Assembly Standing Committee on Utilities and Energy

Good afternoon. Good afternoon and welcome. I'd like to convene today's hearing of the Assembly Committee on Utilities and Energy sergeants, if you can, please call the absent Members. Before we begin with our agenda, I have a few housekeeping announcements to make for today's hearing. We have 10 measures on the agenda. Five of those are on consent.

Please note that two items, item number two, AB 2221, by Assemblymember Carrillo, and item number four, AB 3200, by Assemblymember Hoover, have both been pulled from today's agenda and will not be heard as part of our hearing today. Again, before we begin, I will make a couple of additional announcements. We will maintain decorum throughout the hearing, as is customary, in order to hear as much from the public within the limits of our time.

We will not permit conduct that disrupts or otherwise impedes the orderly conduct of legislative proceedings. Any individual who is disruptive may be removed from the room. Please note the testimony is limited to four minutes total. Two minutes in support, two minutes in opposition. For any additional witnesses on a measure, please only state your name, position, and affiliation. If we exceed today's hearing time, please submit your testimony through the email address on our website. Moving to the agenda.

We do not have a quorum, so we are going to go ahead. I'm sorry. We. In order to begin, we need one of our Republican Members to join us. So if we can, please call our Republican colleagues to join us. We will begin as a Subcommitee when they arrive.

No, no. All right. Okay. Take two. We are ready to resume. We will begin today's hearing as a Subcommitee. I don't see any authors. We'll go ahead and move to the consent calendar. There are five measures on our consent calendar. Oh my God. We don't have quorum, I'm sorry. Now we're waiting for authors. Hello. All right, we will go ahead and begin Assembly Member Addis when you're ready.

Well, thank you, Chair, staff, advocates, Members. Today I'm here to present AB 2847 the Ratepayer Transparency and Accountability Act. And it's no secret that energy rates are skyrocketing, impacting real people across California. In just three years, electricity rates, residential electricity rates have increased 63% for PG&E customers and 52% for SoCal Edison customers. And we all know, we've all heard from families that are struggling to pay their monthly utility bills.

And to me, I'd say to many of us, it feels like there's no end in sight. And we're really wondering just how high these bills are going to climb. So we feel it's time to provide relief. Residents across our state really, truly deserve to know two things. One is what to expect when they open their monthly energy Bill, and the other is that all the costs included in their bills are fair and are reasonable.

And so, in addition, having this kind of information can in turn lower costs for ratepayers. Under current law, utility customers pay for utility infrastructure costs through their rates. And typically, when utilities request permission to make capital project expenditures and recover costs from ratepayers, they're only required to provide information about the list price of the asset and the impact on rates in the short term.

And this really, truly leaves California rate payers in the dark without important information about how these choices are going to impact rates in the future. So AB 2487 will shine a light on the long term impacts of utilities choices and will require utilities to provide information about the long term costs of their capital expenses upfront when making their case to the PUC or the Public Utilities Commission.

This in turn can ensure that the Commission, ratepayer advocates, and most importantly hard working Californians have the information they need to determine whether utilities should be allowed to pass these costs along to consumers or not. So joining me today is Mark Tuney, here to testify, and he's Executive Director of the Utility Reform Network. And thank you for being here, Mark.

Thank you. I'm Mark Toney. I serve as Executive Director of TURN, the Utility Reform Network. Chair Petrie Norris, Members of the Committee TURN is proud to sponsor AB 2847. It's really a truth in financing provision that requires utilities to disclose the estimated costs of capital projects over the full time period and for each year in which money is collected from ratepayers. It's important for the CPUC when they're making a decision to see the entire ratepayer cost over time.

When a utility submits applications for capital spending just like consumers are provided disclosure for the full cost of their home over the life of the mortgage and not just provided the sticker price of the home. We're in a tremendous affordability crisis. All California residents regulators are approving enormous capital projects that will lock in over the long term. A high rate base lock in high monthly bills. It also locks in long term shareholder profits. That's what also gets locked in.

Providing only the revenue requirement during the years of the rate case does not provide an adequate predictor of long term costs because tax benefits are applied in the early years and artificially reduce the revenue requirement in the early years and sometimes the cost is more in later years. Rate payers need to know not just the sticker price of a project, but the full financing interest and principal costs for the life of the 20, 30, 40 or 50 year payment period.

And for each year in between, the utilities have the data they need to provide this estimate. They know the sticker price, return on equity, financing costs, depreciation and length of time.

If you could wrap up. Thank you so much.

Thank you very much. I ask for your yes vote on AB 2847 to provide regulators with the data needed to protect ratepayers against unknown ratepayer shocks in the future. Thank you.

Thank you. And do we have any primary witnesses testifying in opposition? I don't believe so. We do. Thank you. Go ahead and come up.

Good afternoon, Chair, Members Lourdes Ayon with San Diego Gas and Electric in opposition to this Bill. So whereas we don't disagree with the part about transparency I think is really important, and we talked about it as well in this Committee last week. We've also sponsoring an important Bill that talks about AB 1912, which is Pacheco's Bill on transparency as well.

In terms of policy, we do feel that this is important and agree, don't necessarily agree that this policy is necessary because it's already done at the CPUC level. So we do provide this information already. The only part that we disagree with is that we do disclose and do discuss this information. In fact, the information is pointed out in the analysis that we did provide some background information or future information. It's just not necessarily looked at.

So we feel that this policy in particular, apologies become more cumbersome, make for more paperwork and create a more complicated process within the PUC. So we're opposed to the Bill.

Thank you. Thank you both for your comments and testimony. We'll now go ahead and open it up for. You know, before we open up for public comment, we'll go ahead and establish a quorum. Madam Secretary, if you can, please call the roll.

[Roll Call]

That's 11. Okay, great. We will now go ahead and open it up for public comment. Do we have any witnesses in the hearing room to testify in support? Seeing none. Do we have any witnesses in the hearing room to testify in opposition to AB 28? 47. All right, seeing none, we'll go ahead and open it up to Committee Members. Questions or comments? Assemblymember Bauer-Kahan.

Thank you, Madam Chair. Assembly Member, I just wanted to say I love your Bill. I think it's, I really think that it's so critically important that when the PUC is making these decisions that affect rate payers, that they have all the information in front of them. And I think that we are well aware in this room that many of the decision, many of the proposals put forward by IOUs are intended to maximize rate of return. And that's their role.

But it is the role of the PUC to protect ratepayers. And I think having this information will make that job easier. And so I really applaud you for this work. I'm excited to support today. I would love to be added as a co author.

Assembly Member Reyes.

Transparency is always a good thing. I'm not sure what the final result is going to be from having the information. So the estimation is given, and if it's over a period of five years, 10 years, and then we find out that was a bad estimate, we should have asked for more. Then they ask for more. What do we gain from it, is what I want to know.

May I?

Please.

Okay. Thank you for asking the question. So part of it is that there are choices to be made over. You know, there's a difference between, if you finance your home over 15 years or over 30 years, and so there's a balance between how much do you want to pay each month? And, you know, do you want to be higher and be done sooner, or do you want to pay less and pay for a longer time?

There's also the issue of, will the capital project, will the lifespan of what's being spent, will it exceed the amount of time you're paying for it? Nobody will give you a 30 year loan to go buy a new car, okay? Because a new car is not expected to have a 30 year lifetime. We have a situation now where the utilities came in 10 years ago asking for 20 year financing for smart meters.

They're back again saying, well, the technology has changed and we're going to see this more and more. So part of the reason for this Bill is to create an alignment between the life of the expected lifetime of the project and the amount of time you're financing it.

Through the Chair. And I understand that. I'm saying, what happens if they come back and they say, the meter is, it's new technology now we're going to start all over again. Do you use the information that was either correct or incorrect to say you were honest last time. We're going to believe you this time, or you were not accurate. It was a bad estimate, so we're not going to use your estimates.

How do we use it in the future?

It allows intervenors like TURN to be able to present an alternate proposal, an alternate number of years, an alternate rate of depreciation, an alternate financing that in the long run will minimize shareholder profit and maximize trying to control these bills over time.

If I could. The intent isn't so much to be a gotcha. You gave us bad information. Now you're in trouble. The information that's being asked for, we understand there's some estimating that has to go into it just similar to. Not just like, but similar to a 40 year home mortgage that many people are getting into longer and longer mortgages now. Right.

But for the IOUs also to substantiate where they're getting these estimates from, so that the PUC has a full breadth of information that they can then be considering as they're protecting ratepayers, considering rate increases that they have the maximum amount of information possible, so less of a gotcha and more of a help to ratepayers consumers, so that we also understand what we're paying for over the long term and assessments can be made up front about is that justified? Are these costs fair and justifiable?

Thank you

I think that's exactly the rub, Assemblywoman, that the assumptions are large. Right. We have to make assumptions for things we don't know what might happen in the future. We're talking about possibilities of, like, for example, we didn't know COVID was happening. Right. So how can we make that assumption in there? We'd have to make assumptions for laws, different circumstances. We'd have to make assumptions for even inflation. We just don't know if we're looking.

Madam Chair. May I add a little bit of color?

If we have an asset that's 50 years, that has a lifespan of 50 years, how are we supposed to make an accurate assumption 50 years from now? I think that's hard. And when we make those assumptions, which we can make, we absolutely can, but they come up higher because we have to try and protect against all these different things that can happen, and we will miss a bunch of things. So in the end, it'll be a lot more expensive.

Right now, the way it works is that we do provide this information before the PUC, and the PUC has the opportunity to reject, to slow it down, to make part of it, or to come back and say, hey, not $100 million, $50 million, or we're not going to do it at all because it's too expensive. There is that opportunity to do that. Now.

There's a whole process that exists before the PUC, but the rub is making an assumption towards something that's going to happen in the future. It's hard. I think it's very difficult because there's so many things that can happen, especially now with climate change. There's very weather that we can't predict even that is causing a lot of chaos. So it's very difficult to be able to do that.

Assembly Members, did you have a follow up? No. Assemblymember Zbur.

So first of all, I want to thank the author for bringing the Bill, and I want to thank the sponsor. I have great respect for both of you and understand how focused you both are to making sure that ratepayers are being treated fairly and that we're keeping our electric rates both fair and reasonable for people of all income levels. And so I know that that is behind everything that you all do. My biggest question on this was understanding a little bit about the rate making process.

I think it's similar to what my colleague is sort of asking, and I'm not quite sure how to crystallize it, but it's, I know that there's a lot of information in the rate cases. And when I look at this, this looks like another piece of information. I don't have a good sense of how much is duplicative of what already is provided, but it seems to me like it's a piece of information.

I'm wondering how it is used and what's behind it is really just if we're requiring the PG&E to spend a lot of resources on something that is not that valuable from my perspective, a lot of the complaints that I'm hearing are basically about delays in connections, delays and things that we have to do to meet our climate gain, our climate stuff, and then actually having a very complicated, what seems to me like a very complicated and difficult thing to be a new requirement that's imposed on these rates.

So when you look at it, it says, okay, let's look at the capital expenditures of the corporation. And you basically are looking at the net are expected to what the capital expenditures are expected to remain in the applicant's rate base if it's approved and conditionally approved and then set to a net present value of those impacts. So I think what that means is if you actually have a capital expenditure today, right. You have to assume what are all the costs related to servicing that capital expenditure?

What are the interest costs over a 50 year period. But it seems like there's going to be just a lot of assumptions made in that which are going to be pretty subjective.

So how do you have more information where you actually start with something that might be $100 million, and then if you apply all the same assumptions over 50 years and you get a really big number for that, how does having two small numbers that you could compare the relative size of that are going to have some impact on the rate base? How is having two really big numbers that you compare?

How does that give you more information that helps us understand whether or not it's fair and reasonable and whether the investment should be made? So that's the question.

Thank you very much for asking that. It's a completely reasonable question. This is simply asking for an estimate based upon the information that is known. All the inputs are known now. Okay, there are, but you're absolutely right. Things like the authorized return on equity that does vary over time. Right now it's about in the range of 10 and a half or so for most of the utilities. But we've seen it, you know, higher than that and lower than that.

So for that you would say, well, if it were at today's rates, what does it look like over the time? You're right, it is not going to be precise. TURN has asked for this information. Sometimes we get it, sometimes we don't. The one thing I would like to suggest is having a ballpark estimate is better than having no estimate at all.

Assembly Member Patterson.

Joe Patterson. I'm just kidding.

Voting. I saw that. That's what I heard.

Oh, yes, I did say on the elevator I was voting for every piece of legislation today. But I do have some, a question and I think some follow-up sort of concerns. But is this something the PUC can, you know, if it was valuable for them that they can't, you know, make a decision to do that right now already?

Absolutely. The CPUC has the authority, okay, to request this now. They in many times have chosen not to exercise that authority. There have been times where TURN has asked the PUC to exercise that authority and we have gotten radio silence, not a we agree yes or a no, but no response at all. That's why we have come to the Legislature. We believe it's important to always work through the regulator to the capacity of what the regulator is willing to do.

And when the regulator is then unwilling to do it, then and only then does TURN feel it's appropriate to turn to the Legislature to ask for their input.

Just a couple thoughts. Well, thank you first of all. You know, I'm sure the ratepayers appreciate your involvement in the hearings and looking out for things. I think it's really important. I mean, everybody's prices are very expensive right now. A couple concerns I have is that I don't really think it's really just going to be an estimate. I think it actually sets up a series of potential challenges to bog down the process over time.

Because if this is the estimate now and then maybe technology changes or maybe a different infrastructure needs to be added to it, or maybe the assumptions change or maybe, you know, I mean, I could name a lot of reasons that it would cause. Maybe say, oh, remember they said this, or, you know, this was a deliberation that happened, that, and I'm concerned that it could bog down the PUC's deliberations in really, at the end of the day needing to focus on lower rates.

And by the way, I wish that was like point number one on their website of what their responsibility was. But the other thing is, too, as with a mortgage, and you referenced that example, you know, when it comes to home, we only know the price of the mortgage. We don't know everything else. There are a lot of other costs that become associated with it at time changes.

Like my roof just had a leak in it the other day, and when I got my mortgage, I didn't know that was going to be the case. You just kind of assume maybe. But I think the reason why I have concerns with this. I will say one thing and I want to put on record is I've been looking at a lot of the applications that have come in for fee increases just over time.

And I do have some concerns about when there's a cost recovery for various things that, well, how do I know that there wasn't too much overtime spent on this job or that there weren't cost overruns here? And I don't necessarily saying we get down to that granular level, but that's really what I'm concerned about, is to ensure that there's efficiency of the dollars spent. And I'm not entirely sure that this does that.

And I appreciate the thought and the conversation around it, but I just have concerns only because I'm afraid it's going to slow down the process and needing to focus on what I think your main purpose of being concerned about is. And so I welcome the conversation moving forward, but I think this Bill right now, I'm concerned it's going to add too much complexity to stay laser-focused on what I think we need to do over the next hopefully year, but probably 10 years on lowering rates or at least making them somewhat affordable.

So thank you.

If I may just add the last piece, I just, again, part of the opposition is just, we don't see the benefit in providing inaccurate information. Right? If it's all in assumptions, it would, in essence, be inaccurate. So it's, I don't know how valuable that is.

Yeah. Thank you for that comment. I think for all of us, I'd say the universal challenge that we're all grappling with and that Assembly Member Addis teed up in her opening remarks is that today all of our constituents are opening their bills and, like, falling off their chair thinking that, you know, calling our offices because they think they must be wrong.

And I think we all recognize the problem statement and we recognize that our shared goal is cost containment and to lower bills for Californians, figuring out exactly how we do that is the tougher part. So I really appreciate your engagement on this. And I really do think that the point that you made, that something that is, you know, perhaps an estimate that's only 80% right is still better than no estimate at all.

And so let's continue to figure out how do we get better at making those estimates and how do we create some more predictability for Californians. So with that, I think I've got one more comment. Assembly Member Reyes.

I do want to be clear that although I do have questions, I think that whenever we're talking about transparency, trying to find something that is good for the ratepayers. We've got to be creative about what we do. The Bill deserves to move forward, but I think that trying to just tighten it up, or whatever the word is, is important so that we know exactly what we want to do. We don't overburden.

We're not causing more, just paperwork, but to really help because it's the ratepayers we want to help, but just wanted to make that point. Thank you.

Thank you, Assembly Member. Assembly Member Zbur.

I sort of feel like we're clowned of each other today. I'm going to support the Bill, but I do think that because of the transparency and because really of the fact that I give weight to the fact that both of you are saying that it's needed, and I think we see that we need more transparency.

But I think this could be something that could just gobble up a ton, a ton of time for POC staff if it's actually not more defined in some pretty specific ways, maybe even requiring the PUC to come up with some guidelines on how you estimate it, so that when they're doing this, it's something that they take out the rule book and this is the calculation that's required and that they can sort of do it so that it doesn't require, you know, having also different information between what PG and e is doing and what San Diego gas and electric is doing and what Edison is doing.

And they may not be different in terms of the assumptions behind it. So with that, I, you know, that's what I would hope that will happen as it moves forward.

Thank you. All right. Assembly Member Addis, would you like to close?

Yeah, I mean, I want to appreciate the complexity that this brings to the table. I was talking to someone recently about utilities and how sometimes you start to go into what feels like a black hole of terminology and understanding the nitty gritty, all the pieces. And so I want to appreciate my colleagues' questions about this. It's a complicated issue. That said, it's absolutely one we have to solve. It's one we need to solve.

It's one I think we're aligned in solving when it comes to transparency for ratepayers. So I hear a lot of common goals in this room, and I just, I want to appreciate that because I'll repeat it again, what I said at the beginning, at the very least in this world, where rates are out of control, where people do not know what's going to happen when they open that Bill and how much they're going to owe.

And we saw in the past drastic 3 and 4 times what people had paid one month to the next. At the very least, people should know where their money is going to and that they are being charged fair and reasonable. And so I think this Bill gets us towards that place. We're happy to continue the conversation. We've always had a good relationship.

I expect that to continue and so very open, you know, to making sure that this gets to a better place where, you know, people feel like there is a little more surety. So with that, I respectfully ask for your aye vote.

Thank you. All right, we have a motion from Assembly Member Reyes. Do we have a second?

Oh, yeah. Seconded. Sorry.

Okay. Second from Assemblymember Bauer-Kahan, who said she loved the Bill. Okay. All right. The motion is do pass to Appropriations. Madam Secretary, please call the roll.

Item number three, AB 2847. The motion is do pass to Appropriations. [Roll call]

Right. 10-1, so that bill is out. And we'll leave the roll open for absent Members to add on. Thank you. Let's go ahead and dispense with the consent calendar. All right, we've got a motion and a second. All right, we have five measures on the consent calendar. Madam Secretary, if you can please call the roll on the consent file.

Item number one, AB 1921. The motion is do pass as amended to Natural Resources. Item number six, AB 3247. The motion is do pass to Appropriations. Item number eight, AB 2462. The motion is do pass as amended to Appropriations. Item number nine, AB 2764. The motion is do pass to Appropriations. Item number 10, AB 3006. The motion is do pass as amended to Appropriations. [Roll call]

Okay, 12-0. All right, 11-0. And we will leave the roll open for absent Members to add on. Moving right along. Let's see. We'll do file item seven, AB 2054, from Assembly Member Bauer-Kahan. Oh, yeah.

I got confused.

All right, whenever you're ready.

Thank you, Madam Chair and Members. First, I want to thank Committee staff for their work on the Bill and their help getting it to where it is today. The amendments resolve concerns raised by the opposition about the allocation of funds after reasonableness review by the PUC and restrict the requirements in the Bill to wildfire cast and balancing accounts, and shortens the timeframe for the cooling off period. With that, I'm proud, and I accept all those if I wasn't clear.

So I'll be presenting AB 2054. And I want to start with a story about one of my constituents. We got a call recently from a constituent named Lynn. She's 101 years old. She has spent her life being very diligent about her electricity usage and has been able to keep her Bill to $100 a month consistently until three months ago when it shot up to $300 a month. This is a woman on a fixed income.

It's one of my senior constituents, and she's now facing $200 more a month in her utility Bill, and she has no more energy she can save and remain healthy and safe. That's what Californians are facing right now. And so I really appreciate this Committee's focus on driving rates down, ensuring the PUC is doing their job in protecting ratepayers. And that's the work we have ahead of us in AB 2054.

First, the Bill creates a cooling-off period before PUC, before energy and public utility commissioners can work in the regulated industries for whom they set the rates. We should not have commissioners setting rates who get to go accept a huge payday the day they leave the Commission. It's a clear conflict of interest and one that I believe needs to be corrected.

In addition, the Bill ensures that they're not taking gifts from the entities for whom they're regulating and that they are putting our constituents and Californians first. Second, the Bill establishes accountability when utilities overspend allocations in the balancing accounts. And again, this is where the amendments were fairly lengthy, so it really narrowed where that overspending is regulated. But the single largest factor contributing to PG E's $348 million in distribution costs was in a tree trimming balancing account.

And the way these balancing accounts have been used is that the IOUs, in this case PG&E, overspend and then come back and ask forgiveness instead of permission.

The way the PUC is supposed to regulate spending is to figure out in advance if it's just and reasonable when they overspend on balancing accounts that isn't currently happening and so what this Bill will now do with the Committee amendments is ensure that where there was overspending, the PUC can ensure it was just and reasonable so that we continue to have that analysis done.

And where it is not, it will fall onto the shareholders instead of the ratepayers so they no longer have a blank check out of these wildfire balancing accounts. So that's what the Bill does. It is a simple Bill focused on making sure that we're doing what is right. The PUC is doing their job in an unbiased way and that we are reviewing all costs so that what is being put into utility rates is just and reasonable, as is already intended by the PUC.

With me today in support is Mark Tony, Executive Director of TURN.

Thank you Mark Toney, Executive Director of TURN. TURN is proud to support 2054 to set limits on utility overspending and increase commissioner waiting periods before they become utility executives, which is part of the concern that we have. And that's a really big concern because we think it's very important for the public confidence in the CPUC not to be worried that commissioners are making decisions based upon their future ability to cash in on their expertise and experience with the entities that they currently regulate.

I think it's a bad look to the public when a sitting CPUC commissioner is being lobbied by their former CPUC commissioner boss, who is currently a utility executive. I think it's a bad look and we think it's very important. If you want cost containment, we have to do something and fix the broken system where there are no limits to how much utilities can overspend and a guarantee that ratepayers will pay almost 100% of that by requiring shareholders to share the pain of cost overruns.

I guarantee you that utilities, because they are more accountable to shareholders than ratepayers, sadly, will be much more diligent with ratepayer funds. I'm happy to answer any questions, but I'm going to close now and ask for your yes vote.

Thank you. Are there, is there a primary witness in opposition? Go ahead and approach the podium. The dais. Thank you.

Good afternoon. Rachel Koss on behalf of the Coalition of California Utility Employees. We have no objection to the revolving door provisions, the gift provisions of the Bill. We do have issues with the balancing account provisions. Utilities track costs and balancing accounts for a host of safety and reliability work, wildfire prevention, vegetation management, system hardening. This is because California's general rate structure is based on forecasts.

The utility submits an application two years before the GRC test year and six years before the last year of the GRC cycle. There's no way to know exactly what the costs are going to be, what the work will be, what issues will arise in 2, 3, 4, 5, and 6 years. GRC-authorized forecasts will never be exactly right. That's why we have balancing accounts with the one-way account. The utility gets money for a particular thing, say vegetation management.

The PUC has determined that amount to be just and reasonable. The money is tracked and any money not spent is returned to ratepayers. If the utility spends more, shareholders are on the hook for that. Under a two-way account, unspent money is returned and under collections are collected. These tools benefit ratepayers because the utility recovers only what it spends on a narrow category of work.

This is very different from money authorized in the general GRC pot, which can be spent on a whole host of things and does not get returned to ratepayers because it can be used for other things. What happens with the Bill is it'll effectively eliminate the use of these tools because the utility cannot put money in an account if there's a risk of not recovering it despite the PUC finding it to be just and reasonable. They won't be able to borrow money to get work done.

They won't be financially viable. Instead, the PUC is going to have to give utilities way more money in the GRC pot to make sure they have enough to do the work, known and unknown work. Because remember, the GRC is a forecasting exercise which can never be exactly right. And unlike a balancing account where a utility would give back unspent money, they won't have to give it back. This is going to increase rates. Balancing accounts are not a piggy bank for utilities.

They are a tool to control costs. And unfortunately, the Bill is going to take away that tool that helps ratepayers.

Thank you.

Thank you.

All right, we'll go ahead and move to public comment, or do we have a? Sorry, a second witness in opposition? All right.

Thank you, Madam Chair, Members of the Committee. Israel Salas with San Diego Gas and Electric and Southern California Gas Company also in opposition. I'll try not to reiterate the comments that you previously heard, but balancing accounts are a pretty common tool that utilities use, and it funds important safety and reliability work, but also supports implementation of various new legislative requirements and mandates by the CPUC. Generally, as you heard, these are difficult-to-forecast activities.

And the best example that I can give you is we have a balancing account that helps to Fund natural gas pipeline safety work that is required by federal law. Typically, the reason that's difficult to forecast is we don't know exactly the scale of remediation or the costs that are involved until we get into those pipes and inspect the pipes. For that reason, the CPUC gives us the ability to treat those costs as balancing accounts.

The CPUC also imposes layers of review when we seek recovery for these accounts. It includes an advice letter process that takes about two to three months. But someone at the CPUC is doing the review and that requires CPUC approval. And in some cases, we have to file an application as this Bill suggests. So we are not opposed to the review process. This Bill is applying a one-size-fits-all review of application for any, every single balancing account that we have.

That is a 12 to 24-month review process that will impact cash flow for the utilities, underfunded utilities, but also result in rate shock because these balances that we're accumulating are sitting in a waiting room accumulating borrowing costs. At some point they have to go into rates. The longer they sit there, the more borrowing costs they accumulate. That's a bigger rate shock to ratepayers as opposed to the current cadence, where it's regular, it's steady with reviews.

The last thing I'll note is that there is no statute of limitations on review of balancing account for reasonableness. That can happen one year after we put the cost into rates, or it can happen five years after there is no statute of limitations. Thank you.

All right, thank you. We'll go ahead and open it up for public comment or, sorry, not public comment. We'll go ahead and open it up for testimony in the room. If anyone who would like to speak in support, you can approach the microphone at this point.

I'm Megan Shumway on behalf of Sacramento 350 and Climate Action California in strong support.

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

Cynthia Shallitt, representing Indivisible California State Strong with 60 groups with districts in all of your areas in strong support. Thank you.

Rebecca Marcus representing the Union of Concerned Scientists in support.

Kim Craig on behalf of Sunnova, in support.

Allison Hilliard with Reimagine Power, in support. Thank you.

All right, do we have anyone in the room wishing to testify in opposition to AB 2054?

Madam Chairman and Members. Scott Wetch, on behalf of the California State Association of Electrical Workers, in opposition.

Madam Chair, Members. Hunter Stern, IBW 1245, in opposition.

Good afternoon. Brandon Ebek, Pacific Gas and Electric, opposition. Also happy to look at your constituent's bill to see what's going on there. Something sounds off.

Thanks, Brandon.

Good afternoon. Catherine Borg with Southern California Edison in opposition.

Thank you. All right, we'll open it up for questions or comments from Committee Members. Anyone? Questions? Assembly Member Calderon.

Thank you. Assemblywoman, do the Committee, and forgive me if I miss this in a very busy week. Do the Committee amendments limit the scope of the Bill to balancing accounts pertaining to wildfires?

Yes.

Only?

Okay. Glad I'm not missing. They're nodding yes up there.

Yes. Okay. You know, I know rate affordability.

I'm sorry. No, that's the cost-benefit analysis is limited to wildfire expenses. So that's the part that's limited to wildfire

Not the balancing accounts. I'm asking about.

Not just to the wildfire balancing accounts.

Okay. So the answer is no.

That was my understanding of the amendments. So it seems like I thought they were much more narrowing than they are. So I'm happy to continue to look into that because I was a little bit confused by the testimony of the opposition, to be honest. Cause I was like, didn't we narrow every example they're using? So we're happy to continue to work with Committee because we thought we had narrowed it much further.

Okay. Okay. So that's. No, not yet. The amendments still.

Not yet.

But you're gonna continue working?

Yes.

Okay. All right. Thank you.

Clearly, I'm open to it.

Okay.

And I appreciate that. And I know how hard you work your bills and you put a lot of thought into them. And I know rate affordability is a priority for all of us.

I mean, for our constituents, for California, for everybody. But I do have some concerns. I am going to be supporting the Bill today, but I just feel like I need to share them with you. So my concern is that adding a reasonableness review process on balancing accounts will add more time to the rate recovery process. And often balancing account expenditures are made by utilities utilizing interest-bearing financing mechanisms.

So I'm a little worried that ratepayers will ultimately be paying more as the interest continues to accrue. And I'm also concerned about the fiscal impact of the Bill. I mean, right now I'm looking at this through a policy lens, but I just wanted to make sure that I brought this to your attention so I know you're going to continue to work on the Bill, and I look forward to seeing how this evolves.

May I provide.

Thank you. It's up to the Chair.

Sure.

Thank you. You know, the 2022, the California State Auditor took a look at the CPUC, and one of the things that they found was that they were concerned about duplication in balancing accounts that there are so many. And they specifically identified $2.5 billion in vegetation management accounts.

Costs in balance accounts would quote either duplicate costs that the CPUC had already authorized through a general rate case proceeding, or require additional justification and documentation from the utilities to determine whether they duplicated such costs. I'm just letting you know that part of our concern is what the finding of the State Auditor was.

Okay. So I really appreciate that. But, you know, a couple weeks we had a hearing here on rates, a really good informational hearing, and we heard from the CPUC, President Reynolds, and she assured us that there's a very robust process to evaluate balancing accounts and also ensure that these requests are just and reasonable. So again, I look forward to seeing how this plays out. But I just thank you for your comments.

Thank you, Assembly Member.

Assembly Member Chen.

Thank you, Madam Chair. I had a question with the opposition. Early on in your testimony, you talked about how the unspent funds will be going back to the ratepayers. Can you explain a little bit to me so I understand what happens? How you determine those unspent funds given back to ratepayers? Where did it go? What's the process of that?

Yeah. So all of the revenues and all of the costs are tracked in the account. And periodically there's essentially a true up where if the utility has not spent what has been authorized to spend on, say, vegetation management, then there would be a true up in the rate. And so it would, the ratepayers would see that money come back. And then, same with the flip side, if it's a two-way balancing account.

So if the utility spends more, then that would be tracked and eventually collected through rates.

And are you familiar with, I assume that the construction process of where there is going to be some infrastructure process that is going to be agreed upon and built upon if the accounting is going to be done as a item to line item basis as opposed to a projection, is there impact in terms of the construction itself, timeline wise, expediting the process?

I might let my utility counterpart answer that. I think the answer is no.

Yeah, if I'm understanding the question correctly. Are you asking if we'll see any delays and how quickly we? The answer is maybe and probably. What the Bill is saying is that we have to go through a very lengthy review process before we're able to collect any balances that we have accrued in these balancing accounts. So they're essentially sitting there. And so it could have that impact.

May I?

Yes, please.

Just point of clarification. Only if it's over what you had said you were going to spend. And I would just personally say as a ratepayer, I don't know the last time I saw a discount on my Bill, so I don't know how much money is coming back to ratepayers.

So again, just so that... so what... to make sure we all understand kind of what you just, the point you just made that when you set up this balancing account, you have some kind of estimate around the likely size of the expenditure so that amount will be recoverable. It is in the course of doing the project and the work, as you realize, oh my gosh, this is going to cost us not like 10% more than we thought.

It's going to cost us 300% more than we thought. That's when you will be required to demonstrate why and go back to the PUC.

I can elaborate.

Yeah. Well, I'm just making sure that we all understand that's what we're saying. Okay. All right. Did you have a question, Assembly Member Zbur?

Yes, I just wanted to, and I apologize for having, I had to go to another hearing. My biggest concern, you might have already addressed this. My biggest concern is this 5050 issue on something that's determined fair and reasonable. Is that continuing to remain in the Bill?

No, no. So, yeah, as long as it's fair and reasonable, just and reasonable, they will be able to recover.

Okay.

Yeah, 100%.

That's great. There's some other issues. I don't know. There's been a lot of discussion that I have with this, and I just hope that you'll continue to work with both TURN and the opponents on some of these other issues. But that was the biggest concern I had. And so thank you for that.

Yeah, thank you. And I appreciate the comment. I said at the beginning, but I want to reiterate it, I really do appreciate the work of the Committee on these amendments. We did hear from a lot of the opposition that it did deal with a lot of their core concerns. That's not what we're hearing here today, but I think they go a long way.

Thank you. Assembly Member Reyes.

Thank you, Madam Chair. I did have a question. I know there was the opposition from the utilities, but there was opposition from the workers, and I want to know if the opposition from the workers is independent from the opposition from the utilities themselves.

I think she is with IBW, right? Yeah.

I represent the employees of the investor-owned utilities.

Oh, the employees of the... okay.

Yeah.

Sorry. I thought you were utility.

Yeah. Hi, Scott Wetch on behalf of the California Coalition of Utility Employees. We share many of the concerns that utilities have about balancing accounts. Mostly we are very concerned about this critical work that is funded through the balancing accounts being slowed down or stopped, or even the funding not being approved after the fact.

That has all kinds of ramifications, including for our union trust funds, because when the work is performed, and the contractors, they will get paid for a portion of the work. If they have to go and wait for the utilities to get their reimbursement, that slows sometimes by a year or more, the payments to our health and welfare trust funds. So there's a lot of ramifications about this.

And I think just the important point, Mister Chen, to your question, was the difference between the balancing account and if you funded all this through the general rate case. As was pointed out earlier, if it's forced into a general rate case and they don't spend all of the money, they keep it. It doesn't go back to the ratepayer in the balancing account. It's required to. You don't see it on your Bill as, hey, you just got rebated $50.

The volumetric rate that you pay is reduced in all the bills forthcoming.

Thank you. I often like... these, are always very complicated issues. And the way for me to see this is that if the funding is received for a particular purpose and it is not all spent for that, the comment was made that it is returned, but in fact, it's not returned. I just want to. That's my first point.

So with a balancing account, it would be, if the money is authorized just through the large general rate case pot, outside of a balancing account, it would not be returned. It could be used for any other purpose. That's the benefit of the balancing account. Sorry.

Who's returned to?

Ratepayers.

In the last five years, how often has that happened? Or 10 years?

I don't know. Off the top of my head I know that the analysis points to one particular instance recently where that happened. I don't know if you have a log of how many times.

We'd have to get back to you with that number, as far as the universe of how often that occurs. But as was mentioned, the benefit of the balancing account is that the ratepayers are paying exactly for or exactly the amount that is needed to fund the work. But there are additional layers of review that are already required as a condition of balancing accounts, and that's really at the discretion of the CPUC.

And I think the gas safety work is a perfect example where we get a base amount of revenue that's approved through our general rate case. But the CPUC gives us that balancing account treatment to cover any overages, because, again, we don't know what the cost will be, and anytime we go over that. So between one and 35% of overspend, there's one process that we need to follow to let the CPUC know and to receive approval. Anything above 35% does require an application process.

So there are different layers of review.

And under the language of the Bill, anytime you overspend, you are going back to the PUC for review.

That is how we are reading it. Yes. It's broadly applicable to any balancing account.

If I may, Madam Chair?

Yes, please.

I just want to point out one thing that's being said, which is when they say that something has been approved, they're approved for a certain amount, and they don't spend all that amount, it will be returned to ratepayers. Nothing about this Bill changes that. This doesn't change anything that is approved. Once it is approved, it can be spent. Nothing touches that.

What this focuses on is when they get approval for certain costs, and then they just overspend by multiples and multiples. And what we're saying is that just like in every other process, if you are spending ratepayer dollars, the PUC needs to approve it. They need to make sure it's just and reasonable. So I think that this part about return to ratepayers is a little bit of a red herring, because anything approved that process doesn't change based on this Bill.

But what was important to me is to know if it ever is returned.

Yeah, and I liked that question because I.

It appears to me, from the many hearings we've had over the years, that the estimates are usually something less than what is actually spent. And at least for my eight years on this particular Committee, we don't hear a whole lot about ratepayers receiving anything that has not been spent.

But the big issue is when an estimate is given and the final amount that is spent is much more. If we have to wait till the very end, that is a problem. I absolutely see that as a problem. I see this as a good step in moving towards accountability in a timely manner, as opposed to waiting until the very end saying, oh, you know what, we overspent. We need to get an additional $10 million, whatever the dollar amount is, because it's already been spent.

Whereas if you have reviews on a regular basis, then you know that your estimate was so far off and you have to keep getting it reviewed so that next time the estimates are more accurate. Because as long as you can estimate something, this is just in general on just about everything that we do, we estimate something that's lower. It could be on a bid for somebody.

They give the lowest bid, they get the contract, and then there's the over cost, I think having, because we're not talking about our own money, we're talking about the ratepayers' money, and we are all hearing from them about how much more they're having to spend every month.

And so it seems appropriate that we now try to find ways to keep track of this in a timely manner before it becomes such a large amount that we then have people who are spending $200 more that they can't afford to spend. I think it is a good thing to have. But certainly, I understand the opposition and the comments that are made. And when we're talking about the trust fund, that will depend on a lot of these things. The work's already been done.

They have to be paid. These are things that should be considered. But I think just in general, when we're talking about transparency, it has to be timely. It cannot be a year down the road or two years down the road. It has to be something that is done in a timely manner.

May I respond?

Yes.

So I think that's exactly one of our concerns with the Bill, is that the review won't be timely.

If everything has to go through a formal application process, which is, you know, at least 18 months long, it's not going to be timely and the bills are going to pile up, whereas currently those costs are reviewed periodically just through a more informal process, you know, like an advice letter process. So they are reviewed. It's just more efficiently. This will take much, much longer.

And I hear you, but something is still wrong. And maybe this isn't the perfect response. Maybe this isn't the perfect answer.

There has to be something more that we as legislators do. And there's still time to continue the conversation. And I want the conversation to continue so that we can provide the protections all the way around. But we have to do more. We cannot leave it as it is. Something more has to be done. And this is one of the solutions that's being offered. And I appreciate it.

Thank you, Assembly Member, and I know, I think we've got Assembly Member Wood and then Assembly Member Calderon and then Assembly Member Zbur.

Thank you. And this is just a question for clarification. Don't the utilities have, like, I think, as I recall from my research on a Bill last year, that upwards of maybe 100 balancing accounts at a time?

300.

That is correct. So for SDG&E, we have about 70 plus. And for SoCalGas, it's in the neighborhood of 60. So they're a common feature that, again, supports implementation and funding for various programs. Some of them are driven by statute. If there's a new program, new requirement, and it happens in between our rate case cycles, it's like a budget change proposal. It comes in, and a balancing account is then authorized in many cases with conditions to support that.

And also from my understanding, too, is that the review for a balancing account existing in the current process could be several months or longer.

Correct. Yes, as was noted. So advice letter filings can take anywhere from two to three months in many cases. So that requires CPUC energy division to approve. But in some cases, the CPUC will require an application if you spend over a certain percentage. So that applies to our gas pipeline safety work. Our tree trimming balancing account also has the same requirement. Anything over 35% triggers an application. We just went through one for spending 10 million over our authorized budget.

So I guess then the bigger question that I'm coming to is, is your concern that the process will just take too much? As I heard, obviously it takes time. You've got financial instruments that are funding this, and that's potentially other costs. Or are you concerned that some of those costs may actually be rejected as inappropriate?

It's the former. It's the amount of time that it will take to determine the reasonableness of all of those costs.

And how did you determine that time? Because this isn't a process that's existing yet. So where did your 18-month timeline come from?

So that's the standard CPUC timeline for an application.

Can't we as a Legislature dictate a shorter time standard, timeframe? Could we not do that?

Certainly.

I mean, if your concern is time, could we, as a Legislature, not dictate and say, you have 60 days? Would that solve your issue? Would that change your position on the Bill?

Conceptually and in theory, that would address the issue that we're raising about regulatory lag. Yes. The question is, is that even possible?

Well, you know, I'm looking for the art of the possible, not the art of the impossible. So I'm just simply asking a question. I'm not trying to amend the author's Bill, but I see her smiling over there. But if time is the issue, it's not appropriateness, because I don't think you're being questioned as whether. So if time is the issue, if there was a way to shorten the time, then theoretically, you might not have this objection to this degree.

That would be fair.

All right. Thank you. Assembly Member Calderon?

Yeah. Just one quick thought. I wanted to share. You know, I think it's important for us to remember where balancing accounts came from. They were a direct result from the energy crisis. Right? Where the cost of energy went from cents per kilowatt to several $100, right? And there was no control over that. And so there was no way to recover those costs.

And so I think this is a very important mechanism tool, not only for the process, but also to help protect ratepayers. And so just wanted to share that because it was on my mind.

Thank you, Assembly Member Zbur.

If I understand what I'm voting on, because I was gone for a lot of it. So as it's currently proposed or to be worked on to get there, the 50% division on something that's determined to not be fair and reasonable would continue to go to the ratepayers, right?

Something that's determined to be fair and reasonable is not divided. Is that true?

So anything that's just and reasonable will be 100% borne, just like today, by the ratepayers. Anything not just and reasonable will be borne by the shareholders.

Okay. Second thing. On timing, the reviews that are happening under the proposed Bill, it sounds like it would go through some kind of formal rate-making process.

An application process.

Application process that could take some amount of time. And so that makes me nervous. Obviously, given all these balancing accounts, given what I hear is just the backlog of what's backlogged at the PUC, I'm wondering if you're open to amending the Bill so that it's at least codifying.

So on one hand, you have the opponents basically saying, look, you don't need the Bill because there is review on where there's fair and reasonable. It's just done in a more informal way, right? Which is faster. I know a more general rate-making application would be more rigorous, perhaps, but I'm wondering if there are ways to shorten that so that the concern that I have, which is that we're going to be slowing down PUC processes on other stuff that's really important, isn't slowing down, slowed down.

Oh, yeah. Please speak.

You're absolutely right to ask the question about is it possible to expedite some of this review. I also just would like you to consider that if you expedite it too much, then you prevent the advocates from being able to review the documents, from being able to ask for discovery. When the proposals lack, are lacking information, sometimes they are okay where there's more information. So that is something that TURN has always been willing to have a conversation with.

There were certain expedited procedures in AB 1054, the wildfire bond proposal, insurance bond. And so we're certainly open to having the conversation. We just would like it to be something where the Public Advocates Office, groups like TURN have adequate time to at least review and to put in our input and comments.

And if I may, one thing you missed, Assembly Member. So just to... Miss Calderon had asked a question earlier. One of the things we're looking at is narrowing the balancing accounts that this applies to. There are over 300 balancing accounts with overseas $16 billion in them right now.

And I think one of the things this Committee has really been grappling with at the Chair's leadership is just sort of the breadth of ways that things are being fed into rates and the disorganization around it that is resulting in sort of an inability to get our arms around it. And so I think part of what we're struggling with is I'm not getting rid of balancing accounts. I want that to be super clear. So this, you know, I agree with the Assembly Member.

Balancing accounts are important. I voted for bills in this Committee that established balancing accounts. And so that is not the question. But I think to the point that our colleague made, I think we should have an expectation that when they come forward and get the approvals, that it's a reasonable application, that we're seeing what is going to be approved.

We are seeing what the ratepayers are going to pay and that we don't have a system where they're incentivized to make that low and just come back and get whatever they want through a two-month letter process that doesn't have the same robust just and reasonable standard. But I'm absolutely open to this conversation around how we expedite that.

But I think one of the ways that it could potentially be done is by limiting the balancing accounts this applied to, which would narrow the scope of this review.

Thank you. All right. So just a couple of comments, then we'll turn it back to you. And I guess I would say, I think that the issue that the Assembly Member raises is one that I think is very important. So while Assembly Member Calderon's point is very well taken, the balancing accounts have been around for a very long time. It is to my understanding only in recent years that we have seen this massive proliferation of balancing accounts.

I think as recently as five years ago, something like 90% of charges were actually going through the general rate case, and now only 60% are going through the general rate case. So that certainly tells me we have an issue worth grappling with. And I think this is part of a potential solution. I think we had some very good and hopefully productive discussion here. I think bottom line is balancing accounts have a role, but they shouldn't just be a blank check.

And there's no business in the world where you can just go, hey, I think it's going to be $10 to make this widget. And then all of a sudden it costs $40 and somebody pays for it. We've five got to find a way to stop that, if only because it contributes this sense that rates are out of control. So I think getting control of balancing accounts is important. And I just, heads up, you're going to see some more legislation on this issue I think as this session moves forward.

I do think that your point is well taken. We want to make sure that we're not feeding a review through a process that is so onerous and so cumbersome that it actually has unintended consequences of making rates higher. So I appreciate the Assembly Member's willingness to engage with you and figure out perhaps there's some kind of interim process or, you know, midpoint process where there's a real and robust review that doesn't take 18 months and consume 20 PUC staff members.

Equally, I know one of the things that we had talked about that I think is worthwhile for consideration is a threshold at which this process would kick in. So if your cost overrun is 10 or 20%, I don't really think we need to go through any significant process. If your cost overrun is going to be 200 or 300%, I think you need to be raising a red flag so that we can anticipate this and understand what's going on.

And perhaps the PUC can even think about whether or not that's something we want to ask you to be doing. So those are my comments. Thank you for bringing us forward and Assembly Member over to you for your close.

I will accept that as my close, Madam Chair. Respectfully ask for your aye vote.

Okay, well, thank you. Let's see. Do we have a motion and a second on AB 2054?

I'll move the Bill.

All right. Motion and a second. Assembly Member, please call the roll.

Item number seven, AB 2054. The motion is do pass as amended to Appropriations. [Roll call] Nine.

Okay. 9-1. So that Bill is out, and we will leave the roll open for other Members to add on. All right, Assembly Member Garcia, thank you so much for your patience. You may come to the dais as you're ready.

Hello. Good afternoon. Thank you.

Hello, everyone. Good to see you all, and good to be with you. Good afternoon, Chair and colleagues. It is my pleasure to present AB 3238. I'll begin by thanking the team on the Committee staff for their analysis for their recommendations that we will be accepting today. The bill strives to do a couple of things, and, you know, one of the themes in this prior discussion that just closed out was time moving faster.

This bill attempts to do that, and you'll hear the word 'acceleration' used quite a few times in our presentation and that of the witness. Specifically, this bill will accelerate the build out of electrical transmission to meet California's ambitious climate goals. The bill enjoys quite a bit of support. Many of you who are here have signed on, both as co-authors, and have also signed on to a letter which will be referenced in a few minutes.

Specifically, this bill includes measures that modernize existing California public utilities, permitting an expedite California Environmental Quality Act procedures consistent with the 18-party joint motion for adoption of Phase One settlement agreement filed in a recent CPUC rulemaking related to permit streamlining and compliance with SB 529, adopted in 2022, and AB 1373, adopted in 2023.

AB 3238 also includes beneficial measures to prudently expedite Natural Community Conservation Plan amendments and incidental take authorizations of certain species which are under the jurisdiction of Water Parks and Wildlife Committee, where this bill will also be heard. AB 3238 will remove duplication and ensure that processes used by the CPUC and other agencies can handle the volume of electrical infrastructure projects necessary to support the state's goals to achieve our energy reliability and affordability challenges that were just talked about.

The bill could save up to three years on transmission projects that we know, as it currently stands, could take up to nine or ten years, at least one of the last projects that's been approved. I respectfully ask for your aye vote. With me today to testify and support is Erica Martin, Director of Environmental Services for SDG&E Company. Thank you.

Good afternoon, Madam Chair, Members of the Committee. I'm very happy to be with you here today. My name is Erica Martin. I'm the Director of Environmental Services for San Diego Gas and Electric, and I'm happy to speak in support of AB 3238 and essential role that this legislation will play in the clean energy transition as you just heard some of a moment ago. Just a couple days ago, on April 1st, the CAISO released its draft transmission plan for 2024.

That plan is based on a forecast that the state will need to add 7,000 megawatts of generation capacity every year for the next ten years. That's an increase of over 1,000 megawatts--from 1,000 megawatts in the 2021 plan. And just for perspective, 7,000 megawatts would power about five million homes. So that's just an enormous amount of generation capacity that the state needs to add.

And it underscores what we already knew, which is that we need to build renewable energy resources and the infrastructure to carry it to the people who use it at an unprecedented scale and rate. The existing process for approval and construction of electric infrastructure is lengthy and burdensome. It's costly and time-consuming, and we have got to take a hard look at how to do this differently or we will not be able to meet the state's policy goals.

Facing this enormous electric demand on the road to decarbonize, we need to analyze the places where these projects face the most significant obstacles for streamlining and moving through. AB 3238 is a measured and tailored proposal that focuses on those places. Primary focus is the CPUC's permitting and CEQA review because of that agency's constitutional and statutory jurisdiction over electric transmission and other electric infrastructure. There is an open proceeding at the CPUC that the Assembly Member--that the Assembly Member--

That sounds like the alarm when I have to wake up in the morning, so it sends a little bit of panic. I will move quickly. The focuses are the CPUC rules. There is also a narrowly tailored CEQA exemption for the instance where a utility needs to widen its existing right-of-way, and I just want to clarify, that is not an exemption for the projects that would still need to get a permit, it is just for the agency decision to widen the right-of-way and provide the land right.

Thank you. Do we have a primary witness in opposition? You may go ahead and come up to the dais. Just one moment.

Madam Chair, Members, John White with the Clean Power Campaign. We support the bill because we agree with the process--

Just before I open it up for additional testimony, is there anyone testifying in opposition? Our primary witness in opposition.

I got a little thrown off there. So my name is Kim Delfino, and I'm here representing Defenders of Wildlife and Audubon California. I just want to ask, I'm the only opposition witness, so do I have four minutes or two minutes? Just how fast do I speak?

Two minutes.

Okay, well, I will go very quickly. Well, first, I just want to say that the organizations that I represent work very hard to accelerate deployment of clean energy. Mine personally worked for ten years on the Desert Renewable Energy Conservation Plan and identified 400,000 acres of land for renewable energy.

And I would also say, I take no pleasure in opposing a bill by Assembly Member Garcia because he has been a real champion on the climate and on the Salton Sea, which is very near and dear to my heart as well. But with that said, I must respectfully oppose this bill, and I'm going to give three reasons why. Quickly. First, the premise of the bill is flawed. We do not need to move transmission by cutting environmental protections and cultural resource protections and cutting public participation.

And when legislation was passed with SB 529, the proponents of that legislation said specifically, the point of this CPUC proceeding that we're asking for is to expedite approvals that, quote, 'ensures that CEQA is complied with.' Unfortunately, this bill has multiple CEQA exemptions. It also preempts the jurisdiction of the California Coastal Commission, the Department of Fish and Wildlife, and it eliminates public participation, and there's real concerns about what cultural resources are going to be protected. Transmission deployment does need to go faster.

Part of that is clearing out the clogs at the queue, and some of it's also dealing with the PUC as well. There is a proceeding going forward at the PUC to deal with this issue right now, which leads me to my second point, which is that this bill is premature. The PUC is moving forward expeditiously and considering the settlement proposal by the IOUs right now. They finished their scoping proceedings in February. And I want to quickly go to my third point, which is this bill is characterized as--do I have just a brief minute to get to that?

Yeah, if you can just start--

Yeah, I'll make it really fast.

As you heard, we've got a lot of folks who would like to ask questions, so you'll get a chance.

I appreciate that. Really quickly, this bill says that it's only here to enshrine the proposal before the PUC. That is not the bill. I did a comparison. About 70 percent of the bill is a bunch of exemptions that were not put forward by the parties at the PUC for the settlement. And again, Coastal Commission's not exempted. There's all kinds of preemptions.

The right-of-way exemption, again, when SB 529 was put forward, it was to deal with existing right-of-ways, not expansions of right-of-ways and CEQA exemptions. It also includes an in lieu permitting process at the end of the bill that has none of the protections that were put in place in AB 205, which did create an in lieu process over at the CEC. So for these reasons, I would respectfully urge a no vote on this bill. Thank you.

Thank you. All right. We're now going to go ahead and welcome testimony from the room. We'll go ahead and start with any witnesses here in support if you're in support of AB 3238.

Madam Chair, John White with the Clean Power Campaign. We really believe this is an urgent matter and that we can't treat this problem the way we've been treating it. We can't take seven to ten years to review these projects and get them built. They're going to reduce environmental impacts, almost all these projects. The mitigations will still be protected, and we would urge an aye vote.

Oh, and sorry, just for folks approaching, just name, position, and affiliation. Thank you.

Good afternoon. Michael Colvin with Environmental Defense Fund. EDF would like to register a support if amend, supporting Section Seven of this bill, and I have an updated letter which I'd be happy to hand off that represents it.

Cara Martinson with the Large Scale Solar Association, in support.

Kris Rosa, on behalf of Silicon Valley Leadership Group, in support.

Edson Perez with Advanced Energy United, in support.

Thank you. All right, we'll now hear from anyone who would like to speak in opposition. Go ahead and approach the microphone.

Hello. I'm Erin Woolley. I'm with Sierra Club California, and also on behalf of the California Coastal Protection Network, Endangered Habitats League, and Center for Biological Diversity, in opposition.

Hi. Natalie Brown from the Planning and Conservation League, also in opposition to this bill. Thank you.

Okay. Questions or comments from Committee Members? Assembly Member Reyes and then Wood.

Thank you, Madam Chair. I think the opposition stated it correctly. You were champion. You're an expert. We look to you on so many of these issues. I will begin by saying I am going to support it today, but I do see issues that have to be addressed when we're talking about infrastructure delays. That's an important issue, and we absolutely have to deal with that.

And there is no question we need to build out transmissions in an expeditious way because we need to get more projects, put more clean energy projects online. I think we all share the same goal of... but some of those items that are in the analysis for this bill make me question different pieces of the bill. I understand that the committee amendments remove the categorical exemption under CEQA for wildfire mitigation and that there will be a 10-year sunset on some of these new environmental review exemptions.

However, I do wonder why these are being considered in the first place. The analysis indicates that 90% of IOU projects in the past have already been exempted from CEQA. So I'm wondering what evidence or analysis there is, or there has been, that shows that the bill will lead to faster transmission projects. So the first question is, is there evidence that these environmental reviews are indeed slowing down transmissions?

I'm going to defer to Erica to answer those questions.

Yeah, thank you. Great questions. So, and I would love to just point out that the bill does not remove CPUC oversight or the need to undergo CEQA review when triggered for discretionary approval, which would still analyze the impact to environmental resources and require mitigation of them. So that still provides really valuable protections for the study of impacts as well as opportunities for public participation. I think your question about the percentage of projects that doesn't go through CEQA is a good one.

I think that's based on some statistics of projects that have not had to get a permit to construct or a CPCN from the CPUC, which is a lot of acronyms at once. That does not mean that those projects did not go through CEQA at another agency or NEPA on the federal side.

And so, without knowing exactly what projects those are, we can't say across the board that they did not trigger CEQA, but they are also frequently the types of projects that the CPUC has decided do not need to come before them for a permit. Smaller projects generally, there's various categories, modifications, upgrades, repairs. In some cases, what we're the most concerned about are the major transmission projects of the type that the CAISO is approving in their transmission project.

And what concerns us the most is looking at the 2023 transmission plan as well as the new one that's just in draft form. And the large projects that the CAISO has approved last year was 45 projects. I think this report has maybe 25.

Those are the projects that will come before the CPUC now, those major transmission projects needed for reliability and to meet the state's policy goals; those are the projects that will need to have these acceleration, streamlining, and reform benefits to be able to meet those forecasted load demands, meet the policy goals. So we're really taking a forward look here on those. Hopefully, that helps address your question.

It helps. It helps, doesn't completely address it. As to the 90% that is part of the analysis, and so I would ask that that be addressed at some point with the committee. The committee works very hard in their analysis, and the information provided is what we, as legislators, use in our evaluation of the bill. So if there is a question on that, I do recommend that that be discussed with the committee separately.

There's been a lot of characterizations on this bill from support supporters and opponents, especially related to the settlement from General Order 131. If the proponents of this bill claim that AB 3238 is intended to just codify the IOU settlement proposal, why does much of the bill include exemptions well beyond what was proposed by the IOUS? And that goes to the comment from the opponent.

Yeah, I think that's an important clarification. AB 3238 does codify the settlement agreement. It also looks at other places where permit streamlining is necessary to accelerate the construction of electric infrastructure and to carry the renewable energy to the places where people need it. It's not exclusively focused on the settlement agreement, although that is a very important part of it. There is an open proceeding. As was mentioned, that settlement agreement has been before the CPUC since last September.

And although we hear that the CPUC is taking it up, we are, six months later, currently awaiting a new staff proposal with new proposals for how to address reform, with maybe a decision by the end of the year on that proceeding. Meanwhile, the utilities are actively developing and planning those transmission projects that I just mentioned that were approved almost a year ago; 45 of them, three of them, will be awarded by the CAISO this month, and 25 more will be approved next month.

So, we simply cannot wait another year to have a decision on the reforms that have been pending for six months.

May I add a little, just...

I was going to go to you through the chair.

Thank you, Assemblymember.

Okay, great. Thank you. So, with respect to the proposal that was made to the PUC. I would note that in that proposal, very specifically, the parties made it clear that they were not intending on preempting the existing jurisdictions of other state agencies, like the Coastal Commission, like the Department of Fish and Wildlife.

Yes.

This bill departs starkly from that proposal and does do those exemptions, and it does create a new process, or it's proposing to at the PUC that would be in lieu of all the permitting from all state agencies with no sideboards, no public process, no clarity about what it actually means. So, it is quite a departure from what's being put forward at the PUC and with respect to the PUC's proceeding.

Can I stop you for a second? I do want you to respond to that.

Yes, I'd be happy to.

She stated it a whole lot better than I could have and it deserves a response.

Yeah, I'm happy to. The intention of this bill certainly was not to avoid the jurisdiction of CDFW. It does not; it does not close out public participation. CPUC oversight still provides that very substantial opportunity when an application goes before it to obtain a permit. The goal is to streamline by identifying the CPUC as the authority for permitting electric transmission, and I'll just note transmission specifically as a streamlining measure. There are state agencies that are listed in the draft bill for which there is an exception.

If there are additional concerns related specifically to Coastal Commission, we would certainly be open to talking about how to address those directly. CDFW is, I think, not impacted by this bill, and that may be something else for additional discussion to understand that interpretation.

Well, so the bill clearly does. It says in lieu, the PUC's decision is in lieu of all state agencies. And then it does go back and talk about BCDC, the State Lands Commission, and the Water Board. But, you know, so there's that. The other thing is, I would just point out that the in lieu permitting program that they're proposing, again, doesn't say anything about how it fits in with the larger CPU C proceedings. It's completely unclear.

So that, so by the default of not saying anything, there appears to be no public participation, no timeline. It's very uncertain. And finally, that in-loop permitting program that they're proposing goes far beyond transmission. It includes substations, it includes energy storage, it includes renewable energy projects, which, by the way, completely duplicates what we just put into law with AB 205. So this isn't just transmission.

I will say that it is my understanding that when we're talking about this in lieu permitting process, it does contain none of the requirements of public outreach, public comments, stakeholder engagement, compliance with state laws, including the Coastal Act and Endangered Species Act. I understand that the response has been just the opposite that has to be addressed and as it moves, as it makes its way through the legislature. I happen to agree with the opposition on this. It has to be addressed.

If it is your intention that that is an inaccurate statement, then it should be looked into. Madam Chair, may I continue?

Yeah, yeah. Sorry, is it - Chair, may I respond briefly to that question?

Yes.

I don't think there was a question.

Okay.

Go ahead.

Because there are opposing views. I happen to agree with the opposition on that. I still will support it. It deserves to move forward, but it does have to. It has to be addressed. Not right now.

Thank you. Thank you. I understand. Thank you.

All right. The other is, why does the bill include a CEQA exemption for the expansion of a right of way onto state lands, such as state parks for transmission and associated infrastructure? Are projects experiencing delays with projects on state parks?

Yeah, I appreciate that question. So frequently, when utilities obtained right of way a long time ago, sometimes 100 years ago, the need for space for the electric infrastructure was less, the equipment was different, the standards have changed.

And so, for example, maybe we needed 100ft for a transmission right of way, and now in a desire to update because of changing standards and different equipment to co-locate facilities so that we don't have to get new right of way in a new place, we may need 200ft for the utility right of way and asking for a widening of the utility of the right of way, not for permission to build the project.

Just the land right still is a discretionary approval by an agency that triggers CEQA review, and can even when a project is approved by the CPUC, that right of way can significantly delay and add additional time and expense to a project in a place where there is already utility infrastructure in use.

So why not then just say where it's already been approved and you need additional? Then this would be the process as opposed to just saying we're going to exempt right of ways on state lands.

That's an example. It could be the right of way is sought during the course of a proceeding because those things need to move in parallel frequently in order to have the land right in time for construction.

So I think the issue there is just that although the project is moving through another agency for authority to construct the discretionary approval at a state agency to issue a land right can still be a significant source of delay and is something that we ought to encourage because it does encourage the co-location and modernizing of facilities.

And my final question, Madam Chair, the proponents of the bill claim that the CPUC and you mentioned this earlier, is dragging their feet on their rulemaking around looking for efficiencies, inciting decisions. And as was mentioned earlier, the CPUC finished phase one in less than a year and just closed its scoping notice just over a month ago. Is there a reason why this is something that should be done through the legislature rather than the ongoing proceedings?

Well, I mentioned some of that response a little bit earlier, just in terms of the timing, that we are looking at the acceleration that's needed.

But in addition, the legislature has exercised leadership here in SB 529, in other places where the timing is not something that we can ignore and that we need to step in in the face of large energy forecasts, electricity forecasts, the need to decarbonize the grid, the legislature has led on those, and with things like SB 529 has moved the clean energy transition forward, and we need that here again.

Thank you, Madam Chair. Thank you.

Thank you. Assemblymember Wood.

Thank you. Thank you, Madam Chair. So I thank the author for the bill coming forward. I don't think I could stress enough the importance of improving the efficiency of permitting, siding and construction of transmission. If we are serious about our clean energy goals, we have to absolutely do this. I will say a couple of things. This bill is double referred as going to water Parks and Wildlife.

So some of the issues that have come up here will, I'm sure, I know the Chair is sitting right over there. She's taking note of this, I'm sure. And so I know those issues will come up, and I'm confident that the chair will be looking at some of these issues. I'm sorry? Madam Chair, oh, no, she's not. I'm sorry, the former chair. I'm sorry. I was. My apologies. Well, anyway, there is an. I know you do.

I know there is another committee that will be looking at this. So, I want to say I appreciate particularly that the bill comes up with a concrete timeline for the CPUC to resolve environmental disputes. Why that wasn't good enough for the PUC when the other 18 parties agreed to that, I do not understand. And the fact that we have a duplicate; there are additional duplicative processes within the PUC, which slow down the process. I do not understand, and so I'm happy to see that happening.

And we've asked, we asked an oversight hearing more about the 131 D process and really got pretty vague answers, quite frankly, about that. And I don't understand. I don't understand that. I don't know why they feel they have to be special and outside of the rules that everybody else has agreed to follow. I'll go back to, because I appreciate that Assemblymember Reyes brought up that 90% of the projects already have exemptions.

The numbers can be deceiving because that 10% represents power to millions of people, whereas that 90% may represent power to tens of thousands of people. The fact that you have a huge challenge with this 10%, which are major corridors for transmission, is really significant concern to me. So, one of the things that didn't come up and is of concern to me in my district is the permitting and in lieu permitting program. How does this relate with tribes?

I have large tribal land in my district, and they're anticipating, I mean, we're anticipating major transmission corridors for offshore wind. I'm not sure where that's going to go, but how are tribes addressed in this?

So SDG&E is also very proud of the relationships that we have with the many tribal partners in our service territory. I think we have the largest concentration of federally recognized tribes and of any county in the country. So our intention is always to work in partnership with them. This bill does not change any consultation responsibilities, any existing procedures that exist to involve the tribes, both at the CPUC or based on other laws that exist.

And we would continue to pursue those partnership opportunities, those conversations with them. The goal here really is the streamlining of transmission of electric infrastructure and to obviously do that in partnership with the communities that we live and work in.

Thank you. And just a final follow-up. So I will just say, for the record, I don't really like the word streamlining. I prefer the word. I prefer more of efficiencies because I don't perceive that we're cutting corners, although I think there's some question about that relating to some of the potential CEQA exemptions. But what we seem to lack are two things from my perspective: urgency on the part of our state agencies that are doing the permitting and such and efficiency. And without that, we are doomed.

I mean, we've already saw in one of our hearings that the goals for offshore wind that were supposed to be in 2030 were quietly pushed out to 2032 without any advance warning to the committee that that was even there. That was the first we found out about that, and so if you heard me before, you know, talking about a different bill about how we can move things more efficiently, things shouldn't take this long.

And, you know, so I kind of feel like we're here to kind of light a fire, quite frankly, and make, make these agencies accountable if we're truly serious about these goals. And that's an IM. So that being said, I know there's a lot of work to do, but I'm committed to what your process. And if you're taking co-authors at some point, I'd love to be added as a co-author, Mister Garcia.

Thank you very much. Appreciate the discussion and, of course, the goals of the legislation, which are really important. The author is a very trusted and thoughtful author in this space, which makes me a lot more comfortable with the bill. You know, I did a very smaller, a much smaller version of this bill, I believe last year or the year before where we were trying to do an exemption for substations and the beginning, the beginning of transmission lines.

Assemblymember Friedman.

And that bill was held in natural resources because of the CEQA exemptions that were in it. And that was a much scaled down version of this bill. I have to say I am uncomfortable with the fact that the concerns around this bill really center around the CEQA exemptions and the preemption of local agencies. I'm uncomfortable that this bill is not referred to natural resources. That is the most appropriate place for us to be airing those concerns.

And I'm sorry that the bill is not going to be reviewed within that committee because of the jurisdiction of that committee centering around CEQA. That said, I understand the importance of what the bill is trying to accomplish, and I absolutely support those goals. And, like I said, I've legislated in this space as well. But there are some areas in this bill that I think are an overreach. I'm not going to repeat everything that my colleague Assemblymember Reyes said.

My mistake was leaving the room, and she clearly looked at all of my notes. So I'm not going to, you know, repeat, but I share a lot of the concerns around the local agency preemption, around the scope of this, around the CEQA exemptions, around the removal of community and tribal input, around preempting the cup from being able to consider alternatives when they review projects, you know, all of those areas.

So I'm going to not support the bill today, but I do think that there is a way to get the bill there to where you'll address, you know, a bit of these concerns, maybe rein some of this in. You know, I think showing a nexus between the delays and these specific concerns is also very important.

You know, I understand that utilities are having to do CEQA reviews that a lot of times where there's really not going to be any impact at all, but there are places where there will be an impact. And I do think that we need to have a discussion about the tradeoffs in those areas.

And I think the bill, that there's a way of crafting this where you can still allow for a little bit of that around those real areas of concern while allowing the reform, the permitting reform, and the acceleration that we all need in the vast majority of cases. So I'm very happy to, I'd be happy to continue to help with this if that's necessary, but I look forward to being able to support this in its final form when it comes to the floor. Thank you.

Thank you. Assemblymember Connolly.

Thank you, Chair. I'm going to associate myself with Assemblymembers Friedman and Reyes, including starting with really thanking the author for your work in this space. Really appreciate the opportunity to work with you, particularly around the obvious need for transmission development. I think we're in agreement on that. In fact, I recently signed on to the letter in support of the settlement agreement. As was noted, we've heard this bill described as codifying a consensus settlement agreement and additional small environmental review exemptions.

I think that's where the disagreement comes in. In the latter part of that statement, my colleagues have asked questions on certain aspects, including rights of whey, also the California Coastal Commission, Department of Fish and Wildlife. I'll concur in those questions. Additionally, one question is, if I'm reading this correctly, would the bill enable any project that has a federal Endangered Species Act permit to bypass compliance with the California Endangered Species Act?

So I'm happy to answer that question. I understood that those issues may be taken up at the next hearing with Water Parks and Wildlife, but I see that the chair has stepped away, so I can go ahead and start to answer the question, and I know there will be more discussion of these issues again, so can, just to make sure I understand the question, is it that the provisions of the bill will allow a project to bypass the federal Endangered Species Act protections?

No. If it has a federal permit, is it enabled to bypass the California Endangered Species Act?

There is the provision of the bill where an applicant has a federal habitat conservation plan in place or obtains a take permit for a species that is dual-listed as both a federally protected and state protected.

Rather than duplicating the permitting process that has already occurred at the federal level, they would be able to rely on the federal approval for the same species, not for any other state-listed species that isn't covered under federal law; they would rely on that federal review and approval for take authorization or for conservation plan.

Can I just be really clear? Yes. It includes an exemption. So if you have a state-listed species that's also federally listed, if the bill proposes that, if it has a permit by the federal US Fish and Wildlife Service, that they do not have to comply with the state Endangered Species Act, which includes the fully mitigated standard. So we would be basically subverting state protections to whatever the Federal Government decides for dually listed species. For all projects. It does not include, I mean, all projects, period.

Not transmission. It's everything.

Yeah, and I'll flag that as a concern. It sounds like it'll be discussed further. I think we can all, unfortunately, imagine scenarios where there's a less beneficial federal administration toward endangered species. So, I think we want to make sure that California stays strong there. One final question. How does this bill impact natural community conservations conservation plans, and why is that necessary?

The bill would streamline the ability to amend a natural conservation plan, natural community conservation plan once it's already been obtained. And it would do that partly in the streamlining of the agency's review, as well as in a CEQA exemption for the amendment of a plan. A conservation plan is a net benefit to the environment. It requires avoidance protocols and measures, as well as mitigation credits applied when there are impacts to habitat and species.

Once that is obtained, amending it should not be the heavy lift that getting the plan in the first place was, and because we want to encourage this programmatic conservation plan for entities to obtain and to use streamlining, that is a benefit both to the environment, to the agencies, as well as to the entity that obtains the permit.

So the goal there is to streamline and encourage obtaining conservation plans on the state level to be used to ultimately protect on a wide scale while the work is being project and work is being done.

Can I just respond really quickly?

Real quickly? Yeah.

So what they're proposing is, and so SDG&E has a 1995 NCCP that, you know, has - tt's great. I love the NCCP Act. It is the gold standard of conservation planning. It is very smart, and it makes efficient, much more efficient way of proceeding with projects.

However, what the bill proposes to do is says when you have a major amendment to an NCCP, and in this case, for them, it's a 30-year, they want a 30-year extension to their 1995 plan to encompass a suite of activities that impact species that some of which were actually not listed at the time when the NCCP plan was put in place to constrain how the department looks at what is impacted and to exempt that major amendment from CEQA.

It is a hamstringing of the ability to assess and try to appropriate and come up with good approach. And we were going to, we'll deal with this in water Parks and Wildlife. But I do want to be clear that it is blowing a hole in a gold standard conservation law that's been on the books since 1990.

Yeah. So, I think all of this will warrant further discussion. I think where I'm landing today is not able to support it at this time. However, looking forward to continued engagement, looking at Adomas as a Continuum, I think if it is ultimately a transmission-specific bill, you hear a lot of support for that. If it is expanded more toward kind of a wish list type CEQA reform bill, harder. So, I'll be looking forward to seeing where we land on that continuum. Thanks.

All right. Thank you, Assemblymember Bauer-Kahn.

Thank you, and I will just briefly say that I share my colleague's concerns about the impacts to CESA and the other wildlife issues contained in the bill, but trust the Water Parks and Wildlife team to make sure that those issues are dealt with. But I share our colleague from Los Angeles's concerns about the failure to send this to natural resources, and as a member of that committee, I feel like we have to talk about CEQA here today because nobody's going to have that conversation, and it is, I think, one of the most consequential parts of this bill. And I will say that in June, really at the leadership of the Governor, we moved an incredible infrastructure package, and we were able to move a package that will move infrastructure faster while maintaining the integrity of our environmental laws. And I think that was an incredible effort and a win for everybody in California.

And I feel like one of my major concerns is that that has been in place for six months, seven, eight months. We haven't seen its impact. It does contain this stuff, and yet we're here expanding it and blowing holes through the environmental protections that we ensured were in the integrity of that bill. So one of my questions is, you spoke about the right of way over public state land, public state lands, sorry, public land, state lands as if that will have no environmental impact.

Can you talk a little bit about how you use those right of ways - rights of way?

They would contain existing utility infrastructure of different kinds, transmission infrastructure, for example, towers with wires and other transmission-related facilities.

So if you need - so, then you wouldn't need to expand them if they contain current infrastructure.

Would we need to expand the facilities?

The right of way?

Yes, we would need to expand the right of way.

You're not touching the infrastructure that's on the right of way.

There may be a variety of projects that would benefit from something like this. If we want to co-locate new infrastructure where we already have infrastructure, but that means it needs more space. A widening would facilitate that if we want to update and modernize. Because the electric standards have changed since the time it was originally built and now the infrastructure is larger, that might also require more space.

I think the idea is that we wouldn't have to go get new right of way in a new location. We can use an area that has already contained utility infrastructure with an expansion.

Right. So, I think that my concern is that in the need to expand to change that infrastructure, there's no question in my mind some of California's most precious land could be affected when you're changing that infrastructure, updating that infrastructure, putting new wiring in that it could have an environmental impact, and a full exemption in state parks feels wholly inappropriate to me.

And I think that one of the things that made me support the package that moved in June was that we did streamlining and not exemptions was things moved in 270 days. We ensured that things went faster, but we didn't exempt our precious land from these protections that I personally believe are so critical to what has kept California the natural beauty that it is.

And since this goes so far as to just exempt those projects, I will not be supporting it today, in addition to my concerns around the CESA pieces. But I just, I really urge the author and the sponsors to think deeply about how we can continue to move infrastructure faster while protecting our natural resources. I actually think those two things go, can go hand in hand, and we have done in the last year some really phenomenal legislation in this body that has been able to meet both of those needs. And I feel like this bill is not in that place, but I'm hopeful it will get there. Thank you.

Can I make one clarification, Madam Chair?

Certainly.

Thank you. The projects would still undergo CEQA review at the agency that's authorizing them. So the building and construction of them is not exempt from CEQA. It is only the agency's decision over the right of way, the expansion of the right of way, not the ultimate authorization and approval. So, hopefully, that addresses some of your concerns that this wouldn't be something that would bypass the review of the infrastructure, its location, its impact in that location. That would be done at the CPUC.

Is it okay if I respond? Since we're not doing there's no hearing at natural resources, I would want to comment on the CEQA. So it's been put forward that somehow doing CEQA on a right-of-way expansion is kind of like, why? Why would we even bother if we're going to be doing CEQA on the project being proposed itself?

But the point I would make is that if the right of way expansion was not going to implicate significant resource issues, then it would probably have a CEQA exemption. We have so many CEQa exemptions now. It's kind of, we've got a lot of CEQA exemptions.

But if it does trigger real concerns, such as cultural resources or natural resources, I would submit that it would be smarter to do that evaluation when you're evaluating the right-of-way expansion instead of granting the expansion and then going through the process of putting in a project which you know is going to have significant impacts. So to me, I don't see the CEQA review of an expansion onto a state park as being a ministerial, trivial thing.

I actually think it's very smart to do that type of review upfront rather than getting caught on the back end and having huge mitigation costs and major delays and all the, my strong belief in all of this is good siting leads to faster, cheaper, more efficient projects. And if you don't do CEQA review on the right of way, you are running yourself right into a buzz saw of probable litigation. Thank you. Did you want to respond?

Did you want to respond?

No, no.

Okay. All right. Assemblymember Chen. Okay, Assemblymember Zbur. We've got Assemblymember Joe Patterson.

Thanks. I just, like, put on record: the Republican minority leader told me that this was going to be a small subject matter committee, and that's not panning out to be the case. I have a question for the opposition.

You know, if, let's say, there were process not just here, but just globally and other areas where there are a lot of CEQA exemptions if we were to say, "Hey, let's go through the CEQA analysis, but put some kind of protections from actually litigating those particular items because it just takes one single person with one single issue to litigate," what would you feel about something like that in this kind of critical infrastructure?

I mean, I'm open to all new ideas, honestly. I mean, because I agree that we do need to move quickly. And I also do not like the abuse that has been done of CEQA because I actually think it undermines the legitimate use of CEQA. So, I never say no.

Me neither, except for that last time a couple of bills ago. So I think, you know, I'm the Vice Chair of the Housing Committee, and there are a lot of things not only in housing but a lot of things that this state has put forward with bold visions that we need to do. A lot of them, which, frankly, I've disagreed with, but whether it's getting to our, you know, the environmental goals that we've set.

Housing, hey, look, we need to do infill projects, but just because you're going from commercial to residential, we don't need to do a CEQA exemption. But for some reason, we do, and it slows down the process. It takes years and has very small to no environmental impact at all.

But I recognize the point that, hey, look, maybe in some circumstances it has, but there's been no movement to say, "Hey, well, let's do the CEQA analysis, but let's waive the litigation requirement because," as you know, CEQA documents, EIRs, can say, "Hey, this has a serious impact on the environment, but the project moves forward anyways with some kind of mitigation."

And so if we want the disclosure, if we want to make sure people are doing the right thing, I think we got to look at how do we streamline some of these, these goals we've set as a goal, high-speed rail. We've said, hey, look, we want to build more housing. We need more electrical infrastructure. We need clean energy. That's what the state has said. But we have not aligned our environmental policies to do that.

Until we do that, we're never going to have, well, high-speed rail. I'll be retired. We're never going to address our housing crisis. Three and a half million houses got downgraded, two and a half million houses. Now it's like never going to happen. And then our utility infrastructure. And so I just feel like this is a bite at the apple. This is the right, you know, this is the right discussion.

I think there are fair points being brought up in concerns, but we need to take a serious and bold action to get this infrastructure built. I also have concerns about this bill; by the way, going into when I was on a city council, we dealt with eminent domain, with utilities and things like that, and also issues where we lost sort of control of things. I understand those concerns, but it also assumes that everybody's a bad actor in this process.

And I think we got to come to a better understanding, I think both from the environmental community and then also just in meeting our environmental goals. And so I hope we can continue those discussions. Apparently, they're never going to happen in this committee again. Stuff goes in natural resources, and I never want to be on that committee, but I look forward to supporting this bill. And if the conversations continue, I think that that would be good.

I'd love to continue to have the discussions with the opposition, just more globally, on all sorts of infrastructure projects. So thank you. Look forward to supporting the bill.

Thank you, Mister Patterson. Assemblymember Calderon.

Thank you, Madam Chair. You know, I appreciate you bringing this bill forward. I am a co-author of this bill, so obviously, I believe in it. You know, I think we're at a critical juncture where we really, we really just need to keep moving forward. And I'm very concerned about how we're going to meet our goals. And I think this is an important piece of how of we get there. And so, I just wanted to say that I support the bill and thank you for bringing it forward.

Thank you. Assemblymember Ting.

Thank you, Madam Chair. You know, just to echo some of the comments, again, I think we do have to do a much better job of building infrastructure and getting it done quickly and efficiently. However, I just want to try to understand, are there particular areas or regions in particular that you're very concerned about, that you feel like roadblocks have been put up, that things have been extraordinarily slow?

Trying to understand why this seems like a fairly broad bill rather than something a little bit more surgical or a little more detailed or specific about a particular area.

I wouldn't say there are particular areas or regions. I think this is a statewide concern, particularly, again, focused on the CAISO transmission report, which looks at the statewide needs for transmission. I think we have tried to be very focused and targeted with the bill focused particularly on the CPUC and their process, given that they have primary jurisdiction on electric infrastructure. That is where the CEQA review would continue to take place, where the environmental protections would be present.

It's also where the public participation would be taking place for all of the external stakeholders who generally participate and are invited to participate in the review of that project. So from that perspective, we try to focus primarily on that and to look at the other narrower places where we could do some significant streamlining, hearing lots of the concerns.

We are certainly open to discussion about how to refine those so that there aren't unintended consequences to the bill because the goal is certainly not to shortchange environmental review and protection. The contrary, actually, it is to protect the environment from the warming climate, but we have to do things differently. So to do that, we've got to think about different processes, different procedures.

Great. Thank you. And then, what about you mentioned the PUC portion, what about the Fish and Wildlife portion?

So that's a point for discussion. I think, following this concerns that here today because the goal certainly was not to address CDFW jurisdiction or limited in any way with respect to an exemption. The National Communities Conservation Plan and conservation planning piece is a, is significant part of the bill but a narrow piece of CDFW jurisdiction in that way, and so we would certainly be want to discuss how we could refine it and address those concerns.

Yeah, I appreciate that because I think that's where I have more misgivings in terms of, you know, moving faster through the CPUC. You got all of my support. That's, you know, I understand that that's very difficult process. It's not easy. You know, we, as a legislative body, have difficulty communicating with the PUC. So, I can only understand how it feels when you're on the inside. So again, I think that portion, I don't have as many concerns. It's really around some of the Fish and Wildlife.

And I think that's why I'm asking, you know, if there's certain jurisdictions, is there some, is there some park or some, some sort of wildlife area that in particular is of concern? I think if it is, I would prefer to have it spelled out so we know what we're dealing with rather than looking like we're potentially going into areas where there are endangered species, where there are very delicate natural areas.

And again, I really do think this is very important to make sure we are doing the infrastructure. But again, I think that that's where I feel like there needs to be a little bit more specificity or refinement so we actually know what we're actually doing.

Thank you.

So, Mr. Garcia, thank you for bringing the bill. Thank the opponents for I think raising, I think, some very important issues. When I take a step back and I look at this, I am very, very nervous that we are not close to meeting the goals that we've set as a state to meet the climate needs.

I've been very focused on offshore wind because I think that's one of the things that we absolutely have to have if we're going to actually move to a clean energy economy and get off of dirty fossil fuels. And I think that's the thing we're sort of furthest behind on. The next thing we're furthest behind on is transmission. And I know that one of my colleagues was just asking about whether there's specific areas.

I mean, we actually have to have two to three times the electricity that we have today. And we need to build the transition out in the next decade or two at the most. And that is transmission lines that are running all over the state. I mean, they really are.

I know that the utilities, because I had discussions with them and a lot of the clean energy folks and folks that are in this space and in the regulators are looking for ways of making sure that the transmission that is done, that we are actually using higher efficiency transmission lines to reduce the amount that needs to be built, that we're doing stuff in existing alignments and right of ways.

But the reality is, you know, is that we have a very complex regulatory process where I think California is unusual, that what we have done, which is a good thing when we want to really make sure that we're dotting every I and every T. But what we've done is we actually just in the energy space, we have three agencies, at least, the PUC, the CEC and CalISO, that all have regulatory oversight over this body of areas. They all have regulatory reviews.

They many, some of them, some of the stuff is overlapping and is duplicative. Not all of it is. And then we actually have state agencies that have authority over important preservation and protection of our natural resources in a bunch of areas. You know, you look, I look at other states sometimes and they will have a Michigan EPA and basically all the things that we do with probably 20 or 25 agencies in California are done in one place.

So I think the goal of this bill, which is really to try to have put the main agency that's in charge of transmission in charge of the environmental review, is a good one and is a really important one. That doesn't mean that we should be, I think, shortcutting the environmental review that is being done. So, I mean, I think this is a really important bill. I don't see how we're going to make our climate goals if we don't move something like this forward.

And I think we need to take the time to work with the opponents to strengthen those areas in the bill. It's really important that there be really robust public participation. The robust public participation needs to be in all of the areas.

I do think you can have a robust environmental review where you're not cutting CEQA, where you're actually having a robust CEQA process that's housed at the PUC in which every responsible agency comes in and basically has comments and puts advice in and suggests mitigation measures where the public has the opportunity to do that and you can do that and house it at the PUC. And I think that's what the goal of what this bill is. So I would encourage, I'm going to support it today.

I do think there needs to be work. I mean, I'm a little bit troubled. I mean, I think there's, you know, the question that was asked about federal pre, I mean, relying on a federal permit, we should not have ever delegate California authority and the California law to the Federal Government. I mean, we never know what that government is going to look like. We need to sort of keep it here, but we can make those determinations and still streamline it.

We can actually take all the environmental documents that were prepared at the state agency, and that can be the beginning of the environmental database that the PUC starts from. It will reduce a lot of time. And then basically we work with all of the folks that are there and say, like, what's wrong with this? There has to be a robust process. What was missed by the Federal Government, and then you make determinations on that. So anyway, I'm spending a lot of time talking about, recognize that.

I think that the concerns that I've raised, to the extent that we're short changing other review processes, I think is valid. What we need to do is actually beef up what's at the PUC, but make sure that we have a very robust process there that preserves public participation, but that we house it at the PUC because the result of that is that we're not going to build all these things. I mean, I worked on a long line telecommunications line one time when I was a lawyer.

The entitlement of that, because you're going through 50 maybe jurisdictions, county, cities, crossing over federal land, state land, railroad easements, forests, that the entitlement of that because of all of those various overlapping things took, I think, a decade. We don't have time to do that for each thing. So I just think we have to understand that we have to find ways of maintaining our robust environmental review processes, but we do have to streamline it and house it in one place.

And that's why I'm supporting the bill. I want to thank the author for doing that. And I'm hoping, and I want to thank you for raising, I think, really valid issues about whether, about areas where this is short. And I'm hoping that the author will continue working with the opposition to try to strengthen that. So with that, I will support the bill.

Thank you. Assembly Member Santiago.

Yeah, first, I want to thank the opposition for bringing up some valid points. And I know that, and I trust in the author that going forward there might be some places that are sensitive that you'll be able to work through these definitions. And I don't want to make a comparison to apples and oranges, but I will.

And we had a similar situation in Los Angeles because I've carried a couple of CEQA exemption bills, and it wasn't easy to do because you really have to search in your soul if this is what you want to do, because there is a lot of opposition to it and good merited opposition. I think it's been echoed.

So I won't go very far into meeting our environmental standards and goals and not being able to meet them by the same environmental standards that we have today that impede it. And I think all the conversations are valid. One of the reasons I'm supporting is because I do think we need to move this conversation forward, and I do think we need to build the infrastructure, as tough as it may be to grapple with the conversation.

But we had, again, similar but very different conversations in Los Angeles when it came to solving the issue of homelessness. And some of you might remember the first time I tried to carry a CEQA exemption bill on affordable housing, emergency shelters, and permanent supportive housing. But the very problem we were having was that these projects would get tied 5, 6, 7 years, and we weren't building any of it. And it was a similar conversation where we were arguing there's already infrastructure there that's built.

It's a matter of, I don't know what word you want to use, knocking down building back up, but there had been plans and reviews done in past generations of those buildings. And now today we're want to do permit support, housing emergency shelters, and you'd have to start an entire process over. And because of that, there were some that were held up in courts, in communities where they could put the defense funds up.

And it wasn't until we got streamlining done or CEQA exemptions, or however we want to talk about it, or whatever word we want to put to it. Then we began to see some of the emergency shelters and permanent supportive housing done.

And it's interesting, because some of the CEQA lawsuits were not even on the brick and mortar pieces, but on the ordinance changes or the financial transactions or those non brick and mortar things where some who were legally more savvy than I am could find teeth to stop the very projects that we needed desperately. And I know how difficult those conversations can be.

And that's why I want to, as much as I thank the opposition for bringing up very legitimate concerns, I want to thank the author for being bold in his approach, taken a conversation that could be misunderstood as not caring about an environment, when I know, you know, I've served with the Member from Coachella for the last 10 years on this Committee and in this house, where in every environmental fight that he has been at the forefront of, without exception, almost from the first time we got here on the, on renewable standards, from the first time I go on and on and probably make a list of 20, 25 different things where there has been an environmental fight to protect the environment, and he's led it.

So I think we need to acknowledge that as we move forward, but also acknowledge that it takes a little bit of boldness to be able to now say, hey, we need to move this environmental law because we're not going to meet larger environmental goals that we have set before us. And that's why I'm ready and prepared to support it today. Not because I believe anybody wants to ruin the environment. Of course not. But because you have to have these conversations.

In a perfect world, the whole CEQA process will get reviewed, and it would land perfectly in every single section of the law, in every single scenario. But that's not going to happen because no law can predict any situation or all situations that may arise. And I know there's been some hesitation in the past about doing it piece by piece, but that's why the legislative process is so important, because you have to do it piece by piece.

Because when you make broad policy, and I'll be the first to say it, when I did free community college, most of you guys will remember there was interpretations by the Department that exempted populations that I had hoped would never be even talked about. Very few people ever knew about it. But the Departments then translated it to say that people who took less than full time would never be able to get free community college.

Well, nobody ever thought at that point in time that somebody who was disabled, who took one unit, was now exempted from getting free community college. So I'd go back and rewrite the bill that I did to be able to change that one piece that was inadvertently changed. So there is a necessity to sometimes take a look at things piece by piece by piece. So for that, I thank you, and I'm prepared to support the bill today.

Thank you. Assembly Member Schiavo.

Thank you. I wanna commend the author. This is a big bill. It's a hard bill. It's a lot. And reflect on the comments of both Mr. Zbur and Santiago. I think that there's really important progress that we have to make in this space to be able to make our goals and share concerns around making sure that we get the environmental piece of it right. I know this is gonna be coming in front of Water, Park,s and Wildlife as well.

Right. And so I sit on that Committee. So I'm going to support it today and, you know, look forward to seeing the progress that's made before it gets up in Water, Parks, and Wildlife as well. So thank you for your work.

All right. Assembly Member Holden.

I'll be very quick. I just want to commend the author on, as others have, around the need to move forward aggressively in addressing the issues around our transmission lines and to meet our climate goals. It's critical, but at the same time, this is what you would call the natural bill that needs to be in this Committee to address the issues that are primary to what you're trying to accomplish, but at the same time, natural resources to kind of be the hand and glove.

So we're not spending time sort of addressing CEQA type issues in utility and energy. But be that as it may, I think that the witness made some very compelling points, and I think that they've been received by the author. I'm happy to support the bill today. I know this is the front end of a very long process to get through this house and then also the Senate.

And so along the way, Natural Parks and Natural Parks and Wildlife will also, I'm sure, weigh in appropriately on the subject matter. But I do think it's very critical that we continue to focus on how we move forward most efficiently in addressing our climate change issues that are, they're getting more and more critical as the days go by. So I'm happy to support the bill today.

Thank you. So, as I think every Member has noted, I think we all recognize to achieve our climate goals, we've got to dramatically accelerate the pace of clean energy deployment. And we all recognize that we want to do that in a way that moves infrastructure more quickly while maintaining environmental protections. Like our colleague, Assembly Member Wood, I actually don't like to use the word streamlining.

I like to use the word rationalize, as I think you've heard loud and clear from Members throughout the tape, you know, around the room. I think that in order for this bill, if this bill makes it out of Committee today, in order to move through the legislative process, I think there's a need for some, you know, more nuance and to take a more surgical approach, which I have every faith that you will.

And I do want to just appreciate your willingness to wade into this because this is hard and it is incredibly, incredibly important. So thank you for being willing to do this work and look forward to partnering with you as we refine the bill and move it through the process. So with that, would you like to close?

Thank you. So a couple, couple takeaways. I'll start by saying I appreciate much of the deference that's being given to us, given our role and our history working on these issues. Much appreciated. The good news. It sounds like everyone recognizes that there's a problem, right? That's the good news. People on both sides of the aisle are saying we have a problem with our process, our state process. The other is the recognition that we're probably not on track to meeting our renewable energy goals and objectives.

And I think we have to be a little more frank about that. I think we're not going to meet our goals and objectives if we don't really do some transformational policy changes that are not compromising of those same goals and objectives. Right. Which are to ensure that the earth doesn't get really hot. Right. And that ultimately we have an environment that is protecting our generations. That's what this is all about.

That at the same time, we also have a thriving economy that we can point to and say, you see, these policies are actually also creating some good jobs. We've heard a pretty good debate today, and in some instances, I think there's some issues that need to be clarified and we're prepared to do so. The bill is intended to be very narrow and around the jurisdiction of the CPUC.

We've sat in that chair alongside many of you where we've had the CPUC here time and time again asking a lot of questions about process, about timelines, and in many instances not getting a lot of answers. And when we did get the answers, it wasn't the answers that we were hoping we did. And yet we're still talking about maybe we might achieve our objectives, 100% renewable energy goals.

Maybe, you know, Mr. Patterson might be able to build out, you know, Fresno and the rest of the zoo that he talks about, you know, in that region and the housing developments that he has mentioned here in this Committee many, many times. But I don't think that we're being honest with each other that our own policies are what are getting in the way.

I think that we can thread the needle and preserve our state pristine parks at the same time, while ensuring that we're building out the necessary infrastructure to meet what is now the CalISO goals of 7,000 year for the next 10 years to meet the energy demands in the 10% areas of where the population settings are, not the 90% where small pockets of Californians live, and where it's pretty easy to approve a project in CEQA, right?

So, you know, I've been here for 10 years and we've heard these conversations time and time again. And whether you're an environmentalist or environmental justice advocate or a moderate Democrat or Republican advocating for, you know, ratepayers or whatever it may be, the truth of the matter is, is that keeping the lights on and keeping it affordable all has to do with making sure that we have the infrastructure in place and the time that it takes to build it has a lot to do with that.

So if you're for those things, right, you're for this bill. And if you're not for those things, then you're not for the bill. You have my word, my commitment to continue to work on the issues that were raised. And I'm going to actually invite some of you, those of you who were most vocal with concerns raised to be part of a small little workgroup.

I'm going to ask my office to directly reach out to your offices to answer and clarify the points that you've raised today and invite you to be part of a couple of meetings with the opposition so that you can directly hear the conversations that are happening with the sponsors and the opposition, so that when we get back to the next Committee or on the floor, you and or your staff can know firsthand what those conversations were like, why the opposition may still be opposing the bill, or why they may have taken their opposition off the bill so that I'm not having to twist an arm or ask for a vote at a courtesy, because at the end of the day, you should vote for the bill on the basis of merit, the need that's out there, and knowing that, the fact is that we're not going to meet our goals unless we actually make some transformational policy changes. And that's why this bill's before you. Respectfully ask for your aye vote.

Thank you. All right, do we have a motion? All right. Motion from Assembly Member Wallace. Second from Assembly Member Wood. The motion is do pass as amended to Water, Parks, and Wildlife Committee. Madam Secretary, please call the roll.

Item number five, AB 3238. The motion is do pass as amended to Water, Parks, and Wildlife. [Roll Call]

12-1. That bill is out, and we will keep it open if there's any absence numbers. Oh, for absent Members to add on. Okay, and I think I'm up now. I will hand it over to our Vice Chair.

All right, Members, is this on? Yeah, I know. Yeah. Yeah. Can you hear me? What's the matter with this?

Hello?

Yeah, I can hear. Members. It's our last two bills, and then we will be opening up for add ons, and then we'll adjourn. Madam Chair, your next two bills.

Thank you. Members, as we just discussed at some length, California, in order for us to deliver on our clean energy goals, we have got to dramatically accelerate the pace of clean energy deployment. And if you are looking for a very narrow and modest proposal to do so, have I got the bill for you?

So this bill, what this bill does--so what we've been trying to do is identify areas where there is redundancy, where there is overlap, and where we've got processes that are taking too long and adding no value. So what we have done with AB 2292 is repeal the requirement that the California Public Utilities Commission consider alternatives to prospective transmission projects before issuing a permitting approval. In 2005, the Legislature passed SB 1037, which established a non-wires consideration in transmission project approvals at the CPUC.

This is unnecessary and redundant for planning and permitting work that's already being done at the CAISO. So it is duplicative to the TPP at the CAISO and leads to unnecessary and unproductive delays in transmission project timelines. As I said earlier, we're looking for opportunities to rationalize our processes and think that this is a, like I said, a small but valuable step. With that, I've got a couple of witnesses who are joining me today.

Jan Smutny-Jones with Independent Energy Producers, and Michael Colvin with the Environmental Defense Fund. I think, are you just here to answer questions or do you want to add a brief comment of support?

Yeah, I can do a brief comment also.

Yeah, just real quick. Jan Smutny-Jones, IEP, and it's the first time in 37 years I've ever seen a bill that's taking something out of the PUC code that may actually advance things. So congratulations. You're here for historic moment. I heard all of you talk about moving transmission forward. We don't need to belabor that. As the Chair has said, this removes a section that was put in in 2005.

All right. Thank you.

We're doing that through other processes now in terms of looking at non-wires alternatives. That's already in the process, and by removing this, it will make going through a CPN much smoother about not having to determine things that have already been termed further back in the process. So it's the kind of bill we should be looking for, and I'm happy to help prune the tree, so.

Good afternoon, Members of the Committee. Seeing how restless everyone is, I'm going to skip my prepared remarks and happy to answer questions. I do want to make one really brief observation, which is there was some opposition that was put out there about how onerous it is to participate in the CAISO's process. I'd like to just point out: if I can figure it out, anyone can figure it out. It's actually not that hard. It's not like a PUC process where you need attorneys informally, docket things.

This is sending an email, and they just put a draft out this week. There's lots of ways of having an on-ramp for this. So if the concern is trying to figure out how to engage or the processes to black box, let me just say there's lots of different on-ramps to be able to engage in this. And with that, I'm happy to answer any other questions that might come up.

Thank you.

All right, well, good. Any witnesses in opposition, please? Primary? Primary opposition? Do we have any? Okay. Let's move to the public then. Comments in support of the bill, please?

Mr. Chair and Members, Greg Cook, representing Northern California Power Agency, in support of a very important bill. Thank you.

Mr. Chairman and Members, Theo Pahos, representing San Diego Gas and Electric, in support. Thank you.

Good afternoon. Alex Jackson with the American Clean Power Association, small step, but worth taking. Support.

Laura Parra, on behalf of Southern California Edison, in support.

Brandon Ebeck, Pacific Gas and Electric, support.

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

Any members of the public in opposition, please? Okay. We see none. Yes, we have a motion by Member Zbur and a second.

Yes, we do. We have Holden and Santiago.

Oh, okay. Comments from Members, please? Any questions or--yes, Member Calderon.

This is a great bill. Thank you for bringing this forward, Madam Chair.

Thank you.

Want to close?

Thank you. In closing, I'll just simply respectfully ask for your aye vote.

Okay. And I'll call the roll.

Just before we--I do respect the Chair. I appreciate what is happening here, and there's good strong support here, but given the unique nature of the district I serve in the opposition of the Farm Bureau, out of respect for them and you, I will lay off.

Thank you, Mr. Vice Chair.

Any ready to call a question?

Item Number 11: AB 2292: the motion is 'do pass to Appropriations.' [Roll Call].

Yeah, 14-0. We'll keep the roll open. And next to AB 3264.

All right, well, thank you. Appreciate the motion. And the second? I'll be brief. I am here to present AB 3264, which is a code cleanup bill. In 1996, the legislature prompted the creation of the California Power Exchange. However, the power exchange was closed in 2001. Caiso has undertaken the management of the day ahead market and other responsibilities that were originally tasked to the power exchange. The bill simply aligned statute with current practice by eliminating the mention of the now defunct power exchange. That's it.

Do you have witnesses in support?

I do not.

Huh. Okay. Any primary opposition? Seeing none. And public comments. All right, we have a motion. Second. Let's call the roll. Members and a close.

Yeah, I guess I can't resist just noting I was actually a state prosecutor back in the energy crisis days where the power exchange existed then, thankfully didn't. So. Good job these many years later. Yeah. So, rip to the power exchange.

Thank you. Yes. And just also, yes, to clarify, since the power exchange is now defunct. The bill will have zero impact or effect on present day electricity markets and operations. To assuage any lingering concerns, I respectfully ask for your aye vote.

Call the roll, please.

Item number 12. AB 3264, the motion is due. Pass to the floor. [Roll Call]

Thank you, members.

15. We'll keep the roll. 15-0. We'll keep the roll open.

That's out. 150. We're going to keep the roll open. That concludes our bill list.

I'm going to go back to.

And we're going to now go back and allow members to add on. So.

Okay, this is the consent file. [Roll Call] That's 16-0.

All right. Thank you. 16-0, the consent file is out. Moving on to item number three, AB 2847.

Item number three. AB 2847. [Roll Call] That's 13--2.

13-2, that bill is out. Item number five, AB 3238, by Assembly Member Garcia.

[Roll Call] That is 13-1.

That bills out 131 that bill is out. Moving to item number seven, AB 2054, by Assembly Member Bauer Kahan.

[Roll Call] 12-2.

12-2, that bill is out.

Item number 11, AB 2292 the motion is due pass to appropriations. [Roll Call]

Okay, 14-0. Thank you. That bill is out. And then moving to item number 12. AB 3264.

[Roll Call] 15-0.

All right, 15-0. That bill is out. Okay, that concludes the business of our hearing today. With that, we are adjourned.

I was going to take that home up.