the absent Members.

Current vote: ten/zero. Do pass to the Committee on Appropriations. [Roll Call].

15 to one. We'll leave the roll open for absent Members to add on. Now moving on to File Item Three: SB 1003. Please call the absent Members.

Oh, my goodness. I didn't put the vote in here. Hold on one second. Current vote: 14/zero. [Roll call].

17 to zero. We'll leave the roll open for absent Members.

I think it's out.

That's out? Okay. That bill is out. Now moving on to SB 1182.

Do pass to the Committee on Education. Oh, my gosh. My votes aren't in here. Current vote: 13 to zero. [Roll Call].

16 to zero. We'll leave that measure open for absent Members. Now moving on to File Item Five: SB 1130.

I might need your vote thing because my things weren't recoded. Oh, I have it. Okay. Thank you. Current vote: 13 to zero. [Roll Call].

15 to zero. We'll leave that roll open for absent Members to add on. SB 1177.

Current vote: eleven/zero. [Roll call].

14 to zero. That measure's out.

I need your votes.

So it's Senator Caballero. Do we need to open the roll for Senator Caballero on any of these files?

Yes. She's on the first one. Can I see your--she's on the second one. Caballero. Okay.

File Item Four: 1182.

Current vote: 16/zero. [Roll Call].

That measure's out; 17 to zero.

What's the current vote on that one? What's the--oops. Hold on one second. Okay, thanks. Current vote: 12/zero.

Is that SB 983?

983. Yes. [Roll Call].

Is it possible that Senator Skinner can change her vote? Since we're--

You've already voted. You can't not vote. You could change it to no. No, it happens here, too. [Roll Call].

Senator Limon, you're not voting on this? Okay.

[Roll Call]. So it's 13/zero.

SB 983: 13/zero. That measure's out.

So I think they're--does Limon want to--

Members, that concludes our business here today. I want to thank everyone for their participation in today's hearing. The Senate Committee on Energy, Utilities and Communications is now adjourned. Thank you.