Senate Standing Committee on Energy, Utilities and Communications

The Senate Committee on Energy, utilities and communications will come to order. Good morning. We're holding our Committee hearing here on the Oak Street building in room 1200. I would ask all Members to report as soon as possible so we can establish a quorum. I would like to welcome everyone to our first bill hearing of the Committee of 2024. We'll begin the hearing. We have four bills on today's agenda.

SB 1374 by Senator Becker has been pulled, as well as SB 1413 by Senator Nagle has been pulled by the Committee, and I should state 1374 by Becker was pulled by the author. Before we hear a presentation of the bills, let's establish a quorum. Please call the roll secretary. Oh, I forgot we don't. I forgot what Committee I'm in. Yeah, you need half the Legislature to have a quorum. Yeah, yeah.

So in light of that, we'll start as a Subcommitee and we welcome our first author, Senator Padilla. He'll be presenting SB 1165.

Good morning, Mister Chairman and Members. My pleasure to present. I'm back again with the pitch to keep as many options on the table as possible, and I'll explain in a moment here to present SB 1165, I want to thank the chair and the Committee Members for working with our staff on this Bill.

It is a reintroduction plus of SB 619, which would develop an alternative opt in permitting system at the CEC that will significantly accelerate the approval of much needed transmission capacity in California, particularly as we look forward to the transmission demand outlooks that have been prepared for the Legislature. As you know, Cal ISO estimates that we will need more than 7000 megawatts of new transmission capacity every year for the next decade to meet energy demands.

And unfortunately, our permitting system, which includes, particularly with larger capacity transmission projects that require a full CPCN process at the CPUC, can take as much as seven to 10 years to complete at a time when we know, looking forward, that we will need, according to the outlook, $10.74 billion in upgrades to the existing system of infrastructure and more than 30 billion to build new, non existent transmission capacity. If California is going to get even close to meeting our GHG reduction goals, salut.

Whether it is on efficiency capacity and all the rest, current permitting process on average, as I indicated, can take a number of years, and delays in permitting result in higher incremental construction costs. They threaten the ability to reach climate goals. But most importantly, it makes it increasingly difficult to keep the lights on in California, particularly during summer peak demand times. SB 1164 builds on SB 205, which expands facilities that are eligible to be certified as an ELDP or environmental leadership development project.

It's an opt in system for IOU applicants to choose to have the CEC conduct an expedited timeframe CEQA review it authorizes. It also requires specifically that any applicant who chooses the opt in process to specifically avoid and minimize impacts to disadvantaged communities.

And the distinction here from the prior Bill is it authorizes specifically cost recovery so the CEC can recover administrative costs from processing the applications, creating an alternative outlet for the backlog of applications now and what we clearly anticipate in the future is essential to meeting our reduction goals. This will allow the PUC to continue to devote more focused resources to priorities and clean energy projects. Access to accelerated an accelerated process. The Bill does not change the scope of CEQA review.

It only changes the venue from the PUC to the CEC and authorizes the 270 day protocol. In the governor's veto message for SB 619 last year, he stated, the Bill, decentralizing permitting process creates coordination challenges and duplicative staffing and remains committed to working to improve transmission permitting. I would respectfully disagree and dissent with that. The theory of what the Governor has been advised is if you centralize everything in one agency, that will necessarily therefore result in efficiencies and shorter timelines. I beg to differ.

There is something, because the empirical evidence shows just the opposite. In the case of the time it takes for California to entitle major capacity transmission, 7 to 10 years is not an acceptable timeline. We average over two years just for CEQA review. We're not going to meet our GHG reduction goals. We're not going to build the grid of the future if we defend the status quo. There's such a thing as emission creep, Mister Chairman and Members.

There's such a thing as overburdening a regulatory agency with everything from soup to nuts. And I would respectfully submit that that has been the case with the California PUC, and it's specifically the problem. Since that time, my staff and I have done multiple meetings and continue to work with the Administration. We have conducted those also with the CPUC to ensure the commitment to improve the existing process actually happens.

I have to say that the only thing we've received since last year are verbal assurances that they will continue to look at the problem until there are changes made to the transmission permitting process. I will continue to move SB 1165 to improve transmission infrastructure. This is critical to achieving our GHG reduction goals. With me today, I have V John White with the Center for Energy Efficiency and Renewable Technologies.

Good morning, Mister Chairman, Members John White with the Clean Power campaign. We support this legislation because of the reason stated in particular. We are seeing a significant amount of load growth. In addition to electrification from buildings and transportation, we're seeing demand for electricity from data centers, artificial intelligence. We've had flat load growth, as the Chairman knows, for more than 30 years, and that's kept us where we are.

But now it's going the other way, and that puts pressure on the grid to be able to meet that load. And the time that it takes and the duplicative reviews that are in the existing system simply we can't afford it. We're used to building one transmission line at a time and taking our time about it. We need to build 6, 7, 8 lines at the same time, and that means we need to have a process that is more expedited while still protecting the environment.

So we'd ask for an aye vote.

Thank you. Any other witnesses in support of this measure, please come forward at this time. And seeing none. Witnesses in opposition. Any primary witnesses in opposition? All right, seeing none. We'll bring it back to the Committee. Any questions or concerns by Committee? Senator Newman.

Senator Padilla, I don't disagree with your kind of broader thesis on this whole thing, but to the extent that this Bill was vetoed last year, I guess I have two questions. One is a quick scan showed there were no, no votes last year. So first question is, did you consider trying to get a veto override on this Bill? Because someday we will.

Do those still exist? Mister Chairman?

In theory, it's still in the California constitution. But what assurance or even likelihood do we have in this case, if we vote this Bill through that it won't get vetoed again?

Mister Chairman Senator, I think the Legislature needs to be persistent and consistent because of the nature, the criticality of this particular need we have. Even the Committee analysis acknowledges correctly the high demand and the likelihood that there'll be a substantial increase in applications for higher capacity transmission infrastructure, particularly because of the need to meet our GHG goals. So in other words, we're going to have more applications in this process for more impactful infrastructure. Given that that's the reality.

We need as many options on the table to quickly and efficiently entitle this infrastructure, and that means, in our view, all hands on deck. I think the Legislature should be persistent. We are committed to continue working with the governor's office.

We continue in that dialogue and with the CPUC because it's critical, and we hope that if the Legislature continues to be consistent in strong bipartisan support for reforms, like our proffered and this Bill, that, that is a good position to continue that dialogue with both the PUC and the governor's office.

I can't wait to hear your close if that was your, simply your answer. Appreciate it. Glad to move the Bill. Happy support.

Thank you, Senator Dale.

Thank you, Mister Chairman. Good to see you, Senator. So just a quick question. You're just basically moving this from PUC to CEC, right? That's the new what. So, right, I'll just get right to the question. What do you, what makes you think that the CEC is going to do any better than the PUC?

Well, because you have the opt in. If an IOU, for example, files an application, particularly in the case in the future where we're going to have more of the larger capacity transmission infrastructure, which would typically require a more involved process, as you know, depending on the size of the transmission capacity,

There is different levels of review that are required from 50 below to very administrative ministerial review that are considered basically interconnect projects to medium capacity that require a permit to construct, for example, rather than a whole consideration of the necessity and public convenience and all of that.

So there's complex, wonderful processes we've evolved in our state to deal with this. The reason this can provide Shorter timelines, as is acknowledged in the staff report, sometimes months off the timeline for CEQA review is we're going to have more of the larger capacity projects coming forward to meet our goals. And because of that, more applications are going to need to go through a more lengthy, more complex process.

So the more projects that can qualify to opt into the CEC doing a Shorter, expedited sequel review while the PUC looks at questions of convenience and necessity may create an efficiency and may shorten timelines. And that's important for us to be able to meet the goals overall. And that's the point of the Bill.

My concern is that I'm going to lay off the Bill. I get to see it again in EQ. But my concern is that we gave the power to the CEC last year, I believe, I can't remember the Bill number, but it allows them to basically bypassed the local process to site wind farms. We gave the CEC that power.

And we've also, this is like the fourth Bill this year that we've punted to the CEC to do work, and the ratepayers pay for the CEC, which we're concerned about rates going up. So my concern is that obviously the Governor vetoed the Bill last year. We supported the Bill it is very difficult in California with the environmental groups who want to say, we don't need any transmission, we just need more batteries. That's their argument every time. And the Legislature seems to go along with that.

But we really do need transmission. We need to upgrade transmission in California, where we have existing lines that are already, the easements are there. We just need to make them a little larger and we can't get it done. At the end of the day, the goal that you're trying to get to, I'm not sure that this is the right avenue that we need to have a real discussion about. Hey, where do we need the power in California? Number one, map the whole state.

Find out where we're short power, and then build the transmission lines. We don't do it that way. We do it the opposite way. We go and say, let somebody else try to figure out how to build it. It's the same thing we do with water infrastructure. We pass bonds and we put it where the votes are. So I'm going to lay off the Bill. I know what you're trying to do, but I don't know if this is the real avenue to get there.

We really need to have a conversation about where we're short power in the state and how we can get power there and upgrade the lines. And then we need to do some Executive orders to get it done, because at the end of the day, everybody has a dog in the fight. So I'm just using this opportunity to talk about the real problems in California with trying to get power anywhere. And I'm frustrated the same as you are.

I know in your district you have a huge resource out there that we're trying to get to where we need it. I have the same problem in my area. I have lots of land, lots of wind, but can't get at the power to where it needs to go. So I lay off. But hopefully we can get to the point where we actually look at the state as a whole and figure out where we really need to make these transmission investments and do it so that we.

And look, batteries aren't going to solve our problem for the amount of power that we need. We're not going to be able to do micro grids and handle it. It's not going to happen. So those are just some comments I'll be looking at. Your Bill and the community, thank you for continuing to advocate for the problems that we have, but I'm not sure that switching it from one agency to another is actually going to solve the problem.

Thank you any further discussion or debate on this issue by Committee Members? All right, Senator Padilla, would you like to close?

Thank you, Mister Chairman. Briefly, I think, just to bring it back, fundamentally, we do know what the picture looks like over the next 20 years, due respect to my esteemed colleague, and that's been articulated in the 20 year transmission demand review. And it's very clear both about interconnecting to generative sources, to storage and delivery of power to customers and consumers. The grid is aging. It is reducing year by year in its efficiencies and capacities.

We have to do upgrades to the existing system, we have to improve interconnection, we have to better connect to storage, and we have to create new high capacity transmission infrastructure. That's just simply the reality of the grid that we have. That was our grandparents grid, that we're trying to put demands and reductions on towards our grandchildren, and it's not ready, and it's not going to meet those demands if we just simply settle for this status quo.

And so this is an opportunity to provide a number of processes which could result in time saved to reach those goals. And that's why I would respectfully ask for your Aye vote.

Thank you. We're lacking a quorum at this time, but once established, we'll seek one.

Thank you, sir.

Thank you. Next up, Senator Allen. He'll be presenting SB 1480.

Well, thank you so much, Mr. Chair and Member. Let me start by accepting the Committee's proposed amendments, and I want to thank the Chair and Committee for working with my office on this bill. I understand that turn took an opposing, amended position, but I certainly hope that with these amendments, their concerns will be addressed. So this has to do with the Low Income Oversight Board.

And we know this is a board that was created back in 2002 with the purpose of serving as a voice for low income folks at the CPUC. This Bill seeks to increase opportunities for low income Californians to access essential support programs offered by our regulated utilities.

There was a report that came out a few years back from the LAO that said that only 40% of eligible California families are enrolled in Lifeline, which is the state's program to provide discounts to low income households for home phone and cell phone services.

There was a report last year, affordability report from the PUC that indicates that care, one of the state's programs that provides electric and gas bill discounts, reports very high enrollment rates.

But we see really significant geographic variability in places like Placer County, Nevada County, Sierra counties, central and southeast LA, as well, including areas of my district, some of the participation could be as low as 20% to 40%. So, as amended, this bill does three things now.

I mean, we originally, I think, had a broader vision for trying to provide access, since we have all these different programs that people have access to, and we've got to figure out ways to make it easier for people to be able to have their eligibility go across the board.

But here's what the bill does now. So it requires PUC to establish a process by which a consumer enrolled in a low income utility program is notified of their potential eligibility for other utility assistance programs.

It requires the PUC to work with the Low Income Oversight Board to develop an outreach strategy to improve enrollment of eligible households across all low income utility assistance programs, and it adds a representative of a low income telecommunications provider to the Oversight Board.

These active notification and outreach efforts are, I think, a positive step towards increasing enrollment rates across all the regulated utilities. This bill builds upon the foundation that was laid down by our colleague, who I think is on his way.

Ben Hueso is SB 1208, and that's how I got involved with this. I learned about this from him and co-authored his bill. This was a bill that initiated a report to explore strategies for enhancing access to vital services for low income communities. I'm not sure he's here yet. Anyhow, I certainly appreciate everyone's time and consideration for this bill and ask for an aye vote with the amendments.

Thank you. Is Senator Hueso your lead witness?

Yes.

There he is.

There he is. Come on up,

Senator Hueso. You're on.

Yeah.

And like usual, you're late, but we're going to take you from. Well, come on in. You're a monk's family.

Thank you. And it's a pleasure to be back here with my friends, but I'm here representing myself as a private citizen, simply advocating for a bill that I think is very important. Two years ago, through the help of a lot of you, I helped pass Senate Bill 1208. And this is a bill that really sought to eliminate silos and make it easier for low income residents to qualify for different programs.

So I helped to streamline different programs that helped to eliminate, to create a safety gap among the most low income and needy families in different bills that help veterans and help low income families. And this bill in particular, SB 1208, was intended to help make it easier for people to obtain either a low cost telephone, or energy services, or water services.

The idea is that they can apply in one location and all the programs that are created by this Legislature would become available to them and accessible to them instead of having to go to either utility service, a water service provider, instead of having them wait in line in different agencies, that they could qualify for these programs in one location.

So while these services are figured into our rates and ratepayers are paying for them, they're not going to the people that need them and deserve them.

And this is something that the state has to solve, especially that zero money is spent promoting these programs. If people don't know they exist, when will they ever get access to these programs? This bill, and I'm glad that my colleague and my friend Senator Allen, is running this bill.

I'm hoping that, I saw the amendments, I thought maybe we could work with this Legislature to make this process easier, stream like it, make it more accessible.

We have lots of wonderful programs that are available to people in our community that they don't know that exists. How are we going to make it available to them? I put together a fair one day to invite people to learn about all the wonderful programs we offer them that they're eligible for.

And a lot of people say, how come you don't tell us about this? Where do I get information about this? And the state needs to promote this and get us to understand that they're available.

And unfortunately, the answer is we just don't have a budget for it and we don't. So why not make it easier if they learn of one program? Why can't they learn of all when they apply for one program? So that's what this bill intends to do. And just some background, why are we here if SB 1208 really was the bill that did that? Well, we went through the legislative process and there were enormous amendments that really watered the bill down.

So this bill intends to make it so that more programs are under one application process. And I think we have to continue to work on that. There is no doubt in my mind that this Legislature has a commitment to low income families in helping them be part of this economy in our society and helping them to become a bigger part of this economy and this society. I have no doubt the Legislature wants to do that.

But I would like to see that commitment be translated into a bill that really covers everyone in a way that is more comprehensive. Where they're not having to spend days they could be spending either at a job or with their families waiting in a line, applying for services. And in many cases, where they're not even aware that they get a reduced phone. They're not even aware that they apply for reduced utilities and water programs.

If it's theirs to draw and ratepayers are already paying for it, why aren't we implementing those programs? Why aren't we getting them into the homes of families that need them the most? So I really encourage this Legislature to help support this bill, work on this bill, give this bill some big teeth that will help these families survive. Thank you very much.

Thank you. And now we're going to ask when there's this additional Me Too's to come forward or you're in support of this bill, state your name in your organization. All right, seeing none now, let's ask for witnesses in opposition. All right, we got a tweener.

Good morning, Mr. chair Members. Agnostic Hernandez, on behalf of Turn, we proudly supported 1208 a couple of years ago when Senator Hueso was the author. We had some concerns about some of the language moving the existing date.

My understanding on the amendments, I think I've seen a draft of it. I think they addressed most of our concerns. So look forward to looking at that. To just highlight the definition for a low income telecommunications provider.

We want to make sure that's done in such a way where it's Lifeline and it's an ongoing commitment to serving those folks. So just little tweaks like that, but we'll keep an eye on it. But based on the amendments, as we've seen them drafted up, I think we'll be okay with the bill.

Thank you. Any additional witnesses in opposition and support or tweener? All right, seeing none. Let's bring it back to the Committee. Any Committee Members have any questions as it relates to this measure?

No. Senator Allen, first, I want to thank you for working with the Committee and helping address this, and Senator Hueso for your effort in this movement. And as we all know, we want constituents and consumers to know about all these programs.

But unfortunately, one size doesn't fit all the different programs, be it water, telecommunications, electricity, have different eligibility criteria. That's why we suggested the amendment set we put forward to, you know, make it a little easier because we do want folks to be aware of this. We look, realize the take rate is far too low for what is budgeted for these programs.

But again, I want to thank you for your effort in moving forward and we'll continue to keep a mindful eye on making sure that we make this as easy as possible for consumers to take advantage of it. The note, would you like to close.

Thank you to you, Mr. Chair. Thank you for our colleague and friend, Senator Hueso, for coming up to this and all your work in this space. And this is all about trying to make it easier for folks that are already very burdened. So with that, I respect your astronaut vote.

Thank you. Before we seek, I vote we can establish a quorum secretary. Please call the roll.

[Roll Call]

Form is established now, bringing it back to the Committee. We're seeking a motion on SB 1480. It's do pass as a minute to Committee on Appropriations, and I quickly go over those amendments. Elite language expanding the Low Income Oversight board duties, remove requirements for adding new legislative and DHCs appointees to the Low Income Oversight Board.

The LEAP provisions requiring the PUC to expand the concurrent enrollment system to water and telecommunications assistance programs, and instead require the PUC to do the following.

Adopt a process by which a consumer enrolled in a PUC administered low income utility program receives a notification at enrollment providing information about the other utility assistance programs for which the consumer may be presumably eligible and information about how to apply for those programs, and work with the low income oversight board to develop outreach strategy to improve enrollment in eligible households across low income utility assistance. Does that accurately reflect amendments?

That's my best understanding.

Thank you. All right, so we're seeking a motion. It's been moved by Senator Caballero. Secretary, please call the roll.

Due pass is amended, and we refer to the Committee on Appropriations.

[Roll Call]

That Bill has seven votes. Will leave the roll open to let absent Members add on. Thank you, Senator Allen. Next up is Senator Skinner with SB 1210.

One moment, please.

Thank you, chair. Apologies for that bit of delay. Pleased to present SB 1210. Let me begin by indicating that I am accepting the Committee's amendment, Oh, it's 1210. You're right. I said 1200 because that's the room we're in. You know, we just came out of spring break. Anyway, let us return to this bill here, SB 1210. So I am accepting the Committee's amendments.

I want to just point out really quickly for those of you who read the bill before the amendments, that I appreciate, you know, we're at a point now where if we put a cap on these various fees, that could put rate pressure, and we have very significant rate increases that all of us would like not to see as we are moving to electrify.

But in the meantime, we also have a housing crisis and the fees that are charged, and this is not just electric utilities, we're talking sewer hookups, water hookups, you know, different whatever our utility is. So in some cases, you might have three to four of them, you might only have two. But these charges are often per unit of housing. So you can have a multifamily building, and each unit in that multifamily is going to be charged these large dollar amounts per hookup.

Now, if you take some of the, we've obviously done a great deal in the state to make it easier for people to build ADUs. Those are the secondary units. And I would point out that our latest data shows that at least 70% of the ADUs that have been built to date are for family members, and yet they face hookup fees of unbelievable amounts.

A new water meter, for example, within one of the districts of my, one of the utilities within my Senate district, a new water meter, you are charged $28,000, and that's for a single unit. So meanwhile, we are trying to make housing more affordable. We are trying to increase housing. And it's crazy. This is crazy. But I do appreciate that there would be rate pressures and such. So I am accepting the amendment to take away that cap.

But I'm glad to be speaking about it because as this is my last year, I hope more of you will follow these issues and that we can at some point bring some resolution, because not only do they have a high, high fee, you can wait months so a housing unit can be finished, ready for occupancy, except it doesn't yet have electric or water, and it doesn't have electric or water because the utility hasn't hooked it up even with the charging of those fees.

Now, various bills have tried to address that. We've not yet seen great results. We're not yet seeing any, you know, reduction in delay. But now let me get to the bill in front of you with the amendments that I have accepted. What the bill in front of you now does is allow for transparency because the other factor is, let's say you want to build some units. You can't even go onto the website or call these utilities in most cases and get what the cost is.

It's not, they're not transparent. You don't know until you're, you've built it and you've submitted your application. Then all of a sudden, boom, they hit you with the, with the charge. So you can't even necessarily plan for it.

So what the bill now would be is to require them to post to be transparent about those charges so we know in advance and it gives, of course, the applicant a better understanding of the basis for their utility connection and hookup fees and also let you know what they are.

And then at, with the committee's agreement, we're going to look at whether there's some point as the bill moves, if it does, whether there's the ability to put on the ability to pay over, say, a year period versus the upfront, you know, instant payment for that large fee. So we're still looking at a way to do that that could be reasonable and not put a burden on the utilities and such.

So with that, I would like Corey Smith from the Housing Action Coalition to, as my main witness to present.

All right, you will have two minutes to make your presentation.

Thank you, Chair Bradford. And thank you, Senator Skinner and committee. Corey Smith, on behalf of the Housing Action Coalition. I first want to appreciate and recognize Senator Skinner's broader comments. And the HAC is certainly dedicated to this work beyond 2024. We are a home building industry-funded1 nonprofit that advocates for the construction of more housing at all income levels across the State of California and proud sponsor of Senate Bill 1210 because we have consistently heard about the challenges that utility companies present in the home building process.

And while 1210 will not be a panacea to these issues, few things make it harder and more expensive to build housing than introducing unforeseen costs and unpredictability. And that's why 1210 is a good government measure that will solve a problem that builders face. Fee transparency, and at the beginning of the process, allowing home builders to have an understanding of what those costs will be, reduces the overall risk associated with the development and creates more efficiencies as homes get created not only multifamily but ADU as well.

And it's an environment right now where it is financially infeasible to build housing and we need to be doing everything we can to make it easier. Again, this bill will not solve all of our problems, but this is absolutely a step in the right direction. Thank you.

Thank you. Now additional witnesses and support stating your name and your organization. Please form a single line.

Good morning, chair and members. Rebecca Marcus, on behalf of LeadingAge California in support.

Thank you.

Morning, Brooke Pritchard. On behalf of California YIMBY, in support.

Thank you.

Hi, Seamus Garrity with Lighthouse Public Affairs. On behalf of Build Casa in support. Thank you.

Hi, I am Meg Snyder, here on behalf of the California Building Industry Association. No position today. However, we've raised some concerns with the author's office and we hope to address those moving forward. Thank you.

Thank you. Any additional witnesses in support? Hearing seeing none now. Witnesses in opposition. Are there lead witnesses in opposition?

Thank you, Mr. Chair, Israel Salas with SDG and E. We do have an opposed position on the bill, but based on the committee amendments and the acceptance of those amendments today, we should be able to remove our opposition and move to neutral. Thank you.

Thank you. Appreciate that.

Good morning, Andrew Kosydar with Southern California Edison. Appreciate the conversations with the author and the office and the consideration of the amendments. We'll look at them in print and take those into consideration. Thank you.

Thank you.

Good morning, Mr. Chair, members of the committee. I'm Kathy Viatella with East Bay Municipal Utility District. We are a tweener, we do not have a position, sent a letter of concern. We appreciate the amendments to the bill. They did address our concerns and we are in support of greater transparency. We do provide that information on our website and we would like to continue to work with your office and thank you and your staff for the discussions we've had so far.

Thank you. Next witness.

Kris Anderson, on behalf of the Association of California Water Agencies, we submitted a coalition letter in opposition to the bill. Really appreciate the Committee amendments and the author's willingness to take those. Certainly a positive direction. We'll review the transparency language. Transparency is certainly not something we're opposed to and connection capacity fees are subject to extensive transparency measures. So interested to see what the committee or the further amendments look like. Thank you.

Good morning. Brandon Ebeck, Pacific Gas and Electric, I align my comments with everything that's already been said. Thank you.

Morning. Jessica Gauger with California Association of Sanitation Agencies. I'd like to just align my comments with those from ACWA, and we look forward to seeing the amendments and the bill moving forward. Thank you.

Good morning, Spencer Saks with the Inland Empire Utilities Agency, aligning our comments with the previous with opposed, less amended. Thank you.

Good morning, Chairman Members Anthony Tannehill with the California Special Districts Association, I'd like to align my comments also with ACWA. Looking forward to taking another look at the amendments.

Good morning, Chair and members, Derek Dolfie, on behalf of the California Municipal Utilities Association, would like to align our comments with ACWA and CASA and the Special Districts Association. Thank you to the author and the committee staff for working with us.

Thank you. Any additional witnesses in opposition? Seeing none now we're going to bring it back to the Committee. Any questions or concerns by Committee Members? Senator Grove?

Thank you, Mr. Chair. I appreciate that. I want to thank the author for taking the amendments because the original bill, and I'm not trying to be sarcastic or anything, but I just laughed when I read it. And the only reason I did it, it's like, my gosh, I don't think Miss Skinner has ever had to build something ever before. I get comments from my builders. We're supposed to have affordable housing and I have a housing track completely built, waiting eight months for connectivity to the utilities.

That's not the utility's fault. It's the policies that come out of this building that create a disconnect, I guess you would say, no pun intended. But, you know, they're trying to do undergrounding and they're trying to electrify everything and they're trying to do, you know, 50 different things that policies are created out of this building. So there's not a lot of ability to be able to connect individuals on housing. And then you have hospitals and things like that that take priority.

And you have, because we have to have hospitals that are electrified. So we're trying to emergency pass through an immediate electrification of the utilities.

And again, undergrounding, if you look at it from a business perspective, and I'm just going to talk about PG&E for a second, and I am in no way defending PG&E, they have a lot of work that they have to do, but if you look at everything that they have to do for undergrounding, so you take your staff and you're doing undergrounding. And yet, so this is not neglected, but this takes second priority over here.

When you look at the water cost for the connectivity, I had an individual try to build a mother-in-law's quarters or a facility right behind their house to bring their elderly parents in and it took almost two years to get connectivity after permits were already issued. But even before they even started, it was like $12,000 before they even laid the foundation, because of all the fees and permits and everything.

Affordable housing is not affordable in this state because of what we require in this legislature that we pass down into the building construction piece of it and the utilities piece of it. So I appreciate the transparency. I think everybody should be transparent. I don't think it, I don't want to say it doesn't help.

I mean, I think when they go to build like an ADU or a mother in law's quarters or something in their backyard or even builders that have affordable housing out there, they'll look and go, oh, it's $28,000 for a water hookup and they'll know and it'll be transparent and it'll be available on a website. But it doesn't solve the problem. And so I thank you for taking the amendments and not putting one more thing on the utilities.

Which I think will just, the IOUs, it'll just raise the cost of utilities and we'll pass a piece of legislation that comes in to offset that with taxpayer dollars to help reduce that cost. But we're not fixing the problem if that makes sense. So I thank you for taking the amendments and appreciate you working with the opposition.

May I respond?

Madam Chair, you may.

Thank you. I appreciate the perspective, but let's parse this down a little. This affects, the bill was designed to affect any and all utility hiccups, not just electrical. And if we just take that one example, our IOUS are the only business that I am aware of in the State of California that the legislature guarantees a return on investment. So we're, I would just leave that alone there. You know, who else is? Everybody else in the business is taking big risks.

Secondarily, wildfire is real and, and we have done much to, and we need to do more to help limit it, but we have not mandated the undergrounding. And there are, you know, there's lots of experts who would give various opinions as to whether that is the most cost effective way to deal. But at least in the case of PG&E, that is one of the approaches they've chosen to take, which is quite an expensive approach and that was not mandated by the Legislature.

Additionally, some of these other utilities that are affected by this, there are very few mandates that the Legislature has put on them, especially in recent times, and yet these fees and costs still exist and quite significantly. And anyway, so I just wanted to put some of those things in the record before we continued on this.

Vice Chair Dahle?

I'd like to just lend a little bit to this conversation because I think it is real. I think what you bring forward is something that probably 99% of the public doesn't understand why housing is so high in California.

As somebody who came out of local government for 16 years and actually doing land use decisions at the local level, trying to figure out how to drive that rate down, you have school impact fees, you have our climate goals, which require all these little utility districts and large utility districts to exchange their whole fleet of vehicles and equipment because they need to upgrade for less emission vehicles, which is a cost.

There's bargaining units, there's all kinds of costs that go into the people that actually put these, do these public projects for us, and that drives up the rate. And a lot of those laws have been passed by this Legislature, and it's a little here and a little there, and pretty soon it's $28,000 to get a hookup. And if you're building 100 units in a, you know, community development, it's still 100 units that have to have water put to each one of those units.

And each one of them has a toilet and each one of them has a light switch in there. And it cost. And so I would implore most of these legislators to go look and find out why the costs are there. If you go and dig into your local utility district, whether it's electricity, whether it's water, whether it's sewer, there's a reason for all these costs. They're not really gouging you. They have a reason that they have to pay their employees. They have a pension Fund.

They have all those things that is real in California. And we mandate out of this Legislature how they're going to run their business. Like I stated earlier, whether it's environmental goals, building green, all those things cost money. And that's why California, quite frankly, is not competitive, because other states don't require those really high bars to meet the standard that we want everybody to live out in California. And that's the difference. So I'm going to see this bill again, and I'm going to rest it.

We just got the amendments late, I want to look at the amendments. I'm going to lay off the bill, but I want to just state the facts. The facts are California is very expensive to live in. It's because of the policies that come out of this legislature. And we let the, we want the perfect to get in way of the good.

For example, if we allow these utility districts to let attrition with their vehicles rotate out, they can get the life of the engine that was in the backhoe that digs the ditch, that digs up the highway. We would drive the cost down. But no, we have to mandate them that they have to replace all those pieces of equipment and there are hundreds of thousands a piece, and in some cases they're millions of dollars.

And the ratepayer has to pay that because they have to recoup those costs. So I just want to go on record for that. There's a lot of reasons why the cost is high and they're all legit. If you trace them down, most of them are because we passed some law that requires them to do it.

So that is an area we could really do some good in California is if we actually analyzed our policies on climate change and said, hey, let's let some time to get there and allow it to phase in where we don't have to just drop dead dates. We pick dates and they have to respond to them. And it cost the housing to go up, electricity to go up. And you're right, the IOUS do get to make a profit.

And I challenge them on why we're undergrounding in some areas where we don't need to underground and where we could insulate wires. And it drives the cost down because at the end of the day, we got to drive the cost down if we're going to allow California to build and grow, and there are some groups out there that the way to stop growth is just make it too expensive. And they've been very good at it.

And those are my friends in the environment that don't really care about the environment. They just care about stopping growth. So I wanted to go on record to say that I'll be looking at the bill.

I appreciate this conversation because I think the public needs to know what's really going on, because when you do go pull that permit and it's $28,000 just for that, that's not counting the school fees you got to pay and all the other things that have to go on top of it, and pretty soon it's $300 a square foot before you even put a nail in the foundation to build the place. So great conversation. I look forward to seeing it in government.

Thank you for your comments. Senator Stern?

Thank you, Mr. Chair. I appreciate you diving into this issue, Senator. We still haven't really landed this. I mean, the queue is still there. Housing is still stalled. There's still no answer really. I like the 1% of the value concept. I think that's, there's like a benchmarking ability that was in the original bill that I think is going to be useful for between utilities to see who's doing better than others.

And I was wondering sort of in the, I don't have the amends in front of me. So in whatever this transparency compromise that's being made, are we going to be able to kind of go apples to apples between utilities? Like is the idea that you'll know, okay, if it's not 1% and we're capping that, will we at least know what percent it'll be based on the amends or just someone could explain them a little bit more.

It's primarily the committee amendments. So what I accepted was removing the cap, the amortization part and the prioritization of housing. The transparency part is primarily just notice of what the anticipated fee is and you know, a comparison so you can determine fairness. So, but beyond that, there's not really that type. I mean there's a benchmarking only that you can compare, but not a requirement of that percent type benchmarking.

Yeah and I just, I wonder what the report back function or the public, maybe it's a public publication of this data I'm struggling with. If we're using transparency as the tool and not coming in as a cap, is there something with some teeth to it so we can really know, to Senator Dahle's point, right? Like if there is really that value there and that big old clay pipe that hooks up from the person's house does need to be upgraded. Right?

That water costs a lot to get to that new apartment. We get that. But like sort of how to know if we're going to be squeezing especially, this is just a broader comment, especially if we're going to be squeezing on distributed generation this year and pushing back on net metering and pushing back on, you know, speeding up new transmission or pushing back on all these other things that we say are going to cause rate pressure. This has to be part of that give and take too.

And this is such a priority that I just, if we solve for that bigger puzzle, even with the fixed charge, if everyone has to eat that, then like, okay, isn't that rounding it out enough to leave room for us to hit in the future, a 1% kind of benchmark?

Well, there's, I'd say two main benefits of transparency is one that whoever is involved in the building process will know in advance so they can more accurately plan for the costs of any construction, knowing that any costs of construction vary over time anyway. But still there is that benefit. And then secondary benefit is by all the utilities affected, which of course is many. It's gas, it's electric, it's water, it's sewer, any type.

Just transparency alone can sometimes cause an entity to think about their rate and potentially modify it because, you know, now that it's public, so they're just that type of benefit. But it doesn't guarantee that the cost per the hookup would change.

Thank you. Senator Wilk?

Thank you, Mr. Chair. First of all, I agree with the comments made by some of my colleagues about the policies that come out of this building. And I remember I was a private citizen, so it's been quite a while ago I went to a groundbreaking of development in my hometown and talking to the developer, and it was $75,000 more in fees there than in Bakersfield. And so it prices people, you know, people out of the market.

But the fact of the matter is there are issues in this so case, example, again, this is anecdotal, so I don't know how it, if it comes out to scale, but I met with a dentist who had just moved her one person practice up to my city. And she went and did all the, did everything she needed to do. Her facility capacity fee was almost $30,000 for a one person shop. And she was shocked by that. And the guy said, well, that's our regulation.

Then she went back and looked at the regulation. It hadn't been updated since 1982. And I don't know about you, I go to the dentist twice a year. I love going to the dentist. I am a freak. But back, it used to be where they ran the water all the time, right? All day long. You use no water now. So it should have never, ever been, you know, that kind of money. But there was no incentive for them to do it.

And they already, they stung her. And so I actually got that water agency reformed and I got. And those regulations are changed. But the other thing we did is we actually put in, I think it was the first in the nation, a ratepayer advocate for that new water agency to protect consumers. So my only concern about this is that the building industry, who was responsibility is to build housing, is neutral. I'm going to vote for it today because I have faith in you.

And then I'll reserve my right as we, as we move forward. But we need to start tackling these issues. So of course you never decafite. Yeah. So anyway, with that, I am a yes today.

Thank you. Any additional comments or questions by committee members? Hearing, seeing none. Senator, would you like to close?

Yes. Thank you. I appreciate it. And we could have a long discussion as to how these different entities come up with their fees. But one of the factors is Prop 13, which the legislature did not mandate.

But basically, when any of these entities, especially the municipals or local ones, they have high capital costs and they need, and they are reluctant to go to the ballot to either have a bond or something else to deal with some of those costs because of the two thirds requirement, they instead will. And of course, you're right, the different Senators who spoke to this, there are fees or, excuse me, there are costs that they must absorb.

And so one way to do it is to, in effect, you know, share it through these type of hookup fees. But the net result of that, while it's real, they do have these real costs, is that it really dampens our ability to address our housing crisis. So there are so many factors, and as the joke, which too many people who are younger than me will not remember, but as Pogo, the cartoonist Pogo, said, we have met the enemy and it is us.

But we also need to look at what ways we can, you know, try to start stripping out these things. But right now, this is a transparency bill loan. It does not have any caps. It does not change the rates that any utility would charge, and it is silent. It removes the issue of any kind of amortization, but it allows for a continued discussion on whether we could create some kind of mechanism to pay that fee, fee over the course of a year, for example.

And if we can't get there, well, then that won't be in the bill, ultimately. But right now, the only thing that's before you is the transparency piece. And with that, I ask for your aye vote.

Thank you. We're looking for a do pass, as amended, motion to the Committee on Local Government. But before we do that, I just want to clearly state the amendments, delete the provisions of the Bill related to capping fees, require 10-year financing of utility charges and prioritization of utility service applications for housing. That's correct. And expanded transparency requirements to include publicly owned utilities. So with that, we have a motion by Senator Stern. Secretary, please call the roll on SB2310.

Bradford? Bradford, aye. Dahle? Dahle not voting. Ashby? Ashby, aye. Becker? Caballero? Caballero, aye. Dodd? Durazzo? Durazzo, aye. Eggman? Eggman, aye. Gonzalez? Grove? Grove, aye. Limon? Limon, aye? Min? Newman? Rubio? Rubio, aye. Seyarto? Skinner? Skinner, aye. Stern? Stern, aye. Wilk? Wilk, aye. 11 to zero.

That bill has 11 votes. We'll leave the roll open for APPCN Members to add on. Members, now we're going to move back to SB 1165. Senator Padilla made his presentation earlier without a quorum. Now we're seeking a motion.

We have a do pass. It's been moved by Senator Eggman, and I will just restate the motion, do pass the Committee on Environmental Quality. Secretary, please call the roll on SB 1165.

[Roll Call]

That vote has 11 votes. We'll leave the roll open for absent Members to add on. Now we're to SB 1383, which is my bill, and I'll hand the gavel over to our Vice Chair, Senator Dowley.

SB 1383, Bradford.

Thank you, Mr. Chair and Members. I will start by accepting the Committee's suggested Amendments, and I appreciate the Committee work and my staff's work on getting us to this point. In 2013, while I was in Assembly, I authored AB 1299, which established a broadband public housing account.

This account makes money available for public housing agencies to partner with internet service providers or other contractors to make necessary facility upgrades in order to connect a community to a nearby broadband network.

The account has since been expanded to support residents of low income communities and require the offer of free broadband service. As a condition of receiving funds. The account will finance up to 100% of the cost to install inside wiring and other broadband network equipment.

Unfortunately, the broadband public housing account continues to be woefully underutilized. For fiscal year 2023-24, 15 million was allocated to the fund, yet only about 2 million was used in 2023, totaling less than 15% of available funds.

Multiple low income housing providers have cited that existing law requirements that applicants guarantee access to free internet services as a condition to obtain public housing account funds is a major deterrent to applying for these monies.

Further, existing laws restrict eligibility to apply for these funds to only landlords and agencies that own and administer low income and public housing.

Finally, because most public housing and low income communities are unable to pay or secure offers of free high speed internet, many have been forced to resort to wireless solutions in order to provide broadband to residents, virtually all residents.

All recent grants, I should say, provided by the BPHA, have been for wireless services that have not met the CUP standards for speed and requirements. To solve this issue, 1383 makes three changes. It winds the eligibility applicant pool of California's broadband public housing account.

It clarifies that new internet subscription plans can be provided for free, or at least at low cost to the community. It enables the Broadband Housing Authority to award grants to deploy devices that can improve existing broadband services and removes barriers to the development of high speed broadband Internet and communities that need it the most. And I will respectfully ask for your aye vote.

Do you have any lead witnesses?

I have no. I do. I have Miss Gaudarama. I'm sorry. Who will do so?

Thank you. Good morning. Amanda Gualderama with Cal Broadband with the Amendments taken today in Committee, Cal Broadband will be in support of SB 1383. The public housing account finances facility upgrades on the customer side of the meter in low income communities, which is distinct from all the other grant programs for broadband.

As noted historically, the public housing account has been underutilized even after the expansion of eligibility, and it has been stated that this that the requirement for free service is a major deterrent, and by removing this condition, it should enhance the utilization of this account and assist a greater number of Californians who need internet services.

Of note also, the bill expands the eligibility of using the public housing account funds to deploy range extenders and other devices to improve existing broadband services in low income households.

This will be a great opportunity for many homes in these communities because they suffer from Wi-Fi range issues, from interference and physical barriers caused by the materials utilized when many of these affordable housing stock were built. And so for this reason, we support this bill today. Thank you.

Thank you. Anyone else wishing to speak in support of SB 1383? Seeing none. Anyone here wishing to speak in opposition of SB 1383? Seeing none. We'll bring it back to the dais. Yes, ma'am.

Thank you, Mr. Vice Chair. First of all, I want to thank you for the original bill, because I know the fund allowed old homes to be upgraded to be able to sustain at least high speed broadband.

Now, I know that the reason you're bringing this up is that the fund has been underutilized, and so clearly the landlord stated that it was because of, you know, having to provide free access. Now, moving towards this bill, how do you, and this is my personal deficiency and I haven't seen it. How do you get landlords and owners to use the fund. How do you advertise, how do they find out that they have access to this?

And that's part of the outreach that we need to do better. But we're working with our internet service providers as well to make this information available again. And we're not eliminating the free, we're just expanding the option and setting a bar at fees that can be charged in order to install this.

But our biggest challenge, just as a couple bills we heard earlier, was about the take rate and how do we get folks to participate in these programs. So that's part of ongoing process that we're going to be working at to make sure that consumers are aware that these programs are available and the services are affordable and for some still be free.

Yeah, because I see this as the main issue. If you ask me, it has been underutilized, but I could see already, if we don't have a plan to make sure that we advertise and that they take advantage, it just will continue to sit there underutilized. But thank you for that. And that's all. Thank you, Mr. Chair.

Okay, any other comments? Seeing that we would entertain a motion. Thank you. We have a motion by Senator Rubio. Mr. Bradford, would you like to close? I'd like to just weigh in real quick. This is a great bill. I know that you've been working in this area for a long time. I commend you for it, and I'm definitely in support of your bill.

Thank you. And I clearly hear your concerns as to how do we do a better job of making the public aware, consumers aware that these programs are available just earlier, as in Senator Allen's bill. That's one of the challenges that we also heard of. How do we make sure folks are aware that these programs exist, and that's part of the effort that we're going to make in moving forward.

Again, we passed the Assembly Bill in 2013, and I was kind of disappointed at the number of public housing facilities that have taken advantage of that. So that is my charge and my challenge to make sure we do a better job at that. And I respectfully ask for aye vote.

Thank you. Mr. Bradford, this is a do pass to amended to Appropriations?

Yes.

Thank you.

All right.

Would you please call the roll?

[Roll Call]

13 to 0. We'll leave that bill on call for absent Members.

Members, that concludes the bills that we have before us today. But our Vice Chair would like to voice his concerns as to why we postponed the Niello bill from being heard today.

Thank you, Mr. Chair. As I told you when I came in, you're one of the greatest chairs to work for and work with. But I just want to state that, you know, Senator Niello's bill got pulled today. He had witnesses come in from Arizona, and it was unbeknownst to him. So in the future, it'd be nice to at least allow those witnesses to address the Committee.

I know the bill's going to be set again, but, you know, it's unfortunate that he didn't know and have the time to allow those people not to come all the way from Arizona to be witnesses for his bill. So I just want to state that, and on behalf of Senator Niello, he didn't ask me to do it, but I just think it would be the right thing to do to allow those folks or give them more time. If you're going to move a bill without the author's knowledge. Thank you.

And I will personally take responsibility. I didn't know he had witnesses from out of state. When we decide to hold it over, we're still in negotiations with Senator Niello to hopefully move this issue forward. So we're going to open a roll for absent Members to add on. We'll first start with SB 1165 by Senator Padilla. Please call the absent Members.

SB 1165 do pass to Environmental Quality Committee. Current vote 11-0.

[Roll Call]

We still have 13 to one.

That bill is now stands at 13 to one. We're going to leave the roll open again for additional Members. Let's call the roll again on SB 1165.

SB 1165 do pass to Environmental Quality Committee chair voting aye.

[Roll Call]

That has 14 votes. We'll leave the roll open for absent Members. Now moving on to file item two, SB 1413. We pulled that. SB 1480 by Senator Allen.

Do passes amended to the Committee on Appropriations. Current vote, 7-0.

[Roll Call]

13 to one. Is that all our Members, sir? Did we call? No, it was Newman on. He already voted on that. Okay.

Yes.

All right.

Wait a minute. Yes, everybody's voted.

Is that everybody up on that one? So we'll close the roll on 1480. And now, moving on to file item four, SB 1210 by Senator Skinner. Please call the absent Members.

Do pass is amended to Local Government Committee, current vote 11-0.

[Roll Call] 15-1

That Bill is 15 to one. That measures out. Next, moving to SB 1383 by Bradford. Please call the absent Members.

Due pass is amended to Appropriations Committee, current vote 13-0.

[Roll call] 15-0 right now. 15-0.

Current vote is 15-0. We'll leave the roll open for absent Members to add on. So is that everything?

Hold on 1 second.

Yes, we'll open a roll again on file item 11165 by Senator Padilla.

[Roll Call] That's everybody. 15-1. That's everybody. 15-1.

15 to one. That measures out. You're right. And.

Then 1383 is the only one that's open. And your bill.

We'll call the roll on 1383.

[Roll Call] 15-0.

All right, 15 to zero. We'll close the row on that measure. I want to thank you all for participating here today in today's hearing. The Senate Committee on Energy and Utilities is now adjourned. Thank you to staff and all that attendant.