Senate Standing Committee on Energy, Utilities and Communications

The Senate Committee on Energy Utilities Communications will come to order. We are going to start as a Subcommitee. There's a lot going on in the Capitol today, but we do have an author here. We want to honor her time, so we're going to ask her to come up and present to us SB636.

Early bird gets the worm. All right, Mr. Chair, colleagues first. I want to thank you Mr. Chair, and the Committee for working with me very closely on this bill, understanding where I was coming from and allowing us to get to a common place. So I will be accepting the Committee amendments.

We've seen time and time again various headlines talking about California's electricity rates having skyrocketed by 47% from 2019 up to 2023. We're seeing the increases of outpace inflation. We're seeing that we here in California we pay nearly double the national rate for electricity, second only to Hawaii.

So a couple scenarios as to what made me think of introducing this kind of bill. Imagine a single parent working two jobs to make ends meet. Their energy bill has already tripled over five years. Then their child falls ill and they have to stop working to care for that child that perhaps has complex needs, medical needs.

Suddenly they're facing medical bills, lost wages and increased monthly utility bills. Or what about someone who lost their job during the recent fires and is struggling to pay their bills on top of the rent without having a job.

These are the examples behind why I introduced SB 636 to prohibit IOU's from disconnecting ratepayers who have claimed hardships due a death in the family or someone living within the same place, a loss of full time employment within 60 days of the hardship, medical care for themselves or a family Member who lives within the same home, the customer's residence, employment or education being impacted by natural disaster declared by the Governor to be an emergency.

And as the Committee amendments noted, we are looking to have eligible ratepayers defer payments up to three months through a CPUC established application and validation process making clear that we have taken the self attestation part out of the bill and are looking to CPUC to determine what would be required to be deemed eligible to prove that you're eligible for this.

This bill is not a free for all and only aims to provide a safety net for customers who have an unexpected life event is at no fault to their own, meaning they will have to pay it back and they can only apply for Deferment once every 18 months.

Not every 18 months, but only once within an 18 month period. This Bill will not result in cost shifting to other ratepayers because at the conclusion, like I mentioned, of the deferment period, they would have to pay it back.

We just want them to get back on their feet to be able to pay back and not have their utilities be shut off. Mr. Chair, I now like to turn over to my witness here who would testify in support of this bill.

Excellent. Thank you. One witness or two? One primary witness. Okay, great. You have up to four minutes. Thanks.

Thank you, Chair Becker and Members. My name is Constance Slider Pierre. I'm the organizing Director at the Utility Reform Network. Return. I don't need to tell anyone about the energy affordability crisis here in California. We've all seen it. Year after year, the investor owned utilities continue to raise the rates, squeezing families who are already struggling.

For 31% of Californians who are already living near the poverty line, the increased rates are devastating. And it's not just Low income households. Middle income families are struggling now under the strain of these rising costs. Imagine if you're already living paycheck to paycheck and then the unexpected happens.

The job loss, the medical emergency, the passing of a loved one and the funeral expenses that go along with it. Or maybe your home is damaged in a wildfire. In that moment, the whole world shifts and you're focused on grieving, surviving.

The last thing you need to be worried about is whether or not your power is going to stay on. But for too many California, that's exactly what's happening. And for renters who make up 44% of households in this state, a missed utility bill and losing their electricity could mean homelessness. This is where SB 636 comes in.

It provides the three months hardship deferment for people facing major life crises. And it ensures that people have the time to recover from this time type of incident without losing their power at turn.

We hear the stories every day of people who are suddenly faced with a crisis and currently there's no system to offer them a safety net. While some customers qualify for Low income discount programs like care and fare, it's not enough.

When major catastrophe happens and other customers who are just above or below the qualifications for a program that would provide a discount, they have no recourse at all. This isn't just an economic issue. It's a public health and housing crisis issue. When people lose power, they lose access to refrigeration for food and medicine.

They can't heat or cool their homes during extreme weather. For families already struggling, a utility shut off really could be the tipping point into homelessness. So SB 636 ensures the temporary hardship doesn't spiral into a permanent catastrophe. It means that when life throws people into crisis, we just don't let them fall through the crack.

We urge an aye vote on SB 636 to make sure that when Californians face hardship, we are here to lift them up and not just shut them off. Thank you.

Thank you very much. Do we have other supporters in the room who would like to add on? If so, please come to the mic now.

Hi. Adria Tennin. I'm the Director of Race Equity and. Legislative policy with TURN here today to speak on behalf of Small Smart Justice. Smart justice is in strong support for. This bill and also sees the dire need for hardship assistance for customers.

Thank you. Okay. Thank you. We would now like to invite up witnesses in opposition to the bill. Do we have two?

You have one? At least one. Okay. Or two? We only have two minutes. Okay. Thank you. Mr. Chair and Members of the Committee. Israel Solis with Southern California Gas Co. And San Diego Gas and Electric in opposition to the bill. Still reviewing the amendments. We do appreciate the communication with the author's office and the staff.

I guess I'll start with the Committee analysis. Did a pretty good job of outlining the at least dozen different initiatives that have been implemented either through the CPUC or that the utilities themselves have offered customers that are facing hardship, that are available to customers, whether they are Low income or not.

So we are doing a lot of work in that space and there is an open proceeding at the CPUC still examining this very issue. I would say that disconnection for nonpayment is not the first, second, third, fourth, or fifth option. It's really the tenth option for us.

In some cases, it will take us about a year to even reach the point of disconnecting a customer. It's a very expensive endeavor. And so I guess I'll just conclude by saying that we agree that there is an affordability crisis. We think that we should be examining the root causes of those challenges.

We don't think that this bill is really doing that. Thank you. Thank you.

Good afternoon. Laura Parra with Southern California Edison also in opposition, but do want to thank the Committee for the Amendments. We're still discussing with the author's office as well as a hardship discussion and the three points that she's trying to address. So we look forward to those conversations. Thank you.

Okay. Anyone adding on in opposition? See? None. We'll bring it back to the Committee for Questions? Senator Archuleta.

Thank you, Senator for bringing this forward. Especially at this time in our great State of California when everything is on the edge.

From the news coming across from Washington, we don't know a lot of families are on the edge and they're waiting to see some that we heard may lose their job, have already lost their job, may be put on unemployment, God knows what.

But I just want to verify and again this is to defer the payment, not to eliminate the balance. So that's very, very important because the utilities obviously are concerned. They're not going to lose money, they are just going to have to wait for their money. And we're not asking for a handout. Seems like it's a hand up.

And that I think is a great thing. And I think that my question is certifying the Low income versus someone stating their income. How are you going to work that out so we open the door for a wider participation?

Well, first of all, Senator, I'm definitely going to use the hand up talking point when I speak on this on the floor. But to your second question, we struck out our interpretation of how an individual was going to deem to be eligible.

And we have put now with the Committee amendments that CPUC will have to determine what is required to be eligible or what documents would be required, what approach they need to take to claim that they qualify under this Bill. So none. My Bill no longer has any information on guidance on that.

And the CPUC will have full control on what that application process would look like.

And the application I'm sure would go directly to the utilities and not to a city to verify in any way, shape or form.

So the CPUC would have to determine like they do other programs, you know, and other programs. The CPUC actually determined that a self attestation was enough proof to be eligible for other programs. I don't know if they're going to take the same approach on this, but it would be up to them.

And I'd like to add one other thing. There are landlords that are good, decent, hard working landlords that are trying to help those in need. And in some cases the rent includes utilities. How would they be able to fall in this category? Because they're going to need some help too because it does come down.

So if we're helping that landlord, that mom and pop to help their tenants, we got to have a mechanism to include them and maybe somebody that you brought together today that can give us some insight or you just might add.

That in the future that is a phenomenal Question. Senator, in my three years, this is the first time I do not have an answer for a question that was given to me. So I'd like to actually turn to my witness to see if this is something.

Well, if we don't have an answer now, maybe we can look into it in the future. Or maybe we do have an answer. Looks like we do have. Yeah. Please go ahead, witness.

Feel free to respond this time. Speaking on behalf of turn. I believe you're. I apologize, Senator, if you would mind repeating the question for my clarity. I believe I do have an answer for you.

Yeah. But it's important because now we are housing people as often as we can, as quickly as we can. And some of the hotels that we're putting people in temporarily or some of the facilities, we're putting them. Of course, the utilities are included in whatever subsidies we give and so on.

So we should have a mechanism where they too can go to the utilities and say temporarily we need help, so we can help.

So I believe the question is, Isa, especially a mom and pop landlord, are they kind of effective over this? Is there a mechanism for them to also. If that money's coming to them, then to. For them to appeal?

We do not have a mechanism for. That at this time, but that is. Something we could explore at the Commission. Or if the Committee would like to.

Maybe the application on behalf of. And the reason to help, I think would help. So I'm going to support the Bill and I'd like to move it at the appropriate time.

Thank you, Senator, for bringing that up.

Senator Rubio, thank you. I really do appreciate this bill. Thank you, Senator Mentavar. I mean, as we're dealing with the unaffordability crisis here in our state, I think that programs like these are important.

And I often, you know, pay attention to what you push forward, and it's always about making sure that we capture those that are really struggling at this time. And so absolutely support this bill. And, you know, I would like to be a co author and help you move this forward.

And we have to think outside the box sometimes to see how we capture those that are most in need at this time. And with that, I will also supported. Thank you.

Thank you for being my biggest fan, Senator. I am.

Okay. I would like to take this moment to seize the opportunity to establish quorum. I will ask the Committee assistant to please call the roll.

Becker.

Here.

Becker. Here. Ochoa-Bogh. Allen. Archuleta. Here. Archuleta. Here. Arreguin. Ashby. Here. Ashby. Here. Caballero. Caballero. Here. Dahle. Here. Dahle. Here. Gonzalez. Here. Gonzalez. Here. Grove. Hurtado. Limon. McNerney. Here. McNerney. Here. Rubio. Rubio. Here. Stern. Stern. Here. Strickland. Wahab.

We have a quorum. Okay. We will be able to vote and take Senator Archuleta's motion when ready. Anyone else have any questions? Comments here on SB 636? Javar. Okay, we do have a motion which is do pass as amended. The Senate Appropriations Committee. I'll ask the Committee assistant to please call the roll. Oh, sorry.

Would you like to close?

Thank you, Mr. Chair. Again, thank you to the Committee for working with me on this to finding a common ground. I appreciate the Senator's point of bringing it up. We'll continue to have those conversations in with the opposition.

Like you've heard, we are in open dialogue with them to make sure that we're helping and hand up, like you mentioned, Senator Archuleta, for the individuals who are in the most vulnerable situation.

Yes, and I appreciate. I just will say for my own part, I appreciate your leadership on this, your compassion here and working to find the right solution. The hand up. I think that is the right words now for this bill. And I really appreciate you taking this on. And I have an eye recoil. Thank you, Senator.

Please call the roll.

Senators Becker. Aye. Becker, aye. Ochoa-Bogh. Allen. Archuleta. Archuleta. aye. Arreguin. Ashby. Ashby. aye. Caballero. Caballero. aye. Dahle. Dahle. No. Gonzalez. Gonzalez. aye. Grove. Hurtado. Limon. McNerney. McNerney. aye. Rubio. Aye. Rubio. Aye. Stern. Aye. Stern, aye. Strickland. Wahab.

Okay, the bill is. The vote so far is 8:1 and we will keep it on call for other Members. Thank you, Senator Benjamin. All right, I see. Senator Wiener, let's go ahead. We. You have. Let's file item three SB 282.

Go ahead when ready. Thank you very much, Mr. Chairman. And thank you for hearing this bill today. I'm here to present Senate Bill 282, the heat pump Access act, which will make cost saving heat pump, water heater and H Vac installations faster, simpler and more affordable to install by streamlining the permitting process.

As I think you know, heat pumps are a highly efficient zero pollution option for H Vac systems and water heaters that make heating and cooling homes cleaner, safer and more affordable because they are so energy efficient, they can reduce electricity use for heating BY up to 75%. So lowering energy bills, many customers across the state could benefit.

We know that replacing a fossil fuel H Vac or water pump system with a heat pump also eliminates harmful pollutants that can be released into the home, improving health Critical that we streamline the permitting for heat pumps, the Governor has set a goal of installing 6 million heat pumps by 2030 and achieving carbon neutrality by 2045.

Just under 2 million heat pumps have been installed. So we're a little bit behind and we need to catch up and so let's expedite the permitting process to make that happen. I respectfully ask for an aye vote.

I do want to note that we're continuing to work with the sheet metal workers and others in labor and I'm optimistic that we're going to come to a resolution. I want to thank them for working with us.

With me today to testify are Sam Fishman with Spur, a co sponsor of SB282, and Larry Waters with Electrify My Home. Okay, Mr.

Fishman, go ahead.

You have two minutes. Good morning chair and Members. My name is Sam Fishman and I work with SPUR, a non profit in the Bay Area known for its nonpartisan public policy research.

We work on decarbonizing the region's buildings and are Co sponsoring SB282 to help Californians smoothly and affordably replace health harming, climate warming gas appliances with high efficiency heat pumps. Unfortunately, permitting and inspecting heat pumps in California is often a time consuming and costly process for contractors and homeowners. Spur's work has identified widespread issues.

California's municipalities impose widely varying requirements on heat pump installers. Even within a single municipality, contractors sometimes discover contradictory requirements that can lead to costly back and forths with city staff. Local aesthetic and noise requirements often restrict where a homeowner can play replace heat pumps and can lead to costly equipment relocations.

An installer may also have to seek multiple permits for a single heat pump or heat pump. Water heater permitting applications can require contractors to provide planning documents like site plans, which sometimes cost installers thousands of dollars in architectural subcontracting and these requirements can lead to long delays before a contractor can even proceed with work.

Most heat pumps are installed when an old gas equipment, equipment or old equipment of any other heating equipment burns out or fails, and where delays can cause a resident to go without essentials like hot water and heating. SB282 addresses these challenges by standardizing permit requirements, streamlining permitting processes and providing needed consistency for installers and consumers.

State action on permitting for home energy and electrification is not new. The California Legislature has already passed permit streamlining legislation for solar PV and for EV chargers, but to date, no action has been taken to guide permitting for heat pumps, despite their centrality to the clean heating transition.

SB282 would take that action and ensure California is ready to permit and install heat pumps quickly and without unnecessary additional costs to consumers. Thank you very much. Okay, thank you, Mr. Walters.

Good afternoon, chair and Members. I'm honored to be here in front of you guys today. This is really a special occasion for me. My name is Larry Waters and I'm the owner and founder of a company called Electrify My Home. And all we do is install heat pumps.

We've installed around 700 heat pumps in the last three years. I currently employ about 25 people. So we're on the front lines of seeing these problems happen.

And we are here in support of 282 as we believe this will be a game changer to simplifying the activities, reducing the cost to our customers and your constituents that are looking into investing a lot of money into getting these projects done on their homes. We're on the front line of dealing with these heat pump permitting issues.

Every project we do includes at least one heat pump and oftentimes we have to pull multiple permits to get a single project through. We currently do most of our work in the Bay Area cities and Davis and Napa.

It's not uncommon for us to spend five to six hours of administrative time securing a permit even for a relatively simple project. Different cities have different requirements and it's a burden. This time has to be added to the customer's cost. So our customers are actually paying for this additional hoops that we need to jump through.

So it seems to have become status quo in California cities to require more and more arduous hoops to heat pumps just to obtain what used to be a simple counter permit.

It is now commonplace to have to submit detailed site plans, include multiple pages that are often rejected for not having enough detail for even the simplest replacements, often having nothing to do with the actual project being submitted.

This can put a customer's timeline out to multiple weeks, maybe making it very difficult for us to schedule our customers projects in an efficient way and thereby making their jobs more expensive. When the inspector arrives at the house, he has none of the information that we submitted in his possession to verify anything.

So we go through all these hoops and then when they actually come and do the inspection, the guy has nothing there. They're basically looking for the same five things on all jobs and causing a great deal of. So the cost of the permits is not. Thank you to Ask you to start to wrap up. Okay.

The cost of these permits are not fully known in advance and that causes unnecessary burdens to the customers because the cities don't have a clear way for us to determine what the permits costs are going to be. Often those permits are well over $1,000 and that doesn't come until the other end of the job.

So it's often required for us to be on site for the permit inspections. And that could be a one to four hour window that we have to put somebody out in front of the house waiting for inspector to get there. And I just had one of my guys texted me just now at 3:00.

We had a no call, no show by an inspector where I had a guy sitting there inconvenience the customer. This happens once in a while. That's not the biggest thing that happens.

So I understand through conversations with our industry peers that this is unnecessarily burdensome and it's caused a lot of companies to go underground and not pull permits. That's a huge problem because the cities don't have a good inventory of what's going on when permits aren't pulled.

It's estimated that only about 10% of the systems out there are getting permits pulled on them. And I think anything that we can do to make that process easier will make even the smaller companies that can't afford to have extra admin on staff be able to afford to do permits too.

Thank you. Okay, thank you very much. I see some folks would like to add on. Please go ahead and add on your support. Good afternoon. Mark Stivers with the California Housing Partnership and support.

Thank you. Dylan Hoffman on behalf of Stop Waste in support.

Ada Welder with Earthjustice in support.

Hi. Meg Snyder with Axiom Advisors here on behalf of Rewiring America in support.

Matt Kloppenstein on behalf of the Center for Sustainable Energy in support.

Alan Abs with the Bay Area Air Quality Management District co co sponsor of SB 282 in support.

Brandon Waugh on behalf of the Building Decarbonization Coalition, co sponsor also in support.

Excellent. We'll now hear for any opposition witness. Do you have any opposition in the room?

Tweener?

Please go ahead.

Mr. Chairman, Members, Scott Witch on behalf of the California State Pipe Trades Council. We're at Tweener. We're working with the author will appreciate all the work and we'll continue to work with the. Thank you.

Thank you. I see no one else will bring it back to the Committee. Does anyone have any question? Rubio.

Thank you. Yeah, this is an issue that it's, you know, we hear it all the time. I used to be a former Council Member and it's something that kept coming up through city constituents. But this is something that I, you know, I think I advocated for, you know, just streamlining.

I understand what they're talking about, the burdensome cost of administrative costs and just delaying projects.

But in my ideal world, I would like to see some kind of tiered program where, you know, the complicated, really big projects are, you know, do go through a process because you also have to look out on the other side where you may.

And by no means am I insinuating anyone would here, but there could be those bad actors that, you know, if you don't have the city involved or permitting involved that you just don't know what you're going to get.

And but again, so I think know I'm going to support it and I think it's a good Bill in terms of getting what we need to build and streamline.

But again, in my ideal world, you know, I'd like to keep an eye on that because we don't know if we just leave it up to people to come in and fast track it, then you may leave it some kind of the consumer exposed to maybe someone coming in and not doing the right thing.

But again, I've had projects in the city where very simple and yet takes, you know, six months and. But then there's other complicated projects that I like to see looked into. But I don't know if you could even think about it. I'm not advocating one way or the other.

I'm just saying, you know, we have to look out for that consumer that's sort of left exposed. Is there anything that you can tell me?

So this Bill does not eliminate permitting or city involvement. It. The goal is to simplify it. And so that's why the CEC will put together the checklist of what's needed for a permit and it's limited to one permit.

There are cities that sometimes require multiple permits for an apparatus that frankly is not a rocket science kind of situation. Like we don't require permits for like installing a dishwasher or a washing machine and dryer. If you think of all the different appliances that we install, all that, you know, often, you know, don't require a permit.

And the technology here has gotten really advanced. But with that said, the Bill does not eliminate standards or permitting.

It's just trying to make it streamlined and simple and cap the fees and not have these Situations like you've heard, and there are a lot of these sort of horror stories we're going to drag on for weeks or months.

And it just increases cost, not in a way that increases safety, but that it's just not always as coordinated as it should be. So we're just trying to simplify the process.

Thank you. And I also did hear that it does add a lot of cost to the consumer. Well, if we streamline it, maybe we can make it less expensive for the consumer. But. But, you know, this is just a shout out to all the cities. I think in General, cities have to do better.

It is incredibly, you know, distressing to see people wait months. It's just a problem. Not just on this issue, just everything they do. So I hope cities really take this issue on and start streamlining everything that they do, because you don't need three permits or five permits or three different departments. We just need to get the. The.

Whatever it is done. So with that, thank you. And I'll be moving the Bill forward when appropriate. Thank you.

Okay. Senator Groves, did you have a.

I did. Thank you. So I did. I have two questions, or actually three. I think, reading it, I understand that it's a statewide, like a statewide practice, so that everything is the same. Do you think that that limits and creates a cottage industry where just a few people will be able to perform that?

No, this will actually, I think, expand the ability of people to participate. Because what happens now when things get so complicated and convoluted and you have a situation where like the Building Department says, here's your six hour window for when the inspector might come.

And so then the contractor has to sit there for six hours, which is expensive and means they can't work on a different job. That limits who can work on these jobs. And so our goal is to make it so that more people can do it because we need millions more of these.

And that only happens if you have the contractor capacity to be able to deliver it.

Okay. I was reading just some information on the opposition, which is the California building officials. And their concern also is that they're sworn officers to ensure that public safety in their communities.

But it's going to be a self permitting, like a automated permitting they think is troublesome because it gives it no oversight for these trained professionals that are. That are responsible for the safety of the inspections.

Yeah, so we are. That's actually what the piece that we continue to work on is, the self certification piece. The Bill and print does allow them to do the spot checking, which, you know, I think can get you where you're going. But that's the piece that we're continuing to work on and looking for.

You know, is it possible to have the inspection happen, for example, when the contractor is available remotely so they can work on other jobs instead of having to do a six hour window? So we're looking at different ideas, but that's a piece of the Bill that's still under discussion.

And then my final question. Thank you for that. It did clear up what I had questions on, but my final question is Mr. Wedge was up here in opposition or not in opposition as a tweener, and you're continuing to work on him. What is that issue?

You're working? I think with all of them, it's sort of the same issue. The same issue, yeah.

Okay. And you are going to continue to work with them?

Absolutely. Okay.

Because I do. Again, the cottage industry thing bothers me and then not having the oversight and you know, part of it is that we eliminate gas, gas appliances, gas H vac units, we make them all electric, then we require heat pumps, and then now we're going to regulate the heat pump part.

And I just think it increases cost.

Just to be clear, this is not increasing regulation on, on heat pumps. This is making it easier for people to get permits on heat pumps. So this is, this is not. I would.

If this bill were increasing what was required to get a heat pump, I would drop the bill tomorrow because my, you know, like, whether it's housing or, or any other kinds of things, my goal is always to make it easier for people to get permits and to make it less expensive and faster.

And that's what this bill does.

Okay. Thank you, sir. Thank you, Mr. Chair. Thank you.

Okay, Senator Caballero.

Thank you. Mr. Chair. Just a couple of things. I'm going to support your Bill today, but I have communities that are small there. They may or may not be under 5,000 residents, but they have no Building Department and they don't have engineers and they don't have inspectors.

They have to hire people to come in and do the work. And so I'm always looking for the ability for the community to be able to piggyback off of what other communities are doing. And if you do it that way, then it works in your community as well. In.

When I was on the City Council, we used to. We were from a bigger city and we would contract with those cities to send building inspectors down and do some of the work.

So we may need to look at that because I think the exemption for fewer than 5,000 residents for a city may be too Low because I have some cities that, that are a little bit bigger than that that just won't have the staff to be able to actually do the work.

They'd have to contract for it and that costs them money and they have to pass it on.

So anyway, yeah, although, and I appreciate that and by the way, that when we, a few years ago when this Committee passed and Legislature passed SB 379, which was to create the automatic automated app based permitting for solar and storage, we went through these issues as well.

But in that situation it required cities to adopt these apps here. I think this actually makes it simpler for cities. So I don't think that anything in this Bill increases the burdens on cities.

I think we exempted the under 5,000 because we're talking about cities that are, you know, truly so tiny they may not even have, you know, we don't know what they have or don't have. But I think this should make things easier for cities. It standardizes things. But we're happy to have that conversation.

But our goal is to make it easier for everyone.

Okay, well, I just bring that up and I can take a look at it again. And then I think timing, the timing is the issue and that's a technical issue. It's pretty hard for any Department to get anything done within a one year period. So I'm just concerned that we set a date.

It may not work for the cc.

I just have my notes as only one year and I think it's, it's next year.

Yeah, I think I was noted in the analysis. Okay, I'm, I, on one level I agree, I agree with you, with what you're saying in terms of you're making an observation about the State of existence in California.

But I will, I do want to add some commentary to that that I think when it routinely takes two to three years for California agencies to adopt regulations to implement laws that we pass, I find that to be completely unacceptable. And I find it to be sort of one of the reasons why people lose faith in government.

When people's elected representatives pass a law, the Governor signs it and then it takes two or three years to implement it. It should not be that way. So your observation, Senator, I agree with, you're being very accurate, but I, for something this straightforward, I think the Department should be able to easily do it within a year.

Let me just be real clear about what I'm talking about is that if you follow the apa, it is impossible to get something done in the year because of the hearing requirements. You have to give people an opportunity to put their thoughts on paper and then you have to go through them and write it up and respond.

And then. So 18 months is not, is really normal. And I agree with you, two or three years is ridiculous. I just, you made it a year. And so I just caution, because then what we ought to put in the statute, and I'm determined not to support it anymore, are emergency regulations.

This may be one of those situations where emergency regulations work and emergency regulations allow you to ignore most of the public process and go straight to go and not pass jail or whatever that thing is. And so maybe a year works. But it's important to understand the difference between the two.

I agree with you. I agree with you. And I think it is still an indictment of the system and the APA needs to be looked at. I'm just going to say that this regulation, a climate regulation, will also have to undergo CEQA, as far as I know. And there are other requirements.

And so we, we actually incapacitate our agencies from doing their job. And I know you and I tend to be aligned on these, on these issues.

I agree with you 100%. There's a whole bunch of things that we have to take through CEQA that don't make any sense anymore. But that's another subject.

Thank you, Senator.

Thank you, Mr. Chair.

Okay. Senator Stern?

Yeah. Has the Bill been moved? Okay, well, I'll just say thanks on this. We've been working on trying to get epermitting or other sort of fast track permitting not just for heat pumps, but for all cooling and heating equipment.

And you know, the fact is, I think there's also a pro consumer Bill because to the gentleman who runs his small business, when you're having to run basically a shadow economy of doing permanent projects unpermitted and especially people in very hot areas, when their H Vac breaks and they want it to go fast, you don't want to wait three months, let alone, you know, one day.

So I'm really hoping you can have the same success here that you've had on solar and storage to push this ahead. And on this case, I do agree with you on all the other streamlining on APA and SQL and the rest. So Godspeed on this. Excellent.

So, Senator McNerney, thank you, Chairman. Hey, this thing just seems like common sense, you know, the high cost of living and housing and energy, the need to reduce emissions, streamlining, permitting without relaxing environmental protections and without relaxing standards. I think just kind of gets to. Where we need to be. So especially if we're not, if we're.

Willing to work with labor to make sure that the plumbers are happy with this, then I think it sounds really good. I'm going to support you.

Excellent Sinatra. I'll just say for my part, I have a heat pump. Before that, we didn't need air conditioning. Where I lived. When I first moved there, it was hot five days and then 10 days and then really 30 days, really oppressively hot. And we got a heat pump. We got air conditioning as well.

And so I appreciate it was good to hear from the, you know, the business owners. Always helpful to hear from folks on the front lines what they are going through. I know you are a big fan of the abundance you know, of how can we do things faster.

So I appreciate your efforts and so appreciate that you're working with the opposition on iron out those issues. We have a motion by Senator Rubio. I have. Aye. Rekka, would you like to make a closing statement?

Great conversation. Respectfully ask for an aye vote.

Okay. Committee assistant, please call the roll. I will say the motion is do passed to the Senate local government Committee.

Senator Specker.

[Roll call]

Aye.

Okay, we visit 7 to 0. We'll keep that on call.

Okay, we have three bills from Members of the Committee. Senator Grove is first. So we will invite you up for SB13, Senator Grove, when ready.

Thank you. Thank you, Mr. Chair. Colleagues, I'd like to start by accepting the Committee's recommended amendments to reduce the number of reporting requirements in the Bill to consolidate the emissions reporting to CARB, the California Air Resources Board. Thank you. Last year, Californians consumed 1.4 million barrels of oil every day. About 510 million barrels over a year.

But only 118 million barrels for that year were produced in state by California workers for Californians and their consumption. With reduced permits in the Central Valley and Kern, county, that number will drop drastically next year.

The rest of the oil that we get, 392 million barrels, is imported with 324 million barrels coming from foreign countries transported here on huge oil tanker ships which spew roughly 126 million metric tons of carbon emissions, emissions and hazardous waste on their journey from point of origin to point of destination.

The amount of Californians spend on imported oil is enormous. We are the fifth largest economy and I submit to you that we should use our money for good. If oil is Produced at approximately $80 a barrel, Californians send foreign countries $26 billion a year to import the oil that we use and need every single day.

Truly, the state's current energy policies make no sense. We've placed California's energy security into the hand countries that actively are hostile to Californians values when it comes to human rights, labor rights and environmental rights. The top four countries that we do business with account for 70% of the foreign oil.

We import about 589,000 barrels a day, or 221 million barrels a year, comes from Iraq, Brazil, Guyana and Ecuador. Currently, California's top source for barrel foreign crude oil is Iraq. This country is annually highlighted by the U.S. Department, highlighted by the U.S.

State Department, as well as groups like Human Rights Watch and Amnesty International for deplorable human rights violations. As the fifth largest economy, as I said, we should use our money for good.

We import about 68 million barrels of oil from Iraq, which last year passed a law to make it illegal to use the word homosexual in the state and in the press and puts people to death for claiming to be part of the LGBTQ community.

And just recently last year passed a piece of legislation by the Iraqi parliament that says any grown man can marry a nine year old child. That's supporting a country that constitutes and values raping of a child. Nine years old and young. Nine years old and older.

The state's energy policy resulted in about $5.5 billion being sent to that government that encourages child rape. It's just unacceptable to think that we would do that. Members, this is the number one that California buys its oil from. Why are we doing that when we could produce it here for Californians, by Californians?

3 of the top countries that we import oil from. We're actively destroying the most biodiverse ecosystem on the planet to get California oil here. Two of my colleagues on this dais work with those countries and they work with Amazonians. And they know that we are displacing Amazonian families.

We know that we're bulldozing down the rainforest, which is the large bio ecosystem in the entire United or, excuse me, the country. It's called the world's lung. And we're actively bulldozing down that natural sequestration place. Ecuador has been strongly criticized by environmental and indigenous groups for the practice of clear cutting and bulldozing down the Amazon rainforest.

One state, this state, California, imports over half of its crude oil from Ecuador. I have something that I've asked the sergeants to pass out to you. It's actually information regarding what actually happens in these foreign countries.

And if you look at some of the photographs it will describe or you will have a picture where oil is actually released into the rivers and into the waterways. Indigenous populations are washing their clothes and oil is attaching itself to these clothings that they put in there.

Water is being completely contaminated because they don't harvest oil the right way. They don't harvest oil in Kern, county, we bring oil and water up from the ground. We take the oil, we capture the gas, we recycle the gas to run the generators and things on site.

We take the water, we run it through a filtration system and give it to farmers with a reduced.05 pipe part per millions, which equates to exceptional water use for agriculture. There's so many things that we do right here in the State of California, but we continue to send our resources to countries who don't do it right.

California's decision to import rather than to produce oil here means that we're financing more of these. The destruction of the Amazon rainforest. Again, the money that we're sending to these governments directly finances this activity. All of this imported oil brought to us in California by 600 tanker ships in a year.

These tankers spew millions of pounds of carbon emission into the atmosphere. And what we found out from the California Air Resources Board is they don't measure the carbon Emission output from point of origin to point of destination. They measure it by self certification by the foreign operator of the ship.

So some foreign operator from a different country says, I use 12 carbon emissions. And they only require these foreign operators to count the carbon emissions. 12 miles off our coastline, that's it. Not from Saudi Arabia, Iraq, all the way to California and Long Beach. 12 miles off our coastline.

Oil today is used more than just in gas for Californians that they put in their car. There's 6,000 products every single day that we use from petroleum, such as shoes, phones, toothbrushes, eyeglasses, heart valves, disposable diapers. Almost anything that you get in a hospital made of plastic is a petroleum byproduct.

For people that say they hate oil and oil shouldn't be here, I look at the glasses the chair is wearing, the consultant is wearing. It's all an oil BRI product. If you look at the shoes that have the rubber soles, it's an oil byproduct.

If you look at the name plaques on our, the names that are in front of you, those are part of a petroleum byproduct. Almost everything that we use is a petroleum byproduct. And I just think that we as Californians should control the process.

We are in a desperate situation where we don't have enough crude going through pipelines to sustain our refineries. Because we're importing this oil. We could produce oil here for Californians and by Californians and we could solve that problem.

If we lose one more refinery, we are going to be in a world of hurt and it's going to cost us a lot of money, especially at the pump. California's 2022 scoping plan for achieving carbon neutrality admits that the complete phase out of oil extraction in the refining is not possible by 2045.

It was a lofty goal to see if we could make it. We can't make it and we have to adjust course or we going to be in a world of hurt. The plan envisions a gradual phase down in oil and gas extraction. But the state has been aggressively shutting down domestic oil production since 2019.

Over the past few years, production is down 23% and over the past year alone it's 9.5% offsetting, that is the imports of foreign oil production in California is not seen as a compatible decline over consumption.

Over the past three years, California oil production has dropped by 17 million barrels, while foreign imports have have increased by 13 million barrels. Transition off of fossil fuels is not what we are portraying to the public. Transition is leaving and transitioning off of our domestically produced oil to transition to foreign or non domestically produced oil.

I could go on and on and continue to work, but I can tell you that and continue to share this. I've been beating this drum since 2010. I really have. I've been beating this drum since 2010. And you guys, we are in a situation where we've lost our refund refinery capacity.

We're getting ready to lose more, and we are going to rely on foreign countries, some that are hostile to us, to bring us the vital fuel that we need every single day to make life not be a third world country. In California.

SB13 would simply implore the Legislature to prohibit import of crude oil into California if the source of the oil of foreign nation is demonstrated, human rights abuses or environmental standards that are lower than what California requires. The measure would also appreciate your.

If we could start to wrap up.

Thank you. Sorry. The measure would also require that you provide clarity on environmental and economic consequences for importing so much oil. The Air Resources Board to report on its website the annual particulate matter. And when I say the Resources Board, I mean the entire amount from point of origin to point of destination.

And the fuel that these ships use. They not only spew carbon emissions, but they spew hazardous chemicals and hazardous waste because they use bunker fuel, which is just a level below crude. Respectfully asked for an I vote. Here with me to support SB13 is Sean Wallentine with the California Independent Oil Producers. Sorry.

Great, thank you.

You have two minutes?

Yes. I'm not sure why I'm here. That was amazing.

Yeah, I kind of hit it off, but yes, go ahead.

Sean Wallentine, California Independent Petroleum Association, in support of the bill. This bill would take an honest look at the true environmental impact and economic costs of import importing foreign crude oil. As the author noted, Californians use 1.8 million barrels of crude per day. And it's not going down, it's going up. Demand is not reducing, it's increasing.

And so when we talk about transition, what I noticed about the Brown Administration is they were trying to reduce demand using creative ways. Now we're attacking supply, which is causing major problems. Our crude oil production in California has been cut in half since Governor Newsom was sworn into office.

We've gone from 500,000 barrels of crude production per day in California to about 250,000 barrels per day. We have independent oil producers right now that are on the edge of bankruptcy. You can't contract by 50% and survive. Okay. And that's where we are right now.

So we want to be the oil producers under the regime that this Legislature has created in California with responsible oil production. We can show the world how it's done if we're given the opportunity. Right? And so that's what we're asking for.

We're asking for an opportunity to produce more crude oil here instead of shifting our wealth from Central Valley oil families to the tune of billions to Saudi Arabia, Iraq and Ecuador. And by the way, I do want to make a point about Ecuador.

The reason Ecuador has become the focus over the last five to six years is because the permits for our oil wells have gone down so precipitously. The refineries in California have to go to South America to get the similar weighted crude that is under the ground right here. That's why they're having to go there.

It's California's fault that Ecuador's rainforest is being destroyed. SIP has been saying this for years now and telling you, hey, we're not in support of tearing down the rainforest for oil. We're in support of the 1700 per permits. Two years old. How about eight years old at CalGEM? We've got 1700 permits.

We're ready to drill tomorrow if you give us the ability to do that. So we're hoping we can drill more here responsibly under the watchful eye of the layer cake of federal, state and local agencies that we operate cooperatively under. We want to provide the crude oil that California needs. We support the Bill and we hope you'll.

You'll vote for it.

Thank you very much. Do we have any other add ons in support?

Ms. Charlotaba representing Associated Builders and Contractors of California in support.

Thank you. Okay, we'll see if we have anyone in opposition. Do we have any opposition lead opposition witnesses? No, no. Any opposition B2s? Okay, we'll bring it back to the Committee.

Mr. Chair, Senator Letta, Senator Grove. So this is primarily an investigative report, so we could all see the difference, but we hear it all the time. If we have the oil, why don't we go after it?

And I hear from the industry it's just too expensive that not going to be able to do it because it's too expensive. Is that what you're looking to report to say, or the industry is going to say? The report is here. We're ready to go to work.

As was just said so, sir, I don't know who you're talking to in the industry. I represent 70% of the state's oil industry. And the reason we can't go after the oil here is because we have no permits to authorize us to harvest the oil here in a controlled environment, which we control the process.

We go through ceqa, we go through water aquifers exhibitions, we do water aquifer testing, air quality testing, we capture. We're not allowed to use open air flaming anymore. Since the 1950s. We have to pay a certain wage, we have to provide benefits to our employees.

We provide 55% of second chancers with jobs that come out of the prison industry where they have an opportunity to be able to buy homes. And I think that is the number one catastrophic not to go down a rabbit hole.

People say there should be a massive lawsuit and the oil companies worker that has lost their home, lost their car, pulled their kid out of college because they went from making, went back to prison, you know, $125,000 a year down to $15 an hour replacement or now $17 an hour replacement under the oil field worker displacement program at an Amazon or an AutoZone.

That's the biggest catastrophe that we face. But I don't know who you're talking to. If you'd like me to talk to them, I would. We cannot drill for oil because we cannot get permits. That's the only thing we cannot drill. They sit on CalGEM's desk, there is no due process.

They put the information into wellstar to get a permit and the code section, I think it's under 5403 says that they have to respond within 10 days or the permit is guaranteed, you know, approved.

So what they do is they send an email within 10 days that says thank you for your submission or some arbitrary thing like that. And then they wait years to even work with the individual producer to be able to extract the oil that we sit on in our Central California area and throughout the state.

But it is not because we think it's too expensive. I will tell you that it is much cheaper to go to Guyana. It is much cheaper to pay somebody $22 a day instead of $35 an hour.

It is cheaper to just dump your oil into the river or water stream instead of making sure it's captured correctly, stored correctly, transported correctly. I mean it is cheaper to produce in a different country because you don't have the same environmental impact and the same environmental rules.

But I support those rules because they keep our community and our aquifers safe. And so it is cheaper. But I think we should still produce it here by Californians. For Californians.

What's the timeline on this report that will show us exactly where we are?

Well, I've been trying to get it passed since 2012, and we're still in the discovery process. We'd like it by the end of next year.

Okay. Thank you, Senator Stern. Thank you, Mr. Chair. Yeah. 15 years of advocacy. You don't need notes. I get it. And you are making a dent in.

A dent in your issue.

No, I think really there are serious challenges that I think we need to acknowledge and I think we need to have a serious conversation about permitting in Kern. County.

And, you know, there are a lot of laws we've got to protect communities with setbacks and things that are right near their homes and groundwater testing and a lot of other standards that have helped write over the years, including our fracking laws and a number of others. So I do agree with some parts of your premise.

I don't know that we're necessarily complicit for the crimes of multinational corporations in some of these developing countries, but I don't want to get too deep down that rabbit hole. I guess my main thing is if we're going to make this work, and I do think there are gaps in the emissions reporting, the end to end issue.

We had a conversation, I know, before Committee, but I'm really trying to. I don't want to stand up a whole new reporting regime or a new sort of bureaucracy in the State of California to track things that we actually have a lot of laws on the books that in theory should do this.

And right now, CARB, for example, is implementing a climate emissions disclos law that we think can get to some of these issues. There's other standards that they're enforcing that in theory, if they could just enforce them better, we wouldn't have to stand up a whole new architecture.

I get that there may be a timing gap, but I just wanted to, you know, before I can sort of jump out on the limb and support this, I want to get a sense of your commitment to trying to work through, taking full advantage of the existing data sources and opportunities to sort of tighten up those data sources.

So if we're fully implementing SB253, for example, or. Or the Low carbon fuel standards, delivering some of this information, is that something you're willing to consider going forward to make your Bill more efficient and sort of make it work without having to build a whole new, you know, reporting machine?

Absolutely. Sure. So, like I said, we've been working on this since 2010. It's been roughly the Same language, with a lot of updates based on increased production in Guyana and Brazil. Like, it went up 3%. California's oil production went up 3%, which again destroyed that part of the rainforest, 3%. So it's been the same language without.

Except for we change the numbers, because the numbers do change every year, depending on what permits we get. So that has never been brought up to me. You sent me a text this morning. I was very intrigued by the text.

I ran it up the flag pole of the people we work with, and I just haven't had enough time. But what they want to do is look through those previous pieces of legislation, see what matches, see what doesn't, and then see where we can consolidate the oversight. And I'd be definitely willing to do that.

The point is that I'm trying to make is, obviously, Kern County represent 70% of the state's oil and gas and 53% of the state's renewable energy in the State of California out of 58 counties. And this is very important to the jobs in my district.

And it makes no sense to me that we would import oil from foreign countries versus produce it here, where we control the process. I've made that very clear. But if there is a simpler way to do this, to get the information that we need without costing the state a tremendous amount of money, I'm all in.

And so as soon as I get an answer back, I'll work with you and the chair or the Committee to see if that's something that we could work out.

Okay, thank you. Okay with that, I have to go to another Committee. I'm going to turn the gavel over to Senator Stern. We've got McNerney, Rubio, and we'll start there. Senator McNerney.

I thank the Chairman and I thank the Senator for bill. I think you're making a legitimate argument. It's far better to produce energy here in California. California especially if the foreign sources are dirty, which they are, and some of them are anyway, and using human rights abuses. And so that's good.

But I'm going to follow up on Senator Stern's comments. I would ensure that California domestic producers use known high standards for fracking that prevent groundwater contamination, a very serious concern. In California, we all live with limited water supplies. Fracking also causes seismic activity, which is a concern. They've seen that in Oklahoma. And in General, drilling causes harm.

Isn't a way to ignore that. But if we're going to move ahead, then with California domestic production, we have to make sure it's done Right. And there's high standards.

I've put out some standard ideas in earlier life, and some of those might be legitimate, but I would like to look carefully at what the standards for fracking are and make sure that they're safe and they're going to be protecting our groundwater.

Thank you, sir. And I can tell you that California's standards are higher than any other standards in the entire world. I can show you this, which is on a document that I gave you. This is a Kern County oil field. Our oil fields do not look like a decorated palm tree in the middle of someone's palm.

Their parking lot doesn't look like, I don't know, a building or a tower. It's a full, complete oil field on the same water aquifer with the same water aquifer exemptions, the same CEQA that goes through. And a lot of times, oil policy out of this building is brought forth.

And it's a statewide policy that negatively impacts where we have the major factory floor of impacting or producing oil. Because it's not like in Long Beach or Newport Beach or other parts of the state where there's one well, a different water aquifer and different ecological systems underground to be able to produce that oil.

This is all done in Kern County in a field. There is no beneficial use for this field except for to produce oil. It's the largest oil reserves almost in the entire United States. We just don't have access to it because we can't get permits.

But when you do have to do some fracking and some injection wells, because it's real thick and heavy and you have to loosen it up, but it's not around. It's in the middle of nowhere, sir. The Bell Ridge and the Midway Sunsets field are the largest fields, I think, in county.

Kern county produces more, if we had the permits, than any other county in the United States. So it's a different place, if that's what I'm trying to understand. There's not a lot of issues where you're going to have those problems that you would have if you were drilling in a supermarket property down in Los Angeles.

Well, Kern county has. I'm not. Kern county has significant groundwater resources.

We do have significant groundwater resources, and we work with our groundwater resources. And we do. Like the Koala Water District, we have an approved blending process where we can take fracked water, filter it out and make water for agriculture and provide water for our farmers.

We have a process in another part of the county where we do the same thing, only it's run through like a reverse osmosis system, which is the best way to explain it without getting real technical. And it actually exceeds the 0.5 parts per million for our agriculture water.

So in drought years, when we have a huge issue with water coming to the Central Valley, the top three food producing counties in the world, we actually use produced water. Cleaned up, it's almost eligible for drinking. I think it has to be 1 part per million for drinking, 5 parts per million for agriculture production.

And we meet those standards to make sure that we can still grow the food that we use.

So you said that the land doesn't have any other potential uses?

Not this land, sir. The Kern County area. There's a lot of agriculture land, there's a lot of building development, but where these fields are, no, sir, there's not beneficial uses out there.

Okay. I'm not sure I buy that, but okay.

You should come visit my district, sir.

I might if I have to. All right, thanks. I'm going yield back.

Okay, thank you, Senator Rubio.

Thank you. Assistant Chair, I suppose. Thank you so much. You know, I've been hearing the discussion and the information that was shared. It's all true. And I appreciate Mr. McMurray's comment and Senator Stearns, but there's something that, for me is really critically important.

I know, I heard that, you know, we may not be complete what happens in other countries, but, you know, when you mentioned the $26 billion that we spend a day to bring oil from other countries, that are really violating human rights and just the standards are not equitable to what we do here, I think we are complicit in so many ways.

You know, I've seen some of the pictures of children and just what happens in these other countries. You know, you talked about the open fire that they use in other countries, open flames that cause cancer. And if we are buying from them, I think we are complicit.

And I think that not only do we have higher standards here, but also we need to provide jobs for Californians, which is what we're lacking. I know. My heart breaks every time I think of the refinery that's closing in Los Angeles County, which I think 600 people stand to lose their jobs right now.

At a time where people need security, stability, and a patron check, you know, we have to do better and find that middle ground where we're taking care of people, their jobs, but also understanding the impact of what's happening, you know, in our society as it pertains to climate change.

And I think There is a place there in the middle somewhere. And I appreciate that. I guess we're all very open minded in understanding that we have to figure this out. I would prefer that, that we provide the jobs here and that we're not abusing Low wages in other countries.

I would prefer that we use our high standards here in this country, in California, and not leave it to the devices of foreigners who are really just not caring for what they do to our, to humanity. So I just think that there's a conversation to be had where we can find that middle ground.

And I do believe we're complicit and I think we have to do better and not exploiting other cheap labor in other countries or human rights violations in other countries because if we use their oil, we are complicit. So thank you. Thank you.

Okay. zero, Senator Allen.

Well, first of all, appreciate the conversation very much. And you and I have talked about this extensively. Senator, you've brought this before. This is an argument you've been bringing up for a long time. And I think it makes a lot of sense given the challenges that exist elsewhere. I guess I just want to.

I'm comfortable voting for the bill with the understanding that you're going to do some follow up on the request of Senator Stern. We want to make sure, Obviously we passed SB253, you know, last year, two years ago, whatever it was.

And we want to make sure that as we're looking at all the reporting that we're not creating, you know, unnecessary redundancies, that we'll make it more difficult for either the government or people within the oil supply chain chain to do all the reporting that's already required under the previous legislation. So assuming that it sounds like you're.

I don't want anything to be redundant. I don't want anything to be more expensive.

I have a report here that I was going to share with you guys later, but since you brought up that comment, this is a cost sheet from Calgem on abandoning wells because we are now abandoning more wells in the State of California, which we need to.

And the industry that's experts in this field that's been abandoning wells forever can do it for $45,000 or $50,000. And CalGEM is doing it for $568,000, $1,034,000. It's completely ridiculous how that's happening. And it's all redundancy and additional stuff that is being paid for. It shouldn't be done that way.

I would never want to expand government in that way. And I got the chair, the acting chair's text this morning, and I couldn't do a lot about it during floor session and, you know, a few minutes before the hearing, but promised to work on it because I don't want that redundancy either.

I do want to point out that Lorelei Oviat, who's deeply respected in the State of California for county wide eirs, whether it's solar and wind and whether it's, I mean, she's deeply respected by the Administration. They call on her for stuff. The CEC deeply respects her.

She's the only one in the State of California has done an oil eir and an impact study on the air from the wellbore out and any type of environmental impact report that should be through the court process by, I think, in a year. But she's the only one in the state that's done it. She's deeply respected.

So when you look at the numbers, she's the person to contact and has credibility to teach you the information.

Great. Well, I look forward to, and I know you will diligently report back to us on the floor, wherever else, every day, sir. So I'm happy to support it without. A thank you, sir.

Okay. Further questions? Seeing none, I think we would need a motion to amend the Bill and we need some specificity on that just because they're slightly different from the amendments listed in the analysis. So we'd entertain a motion at this point. I'm happy to do that. Zero, we do close before a motion. Yeah.

All right, you can close.

Just respectfully ask your for your I vote. I know that there was a deep discussion and it's probably pretty much, I don't want to say irrelevant, but we do have a significant buying power and where California spends its money, we should be conscious of that because we do impact countries. We spent 5 million, $5 billion with Russia.

Sarcastically, you can't say. I mean, you could say that Russia built food banks and parks, but that's just not what happened with the money. We sent them. We spent money to Iraq. We sent money to Iraq. It's our biggest oil supplier.

And there's no doubt in anybody's mind that they were complicit in what's going on in the Middle East right now. And so I just think that our buying power does have significant impact on global issues. And I think we need to be conscious of where we send our money. Respectfully ask for an aye vote.

Okay. That's the close. We would entertain a motion. So motion from Senator Caballero. Mr. Chair. I've got a question. You mentioned amendments. Yes. So let me read them out to you. What is in the motion? So the amendments would.

They would shift from the CEC to CARB, the reporting on air quality impacts from shipping 5 to 10% of imported oil, and then they would delete the remaining provisions in sections 3 and 4 of the Bill that essentially put some of those and other reporting requirements on the Cec.

So this Bill would now just solely be a CARB reporting Bill with some data sharing between CEC and CARB? That's my understanding. Yep.

It is a little different than the analysis, though, because of what happened later on that evening. I apologize. Yes.

It's okay. Hopefully this will continue to evolve and we can. We can land something here. So, motion. Yeah. Motion as amended, to the Senate Committee on Appropriations. Committee Assistant, please call the roll.

[Roll call]

Okay, that's 70. We will leave that measure on call for absent Members. Thank you so much. Senator. We have Senator Hurtado here with File item number seven, SB593. Come on up and whenever you're ready. Okay.

Good afternoon, Mr. Chair, Members of the Committee. I want to begin by thanking the Chair and the Committee staff for their assistance on this bill. I will be accepting the Committee amendments that are outlined on the analysis.

I'm here to present SB593, the Volt Act, which I'm running as a result of repeated, costly and often dangerous power surges, experience experienced by many individuals in unincorporated communities like the community of Allensworth in my district. And personally, because I've also experienced a situation myself as well. Last year, during a heat wave, my power went out.

When it came back on, my AC unit was technically running, but it wasn't cooling. That night I had to pack a bag and I left my home for a hotel because it was a very dangerous situation to be inside the home without the AC on. And so the following day I ended up scrambling for window units.

And it wasn't until days later that an insurance adjuster came out. And their verdict was that a power surge had fried a component of my AC system. And it was really the heart of the HVAC system that, that it killed the cost to replace.

As you know, many of you know, the cost to replace an HVAC system is over $10,000. It's really pricey. And in regions like the Central Valley, it can be a matter of life and death for some folks.

So now imagine that happening to a senior on a fixed income or a young family already struggling with rising rents, or a small business. Power surges strike without warning. They damage appliances, fry electronics and burn through home systems. They aren't just minor inconveniences.

They leave families with costly repairs or replacements that can destroy critical cooling systems during deadly heat. And they pile on top of already rising cost of living. In Long Beach, for example, small businesses lost thousands in food and some had to shut down due to outages and unaddressed search damage.

They got no warnings, no answers and no compensation from what I am aware. So, you know, SB593 really is looking to bridge the gap on some of the existing policy that's within the CPUC already.

The Volt Act specifically will direct the CPUC by July 1, 2026 to require utilities to adjust consumer protections to better guard against voltage surges, damage equipment and appliances. And it would require public owned utilities to adopt policies to address power surge events and publish this information on their websites. So with me here today, I have two witnesses.

Takoa Kadara, a resident of unincorporated community of Allensworth, and Eddie Ocampo, Director of Public affairs for Self Help Enterprises.

Okay, Great. We will go with whoever you want to go first. We'll do two minutes each.

Greetings, honorable Chair and Members of the Committee. My name is Takoa Kadara from Allensworth, California and rural Tulare County. I'm speaking as a resident and as a Member of the Allensworth Progressive Association. I'm pleased to Support Senator Hurtado's SB 593 Volt Act.

This bill will bring much needed accountability and require public utilities to install equipment to detect power surges and outages, notify residents or customers within five minutes of these outages or surges, and offer reasonable compensation for damages affected by the surges.

It's already hard for our residents being low income, to have to constantly be replacing some of, like the Senator said, air conditioning units, refrigerators and other household appliances. Most recently, I bought an in home garden kit for my parents and in less than three months before our first harvest, it had already shorted out with this.

I think it's, I'm thankful for people like my father that has the know how and the understanding of asking the right questions and seeking answers, which is pretty much the reason that I'm here today.

Because he's found ways to call the utility companies and be able to find some kind of reimbursement for maybe a fifth of the cost of a refrigerator that he lost, which I don't feel and the community doesn't feel is really sufficient.

But in closing, I support this bill because as a paying customer, I'm held accountable for my delinquencies if I don't pay my bills on time. And I feel like this bill will help hold these power companies responsible and accountable for their lack of infrastructure or lack of improving infrastructure in rural communities like Allensworth and surrounding areas.

Okay, thanks so much. Are there any other lead witnesses?

Thank you, Chair and Members of the Committee. My name is Eddie Ocampo. I'm one with Self Help Enterprises. Since 1965, Self Help Enterprises has worked with Low income families to build and sustain healthy homes and communities. Our efforts have touched the lives of over 65,000 families. Our service area consists of nine counties.

Fresno, Kern, Kings, Madera, Mariposa, Merced, San Joaquin, Stanislaus and Tulare county in the heart of the San Joaquin, the world's most productive agricultural land.

Our organization has helped families build their own homes, rehabilitate unsafe houses, develop units of affordable rental housing, and has provided technical assistance for reliable access to safe drinking water and sanitary infrastructure for more than 160 small communities.

Major component of providing affordable and sustainable Housing and access to drinking water and sanitation is also ensuring access to affordable, safe and reliable clean energy.

Today I'm here to support SB593 Volt Act voltage oversight and load transparency legislation whose need is highlighted by the frequent and costly power outages in unincorporated communities like Allensworth where these outages have resulted in damages to hardcome by household appliances and district equipment.

The Volt Act would ensure that utilities take the necessary steps to prevent that these outages occur or at least notify folks when these outages do occur and provide adequate compensation for folks who are impacted by. Many of these folks are on very limited income.

Many of these folks are elderly, particularly vulnerable, particularly during these very difficult summers, really hot summers and would benefit from having this safety net legislation. I urge the Committee and the Chair to consider an Aye vote on this legislation. And thank you very much for your time. Thank you very much.

Do we have other witnesses in support? General support testimony? Seeing none. Do we have any lead opposition witnesses here? I think I'm seeing two. So we'll go two minutes each. Just one. Okay. You can take full four if you want or keep it two if you want.

Thank you. Good afternoon Chair Members. We are Brandon Ebeck from Pacific Gas & Electric. We are opposed to the bill in print and we'll review the amendments that I believe the author is accepting. Just wanted to provide a couple notes specific to Allensworth.

That was an area of our service territory where we serve the community, the homes that's right on our service area boundary. And Edison serves the well that provides community power. So it's a little bit complicated.

That area during the Tulare Lake flooding event which happened over the last two years, we had to reroute infrastructure that it was in the flooded area and provide that community with service in an untraditional abnormal configuration. We are not aware of any power surges that occurred during that reconfiguration.

But we are aware that there was a bunch of temporary momentary outages. Lights flicker off and on because the circuit was not designed to handle the load that it was temporarily picking up. We replaced that circuit to normal configuration in September. We're not aware of any other outages in that area since.

So I think just want to be clear that there are no identified power surges in the area. And then with regards to our claims process, any customer that has a power surge or any claim for anything could be veg management gone wrong. They can submit a claim.

Our claims Department makes every effort to review those claims within 30 days. We provide fair market value or honestly, a lot of times we will try to go above and beyond fair market value, just being a good partner with our hometowns within the community of Allensworth.

We had one single application or claim made for the power outages in the time in question. Been working with the author's office to identify any other community members who may have had damaged equipment.

We stand ready to look at those claims and help anybody in the community fill out a claim if there is equipment behind the meter that was damaged. But for those reasons, we're not sure that there is the justification for the bill, but ask for no vote. Thank you.

Okay, thank you. Others in opposition, please come forward.

Hi, Members Yara Lynn Trujillo with Southern California Edison in opposition of 593. We are still reviewing the amendments and we want to thank the Committee for working on the amendments and we continue to. We look forward to continue working with the author's office. Thank you.

Okay, thank you.

Good afternoon, Chair, Members. Lura DeSallon with San Diego Gas and Electric also echoing SoCal Edison's remarks. We'll be reviewing the amendments and getting back to the author, but in the meantime, we're opposed to the bill in print. Thank you so much.

Okay, very good. Seeing no others in opposition, we will bring it back to the dais. Members, questions? Comments? Yes, Senator Archuleta.

Thank you, Senator, for bringing this forward. Obviously, in your district, with the heat waves that take place that we're all aware of, it's amazing that a power surge, the question is, can the utilities notify when it's about to happen? Is there any mechanism they can.

I know the bill looks to notify and, and give information of maybe why it happened. And I'm hoping that they'll tell you it will last for so long that you'll be without power. In your case, 10 hours or even 10 days, whatever it is.

But I think the constituents, yours and ours, want to know exactly when will it go back on? And of course, there's times where there's not a mobile accident, the pole comes down and you know, and there's the power surge. There's things that are beyond their control. Granted. But notification, people need to know. The utilities, all of them.

Do you think that they're going to be able to give you a pre warning as far as letting you know how much longer have you gotten that together with them?

Thank you for the question. That's really in part why we're accepting the amendments in terms of letting the CPUC work with utilities to figure that piece out. Because they're going to figure out the best way to make that happen. Right. That is the most reasonable approach.

But, you know, it's something that when there is an incident, for example, and it ultimately ends up being damaged property damage of over $50,000, the utilities are required to, from my understanding, report to the CPUC of that damage. So there is like a list that I came across of these incidents that occur. But granted they're over $50,000.

If they got a little bit of media attention, then that's kind of what resulted in that reporting.

I don't know what the internal mechanisms are for each utility that would trigger that, but I think it's something that definitely, I think we need to look into and figure out for consumers across the state because it's something that has happened in my district.

But I'm, you know, confident that this has happened also across the state and other parts.

And I would imagine $50,000 would pertain to a farm farming equipment that was on computerized, you know, of course, our cows or whatever it might be in a home, like you had just mentioned, $10,000 for an air conditioning system, which could almost cause a young family, as you mentioned, or a senior to even go bankrupt, where a company at 50 or 60,000 might be in the same boat.

So I think the Bill has some merit and it's perfectly timed because as we're evolving into the construction in Southern California, we also need to know what's going on. And I know in your district it's a lot tougher because of the heat waves that you have.

So I'm going to support the bill and I'll move it at the appropriate time.

Okay. We'll treat that as a motion. Are there any other questions or comments? Yes, Senator McNerney.

I thank the Vice Chair, I thank the Senator for your bill. I have a couple of questions that I don't quite understand. Sure. The five minute detecting power surge and notification, and that's part of the bill. Right. There's a five minute notification requirement for the power surge was amended out, right?

It was amended out. Okay.

So that's no longer. No, that's no longer. Because I mean, it didn't make sense because I mean, the damage has already happened. So another question, requiring utilities to install and maintain equipment capable of detecting power surges. What's the timing on that? I mean, how much time are you going to be giving the utility companies to do that?

Go ahead. I don't want to interrupt, but I believe, and I can read through the amendments if it's helpful, but I believe that one was also stricken when we removed the specific notifications and technology requirements. Okay.

And then compensation for power surges related from utility equipment failure and negligence. Equipment failure. Now, sometimes it's due to poor maintenance, in which case, yes, they should be held accountable. If it's due to other causes, I think it's something that should be considered. There's other legitimate causes of equipment failure.

And then also the bill is supposed to take place immediately. Again, if you're going to put this kind of an onerous requirement, then the utilities are going to need to have time to implement these changes.

So with those comments, I'm going to just not vote on this one and make sure that I'm happy with the result before I support it. Okay.

Maybe the author. Do we have other comments or questions? No. Maybe in your close you want to address some of that. But I, I am. Does it help you to read the amendments now, what they are? Yeah, if you don't mind. Is that okay? Can I run through that just for the Committee? So you know.

Yes, it is noted in the analysis, but the amendments would recast the bill to remove specific notifications and technology requirements. It would replace the requirement on the PUC in a new existing or proceeding.

New or existing proceeding to evaluate consumer protection requirements and electric IOUs associated with power surges and determine whether it is necessary to strengthen these protections and then replace with requirements on the electric POUs to develop their own consumer protections related to power surges and post these on their website.

So the bill's language, in other words, is being recast but remains consistent with the author's intent, we believe to address the impact of power surges on customers. So that's a little summary if you'd like to close. I believe we do have a motion from Senator Archuleta. Yes. Okay.

Yes, thank you. Through the Chair. I appreciate the comments and the questions here today. And you know, really I'm looking to address the concerns that my, my constituents and even myself that I've come across. Right.

And I don't want to create an extra burden or any like add any additional steps, but I do think that there's already a mechanism in place that really one wouldn't require, you know, any, a whole lot of work or funding. There's already investigations that take place for incidents.

All I'm looking is to have a fair process in place because when the power goes out, there's notifications, you can see that online, that's very transparent. But if the power. There's a power surge or if you're appliances are go out due to a power surge, there's no real protections or transparency involved when it comes to that.

And you know, there's many individuals that can't afford that kind of cost. And you know, unfortunately it's also a matter of public health. So with that I would respect last for an Aye vote.

Okay, the motion is do pass as amended to the Senate Judiciary Committee with the Chair recommending. Aye. Committee's assistant, if you'd like to call the roll.

[Roll Call]

That measures four to one and we'll leave the roll open for absent Members. Next up, Senator Caballero, File item number six. That is SB298. Whenever you're ready.

Good afternoon, Mr. Alternative Chair and Members. I'm here to present SB298 to ensure that California's seaports remain operational and competitive and that they meet California's climate and air quality goals. California has long been a leader in climate solutions, yet we lack a clear regulatory framework to transition the maritime industry away from diesel dependence.

SB298 will begin to fill this gap. California ports handle 60% of all inbound US containers, yet we lack the necessary infrastructure to support clean alternative fuels. In this heavy industrial sector, global competitors are advancing multi fuel operations and California risks falling behind in the transition to a cleaner industry.

Barriers such as inadequate infrastructure, lengthy permitting processes, financing obstacles and regulatory uncertainty continue to hinder investment in cleaner fuel technologies. This bill will create a collaborative plan by 2030 to develop infrastructure for the storage and fueling of alternative fuels at California seaports. The plan will be fuel agnostic.

It will remain inclusive of emerging clean fuel technologies as they develop. By ensuring California ports remain at the forefront of clean energy innovation, we can reduce polluting emissions and maintain our economic competitiveness.

Reducing diesel emissions at our ports will lead to cleaner air for millions of Californians, particularly in communities disproportionately impacted by pollution, who suffer the health impacts of air contaminants. This is a unique opportunity for California to lead the nation and the world in clean maritime technology.

I would like to thank the Chair and the Committee staff for their work on this bill and accept the Committee amends. And I also want to confirm that we will work with the Longshoremen's Union to address concerns that they've raised as well.

I urge the Committee's support for SB298 to ensure our ports, economy and environment are at the forefront of our clean energy commitment. We need to act now to ensure that California's ports remain competitive, clean and future ready. With me today to testify in support of the bill is Mike Jacob with Pacific Merchant Shipping Association. Thank you, Mr. Jacob. Go ahead.

Good afternoon, Mr. Chairman. Members, Mike Jacob, PMSA. We represent OceanCare's marine terminal operators. Thank the Senator for authoring the bill. We have a tremendous opportunity to speak. Start investing in transition to alternative fuels in the state.

We have a global fleet that has a commitment under the International Maritime Organization's adopted policies of transitioning to net zero carbon by 2050. So of the world's container fleet that's sailing right now, 4% of them are equipped with alternative fuel technology.

But of all the ships we have on order right now, we're spending, our Members spend billions of dollars to always replace our ships. We're always moving through, moving to bigger and bigger ships. 83% of those are alternative fuel capable. Right now. Our biggest constraint in the future is not going to be the vessels.

We're already moving towards that. It's going to be, can we actually provide the fuel to actually decarbonize? If you don't, these vessels are equipped with dual fueling systems. If we don't have alternative fuels, we'll just keep using diesel. So we come into California, fuel up the ship.

If you don't have methanol, LNG, IPG, ammonia, hydrogen available for us, we'll use diesel. We'll keep moving. But if you don't invest in this and start a plan, which is what SB298 does, start the planning process for how you're going to actually create supply here. How are you going to actually create the actual fuel?

Where is it going to be stored? How's it going to be distributed and then delivered to the port? We will not be using that fuel here. We're behind other folks. So as Senator pointed out, we're ahead in a lot of respects with respect to decarbonization and supply chain and in our ports, we're very proud of that.

We've reduced our emissions at the port greater than anywhere else in the world with respect to particulate matter, DPM, SOX and NOX. But with respect to what comes next, with respect to decarbonization, we're behind on the infrastructure we need to do that. We're behind Europe, we're behind Asia, we're behind the rest of the United States.

So we're looking forward to the planning. Thank you for the assistance with the amendments today. And as we work forward, we'd like to continue to work with the Committee and the rest of the Legislature on making this a really succinct and workable plan that creates a document that we can turn around and start building infrastructure from.

Thank you. Excellent. Thank you. Do any others in support?

Hello, Good afternoon. Meg Snyder with Acxiom Advisors here on behalf of Invenergy and support.

Okay. To venue. In opposition? No opposition. Okay. Seeing none.

Let's take it back to the Committee. Keep going. You know, I'm so happy you brought this forward. I've always said this, that in California we have a treasure chest of energy and we've got to include everything, whether it be hydrogen, clean diesel, wind, solar. Everything's got to be used in our ports.

I represent Southern California and we need to make sure that everything is brought into play. So I'm hoping that hydrogen is part of this in the future because it will be one of the cornerstones that will maintain our clean air in the future.

So I love the bill and I think we should move it forward and I will do that at the appropriate time. You are on a roll, Senator Archuleta.

Anyone else? Excellent. Well, I appreciate you working with us. I appreciate you taking on this topic. We had a long discussion last night. I'm in support of the bill. I am going to read the amendments aloud. Then I'll give you a chance to close.

To modify the plan required by the bill to remove references to permitting fuel infrastructure outside port facilities specified. The CEC's plan should identify barriers and opportunities for the deployment of alternate fuels at seaports. Require the plan to include a forecast of the demand and supply for fuels that enable ocean going vessels to achieve emissions reductions.

Clarify the CEC may include timelines and costs for fuel transitions to the extent feasible. Require CARB to work with the CC to provide the CC with information on the types of fuels that meet CARB requirements for ocean going vessels. And finally, modify the membership of the bill's working group to include the State Lands Commission.

With that I have an I reco. And do you have a closing statement?

Thank you, Mr. Chair. I appreciate you missed, but I did say that I was taking the amendments and that I appreciated the work of the Committee and yourself in helping to make this a better Bill. So I respectfully ask for your I vote.

Okay. We have a motion from Senator Archuleta do pass as amended to the Senate Environmental Quality Committee. Please call the roll.

[Roll Call]

Okay, the vote is 6 to nothing. We will hold the roll open for absent Members. Okay, we will go to Senator McNerney. You have filename 8 SB698. And go ahead when reading.

Thank you, Chairman, for bringing my Bill up. And I want to start by saying that I'm accepting the Committee's amendments. The passage—I'm just giving a little history here.

The passage of California's Solar Initiative in 2006 had the CEC establish a solar energy equipment list to set energy—or to set standards—for solar equipment and to certify that equipment has met those standards. While the California Solar Initiative Program has sunset, the CEC continues to create standards and certify those standards, and that is a key resource.

Basically, industry professionals from California, and around the country, have relied on those standards on an ongoing basis. Local governments also rely on those standards to make sure they're buying equipment that has quality and has longevity. But the problem is that this Program has sunset.

And what SB 698 does is—basically reauthorizes the Program so that the CEC can continue to do this—so, certification standards creating and certification for good equipment. And here, in order to testify in support of this Bill, is Brad Heavner from the—Executive Director of the California Solar and Storage Association. Brad?

Thank you.

Yeah, go ahead.

Mr. Chair and Members of the Committee, this is an important Bill. It's straightforward, should have been done long ago. I really applaud Senator McNerney for, for putting it forward. Our equipment undergoes extensive safety testing through the certified testing labs and make sure it meets safety and reliability standards.

And then, the Energy Commission has to look at those test reports and just create a list to say, yes, this complies—conforms—to the rules and laws that we have here in California.

Maintain a list that is very useful for utilities, local governments, and others, to make sure that everything that gets installed has gone—undergone—the safety testing, and the results are in conformance with our standards.

It was created, long ago, under—we had a subsidy program—and the state said, if we're going to subsidize this stuff, we're going to need to make sure that the right stuff is getting installed. And so, the energy—it made sense for the Energy Commission to step up and maintain that list.

But that Program ended in 2012—our state subsidy program no longer exists for the past 13 years—and then, but the authority still rests under that Program.

And we, in 2018, when it was seen that we needed a similar list for energy storage, the Energy Commission had to, really, rewrite the rules of the subsidy program, that no longer existed, in order to make it work for them to do this program, because that was the authority you'd given them.

And they did that, and they reissued the SB 1 guidelines, took some work, and then they, you know, they continued to do this useful service for the rest of us. And this came up again this past year when there needed to be an adjustment to the list for power control systems.

Now that we're operating fleets of batteries and able to respond to commands, we need to test to make sure that, when you send a command, that the device does the right thing, and that, you know, is increasingly used, and it's important that we have specific testing for it. And the testing—test—method for that was recently improved.

It was changed from part of UL 1741 to part of UL 3141, so we had to get together with the Energy Commission to just redo their list a little bit and make sure that they're looking at the test reports the right way, they know what to look for, and they're reporting on the right stuff on their lists, and it should be straightforward.

It ended up—they had to get their lawyers involved to say, okay, do we have the authority under this old law, under this old program, to do this new thing that's just, you know, basically a continuation of the stuff we're doing, and it's more complicated for them than it should be.

We should really just untether this program from a very old law and give them authority, so they can just do what they've been doing, going forward.

Okay, thank you very much.

Any other witnesses in support?

Chair, Members. Matthew Klopfenstein, on behalf of the Center for Sustainable Energy, in support. Thank you.

Thank you. Do we have anyone in opposition? Anyone in opposition here? Okay. Seeing none. We'll bring it back to the Committee.

Move the Bill.

Okay.

Move the Bill.

Senator Stern moves the Bill. I would say that—I want to thank you for bringing this up. Very practical Bill. Thank you for witness. We have an "Aye" recommendation. And would you like a closing statement?

Sure. I'm just going to ask for an "Aye" vote and add that it includes bidirectional charging, as an additional feature in this set of items.

Good, thank you. A very important add for that. Tremendous potential there. So, thank you. With that, I'll ask please call the roll. Oh, motion is do pass as amended to the Appropriations Committee.

[Roll Call]

The vote is 5 to 2. We will keep the roll open for absent Members. Thank you. I know that Senator Padilla is on his way. Should be here very shortly. So, I ask people to hang in there, and we will get to his two bills. And those will be the last two bills of the—of the hearing.

Senator Padilla is here. We've got two very important bills in front of us today and we'll start out with SB57 on data centers and go ahead when you are ready.

Thank you very much, Mr. Chairman and Members. Thank you for your patience. Happy to present SB57, which would create the Ratepayer and Technological Innovation Protection act, which would require the PUC to establish special tariff for data centers to prevent cost shifts to existing ratepayers.

And as we talked a little bit about first, let me just say by thanks the Committee for working with my staff, I'll accept Committee amendments, one of which modifies the specific allusion to data centers and replaces that with a slightly broader definition for eligible customers.

And these are any kind of particular infrastructure or technological draw that would draw a heavy load beyond a certain threshold would be eligible. So it wouldn't just be data centers, although they do account for a primary driver of this particular concern.

California, as you know, is undergoing on that topic an AI revolution which is powered by data centers has consumed large amounts of energy and water, putting enormous strain on the electrical grid, requiring massive investments into grid infrastructure and increasing the state's reliance potentially on fossil fuels.

In Pennsylvania, for example, Microsoft signed the largest ever power purchase agreement to reopen Three Mile island to power the company's data centers. In Texas, Chevron Exxon Mobil plan to offer electricity for the first time operating fossil fuel power plants to power centers.

To allow such agreements here in California would go against our own clean air standards and goals. To understand the scale of these data center energy use, the Department of Energy reports that data centers are expected to consume 12% total US electricity by 2028, nearly three times their 2023 electricity demand, or 4.4%.

Analysts warn that this rapid build out of data centers may be outpacing demand. And with innovations in energy and computing, some of these data centers may close earlier than expected or use than initially projected.

Closing their contract terms to put an end early would put ratepayers at risk of footing the bill for transmission, interconnection infrastructure and costs financing costs. They're already struggling, as you know, with affordability and should not be forced to pay for stranded costs, the cost of constructing, maintaining stranded assets.

Other states such as Ohio, Georgia, Illinois, North Carolina, South Carolina, West Virginia and Kentucky have already taken steps to protect their ratepayers from footing the cost of these centers, transmission investments. These states have negotiated exit fees, minimum contract terms, demand requirements and upfront payments.

For example, California has an opportunity to do the same to ensure Electrical grid investments for data centers and other large demand consumers are fully recovered to ensure existing ratepayers are not shackled with their infrastructure costs. And today I believe I have Matt Friedman to turn.

Mr. Friedman, welcome. Go ahead when ready.

Thank you Mr. Chairman, Members of the Committee, my name is Matt Friedman. I'm a Staff Attorney with TURN, The Utility Reform Network and I'm here in support of Senate Bill 57. I want to thank Senator Padilla for introducing this bill.

We supported the original bill and we are maintaining our support after the Committee amendments. The forecasts of growth in new data center deployment have led to concerns about need for upgrades, the amount of electricity to be consumed by these facilities, cost shifting and potential impacts on California's progress towards meeting its zero carbon electricity objectives.

We think SB57 addresses these concerns in a manner that fairly balances the interests of both data centers and non participating customers. Data centers are not like other customer loads.

A large Costco or Walmart might have a load of 3 megawatts, but large data centers are transmission level customers with loads that can range from 10 megawatts to up to 800 megawatts with close to 100% load factor operating 24 hours a day.

Major new grid investments are needed to interconnect new data center customers and these investments could become stranded if a data center fails to reach commercial operations, doesn't consume as much electricity as forecast, or relocates in future years.

And major new investments in zero carbon resources are going to be needed to ensure that data centers don't drive an increase in greenhouse gas emissions in California. Data centers also typically have a large amount of backup generation on site.

Will this result in huge amounts of new diesel generation being deployed or will they use clean generation and battery storage? The requirements established by the Legislature will largely determine what type of on site generation is used by these data centers and then data centers are able to leave the system with greater ease than other large customers.

And this highlights the need for protecting non participating customers.

So we support a number of the key elements of the bill, including the prohibition on any cost shifting to non participating customers relating to interconnection costs and future data center loads falling short of initial projections, allowing the PUC to determine that a portion of onsite generation should come from energy storage and ensuring that data centers connecting to the transmission system will be required to pay a fair share of costs relating to wildfire mitigation, wildfire liability, electrification, environmental programs, all of which are collected in distribution rates which would be avoided by the data center connecting a Distribute transmission, and then finally authorizing the PUC to set clean energy targets specifically for data center loads because they are unique animals in this environment.

And we need to make sure that new generation is built to serve these facilities. So we appreciate the work that's been done by the author and the Committee. We're happy to be here to support it and we look forward to the bill moving forward, hopefully after today's hearing.

Excellent. Thank you. Do we have other witnesses in support?

Good afternoon. Brandon Ebeck, Pacific Gas and Electric. We do not have a position on the bill, but we have been having multiple conversations with the author and all the customer groups and all the stakeholders involved. We are keenly in the middle of this conversation.

Most of the data centers in California will be cited in Santa Clara, Alameda County, either in our service area or Silicon Valley Power. We support the same goals as turn just mentioned and the author mentioned. We want to bring economic development to California. We want to do so in a way that protects customers in the environment.

We want to leverage our existing clean grid. We just need to find a balance between what can attract customers to California and what will push them away. And that's where we're. We think this bill is definitely on the right path. So no position, but it's going the right way.

Okay, for Tweener. Thank you. Anyone else in support? Anyone in opposition? Anyone in opposition?

Thank you, Mr. Chair, Members of the Committee, my name is Kara Bunder speaking in respectful opposition to SB 57 on behalf of the Data Center Coalition. I just want to be clear. I'm speaking in opposition to the bill in print. DCC is a national membership Association for the data center industry.

Our Members include about three dozen leading data center owners and operators. In addition to companies that lease large amounts of data center capacity, data centers provide the digital infrastructure that supports many sectors of the 21st century economy, including government, emergency and financial services, advanced manufacturing, cybersecurity, healthcare, artificial intelligence, among others.

To be clear, we support the intent behind SB57. Industry is committed to paying its full cost of service for electricity. We believe the proposed Committee amends move this in the right direction and appreciate the authors accepting of those amendments.

Given the variation across our Members, we need more time to review among them and understand the impacts of the specific provisions. We look forward to continuing to work with the author's office and very much appreciate our ongoing dialogue as written. Our concerns with the Bill are twofold.

First, we believe the CPUC is best suited to ensure appropriate cost allocation through public proceedings that are evidence based, transparent and open to stakeholder participation and second aligned with sound rate making principles. No customer, industry or class should be singled out for differential or disparate treatment unless such distinctions are backed by verifiable cost based reasoning.

Data centers are but one large end user of electric utilities and part of a larger portfolio of driving increased demand. California's position as a global technology leader depends on the vital infrastructure provided by data centers and underscores the need for careful consideration of legislation that could impact this critical industry. I appreciate your consideration.

Thank you. We appreciate that. Any other folks in opposition? All right, we'll bring it back to the Committee for discussion. Got a question? Go ahead, you're on a roll. And then tariffs.

What do we have some idea what, what that cost is going to be to that proprietor who might want to come into California to start this business there, that he's looking at a tariff that we wasn't thinking about, trying to get some figure what that might be. Do we know yet?

Mr. Chairman, Senator, to the actually, ironically, to the last witness's testimony, that would be, you know, the bill, you know, directs the PUC to establish the regimen that is specifically designed to prevent the shifting of costs from other end users because of the high demand that would suddenly be placed on the grid.

And that itself is subject to the regulatory process. So it's just not quantified right now, but it is, it is a directive that would again prevent cost shifting. And we've tightened the language up in the legislation to be very, very specific and discreet about that. Very good. Thank you, Senator Grove.

Thank you, Mr. Chair. Without sounding catty, I wish I could exempt Kern county from all the bills that most of them that go through this Committee.

The reason why I say that is because, you know, with the, the lack of permits being issued and the things that are going on in our, our district regarding oil and oil production, innovation is taking place that pushes oil companies to do things differently. So we were recently in CRC.