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 a Committee hearing in Oak Street building. We're in room 1200. We would ask all Committee Members to report to room 1200 as soon as possible. I would like to welcome everybody to our third energy hearing this year, and we have 14 bills on our agenda today.

SB 1221 by Senator Min has been pulled by the author, and before we hear the presentation, we have to establish a quorum, but we're lacking at this time, so we're going to start as a Subcommitee. I see we have our first author, Senator Padilla. So if you're ready, you may begin.

Good morning, Mr. Chairman and Members. Pleased to present SB 1006 on reconductoring and grid-enhancing technology. I first want to thank the committee staff for working with our staff and indicate that we will accept committee amendments. SB 1006 would require utilities to prepare a grid-enhancing technology strategic plan to cost-effectively increase transmission capacity.

As you know, Cal ISO estimates that we need more than 7000 transmission capacity every year for the next decade to meet California's energy demand and as importantly, to meet our GHG reduction goals that we lead the nation on, by the way. We are far from achieving this estimate, and it threatens those goals. Grid enhancing technologies can increase capacity, decrease congestion, improve reliability in a cost-effective way, such as redirecting energy away from overloaded lines and onto underutilized lines, which can enhance the existing grid.

A study by RMI finds that GETs are significantly cheaper than default network upgrades and can be applied to enable better utilization. Reconductoring with advanced conductors replaces existing wires with conductors which can handle higher temperatures and can hold roughly twice as much energy as conventional conductors. A study by UC Berkeley states reconductoring can help meet over 80% of the new interzonal transmission needed to reach over 90% clean energy by 2035.

This bill requires transmission utilities to complete a strategic plan for grid enhancing technologies and to continue evaluation of what lines can be reconducted in a cost effective way. Every four years, California should take advantage of these new technologies and upgrade existing transmission lines to expand capacity and deliver reliable energy at lower costs. With me today, I have Julia Selker with grid strategies and Mr. Scott Wetch and I would like to welcome them at this time.

Your two primary witnesses will have two minutes each.

Thank you. Good morning, Chairman and Members of the Committee. Thank you for the opportunity to testify in support of the Grid Modernization and Enhancement Act. I'm Julia Selker. I'm the Executive Director of the Working for Advanced Transmission Technologies, or WATT Coalition. Like the Senator said, California is going to be building a lot of transmission over the next decade, but we can't build everything we need, and we certainly can't build it fast enough.

This bill would require the utilities to make plans to use these cost effective technologies to get more capacity out of existing poles and wires and substances and rights of way. And as a California ratepayer, I do want to get the biggest return on the investment that I've made through my rates. These technologies are in an awkward regulatory limbo where they're not fitting into the business model of the utilities or the existing regulatory frameworks.

And California and the United States have fallen behind other countries in deploying these technologies. There's a report from AES, which is a utility and a renewable energy developer in California. Well, a renewable energy developer in California and utility in Ohio and Indiana that gets our under-deployed in the US power grid relative to their established technical potential. That came out on Friday. So grid-enhancing technologies have been deployed in the United States.

Just in the last year, we had the first market integrated deployment for $250,000 in Pennsylvania. It saved ratepayers $60 million in one year. And we think that the potential of grid enhancing technologies in California to save money on grid congestion is up to $680 million it would have been in 2022. But the story is bigger than congestion costs. Grid constraints are blocking economic development in California, blocking renewable energy, and will help us integrate new large loads.

So a huge opportunity for the California economy and the decarbonization goals. Thank you.

Mr. Chairman and Members, Scott Wetch, and on behalf of the California Coalition of Utility Employees and the State Association of Electrical Workers here in strong support of SB 1006, which would establish processes to help ensure that grid-enhancing technologies and advanced conductors will be evaluated and installed when and where are cost effective. As we all know, we must dramatically increase our transmission capacity to the system in order to meet all of our clean energy and carbon neutrality goals.

Contrary to popular belief, Kew is not supportive of building everything at any cost. We believe that grid enhancing technologies, the hardware and software that monitor and control energy flows and transmission capacity on existing lines, are a very cost efficient and effective way to manage our transmission systems. And I would just, in conclusion, like to point out one characteristic that grid enhancing technologies bring with them is a reduced fire risk at a much reduced cost.

They don't solve the entire problem, but they're a very important component to managing wildfire risk. So we'd urge an aye vote. Thank you.

Speak your name in your organization.

Thank you very much, Mister Chairman. My name is Dan Jacobson with Environment California and strong support. Thank you.

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

Edson Perez with Advanced Energy United, in strong support.

John White with Clean Power Campaign and strong support.

Michele Canales, Union of Concerned Scientists in support.

Ellen Brittingham here on behalf of San Diego Community Power. Unable to get a letter in before the deadline, but wanted to be here in strong support. Thank you.

Merrian Borgeson with Natural Resources Defense Counsel in support.

Nown, witnesses in opposition. Are there witnesses in opposition? If so, come forward at this time, Seeing none, we'll bring it back to the committee. Any questions or concerns by Senators? I'd like to move the Bill at the appropriate time. When a quorum is established, we will do so.

Mr. Chair?

Yes, Senator Caballero.

I may have missed. I believe, on this one. I'm looking. There are amendments that are proposed?

That's correct, and we accept those amendments.

Okay, thank you very much.

So at the appropriate time, we will seek a motion. Would you like to close, Senator Padilla?

I would respectfully ask for aye vote. Thank you. Thank the Chairman and Members.

Senator Cortese.

Good morning, Mister Chair and Senators. Today, may I proceed? Today, I'm here to present SB 1298, a bill that increases the threshold for data center eligibility for consideration under the small power plant exemption. Under that process, the increase, as noted in the bill in print, is from 100. This bill will create larger data center facilities that better meet the demands of California industries.

California law currently allows the California Energy Commission to have exclusive authority to license thermal power plants that are 50 mw or larger. The smaller power plant exemption program allows CEC to exempt from its licensing authority. Thermal power plants do not exceed 100. The CEC can grant an exemption if it finds that the proposed facility would not substantially impact the environment or energy resources. If the exemption is improved, the project developer is responsible for securing all local, state, and federal permits to construct and safely operate the plant.

This bill, at its core, is an economic infrastructure bill. Data centers and the fiber networks underpinning them are necessary and critical infrastructure. They're the backbone for apps, platforms and services integral to daily life, connecting individuals and organizations worldwide, not to mention healthcare and many other activities. However, despite the significant strides made in recent years to expand the data center capacity, the demand for digital services continues to surge, particularly in Silicon Valley, where the vacancy rate for data centers is a mere 1.6%.

Silicon Valley power forecasts that the data center load will double by 2035 and significant resource additions will be needed to support this increase. Data centers support businesses of all sizes, critical infrastructure, essential services, 911 call centers, GPS navigation systems, our hospital industry, our state's tech industry. An aye vote today will ensure that we're maintaining the state's economic vitality and building out capacity for future growth. With us today we have Tim McRae, the Vice President of Sustainability from the Silicon Valley Leadership Group.

And additionally we have Dan Diorio, director of the state policy at the Data Center Coalition. And at the appropriate time, Mister chair, I'd respectfully ask for your. I vote.

Are these your two primary witnesses?

They are.

All right, you'll have two minutes each.

Thank you. My name is Tim McRae with the Silicon Valley Leadership Group. This Bill allows for building larger data centers, which are a critical infrastructure necessity. Emergency services, hospital records, online banking, and cloud-based services all rely on data centers. Despite their high demand and crucial function for the economy and safety, Silicon Valley is the nation's tightest data center market, with a vacancy rate of just 1.6%. Siting data centers near technology headquarters is important for computing latency needs.

When you call 911, you want the response to be instant. Building bigger data centers in Silicon Valley helps power the Silicon Valley economy, which is crucial for the California economy and the California budget. You will hear that there are people who object to these data centers because they may run sometimes on diesel backup generators. That concern, in our minds, is overblown.

The bill does not change environmental requirements for data centers, the California Energy Commission and the local air district and permitting data centers of all sizes would still have to show no substantial adverse impact on the environment for the proposed data center. Additionally, data centers run on grid power and have to rely on their backup sources of power less than 0.07% percent of the time. That's less than 7 hours a year.

All the rest of the time they run on the power that the grid provides, just like any other home or business. 59% of California's power now comes from carbon free sources, and the state has goals of running on zero carbon generation of energy by 2045. That won't change regardless of the allowable size of data centers. And California's clean grid is an additional reason to site these data centers here as opposed to elsewhere in the country. Thank you for your time.

Thank you. Next witness.

Thank you, Mister Chairman and Members of the Committee, I'm Dan Diorio. I'm director of state policy for the Data Center Coalition, a membership association of leading data center owner-operators. Many of our members have facilities, teams or projects underway in California. Data centers are the backbone of the modern economy. Businesses are investing tens of billions of dollars in capital in new data center facilities across the country to meet unprecedented demand for digital services and critical digital infrastructure.

These are central to our lives, including telehealth, financial services, video conferencing, e commerce, government services and entertainment. Data centers catalyze supply chain and service ecosystems in local communities. They create jobs for thousands of construction professionals as facilities well are built, and they provide quality highways to jobs to support ongoing operations. Every data center comes with years of reliable support for local economies by promoting job creation at fiber and HVAC installers, steel fabricators, restaurants, and many other businesses.

A study conducted by PWC determined that for every one job in a data center, six jobs are supported elsewhere in the economy. Currently, California law provides for a cap of 100 MW eligibility for the small power plan exemption. This limits the backup generation capacity for a data center, effectively capping the size and capacity of facilities in the state. This can impair the competitiveness of California's data centers in the broader national market. SB 1298 would increase the cap for eligibility to 200 MW.

Importantly, it preserves all other environmental and local review processes within the SPPE. It would allow data centers to be built to a contemporary size and thus keep data centers in California. I urge Members of the Committee to vote in support of SB 1298 to ensure California remains a competitive state for data center and digital infrastructure investment. Thank you.

Thank you. Now it's time for any folks who are in support. Our me toos. State your name and your organization.

Mr. Chair, Members, Scott Wetch, on behalf of the California State Pipe Trades Council, the Western States Council of Sheet Metal Workers, the State Association of Electrical Workers, the California Coalition of Utility Employees in strong support of the bill.

Charles Watson, on behalf of STACK Infrastructure in support. Thank you.

Robyn Hines with Microsoft in support.

Good morning Mr, Chairman, Members. Hunter Stern with IBEW 1245 who represent the workers at PG&E and at the City of Santa Clara, Silicon Valley Power in strong support.

Good morning. Tiffany Phan on behalf of Ecolab in support. Thank you.

Thank you. Any additional witnesses and support hearing? Hearing and seeing none, now it's time for opposition with our witnesses. Primary witnesses. Is there one or two in opposition? There are two. You have two minutes each.

Good morning Chair Bradford and Members of the Committee. My name is Alan Abbs with the Bay Area Air Quality Management District, the nine-county regional agency surrounding the San Francisco Bay. With respect to Senator Cortese, we have an opposed and less amended position, and our proposed amendment is to allow the increased exemption discretion given to the CEC, but apply that discretion only to power plants not using diesel engines.

As the analysis notes, the CEC routinely grants exemptions for data center power plants under 100 mw, even though the projects almost always consist of banks of 30 to 50 large diesel engines rather than cleaner natural gas or fuel cell engines. When you walk to the swing space on the west side, you'll see that pipe sticking out of the side of the building, which is a diesel generator for this building.

Imagine 30 to 50 of those pipes coming out of a single building, all producing power, all emitting diesel particulate matter. And that's what these hundred megawatt data center power plants really are. The district routinely comments on these projects when the CEC proposes to give the exemption, and we specifically note the health risk assessments that are significant for the local population surrounding these power plants, especially given that these power plants are sighted near other power plants and large sources.

As our letters note, the health risks due to the cumulative burdens on people living nearby are never considered by the CEC. And we have documents from the last several years of comments we submitted to the CEC about proposed projects. This bill is being framed as a data center versus no data center issue. But really, the CEC could give a power plant permit to a data center larger than 100 MW. They just have to go through a different process.

They wouldn't necessarily get to install banks of diesel engines to do that. And so what we'd like to do is have the Committee consider the current process and if they want to give that exemption to 200 MW, make that allowable for projects that are things like natural gas or fuel cells. So with that, I'd encourage Members of the Committee to consider our proposal and respectfully request your no vote on this bill as written. Thank you.

Next witness.

Mr. Chair and Members, Brendan Twohig on behalf of the California Air Pollution Control Officers Association. That's the executive officers, air pollution control officers from all 35 local air districts. We echo the Bay Area AQMD's concerns about the health impact diesel generators have on communities. Diesel generators emit diesel particulate matter, a cancer-causing toxic air contaminant, as well as criteria air pollutants and greenhouse gases. We're already concerned with the public health impacts associated with the current exemption, and now this Bill proposes to double that.

Much of the risk to public health and the environment can be avoided by requiring cleaner technologies such as fuel cells, battery storage options, and non diesel fire generators. CEC certification process includes significant public outreach to encourage awareness of the proposed project and obtain necessary technical information, which includes holding public workshops. So intervenors, including clean technology vendors, agency representatives and members of the public can meet with the CEC and applicant to discuss, clarify and inform pertinent issues like clean energy alternatives.

This robust process helps to inform all potential impact of data center projects, which can have significant air quality and cumulative impacts, especially those located in or near communities that are already overburdened with pollution. Exempting data centers from the CEC certification certification process shortcuts public participation, which exacerbates equity issues as it does not give affected communities the same opportunities to voice their concerns. And CECs full certification process can help to identify and include requirements to mitigate them, identify impacts.

Data centers are being framed by the sponsors as critically important infrastructure. We would advocate that as as with any critically important infrastructure project, data centers should be subject to thorough, robust review, such as the certification process, which allows for meaningful public participation and more opportunity to identify and mitigate.

We're going to ask you to wrap up.

Yeah, I'll wrap up. All we would ask, Mr. Chair, thank you, is just that we think that the current 100-megawatt exemption should be looked at, reviewed, and possibly lowered or moved altogether based on public health.

Thank you. Now, are there any me toos on this measure? State your name in your organization.

Michele Canales, Union of Concerned Scientists, in respectful opposition.

Thank you. That's in opposition or in support? Opposition. Okay. Any additional witnesses in opposition?

Huh? All right. Vice Chair Dahle.

So first of all, I wanted to give the author an opportunity to maybe talk about why we're not using battery technology or something other than diesel.

First of all, thank you very much. Through the share, the bill is technology-neutral. If the CEC and through the CEQA process finds that the least cumulative effect that's feasible is some other technology, so be it.

But the state of the art right now, much like it is with trucking and so many things that are out there that are in transition, is diesel. And the state has a policy of eliminating diesel in the future. I was, as Chairman of the Bay Area MPO, the Metropolitan Transportation Commission, the very first Member to step up and at the request of the air district, one of the opposition, the Bay Area Air District, sign a pledge to commit to diesel free by 33, not 24.

Okay. So to me, to come in and say, you know, we want to talk about diesel on a Bill that's just trying to expand infrastructure under the current rules with CECL review is a little disingenuous. If you want diesel free by 24, you need to ask for diesel free by 24, not 33. But to cripple infrastructure, shut down the economy. To me, it'll be tantamount of shutting down the trucking industry today in all commerce on highway five, because we don't like diesel.

We don't like it, but what's the alternative? That's the problem here with the diesel generators. They only come into play, according to our numbers, less than 0.07% of the time, because obviously it's the megawatts we're looking for to power these facilities.

Thank you. I just want to say I'm 100% for your bill. And I think that we want the perfect to get away with the good way too often around here.

We know that the technology isn't there available to keep these data centers running, which we desperately need. If a data center went down, you want to talk about public health problem, when we crash, the ability to be able to communicate even during times of when we have a natural disaster, that's really when those generators are going to be turned on. And I don't want a battery backup that I can't charge when we have those disasters.

And so for many reasons, this exemption needs to be allowed. And I don't think we ever talk about the public health, if we lost a hospital or if we lost a 911 system, or if we don't have the ability to communicate in real time because our data centers are down. And so for those reasons, I think we should support this bill, allow our technologies to be able to grow in California, and actually give a service that does not is reliable all the time.

So for those reasons, when it's appropriate, I will move the bill.

Thank you. Senator Eggman?

Thank you very much, Mr. Chair. I frequently agree with my colleague from the north, but I disagree with him on this issue because I also don't understand why. I mean, I get what you're saying about data, but then the process, and I'll say, just for the process, I am concerned this is only referred to this Committee, and it's not going to EQ, it's not going to anywhere else.

And it's, you know, you got all the air quality people saying it's not a good idea. So I have concern that it's only going to this Committee. And so that's why I'm going to, I'm not going to be able to support it today. I also think the exemption without any kind of review is too much. And just an example of how anti-diesel we are for the everyday consumer.

I have my in laws live up in the north state who have been impacted by fires multiple times. They've had to get a full house generated diesel for backup during times, but they get nothing but penalization from the state for that, right. Just folks trying to be able to stay alive. But here we're going to grant this massive exemption for data centers.

And we're not prioritizing, not saying, is it hospital, is it public health data, or is it just what kind of pizza I ordered last time data. And there's no kind of differentiation between any of those things. So I have a lot of concerns about why do we have to get that big exemption, why does it have to be without review? And then you leave it to the local governments to have to mitigate that.

So for that, and a lot of other it take reasons I can't support this today, but I'd like to hear your thoughts about, like, why and why can't we say if it's going to be expanded to that degree? I mean, the one thing the Bay Area has besides all the jobs is great air. Those data centers can be elsewhere in the state, too, just to maybe avoid some of that impact. But why so much so soon.

If I may, this is not a district Bill, first of all, in terms of the Bay Area, but the CEC reviews these small power plant exemptions under CEQA now. So the notion, I'm not sure if we're working off of two different pages here, but the CEQA review is still in place under Title 20. So as the lead agency, even under the small power plant example exemptions, the CEC prepares an appropriate CEQA document for the project. That could be an environmental impact report. It's the normal CEQA process.

So it still has to, it still has to comply with CEQA. That's the premise that we're operating under on this Bill. As you know, and I know, we've been around CEQA for years and years, there's the opportunity there to demonstrate alternatives in that report that would mitigate any significant cumulative effect that's being discussed here.

So I think on the other issue, the reality of, the reality of what these data centers are actually being used for is exactly what's fueling the state economy and given us the ability to make massive climate investments change. We know that. We know that in our caucuses, we know that in our budget discussions that the IPOs that are coming along, which in their early stages are dependent on leasing space from data centers because they can't afford to build their own data centers.

So they got to go rent space. You know, they got to go tell the VC guys I've got space for my data center now I'm going to start doing my robotic surgery IPO or we're going to. We're getting ready to go public when they go public. Of course, that, as we all know, that capital gains is what fuels the state's economy and that in turn allows us to mitigate climate issues beyond any other state in the union.

So I don't think it's wise to shut down that kind of economic growth while we're committed, all of us, to eradicating diesel from California as quickly as we can. We just can't eradicate diesel in time to free up data center space. There's not a way to do that right now. That's the issue.

So I guess we both have different cost benefit analysis. I get it.

Senator Dodd?

Yes. I'd like to thank Senator Cortese for bringing this Bill to us today. I mean, I really believe in his first set of comments, he really spoke directly to this. I did serve with him on the Metropolitan Transportation Commission, the MPO that he referred to. And Senator Cortese is one of the most environmentally directed Senators I believe we have. And I think this, and Senator Dahle also addressed this. Making the perfect be the enemy of the good.

It's not going to work in our state going forward. All it's going to do is increase cost. It's going to increase the cost of doing business or it may cause some of these people to leave the state of California and take their investment elsewhere. This is something that's incredibly important for our state. It's incredibly important for the region. And while I respect the airboards, I think with all due respect, you guys come out against anything, anything like this.

And I really believe that at the end of the day, we've got to allow some time for these people to have these investments in these diesel generators. And as the Senators himself said, if there's a new regulation at some point in time that suggests that it's done before 33, so be it. That's not involved in this, you know, in this Bill at all.

But I do believe it's the minimis, frankly, in terms of air quality issues in the long run because of how infrequently these generators are used. They're backup generators.

Thank you, Senator Stern.

Thank you, Mr. Chair. I appreciate what you're doing for your community. I mean, obviously the epicenter of all this is right in your backyard. So no one's going to feel the tensions around this like you are locally. So I appreciate that you have to give voice to what the demands of the community are. And in turn your point about this being an economic engine for the state all valid.

I guess my disappointment is less so with your efforts here as an author, but more so in the supporters and folks I look to as leaders in this energy arena disappointed to see folks I've worked with on micro grids, on climate disclosure. We're talking about some of the biggest companies in the whole world. I mean, to see our friends at Microsoft up there seeking out diesel while being probably the most forward looking climate technology company in the world. It just. I don't get it.

Same with the Silicon Valley Leadership Group. We look to you all for innovation and I just. That's my problem here is that there's nothing in this that says innovation. It says we'll just leave the lowest common denominator available. And my main question, I'm trying to give myself some solace to help you keep moving or working on this bill. I don't want, I don't want to stop the conversation in its tracks.

But one thing that would help is to understand the amendment from the Committee maybe, and how you are, are you taking the amends? Is the motion as amended or? I want to get clarity on that.

I would appreciate the chair or somebody reading the amendment to me. I did not. I wasn't aware the Committee was requiring an amendment until while we were in session yesterday.

While we were in session yesterday we worked on this bill for weeks.

Fair enough.

So I'll be more than happy to read the amendment. It's to reduce the amount of data center backup power eligible for small power plant exemptions from 200 to 150 watts. That's what megawatts. Yeah.

And Mr. Chair, I will under great disappointment accept the amendment if that's what you're asking me to do because of my respect for the chair.

That said, I'm disappointed because it would have been opportune for us to measure what a 50% reduction and what we're asking for is going to do in terms of the economic impact of this. And we just never had that chance. I don't blame you for that. But the process didn't look, lead us to an opportunity to vet this reduction from 200 to 150 at all.

And we've got, we do have people like Microsoft and others who have been working and making calls and providing us assistance on this bill all the way, and none of us got a chance to, you know, to crunch those numbers. So I'm here. We need to keep the bill moving. And, you know, I would say if natural gas was available, I'm pretty sure Mr. Wetch and the plumbers and pride fitters would not be supporting the Bill.

They'd be supporting a bill that brought more natural gas to these facilities. It's not available. We just don't have that opportunity right now, so.

I appreciate that.

Just hold the thought. We're going to establish a quorum real quick. Thank you. Secretary. Please call the roll.

Bradford. Bradford, here. Dahle. Dahle, here. Ashby. Becker. Caballero. Caballero, here. Dodd. Dodd, here. Durazzo. Durazzo, here. Eggman?

Eggman, here. Gonzalez. Grove. Limon. Limon, here. Min. Min, present. Newman, Rubio. Ciarto. Skinner. Stern. Stern, here. Wilk.

Wilk, present. Thank you.

All right, we have a quorum established. You can continue with your questions, Senator.

Thank you, Mr. chair. I just want to get clarification there, because there's, the amendment is on. I think it's on page five of the analysis. But the way you read it, it just said to drop it to 150. But the other pieces of it are that the CEC must make a finding that no lower emissions, backup power systems are technologically feasible, and that the construction operation would not result. Result in any substantial adverse impacts on the environment and energy resources.

Is that part of the Committee's amendment or is that piece not being included?

That piece is not being included.

Okay.

What? Please state. Sorry.

The third one.

Yeah, it's part of existing law already, so.

Okay. That's my central concern. It's the back half of that amendment that I actually liked and I thought gave space to this. Kick the tires, see what's out there. Maybe it's gas, maybe it's fuel cell, maybe it's hydrogen, maybe it's, you know, all this stuff out there. So I like that no lower emission technological feasibility piece. Let's see how the votes go. But that's the reason I can't be on there.

I thought that actually when I read the analysis a few days ago that rounded out the bill, but anyhow, sorry for all the last minute.

Senator, through the Chair. It's what the CEC already does. That's the issue. But it really would be the most redundant amendment to tell them to do what they already do.

Senator Wilk.

Thank you, Mr. Chair. If I could have the Bay Area Air Quality Metro District person come up, I have a question for him.

So listening to the testimony of the proponents, the gentleman from the Silicon Valley Leadership Group said that only 7 hours per year on average, that we actually have to use gas generators. And I'm assuming that you concur with that because in your own report on backup generators in appendix B, page B 10, it says in the report backup generators only run 0.07% of the time, which equates to 7 hours a year. So you really willing to shut down our economy for 7 hours a year?

I mean, I just, I think it feeds into the arguments made by Senator Dahle and Senator Dodd. I consider these data, data centers brains. It's like pulling the, pulling the plug on a person and shutting it all down. Is 7 hours a year really that detrimental to the world's environment?

So thanks for the question, Senator. So before I answer, so, it sounded like you were saying that the air district agreed with that 0.07%.

It's in your own report. So I'm assuming you do.

Which report is that?

It is on backup generators, appendix B, page B 10.

So what document is that though?

Report on your backup generators. I don't know.

Okay. Because what I would. And so as part of the comment process where we've sent letters to the CEC about proposed projects, in most of the letters to the CEC, we've included some data from a, from an information request we sent to existing operating data centers.

And routinely what we saw in those data requests was, was that for hours of operation due to nontesting and nonmaintenance, exceeded well, over that 7 hours a year, which I think is just operational testing and maintenance. And so in some cases we have these diesel generators operating 35, 40 hours a year. And that was pre, some of these last couple years where we had major power outages. So. But I would like to see the information that you're referencing.

Great. So 40 hours a year, that's too high too. We're willing to shut down the economy.

So this is not an issue about shutting down the economy as I mentioned.

It is, if you can't access the data. Is it going to affect health, is it going to affect transportation? It's going to affect all aspects of our constituents lives. And this is not a district issue. This is an issue for the state that's going to take away our competitiveness because plenty of companies are leaving the state already.

I know a lot of people don't like to admit that, but in fact it's true. If you look at the data, just pull up U-Haul and book a one way truck and you'll see people are fleeing. But again, I think it's this pursuit of perfection and at the expense of the good. And it's just really frustrating. I don't want to debate you. You're doing your job. I'm fine with that.

It's really frustrating that I don't think we're doing what's in the best interest of all Californians. I'll just leave it at that. Thank you Mr. Chair.

Thank you. Any other Members' questions? Senator Caballero?

Well, at the risk of continuing kind of the debate, I just want to weigh in because I think I want to, I'm going to support your bill today. We absolutely have to get out of the way if we want to develop the infrastructure necessary to bring on alternative fuels. And that's the bottom line is that if people can't get electricity, they go to diesel engines. They just do. And if we want to get away from diesel, then we have to have alternatives.

The CARB scoping plan very clearly says there have to be alternatives and we just have to, we have to, like I said, get out of the way. These data centers are critically important and I can't emphasize how many people I have had come into my office and talk to me about the need for data centers, including the University for Quantum Physics, the ability to access energy, to be able to do some of the testing.

If California wants to stay as the fourth largest economy in the world and not slip to fifth and not slip to 6th, then we've got to have energy. And that hydrogen, biogas, biomass, alternative fuels, diesel blends. And so the more that we can have things on the table. And I just saw the rise again of nuclear, which nobody really wants to see happen in other countries. Europe is going big with nuclear. It's clean, it's green.

So we have to decide what, what we're willing to do to put on the table so we can get away from diesel. Because I agree, diesel is terrible. We need to move away from it. But we also need these centers to continue to operate, to continue to operate and to expand here. So I'm in support of your bill. Don't like diesel. But you know what? There's some we've got to do. We've got to take interim steps that will get us there.

Thank you. Any additional comments by Committee Members? Well, Senator Cortese, I want to thank you for this measure. I think it's a common-sense measure. And I think our Vice Chair stated we sometimes let the perfect be the enemy of the good. When you consider how infrequent these backup generators. This is not base load power we're talking about. We're not talking about generators running 24 hours a day. We're seeing at best 20 hours a year.

One diesel truck emits more emissions in a day than all of these generators emit on an annual basis. And so that's why every hospital in the State of California has a backup generator that's run on diesel. And I don't think a single person wants to go to a hospital and not have that backup generation there. So this is common sense. It's used very infrequently. So I think it's a measure that we've compromised on the growth of it.

I know you would like to see 200 mw, but we settled on 150. So I hope, it's been moved by Senator Dahle. We have a do pass as amended to the Committee on Appropriations. Senator Cortese, would you like to close?

I appreciate very much the Committee's engagement, the full Committee, including staff. I appreciate the Members of this Committee being so engaged in the issue. Either way, regardless of your vote, thank you, Mr. Chair, for your understanding of the issue which you just articulated.

It's very much appreciated by me and of course by the sponsors as well. Not only are those hospitals backed up by diesel generators for their own operations and to keep the lights on, but if you're involved in robotic surgery and the backup generator goes on so that there's power, but the data center next door goes down because they don't have a backup generator, you're in big trouble. And that's what we're trying to avoid, those kind of things. And with that, I respectfully ask for your aye vote.

Thank you. We have a motion by Senator Dahle. Again, do pass, as amended, to the Committee on Appropriations. Secretary, please call the roll.

[Roll Call]

Current vote is seven to zero. We'll leave that on call for absent Members to add on. Thank you. Do we have another out there available? Oh, I didn't see him. Okay. Senator Niello. Members and audience, we have just been informed by Senator Blakespear that she's pulling file item two, SB 1148, from today's hearing.

Senator Niello, when you're ready. SB 1413.

Mr. Chair, I was born ready. Thank you very much. I thank you, Mr. Chair and Members, for the opportunity to present SB 1413. And I'll start by saying that I will accept the Committee's proposed amendments. SB 1413 is a policy debate that some might say is as old as time itself. Well, maybe not quite that old, but it is a longstanding debate about how we in California can control our own destiny and once and for all, ditch the switch to the time change.

It is a majority opinion that we do ditch the switch. The only question is to which switch to ditch. In 2018, California voters approved Proposition 7, which allows the Legislature to change rules relating to daylight saving time. Since the passage of Prop. 7, there's been a great deal of confusion. Many voters actually thought that they had decided this issue, but like so many bills and propositions, the devil is in the details.

Proposition 7 authorizes the Legislature to amend these provisions by a two thirds vote, two thirds vote in our institution to change the dates and times of the daylight saving time period, consistent with federal law to provide for the application of year-round daylight saving time if authorized by Congress. That's an important distinction. Currently, federal law only allows states to authorize permanent standard time or utilize daylight saving time on a temporary basis during the year as we currently do.

To date, Congress has not approved a move to permanent daylight saving time and so far shows no inclination to do so. In light of the lack of action by the Federal Government. It is important, given the widespread opinion that we do stop switching every six months, that California consider another option to address the issue by moving to permanent standard time. A majority of Californians agree that they do not want to keep switching back and forth.

I've worked over the interim with a group of lawmakers in bordering states, Washington, Oregon, Idaho, and Utah, who are all considering the same thing in their respective houses so that we would have consistency. Not only does SB 1413 eliminate an inconvenience for Californians, but there are multiple health and safety implications this change would help to address.

Medical experts such as the American Academy of Sleep Medicine state that permanent standard time aligns with our body's internal clock and provides a better opportunity to get the right duration of high quality, restful sleep on a regular basis, which improves our cognition, mood, cardiovascular health, and overall well being.

The California Sleep Society also supports moving to permanent standard time, citing increased risk of accidents, obesity, cardiovascular disease, mood disorders, cognitive impairment, decreased immunity, and the development of neurologic degeneration due to sleep deprivation associated with switching to daylight saving time. Another study shows traffic fatalities have an increase of 6% during the daylight saving time transition. The Journal of Clinical Medicine also reports a 5.6% increase in heart attacks following the switch to daylight saving time.

And to add just a bit more, stroke rates also increase under daylight saving time. A study in Finland, researchers found that the overall rate of ischemic stroke was 8% higher during the first few days after daylight saving time transition. I'd now like to call on my two witnesses. First, we have Mr. Jay Pea with the nonprofit Save Standard Time, and I'll introduce the second witness when Jay concludes. Jay?

You'll have two minutes to make your presentation.

Thank you, sir. Hi. Chair Bradford, Vice Chair Dahle, Members of the Committee, my name is Jay Pea. Last name is spelled Papa Echo Alpha. I am the President of Save Standard Time. I'm also the great grandson of farmers. I'm an amateur astronomer. I'm a software engineer, and I'm asking for your yes vote on SB 1413, and thank you to Senator Niello for bringing this Bill forward. This Bill can ditch the switch in the fastest and safest way possible.

Standard time is the natural time set to the sun, where 12:00 p.m. Corresponds to high noon. This balances the light over the morning and the evening, which corresponds to better sleep, mood, health, safety, education, and even the economy. This is especially important for school children, for commuters, for farmers, construction workers, and even persons of lower income levels. This is the opinion of the California Medical Association, the California Sleep Society, the American Medical Association, the National Safety Council, even the editors of Bloomberg.

This information is based on hundreds of studies and decades of history. Permanent standard time has long been observed in Arizona, in Hawaii, the five us territories, most nations on Earth. Mexico just last year restored permanent standard time so this would improve our training relationship. More states than ever now have bills for permanent standard time. Now, I know some people might think, what about permanent daylight time? And I would warn against that.

Daylight saving time forces early waking and permanent daylight time would force us to go to school or work in the dark in the winter. Here in Sacramento, the sunrise would come up after eight in the morning for two and a half months under permanent daylight time, as late as 8:30. When we tried it in 1974, it literally cost lives, and that is why it is federally prohibited. Regarding energy, there have been many studies about this. Daylight saving time does not save energy.

It's often a wash, or in some cases, it increases energy waste. Even if it were a policy to decrease energy, I would implore you to look to the strong science showing that standard time is better for health and safety. The days will always be longer in the summer by nature, not by government. Most people want us to ditch the switch. And again, permanent standard time is the quickest and safest way possible. Please vote yes. Thank you.

Thank you. Any additional witnesses and support? Oh, you have another background?

Yes. Let me introduce my next witness. Please do not hold the introduction against her time because I want to make sure that you get the full portion of her expertise. Next, we have Dr. Erin Flynn-Evans. Dr. Flynn-Evans is a sleep and circadian rhythm researcher, and she is a representative at the American Academy of Sleep Medicine.

Doctor Flynn Evans has extensive research experience examining the short and long term effects of sleep loss and circadian dysynchrony in occupational settings, including among astronauts, airline pilots, physicians, and other shift workers. Currently, she is a direct sleep researcher for a large Federal Government organization. Doctor Flynn Evans.

Doctor, you have two minutes.

Thank you, Chair Bradford, and thank you. I'd like to certainly thank Senator Niello for the opportunity to support this Bill. As you just heard, I'm a circadian physiologist. I've worked in sleep medicine for over 20 years. I'm also a mother to two teenagers who I've brought with me for a civics lesson today. I also co-authored the American Academy of Sleep Medicine's position position statements on this issue in 2020 and 2024. I recommend the elimination of daylight saving time in favor of permanent standard time.

As a resident of California and a representative of the AASM, there are two primary reasons to support this Bill. First, standard time is better aligned with our internal clock. Daylight saving time sets our social clock 1 hour earlier than standard time. And when I say social clock, I mean the clock on the wall. That's the clock that determines when we have to go to work, when we have to go to school, and when we have to do other activities.

This daylight saving time creates a mismatch between our internal clock and our social clock, requiring us all to wake up earlier than is natural for our bodies. Why does this happen? Because daylight saving time results in later morning darkness and later evening light. Light is the primary stimulus for the circadian rhythm or internal clock, and evening light shifts the drive to sleep and wake later. Therefore, people are unable to naturally feel sleepy until later in the night during daylight saving time.

Together with the unchanged demands of having to get up early when we set our clocks, that daylight saving time forces, we lose sleep each night during the season of daylight saving time. We do not get used to chronic sleep deprivation. We feel like we do, but we do not. It continues to build, affecting our alertness, performance, and our mood. Our teenagers are particularly vulnerable because they have a natural tendency to be night owls and are more sensitive to evening light.

This has consequences for their health, and studies have also shown that it has consequences for their academic performance. Second, changing the clocks twice per year results in a number of negative consequences. Specifically, the transition to daylight saving time in the spring results in many of the things that we heard from Dr. Niello or Mr. Niello.

Doctor, we're going to ask you to wrap up here at two minutes.

An increased rate of industrial accidents, motor vehicle crashes, increased risk for heart attacks and strokes. It's the safer and simpler choice to adopt permanent standard time. The American Academy of Sleep Medicine and many other professional and medical organizations agree permanent standard time is better aligned with our natural body clocks. By voting yes on SB 1413, Californians will stop altering our biological clocks twice a year and benefit from better sleep, health and well being. Thank you for your time.

Thank you. Now, are there any me toos to this measure? Now is the time to come forward. State your name and organization. See none. Individuals in opposition. It's time to come forward. See none here in the chamber. Bring it back to the Committee. Senator Dodd.

Can I ask? I think you did a great job explaining that. But could you, what would happen if it was daylight savings time all year round? I guess it's light so long that and you didn't hit, you didn't change.

So if we had daylight saving time year round, that would obviously stop this changing that we do twice a year, but the problem is that in the winter it would be dark in the morning. We would all be getting up in the dark because we're not going to shift the timing of our work and activities later to accommodate the later sunrise that comes with a later sort of shift in the clocks in the winter.

And so just my teenagers will suffer a lot if we adopt permanent daylight saving time.

It would undo everything that we did to start school later.

Keep that in mind.

And as the honorary doctor here, I would add to that that we have experience with permanent daylight saving time. Some of us are old enough to remember the energy crisis in the early seventies, and we went to a two year pilot for daylight saving time and we abandoned it after less than a year because it was so unpopular.

Thank you. Senator Wilk.

Thank you, Mr. Chair. So in your opening comments, you mentioned that you were born ready, but I was on Wikipedia and you were born on June 2, which is daylight savings time. So you were actually born too soon.

Thank you.

Having said that, I think this is a really important measure. I mean, I care about my dogs not so much people, but my dogs, my dogs. This messes up my dogs as well. And this body a couple years ago passed a Bill to start high school, middle school later because of the need for young people to sleep.

So again, God and mother Nature created one rhythm and us being man, trying to change it and just going back to the way it ought to be again, supported by sound science, makes sense. So I salute you for this Bill and happy to move it when appropriate.

Thank you. Any additional Senator Min.

Thank you for bringing this Bill forward. I hate the switch as well, but I did just want to first I wanted to mention you are a doctor of time and I think that is like a Doctor Who reference, right?

Of course.

There we go. A Time Lord I think is another title for you. But I guess my question is, I know that I believe that there was a previous iteration of this Bill that we tried to forward and one of the concerns was around, it was around the economic costs that this would create for the state.

And I guess I was wondering if you could speak to what this might do as far as the cost to California, and has anyone done a comparison between the effects of, say, daylight savings time permanently versus standard time permanently versus the status quo and what that looks like as far as the cost benefit for the state?

I'll ask the real doctor to address that point, I assume, or perhaps Mr. Pea?

I've been nominated. When we are on daylight saving time, we are sleeping less. I believe it's an average of 19 minutes less every single night. The first, when we spring the clocks forward, we get 40 minutes less sleep, but every night thereafter, we're still getting less sleep because we are still getting up early. And over the long term, that chronically reduces our productivity and that has a wear and tear on the economy.

There was a study that found it could decrease wages by one to 3%, even. So, daylight time is worse for the general economy and standard time would be better.

I guess I'm thinking specifically, I know the golf whatever clubs association opposed this because they wanted the later sun in certain times of the year. And I'm also wondering, there's probably costs of us. If we were the only state to do this, there's probably some costs incurred from airplanes coming in at different times and changing the way that we're labeled. I know we have Arizona as an example, but what happened there? Did they have to incur costs?

Would we have not just the economic productivity issues, but would there be effects on the state that would impact our budget?

That's why I was attracted to this. I was actually contacted by state Senators in Washington and Oregon about this because they have the same concern. They are pursuing bills in their institution for permanent standard time also. Oregon approved a move to permanent standard time subject to California doing it, interestingly. Washington did not hear the Bill, but they will next year. The chair of the Committee did not want to. That chair is termed out. They're anticipating that next year.

Utah and Idaho are similarly considering that, and so we should have unanimity among states close. And Mexico, the northern portion already is on daylight saving time. I'm not aware of any studies of the economic impact. There certainly isn't any just by virtue of doing the switch. You're talking about ancillary effects because of adjustments. I have a hard time believing that that would be a particularly challenging thing.

I just traveled across the country this weekend and everything I've got automatically adjusted me to the new time that happens routinely by time zone changes. So I have a hard time believing that there would be significant economic effects. But the issue, both from an energy perspective as well as a health perspective, has been studied to death, pardon the pun. The energy impact has been long since debunked. And the negative health impacts you have heard about, they are well established. Both of those issues with many studies.

Senator Durazzo.

Mr. Chair, if you could clarify, what is this the Bill is actually asking for? Because I had heard that there were potential amendments, so I just want to be.

The amendment clearly, states require the CEC by February 1 to conduct an assessment of the impacts of California's energy reliability of moving to year round standard time with a focus on late summer, early fall. That's the extent of that.

Okay, so it's an assessment.

Yes.

It's not the actual repeal.

But the policy is still. The policy of the Bill is to move to permanent standard time.

Okay, I'm not sure I understand that then. So if it's with the goal of moving to permanent standard time, that's different, but the study would move. In other words, we're making the decision today to move to standard time. Okay.

Yeah.

Okay.

Any additional questions or concerns? None. Senator Niello, would you like to close?

Yes, thank you very much. There is multiple surveys have shown that most people want to ditch the switch. As I said earlier, when my Chief of Staff told me I was listening to too much Doctor Seuss, the issue isn't whether we ditched a switch. The issue is to which switch we ditch. And the quickest way to do that is to switch to permanent standard time because we can't move to permanent daylight saving time. It is contrary to federal policy.

And as I said before, the Federal Government shows no inclination to approve that. And we had that failed experience 50 years ago. And I would emphasize that it is a high bar of approval on the floor, both in the Senate as well as the Assembly. It has to pass by a two thirds majority.

So if you have a personal preference for permanent daylight saving time, I would request that you let this move forward, and if it passes on a supermajority to honor that super majority for permanent standard time. So with that, I request an aye vote.

It's been moved by Senator Min. We have a do pass as amended to the Senate Floor. Secretary, please read.

[Roll Call].

That measure has seven votes. Will leave the roll open for absent Members to add on.

Thank you very much.

Thank you, Senator.

Thank you all.

Do you want to bring up the Padilla Bill?

Oh, yes, it was. We have SB 1006 by Senator Padilla.

It was moved by Wilk.

It was moved by Wilk as amended. I don't remember getting a statement him accepting, but he accepted it. Okay, got it. Thank you. So we have that. So, we have a motion by Senator Wilk. Secretary, please call the roll on SB 1006.

[Roll Call]

You want to call the roll again on that one? We have Senator Ashby, who's here now. Okay. All right, thanks. I guess not. Let's move on to Senator Min, SB 938.

Thank you, Chair Bradford, Committee Members. Before I start, just want to thank the Committee staff for their excellent work on this Bill and want to state that we will be accepting the proposed Committee amendments. SB-938 would prevent investor-owned utilities from using ratepayer dollars to fund political activities, promotional advertisements, and membership dues of trade associations that are engaged in lobbying. Californians are only supposed to pay their utilities to provide them with safe and reliable services.

However, alongside the costs of metering, pipes and wires, utilities have been sneaking the cost of their political influence into customer bills. As reported last year in a groundbreaking Sacramento Bee story, Southern California Gas booked at least $36 million to its customers for political lobbying. In one example, a secret contract showed how SoCalGas had used customer money to pay the Business Federation of Los Angeles to recruit speakers against electrification requirements, even driving them to CPUC meetings.

SB-938 would address these abuses by clearly defining the political and advertising activities which utility shareholders, and not ratepayers, are responsible for funding. It does not prohibit lobbying or political activities by the utilities. It just simply states that they cannot use ratepayer money to do so, building on federal prohibitions on lobbying for those purposes already. This creates strong transparency and penalty provisions to deter noncompliance and prohibits utilities from charging ratepayers for costly memberships to trade groups that are engaged in political influence activities.

I have with me today Matt Vespa with Earthjustice and Mark Toney with the Utility Reform Network, to testify and support.

You have two minutes, please.

Thank you, Chairman Bradford and Members of the Committee. I'm Matt Vespa, Senior Attorney at Earthjustice. Earthjustice is proud to co-sponsor SB-938. I have spent over the past 10 years practicing before the Public Utilities Commission, where I have worked to uncover utility misuse of customer money on political activities. SB-938 is critical legislation that will protect Californians by keeping utility lapping costs out of their bills.

While utilities are not supposed to charge customers for their lapping costs, the system currently incentivizes them to see what they can get away with. And that's because utility costs are typically reviewed every four years, in a general rate case. There are a massive number of expenditures that form the basis for revenue requests in hundreds of different cost categories.

Parties participating in rate cases do not have anywhere near the time or the resources to conduct the type of detailed review required to catch all or even most accounting errors. Even investigating a single expense is significant work that often requires overcoming utility obstruction. And when you do and finally catch them charging ratepayers for political activities, they claim inadvertent error, move the cost to a shareholder account, and face no other consequences. This has happened repeatedly.

If you rob a bank and the only thing you have to do is return the money, if you happen to get caught, you are incentivized to keep doing it. This is what SB-938 is designed to stop. It establishes clear definitions on the political influence activities utility shareholders must pay for. And then it makes clear that improperly recording these costs to ratepayer accounts are violations subject to penalties. SB-938 incentivizes utilities to get it right, not see what they can get away with.

In doing so, it gives Californians much greater confidence that the costs of utilities political influence machines are not being slipped into their bills. I want to thank Senator Min for authoring this important piece of legislation. And I want to thank the Committee, the Chair, and Staff for working with us on this Bill. I respectfully request an aye vote on SB-938. Thank you.

Mr. Toney.

I'm Mark Toney. Executive Director of TURN, The Utility Reform Network. Chair Bradford, Vice Chair Dahle, Members of the Committee. TURN is proud to co-sponsor SB-938 because it offers ratepayer relief by holding shareholders accountable to foot the Bill for lobbying activities that aren't supposed to be charged to ratepayers and for public relations that benefit their bottom line.

SB-938 offers ratepayer relief because it puts an end to the practice of spending untold millions of ratepayer dollars for PG&E and other utilities, for television commercials during Warrior basketball games, for one, and other sporting events. SB-938 promotes accountability because it requires truth and in advertising disclosure. It would require every piece of utility advertising to spell out for the world to see whether it was paid by ratepayers or paid by shareholders.

Your yes vote on SB-938 will let you loudly proclaim to your constituents back home that you are holding utility shareholders accountable and doing something concrete to provide them relief from record-breaking monthly bills.

Thank you. Any additional witnesses and support? State your name and your organization.

Mr. Chair and Members. Kendra Harris. The Climate Center. In strong support.

Isabella Carreño, on behalf of The Greenlining Institute. In support.

Michele Canales, on behalf of Union of Concerned Scientists. In support.

Dr. Brianna James on behalf of TURN and Rate Payers United. In strong support.

Cynthia Shallot on behalf of California StateStrong Indivisible and its 60 groups across the state and also with the 40 groups that signed on to the coalition letter prepared by Indivisible Green Team. Thank you. In strong support of 938.

Hello, my name is Karime. I am a member of TURN and Ratepayers United. I live in Bell Gardens, California, and I strongly support. Thank you.

Good morning. Raquel Mason, on behalf of the California Environmental Justice Alliance. In strong support. Thank you.

Good morning. Elise Fondrick from Trenton Price Consulting. Here on behalf of EnviroVoters. In support of the Bill.

Hello, I'm Janet Cox, speaking in support of the Bill for Climate Action California, The Climate Reality Project California Coalition, 350 Bay Area Action, and the Glendale Environmental Coalition. Thank you.

Good morning. Savannah Jorgensen, with the Lutheran Office Of Public Policy California. In Support.

Chair and Members. James Thuerwachter, with the California State Council of Laborers. Proud to be in support.

Gabriella, with Sierra Club California. In support.

Mr. Chair. Mark Fenstermaker. Asked to provide support for the California Public Interest Research Group, CALPIRG. In support.

My name is Reverend Jones and I'm from Oakland, California. And I'm here with TURN and with Ratepayers United and also with the Good Hope Missionary Baptist Church, Good Hope Resource Center, Bay City Baptist Ministries, and Falcon Three Resource Center. And we urge a strong, yes.

Good morning. Kim Craig on behalf of Sonova. In support.

Kevin Luo, on behalf of the California Solar and Storage Association. In support.

Good morning. My name is Mayra Yanez. I'm a member of TURN, Union of Neighbors of Bell Gardens, Neighborhood Watch, the Association of Chaplains. And in name of all the Hispanic community in Belle Gardens. I support.

Thank you.

Thank you.

Ben Schwartz with the Clean Coalition. In support.

Good morning, my name is Mayra Rodriguez. I am here from Bell Gardens, California. Also a member of the Union of Neighbors of Bell Gardens, MHAction, member of TURN. In support. Thank you.

Good morning, Chairman Bradford, distinguished Members of this Committee. My name is Irinao Domingo Duran. I'm from Arcadia, California. I'm the Public Policy Director of Public Policy Exchange. I'm also with the Utility Reform Network and Ratepayers United. In support.

Good morning, my name is Salvador Diaz and I'm from Gundam Park, California. I'm with TURN and Gundam Pacific Engagement Project. In strong support.

Good morning, my name is Amanda Lee from West Sacramento. I'm representing TURN and Ratepayers United and I'm in support as well. Thank you.

Hello, my name is Brendia Pierre and I'm here representing TURN and Ratepayers United, Pilgrim Community Church, United Church of Christ in San Francisco. IT Bookman Community Center in San Francisco seniors.

Hello. Dr. Harold Pierre. Pastor of Pilgrim Community Church, serving the San Francisco Bay Area for the past 135 years and the United Church of Christ in Northern California. And on behalf of TURN, I am in support.

Thank you.

Hello, Chair and Committee. My name is Allison Hilliard with Reimagine Power. In support today. Thank you.

Good morning, Mr. Chairman and the committee. My name is Marcus Walker of Berkeley, California, and I'm representing TURN and Ratepayers United and also the Oral Lee Brown Scholarship Foundation and the acts of Grace Ministries. And I strongly urge your support in the passage of this bill. Thank you for this time.

Thank you. Any additional witnesses and support? Seeing none, now it's time for opposition. Do we have two primary witnesses in opposition? You have two minutes each.

Mr. Chairman and members, Scott Wetch, on behalf of the California Coalition of Utility Employees and State Association of Electrical Workers. Our opposition to SB 938 is that it impinges on the First Amendment rights of my members by preempting provisions that are collectively bargained under the National Labor Relations Act and under the National Labor Management Act. It's very common within collective bargaining agreements for there to be provisions that provide, for instance, for release time so that my members can participate in union activities, can participate in legislative advocacy, could go out and participate in any number of First Amendment type of activities.

It's also very common through the collective bargaining process for monies to be agreed to be spent on through a joint labor management Committee on all kinds of different issues, from safety to advocacy to different activities. Because this bill's sloppily written language in its definitions of political activities and its definitions of above-line accounts infringes on my members' rights through collective bargaining. I mean, if this bill would go into effect tomorrow, we would absolutely litigate on those basis as being preempted by the National Labor Relations Act.

Similar legislation was proposed and passed in right around 2012 by Senator Mark Leno, prohibiting utilities from using marketing funds to oppose the creation of community choice aggregation districts. And amendments were put into the bill by this committee to ensure that my members' collective bargaining rights are not infringed. So for that reason, we're opposed and urge a no vote.

Thank you. Next witness.

Good morning. Brandon Ebeck on behalf of Pacific Gas and Electric. We oppose because, to be clear, we do not use any ratepayer dollars for lobbying. That's all shareholder-funded. This bill ultimately just takes away PUC discretion to go into each and every individual cost and determine whether or not it's a just or reasonable cost that should be paid for by customers. I want to highlight two specific portions of the bill. One with regards to trade associations.

We are members of a lot of trade associations, including ones that support climate bills, including there was a prior bill that got pulled from this committee. We are a member of that trade association that advances decarbonization goals. We go to the PUC we present all the trade associations and they make a determination of if there should be any ratepayer funds used towards that. The biggest ones, Edison Electric Institute and the American Gas Association. The sponsors have called for us to pull out from those associations entirely.

They don't agree with the national situation. We are the largest members, large utility, largest members of those associations. We use the association to do emergency response, mutual aid, wildfire training, and coordination to make sure that the utilities are sharing information across the nation. When there was the crisis in Ukraine first broke out, Edison Electric Institute used the mechanism there to reach out and say, do we have any surplus equipment we could provide to Ukraine?

There's a lot of benefits to customers and we argue that before the PUC to figure out what those splits are between shareholders and customers with regards to advertising, if there is brand advertising that is shareholder-funded, the bulk of our underground program is shareholder-funded. There are some commercials that also deal with wildfire safety. We have proposed that some of those are customer-funded because customers want to know what we are doing with the 2 to $3 billion a year in wildfire mitigation. So ultimately this bill just takes away PUC discretion. We ask for no vote, but happy to ask any questions. This is pretty complicated.

Thank you. Additional opposition. State your name and your organization.

Good morning, Mr. Chair and members of the committee. Israel Salas with San Diego Gas and Electric, and Southern California Gas Company, in opposition as well. Thank you.

Thank you.

Good morning. Andrew Kosydar, with Southern California Edison, in opposition.

Hi, Meg Snyder, on behalf of the Institute of Governmental Advocates, opposed.

Thank you. Any additional witnesses in opposition here in the room? Seeing none. I'll bring it back to the committee. Any questions or concerns by committee? Senator Dodd.

Could one of the witnesses in support of this enlighten the committee on how much money you think this amounts to per year?

That's a very good question, and we only have a partial answer because utilities are very good at hiding expenses. And when you hear about television commercials, you may have seen some of the same ones I see on the Warrior basketball games. That when the CEO of PG&E puts on a hard hat and says that they're going to underground for safety, that gets categorized as a safety message and charged to ratepayers. Those are very expensive ads and those are the types of ads.

A single ad that we had asked for information on how much did it cost to produce and to run it was $6 million. Okay. There are multiple ads. That's part of why this bill has a requirement, just like a political advertisement paid for by the candidate or paid for by an independent expenditure committee. Okay. Paid for by ratepayers or paid for by shareholders. That will make it clear to everybody who is paying for what. And it is absolutely the most important, one of the most important provisions of this bill.

So, Mr. Chair., you didn't give me a number. I mean, even if it's 40 million. Listen, even if it's $40 million a year, look, I'm probably going to vote for this bill because I've got so damn many people in my district with PG&E and the fires and everything. But so often what we do here is we create programs like this and we will get the headlines.

It'll probably save a dollar a month. Just hang on a second. A dollar a month and maybe not even that. And so we get all the headlines for this, but at the same time, how much money is put in these rates that we've got now that this committee and the Legislature has put forward over the years, all for the right reasons? So now we're coming in for this particular reason here and doing this. But I haven't seen us really go back through and look at what's in our rate base that we could perhaps be giving our customers a break on.

And if I could just respond as well. Again, as I noted in the outset, the Sacramento Bee uncovered $36 million in one instance from SoCalGas. But as I think the other witness noted, this is kind of a game where you only know how much has been spent using repair money when you catch them.

And that's one of the challenges of the status quo that we're trying to address is more transparency or reporting, so that it's not just a thing where we catch them and we say, okay, 36 million, which may not seem like a lot of money. You know, I know you and I have talked, Senator, about how that aggregates out to a very small amount per customer. But again, that's just one instance where they were caught.

We don't actually have a sense of how much is being spent, a pair of money, because it gets categorized as education or all these other activities. And that's what this bill is trying to address. So I hear your point. And I guess I just add on top of that, I think there's a general principle that is regulated monopolies. They shouldn't be using our money, our ratepayer money when they have huge pots of shareholder money they can use for that purpose. And of course, we know the saga of PG&E, which for many years spent money to try to lobby against safety rules, and look where that got us. So I think there's also the principle of the thing as regulated monopolies.

Senator Durazo, did you want? Wait, hang on. So, Senator Dodd, did you want?

Yeah, if you would. I just want to get done with this part of this.

Okay, no problem. Go ahead.

I just want to put in context. Yes, it's $6 million over three years. That's $2 million a year. That's less than a 10th of a percent of our entire wildfire mitigation plan. That's less than we spend on intervener compensation. That goes to the organizations that do use ratepayer dollars to lobby. The public utilities, CCAS, interveners can all use customer dollars today to lobby. We do not. Just want to put that on the record.

Okay. Senator Durazo.

Thank you. Thank you, Mr. Chair. If I could. Thank you. I have spoken with the author about the issue. It did get my attention about how this might affect employees of the utilities and want to make sure that while we're addressing the issue of customers not paying for political activities, that we want to make sure that employees also are not sucked into that category. So I'm very concerned about that.

And so I would ask the author who will support with an amendment, some version of an amendment that addresses funds that are paid through a collective bargaining agreement language has been won at the negotiation table or pursuant to the National Labor Management Act. So just want to make sure that that issue doesn't get lost in the bigger, I think, far more important issue of ratepayers paying for these kinds of activities.

So first, again, I want to just thank staff again for their hard work on this bill. And of course, like all bills, we're going to continue to try to revise it and make it better. But my belief at this point in time is that the First Amendment concerns raised by one of the opposition witnesses are not probably applicable here.

But if there is a real concern about CBA negotiated benefits or NLRA provisions potentially having some interaction, we are going to talk closely with ledge counsel again and determine that if that is the case, we want to make sure that we're going to doing everything we can to promote hard fought CVAs that we're going to do everything we can to make sure that we're in compliance with federal law, including the National Labor Relations Act and of course the First Amendment to the Constitution. But to the extent that any of those concerns raised have any validity, we will of course try to address those. And you have my commitment on that, Senator Durazo.

Okay. Thank you.

Senator Stern.

Thank you. I appreciate the author and the committee's work on this especially. I wish this bill weren't necessary. I kind of wish we weren't even having to take this vote today. It's an uncomfortable conversation. It's also, as you noted, there are this sort of constitutional overlays that court is never the right place to end up. I'm hoping that the committee amends, avert some of that, that risk as well as the sort of placement of this process within the Public Utilities Commission.

But I don't think we'd have to be going down this road if the really public instances of that advocacy aligned better with our work here in California and the parts of the IOUs that we actually, we think are forward-leaning and the best utilities in the whole country and the best labor force in the whole country.

But then when the positions out of, say, the American Gas Association or EEI are undercutting President Biden's Clean Air Act plans are pushing back on efforts to advance climate policy at a federal level, let alone at a state level, it makes it really hard to defend those memberships and that work because it doesn't look to be in rape payers interests. I had those discussions with our stakeholders and again, I wish it weren't necessary, but I really do think it is to push the envelope here.

And I appreciate what you're doing, and I think you've threaded the needle here now with Energy Committee. There may be other details that have to be worked out, but I think this is a necessary measure at this time. If things changed federally and the advocacy changed and the look changed, then I'd reconsider. But with that I'd make a motion at the appropriate time, Mr. Chair.

Thank you. Senator Ashby.

Thank you. I agree with so many comments here from my colleagues on obviously we want to side with ratepayers, but I agree with Senator Dodd's concerns on questioning that and how far this gets us. I think Senator Stern brings up really important questions about how this bill interplays with climate policy work that's so important to so many of us. And then I know you don't feel that the constitutional question is valid, but I do.

And I'm somewhat perplexed by why the bill didn't get double referred to both here and judiciary. I think that would have given me a level of comfort to have it go through judiciary staff potentially to look at some of the First Amendment rights and issues just to make sure. I think I fall a little bit different from my colleagues in the sense that I don't want to vote against it, but I'm not ready to vote for it either.

So I think what I'm going to do is lay off of the bill today and watch carefully to see how you address those issues as you move forward. Sounds like you have the votes. And, you know, when we see it again, then I'll take a look at what changes you've made.

Thank you, Senator Ashby. You have my commitment. We'll try, obviously try to address any potential. I did not say for the record that they were not valid. Just my belief is that the way this bill is written, they may not be applicable, but that is something we'll look into. Of course, we want to have a Bill that is compliant with the Constitution, with federal law, which is thoughtful.

I will also just point out that nothing in this bill prevents people on their own free time or shareholders or management using shareholder funds from engaging in all the activities, including those that are prohibited right now under federal law for lobbying, using ratepayer money. This is simply about siloing out ratepayer money. And again, these are unique institutions that, they're monopolies that are heavily regulated. We don't have a choice when it comes to who provides our gas or electricity. Because of that, they're uniquely regulated. It also creates a problem of potentially moral hazard where they're using our money to lobby for things that are not in our interest. And so it's not just climate change.

And you are clearly, I laud your effort here to thread the needle. It's a tough one. This is a tough one, and you're taking it on. Good on you. I just need a little more time and some more information I'm sure we'll get. And I know you'll work hard on the bill.

Senator Rubio.

Yes, thank you. And I'm sorry. Just the nature of the work we do. We have to run around from committee to committee, and I catch little pieces, but I think I cut a little piece of Wetch speaking on behalf of the union. Can I ask him to come back so I can just ask him to clarify something for me?

Yes.

Did I hear you say that it's already been sort of tried before and challenged? I'm sorry, and I caught the tail end. You said something about you'll go to court. It's been tried before. Can you reiterate that point?

Yes, Senator. Thank you. Scott Wetch on behalf of California Coalition of Utility Employees. On your analysis, under the previous legislation. You'll see that the consultant noted that this committee passed SB 790 by then-Senator Mark Leno. The last section of that bill, because this issue was looked at and considered to be significant, says nothing in the division prohibits payments pursuant to an agreement authorized by the National Labor Relations Act or payments permitted by the federal Labor Management Cooperation Act.

Nothing in this division restricts any use permitted by federal law or money paid pursuant to these acts. And those belt, that belt and suspender language was included to ensure being that every single dollar that flows to my members through their union and through their collective bargaining agreement is a ratepayer fund.

And during collective bargaining, we will agree to have money put into a joint labor-management committee for all kinds of different purposes so that my members can have a voice and can be advocates, can go out and do all kinds of different trainings. And we want to ensure that the language of this bill doesn't prohibit that inadvertently or purposefully.

Thank you. Thank you for that. The other concern that I have, and because I've been doing so much work on this bill, and I want to just also reiterate that every single person up here is going to side on the side of ratepayers. That's why we're here.

And someone that speaks often on policies that we bring on a daily basis, and I always say it's going to add cost to our ratepayers, and then we go ahead and do it and we keep compounding what our ratepayers have to pay. I'm constantly fighting that coming from a low-income community, but I want to just sort of dissect a little bit.

And again, this is not my area of expertise, but when we talk about lobbying efforts, and I'm not sure someone can come and explain this to me, we also invest, like, commercials for, like, not commercials, but I'm sorry. Invest in trying to prepare for, like, disasters, cybersecurity. Tell me, how do we differentiate what we're using in terms of, like, trying to protect our communities? You know, they invest money on preparedness for.

I've heard things, and again, I've met with a lot of people, cybersecurity, disaster preparedness, wildfire mitigation, sometimes commercials and response, mutual aid. And, I mean, I know that I, you know, I'm the chair of the Insurance Committee, and I know we're dealing with a lot of wildfires. So someone explain to me, how do we differentiate what's being used in terms of that type of safety, preparedness versus political?

I appreciate the question. And you had two so I'll just note that I think the first question you had dovetailed with the question that Senator Durazo had around CBAs and the NLRA and the First Amendment issue that the opposition witness raised, again, you have my commitment that we'll try to address these. I'm not sure that this bill falls outside of those provisions, but it's something we'll look into. That's not something that had been raised to us by ledge counsel.

I'll just put it that way so we'll take a close look. And I will also note, by the way, that this would not be the first bill of its kind to pass in a law in the United States. I think Connecticut and Colorado have already done this. I think there's a few other states that are considering it right now. And of course, all of these are going to have to be in compliance with federal law and the US Constitution.

To your second question, we explicitly try to define political influence in this bill as any activity for the purpose of directly or indirectly influencing the possible adoption of federal, state, or local legislation, regulations, or ordinances, the possible repeal or modifications of federal, state, or local legislation, regulations, or ordinances, any activity for the purpose of directly or indirectly influencing elections or referenda or, or appointments of public officials, and on and on. So there's a few other sections like that, but it's very, very narrow language.

Now, obviously, the courts will have to interpret what that means, and there's a whole bunch of case law out there, but this is like any definition that we try to come up with. And I think the problem it's trying to solve is that lobbying itself became too narrow. And obviously, the folks behind me figured out a lot of ways to find loopholes in that. And they effectively were able to lobby us, they were able to lobby local officials.

They were able to use ratepayer money to influence elections without directly violating the federal prohibition. So this is just trying to basically expand the definition a little bit to try to make sure that we're capturing the intent of the federal prohibitions on ratepayer money for political purposes.

Thank you. And I also want to see, and again, so many conversations I've had that I have a lot of pending questions in my mind. But right now, as it stands, they have to go before the CPUC to determine sort of a court right where they lay out the evidence. And this is what we're using the ratepayer money for. Don't we have that through the CPUC, where they already assess the information before them, where they make the determination whether or not the money is being misused? Can someone clarify that for me?

So I think when you were gone, one of my witnesses from Earth justice actually had a very good answer on why the CPUC process is flood. So I'll just have him come back up.

Just for the record, I'm going to ask for the opposition and someone of both sides.

Sure. Matt Vespa from Earth Justice, and I spoke to in my opening statement, but the issue is that there are, when these go to the General rate case for review, there are any tens of thousands of individual expenses and hundreds of cost categories, and it's left to parties with out significant time and certainly not the resources to go over every single one. And even one expense is significant amount of time.

You deal with utility obstruction all the time to get to the bottom of what the expense was about. One time I had to do a motion to compel to get an answer, and only then did the utility admit it was an inadvertent error, that they booked it to customers. So all of that for one expense. And so what the bill is trying to do is sort of shift the structure from, can I get away with this?

And if I'm caught there at least a consequence to saying do it right the first time when you book. So when we get to the rate case, we don't have to deal with this anymore. We can spend our time looking into the reasonableness of legitimate expenses on your operations and not waste all this time trying to pick through all these things. Because now you're incentivized to properly book these accounts to shareholders and not slip them into ratepayers. So it's left to us with which it's not possible to audit all of these things. It's just not given the sheer volume.

Thank you. Can I have someone from the other side explain this particular issue?

Yeah. I think this bill ultimately conflates the practice of accounting and the practice of rate making. Just because something's booked to an account doesn't mean that it is or ever will be charged to a customer. We book things into account. They sit there. We might find through, we have mandated quarterly audits and annual audits that we go through. At that point, an Auditor or internal staff will move an account that was improperly booked. Human error or something could be subject to litigation.

We charge above the line account. Later, there's some different settlement, you move it to below the line account. So that's there's. And then ultimately we package up those costs. The PUC will go through and make just and reasonable determinations. You could have small costs, couple $1000. You could have large multi $100 million expenses. Depends on what we're doing. This bill applies a broad brush to all of it. And then within the definitions of the bill, it is very broad. It says possible influence.

What does possible influence means? It could be any commercial run. There is an exemption for safety advertisement and for mandated commercials. But then it says, if any portion of any commercials says it's brand advertising, does that mean if there's a PG&E truck or somebody from IBW or somebody who works for us in a commercial, is that brand advertising, then that means that even if we're doing 811 call before you dig commercial, that that has to be shareholder funded. That's, all of this currently exists before the PUC. They balance all these equations and then they come up with a determination that protects the customer. So we don't think that the bill is even necessary.

So, Senator, if I could just interject, just to illustrate the complicated nature of these balance sheets and this whole process, and to add to the point of the attorney from Earth Justice, we were wondering whether a particular commercial, which was clearly for political advertising purposes, was charged to ratepayers or shareholders. And we did not know. After researching, it was only after my staff asked PG&E did we get a response that, yes, this was ratepayer money. And so that's how difficult this is to determine.

So it's really hard for outsiders to figure this out. And there are a lot of items that get categorized. And I think that the opposition's testimony just illustrated how complicated this is and how difficult it is to understand and to say, basically, this is ratepayer money and this should not be used for the following purpose. So right now, the enforcement of this is haphazard.

And as was testified to earlier, it's, it's only if you're caught are there any consequences, and the consequences are only that you move it down to the shareholders. And so I think the analogy was used before. This is like, if the penalty for robbing a bank was just that you had to return the money, obviously the incentives would be to keep robbing the banks.

Thank you. I feel a little bit conflicted on this one, I guess because I've been having conversations on both sides. And again, I want to make clear, because the conversation always comes out, whether or not you say support ratepayers 100%, everyone is on the side of ratepayers. And again, since I fight a lot on every time we pass policies, I keep saying it's going to cost more to ratepayers, but we still go ahead and vote for it and it adds to the ratepayers.

So we have to be mindful that, you know, that we're adding cost ratepayers one way or the other through our policies here, that we move forward. But I'm conflicted because, you know, I think what Scott Wetch said, it's pending in my mind in terms of the interpretation. I think I heard you say Senator, as well, that, you know, a court may have to make a determination.

So I'd like to, just like I think, as Senator Ashby stated, it's one of these that this committee just seems to be, for me, not equipped to make those legal determinations. And I'm a little uncomfortable with a variety of things. So I feel the same way and I'm conflicted and I haven't made a determination. I just need you to think about it for a second. Thank you.

Great. Any additional members? Senator Dahle.

Thank you, Mr. Chair. Members, I am going to take maybe a whole different outlook to this bill. First, I want to say I've sat on the Energy Committee in the Assembly, I've been the vice chair since I got to the Senate, and I'm really disappointed in turn. And, you know, you want to talk about ratepayer-funded, they're funded by ratepayers.

And I can't tell you how many times they've supported legislation that does something for the environment through energy, but drives the cost of rates up and doesn't say, hey, this is going to drive the cost of rates up. So, and that's their job is to be going and finding out what's happening with our ratepayer-funded monies. And I think they've dropped the ball.

And so I just want, for the record, to show that, you know, if you want to talk about ratepayers, there's been a lot of legislation that's come through here that just drives up the cost of rates and it gets passed through with their support and then we have the PUC for a reason and they're attempting to do their job. Yes, it is complicated, but this bill, I think, lacks a lot of detail that we really need to make the right decisions the first place. And I'm really frustrated that turns a sponsor of it and I might ratepayers are paying for that to sponsor legislation like this. That is, in my mind, not helpful. So I'll be opposing the bill today.

Thank you. Any other members' concerns? I'm going to thank the author for this, but I, too, have real concerns regarding this measure. Again, it's a real slippery slope when you can say accounting, if you book something above the line or below the line and it could be an error.

It's not necessarily intentional. That's why a grace period has been added in this bill. But it's real still concerns, as all our colleagues have stated, as it relates to this measure, and it's one that I think could use some better vetting and a further discussion. But we do have a recommendation of aye with do pass as amended to appropriations. Would you like to close?

Yeah. You have my commitment that we'll continue to try to work on this bill to make it better and to address some of the many of the concerns raised should it get out of this committee. So I respectfully ask your aye vote.

And, secretary, will you clearly articulate those amendments that we've asked for? Consultant? It's preserved the ability. All right, I'll let you read.

SB 938. Committee amendments are to preserve the ability of the PUC to determine the appropriate penalty amount for violations in connection to the requirements proposed in the bill. Secondly, to authorize a grace period of 25 days that provides, if an IOU adjusted line item expense, that it's book two, that there would be no penalty because of such an adjustment. Third, to require that any monies collected by fines and penalties are deposited into the state's general fund. That's consistent with the CPUC's fines and penalties, as customary. And the last one is some additional clarifying changes.

Is that correct? Senator, Min, would you agree? Is there a motion for this bill?

Stern. Stern made the motion.

We have a motion by Senator Stern. Secretary, please call the roll.

[Roll Call]

Six to one. We'll leave the roll open for absent Members to add on. Our next Bill. We have Senator Becker. We have 993.

All right, thank you. First, I want to thank the Chair and the Committee staff for working with us, and I will be accepting the Committee amendments today. 993 is the first of two bills I'll be presenting that are both trying to accelerate our progress on making green hydrogen and using electricity to reduce pollution, pollution from industrial sources.

So first, let me talk about why these are important goals, and I'll go over these very quickly in interest of time. First of all, I think a lot of people in this Committee agree that hydrogen is an important tool for achieving our climate goals. And it makes sense to align our state policy to support the development of low carbon hydrogen as part of our climate strategy, as this Bill will help do.

I just want to say importantly, and people may not focus as much on this, is that an important part of our policy is helping industry switch away from burning fuels for heat to less polluting alternatives. So while we've done a lot on electric vehicles and on buildings, 23% of greenhouse gases nationally comes from burning fossil fuels for factories. 23% is burning fossil fuels for factories, and that's an area we've made almost zero progress in.

And what both green hydrogen, electrolytic, and industrial heat have in common is that they're economically competitive only if they have access to inexpensive electricity. And they are only good climate solutions if they rely on clean electricity. The good news is that electricity in California is clean and inexpensive at certain times of day. We just really need to send the right price signals, and that's exactly what this Bill does.

It creates new price signals and price structures for green hydrogen production and for industrial customers switching away from fossil fuels to electricity for their heat. And with me, I have two witnesses here today, Chair Janice Lin, representing the Green Hydrogen Coalition, and Merrian Borgeson from NRDC.

All right, you have two minutes for your presentation. You may begin.

Thank you. Good morning, Chair Bradford, Members of the Committee. My name is Janice Lin, and I'm the founder and president of the Green Hydrogen Coalition, or GHC. We're an independent educational nonprofit whose mission is to accelerate the realization of green hydrogen projects and infrastructure to achieve economy wide decarbonization and, importantly, displace fossil fuel end use as fast as possible. I'd like to thank Senator Becker for his leadership in introducing Senate Bill 993.

Let's face it, we are at a critical juncture in our energy transition, and this Bill appropriately recognizes the role clean hydrogen will play if we set the appropriate price signals and production mechanisms to do so. It's all about scale and cost reduction, as we have seen in so many other technologies. Appropriate clean electricity price signals that optimize our electric sector are critical to accelerating renewable hydrogen at scale. This will help us directly reduce our fossil fuel use economy wide. How does this work?

Simply two ways. One, by making clean, affordable electricity available through the grid, you can improve the capacity factor or the utilization of electrolysis equipment. When you do that, the cost comes down. Secondly, we have abundant renewable electricity, and this price signal will provide an incentive to develop industrial heat load, electrolytic hydrogen. So it'll help us make use of that curtailed renewable electricity. Senate Bill 993 will also directly support ARCHES and the state's efforts to secure federal funding by enabling more cost competitive hydrogen production.

According to ARCHES, the state's build out will result in a lot of electrolytic hydrogen, of which about 12% of the power needed will come from the grid. The more clean, affordable hydrogen we can produce, the more fossil fuels we can displace economy wide, all while creating family sustaining green jobs. We believe Senate Bill 993, if enacted, will become an important piece of model legislation for all other states to follow. For these reasons, the GHC respect respectfully urges your aye vote. Thank you.

Thank you. Next witness. You have two minutes.

Good morning, Chair Bradford and Members of the Committee. My name is Merrian Borgeson. I'm the California Director for Climate and Energy at the Natural Resources Defense Council. We have advocated for the production of truly clean and green hydrogen at both the federal and state levels. It's a priority for us to ensure that California moves away from today's hydrogen production methods, which burn fossil fuels and harm local communities with NOx and other air pollution.

Electrolytic hydrogen with clean energy and the appropriate guardrails is the primary pathway to produce zero emissions hydrogen. But you can't just plug in electrolyzer into the grid and call that hydrogen clean. It's worth noting that hydrogen produced with California's current average electricity mix would be more than twice as carbon intensive as steam methane reformation used with fossil gas to produce hydrogen. So it's not just plug and play in terms of the green hydrogen.

In our view, this Bill is a smart approach to providing access to grid for specific targeted uses and with the incentives to ensure that hydrogen producers and industrial users are responsible grid citizens and add to the flexibility and resilience of the grid rather than threaten it. So we appreciate Senator Becker's thoughtful and very targeted approach to making progress on hydrogen this session, and we urge your aye vote on this Bill. Thank you.

Thank you. Any additional witnesses here in the room in support, state your name and your organization, please.

John Costantino, on behalf of Rondo Energy on the industrial de-carb side. Thank you. Appreciate the support.

Mckinley Thompson Morley, on behalf of the Solar Energy Industries Association in support.

Elise Fandrich from TrattenPrice Consulting, here on behalf of EDF in support.

Hi. Samantha Samuelsen on behalf of Industries Labs in support.

Gabriela Facio with Sierra Club California in support.

Janet Cox for Climate Action California, the Santa Cruz Climate Action Network, and 350 Sacramento in support. Thanks, Senator Becker.

Tiffany Phan, on behalf of Intersect Power in support.

Hunter Stern on behalf of the Coalition of California Utility Employees, the California State Association of Electrical Workers, and the California State Pipe Trades in strong support.

Thank you, Chair and Members. Teresa Cooke on behalf of the California Hydrogen Coalition in support.

Thank you. Now we're moving to opposition, witnesses in opposition. Are you the primary witness in opposition? Yes. You'll have two minutes.

Thank you. Good morning, Mister Chairman, Members of the Committee, Valerie Turella with Pacific Gas and Electric Company, and regrettably, and with all due respect to the author, we are in opposition. And a lot of what the support said, we're in agreement with that. The transition that we're in, the fact that we're going to need diverse sets of fuels and one of them is going to be hydrogen.

I think there's a Bill coming into this Committee authored by Senator Caballero, and we're going to have a conversation about what is green and how can we get there. One of the ways that PG&E wants to be careful about and getting there is thinking about cost shifts. We appreciate the Committee's cost shifts to other customers to get to where we need to go. So that means extra expense to another customer due to provisions of the Bill.

Now we appreciate what the Committee has done in trying to limit this. We will want to take a careful look at that and continue our conversations with the author. We know that finding these pathways, these economical pathways are going to be challenging. We want to be at the table. We also want to say, let's not forget about non utility resources. Glad to hear, obviously about how we're all very excited about federal money coming in.

So with that, we are opposed today and do want to continue our conversations with the author. Thank you.

Thank you. Additional witnesses in opposition.

Good morning, Chair and Members. Lourdes Ayon with San Diego Gas and Electric, also in opposition to Senator Becker's Bill, SB 993. Definitely agree with the supporters of the Bill and agree with what Val from PG&E just said as well. Adding to that is that it's just a piecemeal to affordability, to solutions. I feel like it's important to come together and provide solutions that will not create a cost shift for our ratepayers.

We're very sensitive to that at the moment. So we appreciate not supporting this vote today. Thank you.

Thank you. Any additional witnesses in opposition? Hearing and seeing none, I'll bring it back to the Committee. Any questions or concerns by Committee Members? Senator Dahle.

I know we're trying to get hydrogen as part of our, another bucket for our solution, but what is this? What's the cost shift to other ratepayers with this piece of legislation?

We don't believe there is a cost shift. That's kind of the whole point of this, is we want to encourage hydrogen production during the day when there's lots of clean renewables on the grid. And many were actually curtailing a lot of renewables in many cases now. And so that's really the whole idea. It's kind of like time of use pricing for individuals, and we're instituting this now for this kind of production.

There's a tax credit also available to fort as well, right? Which that means the taxpayer would be picking up part of the tax.

I don't believe our Bill gets in tax credit. Witness.

Or the tariff rates?

Yeah. There are federal incentives proposed under the Inflation Reduction Act that are being implemented now. So anything that we did here would be complemented by those federal tax credits.

So they're already available underneath the. So they would be, this Bill would allow them to be eligible to get those tariffs from the Reduction Recovery Act?

So this Bill would allow for optimization of the electric system here for the production of hydrogen through a price signal. Any production of hydrogen here, if they met the eligibility requirements of the IRS, would also benefit from a federal tax credit. But that's a separate swim lane. And those tax credits are also super important to achieving scaled, affordable hydrogen production.

Thank you.

Senator Dodd.

The positives about the Bill, we heard from the supporters of the Bill. That is something that's really important to me. I really do believe in the future of hydrogen in this state and how important that is to us. On the other hand, I am concerned about cost shifts. I am going to support the Bill today because I think the basics of the Bill are incredibly important.

But I am going to reserve the right, if more information is shed on the rate shedding to other ratepayers, the ability to not support it on the floor. But for today, I'll support the Bill. Thank you.

Great. Senator Stern.

I want to make a motion and a brief comment that I appreciate the coalition that's been working on this Bill. I think it's a unique moment.

I try to challenge both the environmental community to step up and find those opportunities where they can say yes to work with labor, to work with the industrial sector and business. And I think you put a really solid coalition here. So I appreciate that work, and I think the math will bear itself out. I know you're going to keep working to prove out that this is going to be both cost effective and innovative. So with that, I'd make a motion.

Thank you. Any further discussion or debate? Senator Becker, would you like to close?

Sure. Appreciate the discussion. Just for Senator Dodd, I just want to clarify a couple things. Number one, the Bill explicitly prohibits a cost shift between customer classes, so between industrial customers to residential customers. So number one, if there even was something, it would only be industrial customers. But secondly, I just want to be clear that the tariffs are only available for new load, so it's not allowing customers with existing load to switch onto this tariff.

So it's really about, it covers only new load where utilities have not yet made investments, so there's no existing investments these new customers would be no longer helping to pay for. But happy to continue working with you on this to make sure that we address that. And with that, I respectfully ask for an aye vote.

Thank you. So you've accepted the Committee amendments? All right. And secretary, please state those amendments, if you don't mind, please.

Delete provisions regarding the conditions under which other load serving entities may adopt tariffs similar to the tariff established under this Bill and delete provisions authorizing the CPUC to consider adopting an hourly time matching requirement for load serving entities.

Is that correct, Senator Becker?

Yes, that's correct.

Thank you. So, secretary, please call the roll on SB 993.

[Roll Call]

That measure has nine votes. We'll leave the roll open for absent Members to add on. Next up is your measure, SB 1018.

Okay, thank you. This is my second Bill aimed at supporting green hydrogen and electrifying industrial heat, as well as creating excellent green jobs. I'm going to spend a little more time on this. I know they're both pretty wonky, but I know there were some more concerns about this one. So 993 was looking at projects that are drawing power from the grid.

The other way to supply power for these kinds of projects, these hydrogen and electrifying industrial heat projects, is to have them powered by solar or wind directly supplied to the hydrogen facility or factory. In that case, we know it's clean and we know it isn't putting any new stress on the grid. Using off grid renewables to produce hydrogen like this is actually part of the state's official plan. The 2022 scoping plan anticipates 10 gigawatts, again, 10 gigawatts of hydrogen production directly connected to renewable generation.

The problem is that is not possible today. That is not possible today because of what is known as the over-the-fence rule. Renewable energy can be supplied directly behind the meter only if it falls within one of the exceptions within PUC 218, the so called over-the-fence rule. Otherwise, the renewable generator is treated as a utility with a very heavy regulatory burden.

Today, the exceptions to the over the fence rule are restricted to generation that is on the same parcel of land or an adjacent parcel. That's where the over-the-fence rule name comes from. That works fine for rooftop solar on a home but it's not sufficient for the megawatts of solar spread across many acres of land that we're going to need for a modest hydrogen facility or factory.

This Bill, SB 1018, solves this problem by creating a narrow new exemption that would allow a large solar or wind generator to sell their output directly to a single customer who will use that power for producing hydrogen or providing industrial heat. Now, people have raised concerns about whether changing this over-the-fence rule opens a door for unregulated utilities, and very clearly, this Bill will not do that. We are very careful to keep it narrow and targeted.

It allows a generator to supply power to a single customer, not one to many, like an unregulated utility would do so. It's only to a single customer. It's actually very similar to the existing exceptions for rooftop solar or for onsite cogeneration plants. The important difference is that you cannot put enough generation for a hydrogen facility or factory on the roof or even on a single neighboring parcel of land. They just take up too much space.

So this change will allow the equivalent kind of behind the meter generation and self consumption to spread over a larger area. And unlike rooftop solar or cogeneration, this is only allowed for new load, not departing load. So there's no problem with existing customers using this to reduce their electricity consumption and shift grid costs to other customers. Stakeholders have also raised a concern about whether the private electrical lines connecting the renewable generation to the customer's hydrogen facility or factory will create new safety concerns.

Since most of our safety regulations for transmitting power are based on the regulation of electricity corporations, this is an important question, but one that can be resolved right now. Developers of solar and wind farms build many miles of private electrical lines within their facilities to connect all the turbines or panels to the transformer at the facility's exit. I don't think anyone views those private lines as a safety concern today. Those projects are typically built.

Those projects also typically build the transmission lines, called Gen-Tie lines, that connect the facilities to a utility substation. They have to build those lines to the PUC safety standards under General Order 95, even though they are not utilities themselves. Those lines are very similar to the kinds of short transmission segments that might be needed to connect renewable generation to a nearby factory. There are also long distance transmission lines that are owned and operated by entities who are not electrical corporations.

For example, LADWP owns a transmission line that goes all the way to Utah, and they're obviously not an IOU. The General Order 95 from the PUC very explicitly says it governs all electric transmission lines, including facilities that belong to non electric utilities. If there's any doubt about whether the private electric lines enabled by this Bill will be under the PUC's jurisdiction, I will commit to clarifying it in the Bill. I will work with the PUC to see if a clarification is necessary.

I know the chair had some concerns, and I look forward to continue to working with him and others, but it's important to move this Bill today. It will support the growth of green hydrogen and industrial electrification in a way that will ensure it makes use of clean energy and does not impact electricity rates or grid reliability. I respectfully asked for an aye vote, and I have the same two witnesses here on this Bill as well.

Thank you. Two minutes apiece.

Thank you, Senator Becker, Committee Members, Janice Lin again from the Green Hydrogen Coalition. California is truly blessed with a lot of renewable electricity resource, literally all over our state. The issue is that this resource is not is only accessible to electrolytic hydrogen producers if it's on site or if it's through the grid. And because of the sheer size of some of the projects that are being proposed, remember earlier I said it's all about scale and cost reduction.

Some of these projects will find it very difficult to achieve that scale without SB 18. I'll give you an example of a project that's being proposed now. It's the Darden clean energy project being proposed for Fresno county. It's on 9500 acres, includes 1.15 gigawatts of solar, 4.5 gigawatts of battery storage, 1.15 gigawatts of electrolysis with step up substation, 10 to 15 miles of the Gen-Tie that Senator Becker mentioned, and a utility switching station.

As I mentioned earlier, displacing fossil fuels requires scale, this kind of scale, which will achieve cost reduction. The Darden project is very big and has a lot of land. SB 18 would enable other projects that aren't so blessed with 9500 acres to procure scaled renewable electricity resources. And if we want to scale renewable hydrogen, we have to scale these off grid resources, and that requires fixing this over the fence rule. So for these reasons, the GHC recommends and respectfully urges your aye vote. Thank you.

Thank you. Next witness.

Good morning again. My name is Merrian Borgeson. I'm the California Director for Climate and Energy at the Natural Resources Defense Council. Based on our understanding of the green hydrogen production landscape both in the US and abroad, off grid renewables paired with electrolyzers are poised to be one of the most economic means of producing green hydrogen. We also anticipate that off grid renewables will be one of the most cost effective ways to power carbon free industrial heat processes.

So this Bill would be providing an option for new industrial technologies to be powered entirely by renewable energy while minimizing emissions and avoiding impacts on the grid. Further, it would bring renewables online more quickly by having them match directly with those loads and allowing them to bypass rather than bog down the current very slow interconnection process. As with 993, we just want to appreciate Senator Becker's targeted approach to making progress on hydrogen where we can this legislative session, and we urge your aye vote on 1018. Thank you.

Thank you. Others wishing to add on as a support.

Thank you, Senator Teresa Cook, on behalf of the California Hydrogen Coalition. Our thanks to to the author for taking an incentive based approach as opposed to a heavy handed, mandatory approach as done in the Assembly. These are very complex issues, as the Committee analysis raised in both this and 993. We look forward to working through it. Thank you.

Name and affiliation, please.

Samantha Samuelsen, on behalf of industrious labs. In support.

McKinley Thompson-Morley, on behalf of the Solar Energy Industries Association in support.

Thank you.

John Cosentino, on behalf of Rondo Energy in strong support.

Hunter Stern, on behalf of the California Coalition of Utility Employees, the California State Association of Electrical Workers and the California State Association of the Pipe Trades.

Gabriela Facio with Sierra Club California in support.

Janet Cox for Climate Action California, the Santa Cruz Climate Action Network and the 350 Sacramento in support. Thank you.

Thank you.

Tiffany Fan, on behalf of Intersect Power in support. We are the developer of that Darden project that Janice mentioned earlier. Thank you.

Any others wishing to add on us in support here in the O Street? Seeing none, we'll go to the opposition.

Hello, Mister chair, Vice Chair, Members of the Committee, Valerie Turella Vlahos with Pacific Gas and Electric Company and regrettably we are in opposition to SB 1018. Same as my prior comments, except I'll say again the widespread excitement. We are very encouraged by and are also excited about what hydrogen production can bring to our energy transition. Excited about the conversation also happening in the Senate with Senator Caballero's Bill on this particular issue.

We don't see it as right over-the-fence and which, you know, it's not an adjacent parcel. We think that the protections are not there. It's unclear how long this, if you want to call it a Gen-Tie a line, this electrical line would be. And so we are very concerned about the protections that are not there. Exemption to public utility code 218.

Basically, the concerns as laid out in the analysis, it's unclear if there could be some additional protections proposed, but at this time we are opposed to this Bill. Thank you.

Anyone else in opposition?

Chair Members, hi. Lourdes Ayon, again with San Diego Gas and Electric. Also in opposition. The concerns in particular lie with undermining grid planning, safety and reliability, of deregulating this particular piece, and again, agree with the consultant and the analysis. This is a very complex process and I think deregulation would be something that we're very concerned about.

I do have a question. So what is the distance? I think that really for the Bill, over-the-fence is how far, as it stated in here, how far you can you be over-the-fence? 3 miles. Can you be just over-the-fence a mile, 100ft? Or how far is it?

Thank you. Anyone else wishing to speak in opposition? Seeing none, we'll bring it back to the dais. Comments, concerns by Members? Have a motion by Senator Stern.

Let me ask myself a witness to come up and address it. I'll just say quickly while she's doing that, the Bill doesn't contain a limit on the distance, but the cost of acquiring land easements and building a private transmission line from location of generation to location of usage will limit the practical distance. That would make any kind of economic sense. So we don't want to prejudge what this practical limit would be by putting arbitrary limit in. But any quick comments on that?

That was exactly what I was going to say, that the limit would be dictated by what is cost effective and feasible given the resource that you have, the location of the new load and the single customer.

Well, I would just say that that might be the case if you're in San Francisco, but if you're in my district, you can go miles without having anybody in the way and people would be incentivized to. And then there's the safety part of that that needs to be dealt with as well. So I just. I think there needs to be some limit on how far that can be. There is no limit. It's basically saying if they can do it, they can make it happen.

You're saying that cost might do it, but we don't know that right now. Or you're saying that there may be difficult to get the permits to build the transmission line.

I hear the concern. This is obviously the first Committee hearing, so I'm happy to.

Is it referred to? Where is it going after this approves? So this is the last Committee policy.

But I'm happy to. We haven't heard that specific issue about a specific limit. I'm happy to continue those discussions, but certainly safety is paramount. And we do believe that these other examples that we've mentioned show cases where, again, this will be regulated by the PUC. And, you know, we don't believe safety is a concern, but happy to continue discussions.

Okay, we have any further comments? Seeing now we have a motion by Senator Stern. Would you like to close?

Yeah. Thank you again for the discussion. Commitment to safety is paramount for us in this. I do, again with these. Both these bills, again, 23% of our greenhouse gas emissions we're not addressing right now. And this is a chance for us to encourage a lot more of this production and lots of great green jobs. And respectfully asked for your aye vote.

So, I want to state that the Bill has a, is a do pass to appropriate or appropriations. And what were the amendments?

There are none.

No amendments. Okay. Call the roll please.

Do pass to appropriations. Senators Bradford? Dahle?

Dahle, No. Ashby? Becker?

No.

Aye.

Becker, aye. Caballero? Caballero, aye. Dodd? Dodd, aye. Durazo? Durazo, aye. Eggman? Gonzalez? Grove? Limon? Limone, aye. Min? Min, Aye. Newman? Rubio? Seyarto? Skinner? Stern? Stern, aye. Wilk? Wilk, no. Ashby, aye. Eight to two, it needs more.

Bill has eight votes. We'll leave it on call for their absent Members.

Thank you.

We'll go with. To Senator Stern on SB 1237. Can I clarify, Mister chair? Actually, I think we're going to be pulling that file. Item 11. Got a. Okay, yeah. Got a very late note last.

Foundation chair was opposed and. Yeah, exactly. So. Found out about chair opposition very late last night and have had to react on the fly, as many other members have today. Let's move to 1301, if we could file item 12. So this bill is really just trying to do better rule making at the CPUC and make sure they have the data needed to do both long term gas system planning as well as near term decision making.

And then.

There's currently a proceeding underway, PUC, on long term gas transmission planning as well as a General order they undertook for major expansions of the gas system. We think that there's some good work going on amongst the state's IOUS on this front, and actually a collaborative process. And we also think there are places where there's just a lack of data and acuity to know where best to invest our dollars. So I'm concerned about stranded assets like everyone else's, and I think this is a smart policy.

That will save ratepayers dollars, decarbonize our grid, and hopefully build a more reliable system. And with that respect for your aye vote.

Do you have any witnesses?

I may.

Those who wish to.

Main witnesses in support? Yeah, I believe. Janet Cox with Climate Action California.

That's me. Thank you very much.

Hang on a second. Are you accepting the amendments for the Committee?

Yes.

Yes. Okay, go ahead, ma'am.

Thank you. I'm Janet Cox from Climate Action California. California's clean energy transition requires us to shut down our natural gas network over the coming decades. This will likely be done by first shutting down parts of the gas network, serving consumers that can more easily move to electrified alternatives. Determining which parts of the gas network can be shut down and when and when, requires detailed understanding and modeling of the operation of the gas network.

Our state agencies cannot plan and guide these efforts without the data showing how the gas network is operating now and in the future. Transitioning California away from the use of natural gas will be a huge accomplishment in the pursuit of our climate goals. And it will also show the world that this can be done. We need California to lead the world once again in tackling the most difficult aspects of the clean energy transition.

Enabling our state agencies to lead the way, as you're doing with SB 1301, is critical to the success of our energy transition and meeting our climate goals. Thank you, Senator Stern.

Thank you. Any other witnesses in support?

Hello. Elise Fandrich on behalf of Environmental Defense Fund, in support.

Thank you.

Hi. Samantha Samuelsen on behalf of the Building Decarbonization Coalition, in support.

Thank you. Any witnesses in opposition? We have no formal opposition. Thank you. We will bring it back. Any questions by Senators? Seeing none, we will entertain a motion. Senator Ashby. Senator Stern, would you like to close.

Respectfully ask for your aye vote.

Thank you. Would you please call the roll?

SB 1301, do pass, is amended to appropriations. [Roll Call]

8-0. We'll keep that Bill on call for absent Members. Senator Stern, would you please take up SB-1311?

Yes. 1311 is a redux of a Bill from last year. This Committee was generous enough to vote out, as was our Legislature. It was vetoed by the Governor. But we've been working on ways to land this with the Administration. We think they've actually made great progress in launching things like build.ca.gov, and appreciate what the governor's office has been doing to coordinate better on our energy deployment, both for purposes of reliability and accomplishing clean energy goals.

The planning piece of this is still one that should be of great concern to Members on both sides of the aisle and around the state. We're looking at multi-day extreme weather events, that there are different sets of data and assumptions driving planning at the CEC versus the PUC versus the ISO.

And this is a recommendation we saw out of the joint reliability planning assessment to say we need a common set of presumptions, we need a common set of understanding of how demand works, how hot it could get on an evening in September, and that the planning around transmission generation as well as the overall grid reliability has got to be integrated. So hopefully this drives that forward. And we think the CEC has been doing yeoman's work on it.

We just need a little more nudging to get everyone on the same page. With me here to testify and support is V. John White with the Clean Power Campaign.

Mr. Chairman and Members. John White with the Clean Power Campaign. We support this Bill because of the need for transparency and clarity about the assumptions that we're using in our energy planning process. Three years ago, we thought we were going to have a huge deficit in our energy planning, and in fact, we turned out those assumptions were wrong, not because there wasn't a risk, but because we made great progress in implementing supply chain issues, batteries and so forth.

So we think that this Bill is in the same direction as the current approach, but it provides more transparency and direction and ensures greater coordination between and among the agencies. So we ask for your aye vote.

Thank you. Anyone else wishing to speak in support? Name and affiliation, please.

Hello. Elise Fondrick again. On behalf of Environmental Defense Fund. In support. Thank you.

I don't think I have opposition.

Janet Cox again for 350 Silicon Valley, The Climate Reality Project Silicon Valley, the Glendale Environmental Coalition, the Santa Claus Climate Action Network, and Climate Action California. Thanks.

Thank you. Anyone wishing to speak in opposition? Seeing none, we'll bring it back. Entertain a motion. So moved by Assemblymember Caballero. Would you like to close Senator Sterb?

Thank you, Mayor. Respect for the ask your aye vote.

Please call the roll.

SB-1311, Stern do pass to appropriations [Roll Cal]

We'll keep that phone call. Members, it's been requested by many of the Democrat Senators that we take a break until after caucus. All right. I'm prepared to go if we can't. Okay, Senator Durazo, you're up. Real quick. We want to get through. Senator Durazo.

7-0.

Mister Chair and fellow Members, I accept the Committee amendments on page seven of the analysis. And I respectfully ask for your aye vote.

Anyone wish to speak in support? Quickly, please.

Elmer Lizardi on behalf of the California Labor Federation in support.

Anyone wishing to speak in opposition?

Amanda Gualderama with CalBroadband, also USTelecom. We were in opposition. We are reviewing the amendments. We believe it's going in the right direction. I want to thank the author and Committee staff.

Thank you. I have a motion. Okay. Seeing no one else, bring it back. I have a motion from Senator Min. Thank you. It is do pass to Appropriations. Did you accept the amendments?

I'll do it. I'll do it. I'll do it. Are we ready?

Yes. Would you like to close?

Ask for your aye vote. Thank you.

Thank you. Motion. Go ahead.

Motion is do pass to be amended in the Labor, Public Employment, and Retirement Committee. [Roll call] Current vote: 6-2.

Current vote is six to two and we'll put it on call for the absent Members.

And then we'll recess and convene after. We're going to do one more.

Are we going to do one more? We're doing.

We're doing yours?

Go for it. Let's do it.

Thank you, Members.

Thank you very much. The next bill we'll take up is Senator Dahle's SB 1062.

Thank you, members. I appreciate you hanging around. SB 1062 is very simple. What we're trying to do is promote biomass on facilities that are not up and running, and this Bill will help do that. I will accept the amendments. I do want to keep it at the CE or at this, not at the CEC. I want to go to the Department of Conservation. I talked to the chair about that, and we think we're in good shape for that.

So I also have witnesses here that drove all the way up from the north state. But if you need to ask them a question, we can do that. If not, I respectfully ask for an aye vote.

Thank you very much. Please come forward.

Go ahead and state. Okay.

My name is Christiana Darlington and I'm with the Placer County Air Pollution Control District. We're working on this bill to help transition direct combustion biomass facilities to new bioenergy advanced technology that's cleaner. We have worked with many different folks from the state as well as federal groups to talk about how to do this most efficiently. And the Department of Conservation has experience doing this with their biofuels program. So that's why we're looking to that department to work on this transition from direct combustion to bioenergy.

I can talk more about it if you have any other questions.

Great. Thank you so much. We'll see if we have any questions. Those in favor? Those in support of the bill?

Madam Chair and members, Greg Cook, representing Golden State Power Cooperative, in support of the bill.

Thank you very much. Anyone else in support? Is there anybody in opposition? Like to welcome you to come forward.

Margie Lie, Samson Advisors on behalf of the Southern California Public Power Authority in a current opposed position. Look forward to reviewing the committee amendments once they're in print and look forward to removing our offices.

Very good. Thank you. Anyone else in opposition? Seeing no one in opposition, we'll turn it back to the chair and see if the committee has any questions.

Any questions by committee members.

Happy to move the bill.

It's been moved. I missed a beta on this. Senator Becker.

Yeah. I'll just say quickly, I know this is a controversial area. But I think that trying to clean up these old plants and convert them some more useful and is a worthy goal. So I'll be supporting the bill.

Thank you.

Would you like to close respectfully?

Respectfully ask for an aye vote.

We have a do pass to be amended in the Committee on Environmental Quality. And those amendments are as such delete the energy procurement mandate in the bill. Section two and its referenced in Section one. Amend the Administration the biomass technology transition program to the California Energy Commission and clarify incentive grant program for the biomass facilities.

Senator Bradford, we wanted to keep that in the Department of Conservation, not at the CEC. They're already overloaded and its a cost shift to the ratepayers.

So can that. Can that be adjusted here at this point or does that have to be addressed? All right, we'll agree to that.

Thank you. I appreciate it.

Department of Conservation. So, secretary, please call the roll.

Due pass to be amended in Environmental Quality Committee. [Roll Call] 11 to 1.

That bill has 11 votes. We'll leave the roll open for absent members to add on. Committee Members. Oh. You wanted. You want to try to do yours real quick? Yeah. All right. Senator Eggman, SB, SB 1118.

SB-1118, go right ahead.

1118. Thank you. I'm accepting the amendments. Last year, we made improvements to a program that I worked on way back in 2015, SOMAH. That was SB-355. This just provides the process for tribal grounds to be able to be included. I have with me Rocky Fernandez from Center for Sustainable Energy and Andrew Dawson from California Housing Partnership, and they will be very brief.

Very brief. Good afternoon, Chair, Committee Members. Rocky Fernandez with the Center for Sustainable Energy. We're part of the program administration team for SOMAH. We came back from SB-355 last year with one more fix around tribal eligibility. We think it's a great Bill and urgent an aye vote. And thanks to the Committee for working with us on unintended consequences.

Thank you.

Andrew Dawson. California Housing Partnership. Support or drive out?

Thank you.

Michele Canales. Union of Concerned Scientists. In support.

Thank you.

Janet Cox, for Climate Action California. In support. Thanks.

Kevin Luo, from the California Solar & Storage Association. In support.

Merrian Borgeson, with Natural Resources Defense Counsel. In support.

Any additional witnesses here in the room in support? Hearing and seeing none. Now let's move to witnesses in opposition. Are there witnesses in opposition of-SB 1118? Seeing none. I bring it back to the Committee. Are there any questions or concerns in regards to this measure? It's been moved by Senator Stern. We have a do-pass as amended, to the Committee on Appropriations. Required and the amendments are followed.

Require tribal projects that are exempt from the deed restriction to continue to meet the income requirements of SOMAH program, limits tribal projects that are exempted from the deed restriction to those projects that receive public financing to fund affordable housing from the US Housing and Urban Development, Indian Housing Block Grant, US Bureau of Indian Affairs, or Native American Housing Assistance and Self Determination Act. Is that correct? Okay. All right. Secretary, please call the roll on SB-1118.

Senators Bradford.

9-2. Do we have time to open the roll for absent Members?

I think so.

Let's do that real quick, and then we'll recess for caucus.

We're starting with file item one, SB 1006, Padilla. Please call the apps of Members.

[Roll Call]

Nine to two. We'll leave the roll open. And so now, Members, we're going to take a recess for lunch, and we'll return after lunch to resume our hearing. Thank you.

The Senate Committee on energy, utilities and communication. We're hoping that all Members will report back to room 1200, and we're going to start by lifting the calls on those outstanding items. And we'll start with file item one, SB 1006 by Senator Padilla.

[Roll Call]

All right, Members, that concludes our business for today. We're going to grant reconsider. We're going to grant reconsideration to Senator Min on SB 938, and I want to thank everyone for coming to the Committee today and for your participation here in the Senate Energy Committee hearing. Senate Committee on Energy, Utilities and Communications is now adjourned.