Senate Standing Committee on Energy, Utilities and Communications

The Senate Committee on Energy, Utilities and Communications will come to order. Again, we ask all Members to come be present in room 1200. We are going to start as a Subcommitee. We do have an author. Senator Perez, you are here to present SB256 and please go ahead when ready.

Yes, thank you so much and good morning Mr. Chair and Members. First, I want to thank the Committee staff's incredible work on SB256.

I would like to begin my presentation by accepting the Committee's amendments to ensure alignment with existing guidelines and protocols for De energization events and propose adjustments to the language regarding notifications and undergrounding within the wildfire mitigation Plan.

These amendments would do the following Require consideration of undergrounding where it is cost effective for areas rebuilding after a wildfire Ensure the language reflects the notifications to public safety partners and instead of non customers who would be difficult for the utility to notify Ensure references to local publicly owned utilities reflect their WMP framework Delete the requirements to tie additional specified actions to the safety certificate and require the CPUC to restrict large electrical corporations from passing certain fire prevention cost onto customers or ratepayers through rate increases.

SB256, the enhancing infrastructure for Wildfire Mitigation act, will strengthen California's wildfire mitigation by improving planning, enhancing emergency response and increasing public safety through better communication and undergrounding of power lines using strategic cost effective methods.

Over the past decade, California's wildfires have destroyed a total of 53,970 structures and claimed 207 lives, with numerous incidents traced back to electrical infrastructure failures. The Eaton and Palisades fires in Los Angeles County alone destroyed 16,246 structures and caused 30 deaths, ranking it amongst the most destructive.

UCLA estimates the broader economic impact for Los Angeles County could reach $131 billion with up to $45 billion in insured losses and $297 million in lost wages. To address this crisis, the Legislature has strengthened oversight of electrical utilities through wildfire mitigation plans, system hardening and safety power shutoffs, also known as PSPs.

It also authorized a long term power line undergrounding program. Governor Newsom recently ordered an acceleration of underground utility systems in fire damaged areas like Altadena and the Palisade. However, the recent wildfires revealed gaps in our state's mitigation efforts.

While the Altadena area was not officially classified as high risk, the destruction of the Eaton fire underscores the need to expand how wildfire risk is assessed. Slow response times to firefighters during the wildfires as reported by the media such as NPR, highlights the need for better coordination with emergency services.

This includes assessing PSPS to ensure decisions on power shutoffs are transparent and clearly communicated. Although undergrounding of high risk power lines is a well established wildfire prevention strategy, participation in the state's program is voluntary.

SB256 strengthens California's wildfire and emergency response policies by by expanding mitigation planning to include areas adjacent to high fire threat areas and addressing past communication challenges to improve future coordination. It also requires annual preparedness workshops, mandates utilities to collaborate with regional emergency centers, and enhances PSPS notifications.

Finally, it will also ensure that its undergrounding is actively considered as part of the recovery process rather than left entirely to voluntary participation. Joining me to testify today in support of this Bill is Jonathan Weedman, who is here to share his personal story as a resident of Altadena.

Okay, great...witness, go ahead when ready.

Thank you very much. Good morning, Chair and Members of the Committee. It's an honor to be here this morning. My name is Jonathan Weedman and I am Chief External Relations Officer for Viacare Community Health in Los Angeles. Some of you know our President and CEO, Deborah Villar.

Prior to that, for 20 years I was head of the Wells Fargo foundation in Los Angeles. And I am also a proud resident of Altadena, where my husband, Raymundo Baltazar, and I have lived for over 13 years.

In the early morning hours of January 8 this year, after over four hours in raging winds and choking smoke trying to save our home with garden hoses, when the homes behind us caught fire, we literally fled with our lives. We returned a few hours later to find our home in the entire area destroyed.

We lost everything, as did thousands of others. And 18 people in our community horrifically lost their lives. Nothing in life prepares you for the shock, the trauma, the loss, the fear. And we will spend years recovering and rebuilding our lives. We will get through it. But I can assure you we will never get over it.

And none of this had to happen. And that is why I'm here this morning to urge you with everything I've got to implore you to support our State Senator Sacha Pettis, Senate Bill 256. It's a good Bill, it's a smart Bill, and it addresses the realities of what millions of Californians now face.

History will record these fires and be recalled in the same catalog as Hurricane Katrina, the Chicago Fire of 1871 and the San Francisco earthquake. And history will remember our leaders who enacted this legislation so that events like this hopefully never happen again. Southern California Edison should have De energized their power lines at least two days before.

And we certainly expect them to be held to account for their unpardonable negligence. Had there been a Senate Bill 256 on the books, I dare say this fire would not have happened. Now, on a personal note, as I mentioned, we lost everything. The full record of our lives, precious and truly irreplaceable items, gone forever.

And I'd like to tell you about mine. My grandfather, many years ago, lived and worked right here in Sacramento. His name was Goodwin Knight, and He was the 31st Governor of California in the 1950s. I am our family's historian, our family's archivist.

And we lost in the fire dozens of boxes of my grandfather's correspondence, photographs, personal items from his Administration, irreplaceable California history. And it just sickens me that I didn't donate them to the California State Archives. I plan to do so this year. Thousands of Californians have similar stories.

And if we had a Bill like 256 on the books, maybe this wouldn't have happened. Maybe those documents would still exist. I want to thank you for your time and listening to me. And I want to thank Senator Pettis for this Bill and your leadership. We are glad you are a Senator. Please support this Bill.

Now I'm going to go visit the historic Governor's Mansion where my parents were married in 1955. And happily, after 150 years, it still stands. And I hope that it stays that way. Thank you all very much.

Thank you. Do we have any other witnesses? Want to come up in support, add on support for the Bill? Okay. Do we have any witnesses in opposition?

Mr. Chairman and Members, Scott Wetch, State Association of Electrical Workers in the California Coalition of Utility Employees, want to thank the author. We've been in conversations. She's taken a few amendments in deference to her and her district. We look forward to working with her. There's much refinement that needs to be done in this Bill.

There's duplication of existing processes and whatnot that really needs to be worked through. But we are committed to working with the author.

Okay. Do we have lead opposition witnesses? Great. Two witnesses. Two minutes.

Good morning, Senators and Committee Members. Laura Parra, on behalf of Southern California Edison, we do have an opposition position. Right now on the Bill and understand. The severity of the windstorm and wildfires. That caused the issue. We are in in January. I want to continue working with the author and the Committee to clarify the.

Language on the public ownership models want to make sure that we are able. To understand that moving forward and what the Commission is working on. So with that, I'll just say we. Continue to be in opposition, but look. Forward to working with the author. Thank you.

Thank you, Mr. Chair. Members, Joe Zanzi with San Diego Gas and Electric like to align my comments with those of my colleague from Edison. Appreciate the work of the Committee and the author. Looking forward to seeing the amendments and. Especially around the cost recovery piece and see how that all works and looking forward to working with everyone. Thank you.

Good morning. Brandon Eback, Pacific Gas and Electric. Same comments here as San Diego Edison and Labor. Thank you.

Ryan Pesa with Western Wood Preservers Institute. Treated Wood Council and North American Wood Pole Council opposed to this. We feel that undergrounding measures have their own issues and they're just as unsafe. As overground or overground or safer than underground issues. And we urge the Member to seek that understanding. Okay, thank you.

We're going to bring it back to the Committee for discussion. Senator McNerney.

Well, thank you, Chair, and thank you, Senator Perez, for bringing this forward. These fires need to be prevented. And if bills like this move us in a position to keep our cities and our communities safer, then we need to support them. And there's obviously room for improvement on any piece of legislation. This one's no exception.

But the author is willing to work through these issues and I think she deserves our support.

Thank you. I'm going to turn it over to Senator Ochoa Bogh. Do you have question comments too? And then I'll turn over the gavel to you. I will be supporting this measure today, but I have to go present in Judiciary. I'll be back.

Okay. Thank you, Mr. Chair. So a couple of questions. I thank you for accepting the Committee amendments. I was reading to make sure some of the concerns were actually addressed in the amendments that we had here. And I know that you're still continuing to work on this particular Bill.

And I know, you know, we've had, we just had a town hall in our, in our district with regards to the public emergency shutoffs and the impact that it had in our communities.

So it's interesting that because on one end we see the testimony of folks who have lost everything and who wish the announcement had been done or the shadows had happened two days prior to and then I have community Members who were extremely upset that they were without power for my City of Grand Terrace for nine days and the impact that it had on the local communities.

And it just shows just the difference of opinions, of life experiences and how we all have to be better prepared in order to navigate this, these fires. I mean, from the consumer perspective, from the company's perspective, from government's perspective, there's room for growth for everyone to be able to.

And it's interesting to see the different perspectives as the testimonies come through on that end. And California as a whole has a lot to work with. So, so some of the amendments were absolutely addressed or some of the concerns were addressed in the amendments, but I do have one with regards to the CPUC.

And this is and clarify for me because I kind of still a little foggy in this one. But it's my understanding that the CPUC doesn't have jurisdiction over the POUs or the public utility and that the POUs are governed by a locally elected body.

They cannot require the POUs to establish a notification process to use during a PSPS. So is there conversation on how that's going to be addressed?

Yeah, the, the, the Bill and the requirements that are placed in. The Bill places different requirements in the IOUS versus the public utilities just because they operate a little bit differently and also just their process and even the cost of doing certain things, whether it be undergrounding, all of that looks very different.

So we've been working directly with the public utilities to make sure that the policy takes that into account. Kind of the major differences between the IOUS and the public utilities.

And then there's another component that was brought to our attention as well, was that doing so prior to doing the shut offs and then doing the shut offs, especially when there are multiple days, the communication then becomes a little bit quirky because if you don't have electricity, then how do you, you don't usually have access to Internet in the area.

Your phones are impacted. If you don't have portable chargers and especially for the most vulnerable ones that don't have the actual resources that many of us may have to occupy that.

So it also makes me think of the companies and their ability to communicate with those whose emails might not be on file or phone numbers, you know, are not necessarily cell phones, but are landlines or vice versa. So there's a lot of details, nuances that have to be considered.

So I'm going to support the Bill today attentively to see what the final language looks like, because it is. Thank you for taking it on because there is a lot, a lot of work to be done in this space on many, many angles. But I think the intent is actually very, very well merited.

So thank you for bringing this forth to our attention and to your witness today. Goodness gracious. Can't imagine, can't imagine lost history. So thank you.

Thank you so much, Senator and appreciate your comments as well and understand exactly what you're sharing around frustrations that folks feel when we do do PSPs. Right. And so that being an important tool but also a tool that can sometimes upset customers, as you know our utility folks in the room understand as well.

So that has to be navigated carefully. But it is an important tool that we have to utilize when it's very much needed.

So thank you Senator Perez and we're obviously going to put that on hold because we don't have any Members here. Yes. Would you like to close?

Senator Perez yeah, I would just respectfully ask for your aye vote. So thank you.

Senator Perez yeah, so it'll be on call since we're, we're going to have to place that on call for officer Members. Thank you. Thank you. And we haven't been able to establish a quorum either. So we're just going to be hearing the bills we have. Senator Choi, Senator Choi, File item number six, SB797.

Thank you for being here this morning.

Thank you. Vice Chair Senator Ochoa Bogh. Good morning everyone. I wish we had a full Member because my Bill that I'm going to present, SB797 is very important and related to Senator Perez's undergrounding Bill. This Bill, SB797 intends to create a study group on undergrounding and insulating power lines in wildfire prone areas across the state.

By forming a CPUC led workgroup, the state can gather essential data on cost comparisons between undergrounding and insulation, geographic prioritization impacts on ratepayers and long term wildfire prevention strategy. This Bill ensures policy decisions are backed by thorough analysis, not guesswork or piecemeal approaches.

I know there are undergrounding in progress in some areas and this is the topic of the prevention for the prevention of the wildfire. And as we can see, this must be thoroughly studied. The workgroup will evaluate existing wildfire mitigation plans, WMPs and identify the most impactful, appropriate and cost effective investments.

With rising energy bills, ratepayers impacts must be considered and this Bill will ensure they are. The report will help the Legislature make informed funding decisions with the best return on investment in safety and infrastructure resilience. Without this Bill, lawmakers are at the risk of blindly regulating and funding while wildfire safer infrastructure.

SB797 is a common sense Proactive step to better protect California from catastrophic wildfire. It begins. Brings transparency, coordination and accountability to one of the most urgent infrastructure challenges are facing the state. This is about saving lives, preventing disaster, and building smarter, safer energy infrastructure for the future. Thank you.

Thank you. Mr. Choi, do you have any lead witnesses in support?

No, I don't.

Yes, Senator Choi? Thank you. Senator Choi, do you have any lead witnesses in support?

No, not that I know of.

Okay, so then we will continue to ask for any witnesses in support of viral item number six, SB797, here in room 1200. Seeing no witnesses in support. We're not. Continue with any lead witnesses in opposition. Seeing no witnesses in opposition. How about in room 1200? Do we have any witnesses in opposition to SB797? Seeing none.

We'll bring it back to the dais. Senator McNerney.

Thank you, Vice Chair. And I thank Senator Choi for his efforts here. I guess I just have one question. You know, we all want to prevent wildfires, and we all want to make sure utility rates are reasonable, but is this Bill needed?

I mean, I think there's overlap here, and I just want to get a sense of why this is coming forward.

Thank you. Yeah, it's a comprehensive approach with the data that we need to compare. There are a lot of studies and activities and the talks that are going on. Underground and insulating power lines. We don't know which will be more cost effective. And then also practically working better.

And then also certain areas, depending upon geographic area, insulating the power lines may be better than undergrounding tough areas. And then also prioritizing certain areas and how much the undergrounding progress has been made in the state. And we don't have the comprehensive data.

So before we make any mandating, insulating and asking power companies to do undergrounding, I think this will give us basic data that the Legislature must have.

Well, thank you. I guess I missed the first part of your presentation. I apologize for that. So it sounds like this is basically a study. Study, yes. There we go. All right, thank you. I'll yield back.

Thank you, Senator Stern.

Yeah, thank you, Madam Vice Chair. And I appreciate the Senator's advocacy on wildfire and power. You've been working on this diligently all throughout the year in multiple vehicles. My concern is that you used the word before, and we said this is just a study.

We want to see active decisions, and they are being made right now before the Public Utilities Commission from the IOUS to pursue undergrounding in circumstances where it makes sense within their wildfire mitigation plans as well as through their General rate case proceedings. And we know that there are actively some of those decisions being made.

My concern is if we start a work group process and sort of say well let's wait and see before you underground study this more, let's gather more data that we're going to actually delay projects. So I don't know how you square that concern.

I wouldn't want this Bill to sort of be taken as a pretext for say delaying undergrounding efforts and then while we study say till 2027 and then proceed where there are pending undergrounding jobs currently currently in queue. And so that's my concern. Maybe you can address that either now or in your close.

But I certainly side with you on the merits and the urgency of the issue. I just. I'm concerned about sort of adding more bureaucracy to the process.

And thank you Senator Stern for your question. My Bill will provide unnecessary data for comprehensive decision making. Right now any efforts and plans under consideration and already decided to do undergrounding by utility companies.

This Bill is not going to stop them because they have come to the conclusion that was the best solution for preventing fires in those areas. For example, the City of Irvine where I come from for fire prevention might have been a secondary reason. But for beautification reasons all how high power lines have been undergrounded any developments?

Certain area power lines were asked to underground. So with about a couple of major areas that I know of. One of them is alongside the Jeffrey Road which is away from residential area and vegetation area. There are underground underneath the power lines. Some agricultural activities are being done but no shrubs.

So those are most likely to stay a long time because it's unlikely to be developed. So when there is a development is presented city required undergrounding in a certain area left and right a certain distance. And so it has been city has been doing that for a long time.

And you will find the city's very in beautification purposes was very, you know, safe. But now wildfire is so prevalent and also certain areas are also fire prone. In my own area where I live in close to the mountain and sometime about five years ago I had to evacuate myself from the fire burning in that vicinity.

And so I think as a result we benefited and we didn't have to worry about no study or nothing had to be done because undergrounding has been done.

So it has been my always common sense that why not we underground why we keep on dealing with disaster damages and loss of human lives because we determined, we knew that high power lines were, as I understand, over 90% of cause of the fire in the wilderness and the nearby urban areas and widespreading.

And we have seen it in Altadena and then also in Southern California, Pacific Palisade.

So this prompted me, maybe we can mandate, but if I start asking mandating, there may be a lot of oppositions from the power companies and the environmentalists, but let's do some how effective this will be and how much cost will be, how much ratepayers will have to bear, the cost of that will there be and will there be any volunteer work?

But this will give us a before we Legislature statewide mandate, so to speak, through the policy, through the bills. But let's have some data so we don't have to do anything if the study results show us that it's not necessary and more unrealistic. So let's have the data first. So this is the purpose of my Bill.

Thank you for that. Sure.

Senator, thank you for bringing this forward. I know that all of us are concerned about the utility costs, fire safety, and we keep hearing it over and over that if only the lines were underground, if only the lines were underground, but we don't know the cost. We don't know the number of years it would take.

So are you indicating that this study group, work group, this investigation, whatever handle you want to give it, but it will give us the data we need so we can all understand the pitfalls in the future or the cost and even the cost to our utility bills that if we go underground in rural areas and maybe not in city areas or vice versa, whatever it might be, that study will bring all that to us.

Exactly. That's the intent of the Bill.

And the cost of the study.

Cost of the study done will be done too? Yeah. And also comparison between insulating the power lines and underground will be which will be more effective and cost effective.

Okay. Okay. Well, thank you.

Thank you, sir.

Thank you, Senator Archuleta. Seeing no other comments from the dais, Senator Choi, would you like to close?

I respectively ask for an aye vote.

Thank you, Senator Choi And we will place that on call for absent Members. I see Senator Cervantes is here. We'll be presenting File item number two, SB292 by Senator Cervantes. Welcome. You may proceed when ready.

Thank you so much. Good morning, Madam Chair and Committee Members for the opportunity to present Senate Bill 292. I want to thank the Committee staff for their support on this Bill and their work. I have worked with the Committee and will be amending SB292 as reflected on page 7 of the analysis.

Although only about 1% of wildfires were ignited by power lines in California, half of the 10 of the most destructive wildfires can be tracked back to energy systems. Since then, power utilities began to develop and integrate new strategies for significantly reducing the risk of igniting wildfires by power equipments while avoiding possible wildfire liabilities.

To bolster public safety and avoid significant wildfire loss, California's electric utilities have invested heavily in ignition mitigation. In 2019, the three large investor owned utilities reported approximately $4.7 billion in system hardening, vegetation management and equipment inspection.

Utilities have recently pursued PSPS when high risk weather is forecasted preemptively De energizing power lines to reduce the probability of them sparking and causing ignition. While PSPS addresses the immediate risk to power infrastructure, it raises significant concerns about the broader societal implications, particularly with vulnerable populations who heavily rely on the availability of electricity.

Numerous negative impacts of PSPS on these grounds have been reported. For example, in 2019, an oxygen dependent California man tragically passed away within minutes after PGE cut power to his home to prevent high winds from toppling power lines which could have caused devastating wildfires like the campfire.

Similarly, in 2023, a disabled person reliant on a feeding machine and a ventilator experienced severe disruptions due to the PGE power shutoffs. The negative impact by PSPA events on public on vulnerable groups across our state have led to the introduction of Senate Bill 292 today which mandates electrical Cooperatives.

Local publicly owned electric utilities and electrical Cooperatives collaborate with representatives from the access and functional needs population.

It also requires electrical cooperatives, local electric POUs and electrical cooperatives after each De energization event to prepare a report containing certain information related to the De energization event and requires the report to be provided to the locally elected body and specifically individuals of the cities and counties affected by this event.

Additionally, it requires a reliability report prepared by these local electric POUs to include specific information including among the other things, system and division level reliability and reliability statistics on census tracts or similar resolutions. My district was heavily hit at the beginning of this year.

Residents from Harupa Valley to Corona, Eastville, Myrna Valley raised concerns about food spoilage caused by public safety power shutoffs during the recent wildfires affecting Southern California losing power for nearly 10 days. Over 100,000 of my constituents no power for 10 days. Many of these individuals were seniors calling my office asking for help.

There were residents in mobile home parks, individuals on fixed incomes, small businesses that were also impacted. The primary concerns voiced by residents and stakeholders revolved around the perceived lack of timely and accurate information, communication from Southern California Edison, and ultimately response from local government.

In my district, Southern California Edison initially referred residents to their website with the map of PSPS shut offs. However, many residents noted that the map did not include all outages.

Some residents have stated that SCE relied on out of date information of their own grid, leading to employees being sent out to repair electrical equipment in the wrong location or residents receiving conflicting and incorrect automated notifications. During the PSPs, some cell towers lost electricity.

Residents without a landline were left without access to any communication, either by phone or Internet, making it impossible to contact emergency services in a timely manner.

During this event, residents experienced disruption of medical necessity equipment as well as subsequent hospitalizations, lack of access to drinking water, and inability to leave residents leave their residents for individuals with limited mobility I have several of those stories that I could share with you.

In short, my district, like many in our state, have faced sustained PSPS events and they must be treated with the delicacy of an emergency response. To effectively address the challenges associated with power outages, it is essential to bridge the gap between utility reliability reporting and community resilience planning.

Understanding who is experiencing power outages, how often they occur, and their typical duration are essential for effective resilience planning. The demographics and social economic data can help inform where to prioritize investments in local solutions that can provide support not only in natural disasters but also during outages and crisis.

Utility metrics do not adequately address who is losing power and the implications for their daily lives. While some utilities report the number of customers with medical baseline needs affected by the outage, this information provides an incomplete picture of the outage potential impact and it does not help communities understand their risk of experiencing outages.

With me, we have two witnesses to testify for the Bill. Madam Chair, if they could approach Absolutely, please and I'll allow them to self identify Good morning.

I'm Patrick Murphy. I'm a senior scientist with PSE Healthy Energy. I work on energy resilience for all. I've been managing and running and leading research and implementation programs in resilient energy for a few decades. Starting at Department of Homeland Security, I initiated the Energy Resilience portfolio of research there.

I've also done resilient energy projects and research across the world in Africa and lately I've been focusing on resilient energy and energy affordability in California Question that I have is does the current outage reporting from utilities help families, businesses, communities and towns and cities and the whole state proactively and efficiently protect themselves from powder outages including public safety, power shutoffs, both with long term investments and planning and with immediate responses?

The problem that I see is before, during and after outages information is lacking, is hard to get to, difficult to obtain, insufficient for decision making. As noted by Senator Ochoa Bogh on the SB 252 Comments earlier Communications shuts down often during power outages and then you no longer have access.

Even if that data is available, local historical frequency and duration is not archived in an easily obtainable manner for people to then make decisions about their local risk profile. Estimated outages in California cost households not even including business damages households $5 billion per year. That damage is not evenly distributed or randomly distributed across the state.

There are places where those risks are higher and it's hard to get the data to find those and make decisions based on that. Now while a recommended solution would be to have ideally real time accurate data posted constantly so that you could see where outages were currently happening, you'd have notifications beforehand.

That's a bridge too far for now. In the interim solution, there is no reason why data supporting planning with more accurate comprehensive post event reporting would enable better informed decision making from households all the way up to state decision makers.

You're at two minutes towards this.

Extending the reporting from PSPS type reports to all utilities and extending the reporting from PSPS type reports to all outages over a threshold of say three hours would greatly add to the resilience decision making process. Thank you.

Thank you sir.

Hi, my name is Bethany Kwoka. I am a scientist at PSE Healthy Energy and I work with Dr. Murphy. So my work also focuses on building resilience and equity into energy system transitions.

And as part of that I put together the first comprehensive geospatial data set on PSPS events in California which covered all events reported up to that point. And since publishing this data in a publicly accessible web tool, I've consistently had people reach out to me, residents, organizations, community choice aggregators to talk to me about this data.

So I'd like to share three particularly relevant observations from doing this work. The first was that mapping historic PSPS outages to understand more about who is actually impacted required some kind of crude assumptions on my end, and more accurate data would improve the resilience decision making processes. This is not a surprising conclusion or observation.

The CPUC has Seems to have found the same thing and have dramatically improved reporting requirements over time. In particular, the inclusion of geospatial information on outages, medical baseline customers impacted, low income assistance program customers impacted provide critical information for resilience planners. In particular, census tract level data gives us critical locational info without concern about privacy protected information.

And more recent reports indicates that it should be fairly easy for utilities to provide this information in this day and age. My second observation is that lack of data from non investor owned utilities is very notable. There are more than 40 publicly owned utilities in California, some of whom cover millions of customers.

We're right at four minutes, so we're going to have to start wrapping up.

All right. Well, my third observation was that users found it frustrating that this tool only covered PSPS events. These are not even the only type of wildfire related outage event.

And having these reporting requirements similar to PSPs, though perhaps not quite as extensive for all outages, in particular, the census tract level statistics would be extremely valuable for those doing resilience planning at both the local, municipal and state levels. Thank you, ma'am. Thank you.

All right, we'll now continue with any witnesses in support of SB 292 here in room 1200. Seeing none, we're going to continue with any lead witnesses in opposition to SB292.

Good morning. Brandon Ebeck with Pacific Gas and Electric. We have an opposed position on the Bill primarily because we already do 98% of what the Bill requires. And as the support witness just testified, a lot of this has been done through the rulemaking process.

I would point out that ironically the Committee amendments strip out the public utilities from this Bill even though as the support witness said, they don't do this. So we are opposed to the Bill in print. Thank you.

Joe Zanzi, San Diego Gas and Electric. We have an opposed unless amended position on the Bill. Appreciate the conversations with the author and the work of the Committee to align a lot of the stuff with the existing proceedings at the CPUC. Looking forward to seeing those amendments and continuing to work with everyone on the, on the Bill. Thank you.

Good morning. Good morning Members. ... here with Southern California Edison. We align the same with our colleagues. We have a opposing, less amended position. We want to thank you, thank the author's office for working with us on this issue and we want to see the amendments and, and we would like to continue working on, on this issue. Thank you.

Thank you very much. Now we'll continue with any, any witnesses in opposition here in room 1200. This is for SB292, Seeing none we'll bring it back to the dais. Do you have any questions or comments, Senator Archuleta?

Yeah, thank you, Senator, for bringing this forward. As I had mentioned with the prior Bill, Senate Bill 797, of course, that being a study, yours is leaning a little harder and I can understand why because of the 10 days that your constituents were without electrical power. So walk me through.

If this Bill were enacted and we turned the clock back and we had this Bill in place, what would have changed in your situation?

It's really focusing on the reporting metrics and as Steve stated by some of the opposition who we are working with, we want to assure that efforts aren't duplicative in any way. So we're being very thoughtful.

At the end of the day, we want to, we have the same issue that we want to address, resiliency planning to better streamline reporting.

At the end of the day, having this kind of granular data will help us as a legislative body to better understand who is being affected, how often they are being affected and how we direct funding where it's needed most across our state.

I can see how the Bill would really help and I intend to support it. I'll move it at the appropriate time. And I thank you for bringing it forward.

I think all of us, as we've said in the prior Bill, we want to make some adjustments on the electricity bills that we have to pay, but we also want to make it safe, prevent fires, work with utilities.

And it's going to take a number of years to do it, no doubt, but we've got to go forward and this is a good start. Thank you for bringing it.

Well, thank you, Senator Archuleta, Senator Cervantes. Once again, being that we had a community impacted quite a bit, grand terrorists in our district who, as I mentioned earlier were I first of all, I feel for, for the utility companies right now because in one area they're trying to be very proactive with the power shutoffs.

And some folks, as I mentioned earlier, some constituents, you know, wish they had been done earlier.

And then we have constituents who then say, you know, this was a, you know, we were 34 days, nine days such in Grand Terrance without electricity and the impact that that has, especially in those with our seniors and most vulnerable, those that are on fixed income.

So trying to find that information, we held a town hall actually with Southern California Edison to explain the process that they, you know, that they have to literally proceed with in order and before they actually do a PSPS event and it was very complicated. I mean, they went through every single little detail on it.

And I, I want to thank them for holding the town hall and explaining the process for our residents, our constituents in our district that were impacted.

But I think the question I'm trying to address, and I know you don't want to be duplicative of current efforts, but I do want to make sure that we have on record that it's my understanding, based on what we heard, that the CPUC already requires the utility to file a post PSPS report and post the reports on their website, and that the report includes information on the scope of the De energization event and the communities impacted.

Do you believe that this is duplicative of the existing requirement on the utilities?

If I may respond. Yes, I believe that we need to have further discussion. Discussion with either the public owned utilities, investor owned utilities and other stakeholders to ensure that we aren't being duplicative in any way. Which is why there are some amendments we have taken today to address those concerns. Okay. All righty.

Okay. I have the amendments right here. So thank you so much. Other than that, Senator Cervantes, would you like to close?

Thank you so much, Madam Chair. Again, sb292 addresses really making sure that shutoffs must be treated with the urgency of emergency response. We know that current reporting standards often obscure who is impacted and how.

Therefore, this Bill bridges utility reporting with community resiliency, enabling more targeted investments and solutions so that our communities can thrive, especially as we've seen historic wildfires across our state. I believe that we need to ensure that we do have better and stronger reporting at a very granular level.

And my commitment is to continue to work with all those involved to ensure for the betterment of all Californians. I respectfully ask for an aye vote.

Thank you, Senator Cervantes. We'll put that Bill on hold for our absent Members and once we establish a quorum. We have not been able to establish a quorum today. Thank you. And I believe we. We are seeing Senator Durazzo here. She will presenting file item 5, SB716.

[Background]

Good morning, Senator Durazo and welcome. Please proceed when you're ready.

Thank you, Madam Chair, and good morning and Member of the Committee. I wanted to start out by saying that I accept the amendments, the Committee amendments to the Bill. They are major amendments, but I believe this is a very important step forward for California. Picture this.

A 10 year old sitting outside a library at night trying to finish homework on a borrowed phone. Because even today, too many families in California still can't afford Internet at home. This Bill is about making sure no child falls behind simply because they can't get online.

Nearly one in three families in California cannot count on reliable home Internet for their kids to do schoolwork. And with the expiration of the federal Affordable connectivity program, almost 3 million low income households have lost critical support. We as legislators have worked hard to close the digital dividend.

The Governor has made a historic $6 billion investment in broadband infrastructure. But affordability remains the persistent barrier. We need to make sure families can actually connect to the wires that we're building. The Brookings Institute calls broadband, quote unquote, essential infrastructure. Without affordable Internet, students can't do homework, patients miss out on telehealth. Students and workers lose economic opportunities.

This Bill creates a permanent home Internet lifeline program for low income families. It allows families to use the state lifeline subsidy they would otherwise receive and choose to use it for home Internet. Households should pay no more than $10 out of pocket for speeds of 100 up, 20 down, which would allow children to finish their homework.

A mom to take college course online, a grandparent to attend a telehealth appointment, and at this all at the same time on the same Internet connection without freezing, buffering or dropping off. It prohibits upselling into expensive plans, bans hidden fees, and streamlines participation for Internet providers.

Families can apply lifeline support directly to Internet service with no forced bundling and no gimmicks. The PUC would adopt rules to implement the program by July 12026. SB716 is an investment in California's future workforce. If kids can't finish homework today, they can't compete in tomorrow's economy. Closing the digital divide isn't charity. It's building California's future strength.

Affordability, not infrastructure, is now the greatest barrier. If we fail to act, we risk losing. We risk lost potential lower incomes and a workforce less prepared to meet the challenges ahead. We are now the fourth largest economy in the world. California's kids deserve more than parking lots and borrowed phones. They deserve a chance to succeed.

Let's give them that chance. And with me today I have as witnesses Senator Richard Polanco, a well known iconic leader across the state and also an advocate of digital divide. Trish Kelly, the managing Director of Valley Vision. And for technical questions have called upon Sonny McPeek, President and CEO of the California Emerging Technology Fund. Thank you. Madam Chair,

Good morning. I'm retired Senator Richard Polanco.

One moment. Just. We just need to remind everyone that each lead witness has two minutes. And if you go over the two minutes we have to take it away from the. From the other witness. So a total of 4 minutes per supporting opposition witnesses. So please proceed, sir.

Thank you. I'm retired state Senator Richard Polanco. I served in the California Legislature for 16 years, both in the Assembly and the Senate. I'm here today. I represent the California Emerging Technology Fund. We are asking you to move the Bill as amended.

I thank each and every one of you and your staff for giving me the opportunity to meet with you over the last several weeks. We want to commend Senator Durazo for her tireless championing for Internet affordability. The Legislature and the Governor have been trailblazers in the quest to get Californians connected.

Last year's session, Governor Newsom proposed that the Internet Lifeline program be replaced with the affordable with Lifeline, I should say the Affordable Connectivity program. As you know, terminated. 5.8 million people had been identified. 2.9 were enrolled. The balance most difficult to reach. In my years in the Legislature, I've never witnessed more inclusive process of stakeholders.

Senator Durazo's leadership. The leadership of Sunny Macpeak facilitated 50 stakeholder meetings. Seven weeks, two hours each with weekly reports to everyone. Of course the Committee staff was invited to participate and was sent weekly summaries and final reports. Unfortunately, we were not able to reach a consensus.

The reality is that the large Internet service providers who are headquartered outside of California have not authorized the lobbyists to support a program that guarantees low income families, your constituents the opportunity of Internet plan with speeds adequate. 100 down. 20 up. We are grateful to the chair and to the Committee for.

For providing a path forward to authorize a standalone Internet Lifeline program. Senator Durazo and ctf, we accept the amendments. We urge an aye vote. We remind the Members here that the control still remains with you. As the Bill moves and becomes a program. The budget will come annually back to you. This is an opportunity to close digital divide. We ask for your aye vote.

2 minutes and 23 seconds.

Good morning, chair and Members. My name is Trish Kelly. I'm a managing Director at Valley Vision here in Sacramento. We also manage the Connected Capital Area Broadband Consortium and the Capital Region Coalition for Digital Inclusion. I'm here today representing Sam Floyd, who is the principal of Leotata Floyd Elementary School here in Sacramento.

We've supported the school for several years through a School to Home project funded by CETF to bring digital equity and access to this school, which represents the community that Senator Durazzo is speaking about. We are 10 minutes from the capital of the fourth largest economy in the world, and yet we have students struggling.

The students at Leotacha Floyd all come from two public housing projects, and they are the students that you hear about sitting in the library or on their phone, or else they don't get their homework done.

So we had a successful program to get devices, but when the pandemic hit, many of the families could not afford the Internet, so these students fell further behind. And we've been working very hard with the city and the Housing Authority and others to try to get access to this community.

And this is really critical for the future of our community here. And we really need the support of this Bill because as the Senator said, it's affordability that is now our critical issue. So, speaking on behalf of Sam, the principal, he just thank Senator Durazzo and encourages the Committee to please support this legislation. Thank you.

Thank you. Just under four minutes. Great teamwork there. Okay. We'll now continue with any witnesses in support of SB716. Hearing room 1200. Please proceed to the microphone. Just state your name, the organization that you present, and your position on the Bill.

Thank you very much. First of all, I'd like to communicate that I support the Bill wholeheartedly. My name is Jose Ramirez, and I. Represent the Energy Transition Collective, the Rural Communities Rising, and I'm also a city manager in the Valley. Affordability is super important.

Actually, we've already done the lead witnesses, sir, so I just. Your position on the Bill at this time, It's a. Me, too.

Yes. Thank you. Sorry. I support the Bill and thank you for the opportunity to make a comment.

Thank you, sir.

Good morning. Excuse me. Indulge. I'm getting over a baf cough... Energy. Transition Collective, and I support the Bill strongly.

Thank you, ma'am.

Michael Lizárraga from Telacu in support.

Thank you. Do you have any other witnesses in Support of Bill SB716? Seeing none. We're now continuing with any lead witnesses in opposition to SB716. And just a reminder, two minutes.

Of course. Thank you. Good morning. Amanda Gualderama with Cal Broadband. I want to start by thanking the Committee and the staff for their hard work on this Bill. And also thank the author and sponsor for hosting all those meetings that Senator Polanco stated.

And it was an opportunity for the ISPs to share a proposal that we could have supported but was decided against. We are still reviewing the substantive amendments outlined in the analysis and will reevaluate our position once the new Bill is in print.

But just a few points that Cal Broadband has consistently advocated on regarding this type of proposal. First, is the cost to consumers for these types of programs needs to be considered. Lifeline is funded through surcharges of cell phone and landline bills, and any increase in the surcharges will be especially felt by the working class.

Second, any program should have parameters solidly outlined in legislation rather than punting important programmatic decisions to the CPUC. Cal Broadband will continue to work with the author and Committee on this new Bill with those guidelines in mind. Thank you.

Thank you very much. We'll now continue with their second. Nope. Okay. Do we have any other lead witnesses in opposition? Seeing none. Will now continue with any witnesses in opposition here in room 1200.

Thank you. Madam Chair, Members of the Committee. Yolanda Benson, on behalf of US Telecom, the Broadband Association, we echo the comments made by Cal Broadband. Especialy, specifically the problematic issues with the surcharge on customers who can least afford it. We are opposed to this Bill. Thank you.

Good morning, Madam Chair, Members of the Committee. John Kendrick, on behalf of the California Chamber of Commerce in opposition. Thank you.

Good morning. Audra Hartmann, on behalf of Calcom. We are opposed to the Bill in print, but we're reviewing the amendments that were agreed to today and look forward to working with everyone on those. Thank you.

Thank you. Members. Jonathan Arambel, on behalf of CTIA, the trade Association for the Wireless industry. Also opposed. Also reviewing the amendments. Thank you.

Good morning. Anthony Butler Torres with the California Hispanic Chambers of Commerce in opposition. Thank you.

Good morning. Nora Canetti on behalf of Hispanic 100 in opposition.

Good morning. Dr. Ruben Guerra with the Latin Business Association. Opposing.

Thank you very much. Do we have any other witnesses in opposition? Seeing none. We'll bring it back to the Dias. Senator Archuletta,

thank you, Madam Chair. Senator Durazo, thank you for bringing this forward. Obviously, you're looking ahead with this Bill to the future of California. And I will say to this, this Bill is not a handout, but a Hand up.

Because if we don't educate our children, especially in the inner cities, especially the underserved, how is that going to melt with the others? How are people from the generations to follow us going to be able to feel part of the community if they're not part of the school systems in higher education?

And I noticed you had a witness from Telacu. Mr. Lizarraga, thank you for being here. And I appreciate your efforts in the past with working with the underserved.

And I know there in the East LA community that the Senator now represents and of course your location, the City of Commerce, of which I represented at 1.0 until we had the shift, now I've given it over to Senator Rosso and she's got the ball on that.

But I will tell you that the fight here is not about whether we can, is we must because of the fact that if we don't look to the future, later in this session I'll be talking about hydrogen. Who is going to be in that hydrogen energy and that hydrogen environment, if not our younger generations?

But we have to teach, guide and train them to stay in school, to participate in the future. And we heard about the Hispanic community, Latino community. Well, it's just not them, but the Asian community, the black community, all of them. If these young people don't have access to that computer, the world will change.

And if we can turn the clock back, I'm sure some of the teachers that some of you may have had or your children, they said unless report is substantiated by investigations within the Internet and the kid didn't have the Internet, well, he fell behind. If it wasn't typed and with graphics and so on, it was thrown out. So this was an equalizer and it's for all California.

And when we find the kids in, in the areas in the center of state who desperately need the Internet, who desperately need the Internet, not just the inner cities, we find that this Bill is going to open some doors and I think that be able to pay for it from the funds that we already have.

And I believe you've done that. Is that correct, Senator?

Yes.

And the fact is that as time goes on, those kids who will graduate and go on for that better education will, will be able to come back and participate financially because they've grown economically and financially.

So it's a win win for all of us who believe that if we're ever going to maintain our level of the fourth largest economy in the world, we've got to educate our children. And I know the LA Unified School District would agree, and I know the school districts that I represent would agree that education is the future.

And without the Internet, without computers, without the ability to have one before you, it's going to be tough because the libraries do close at a certain hour and they're not open on a Sunday. Guess what? But your computer is open 247. So I'd like to congratulate you, Senator, for bringing this forward.

And I know you have a tough battle, and I'm hoping that you could make some adjustments down the road and look at some of these amendments that are before you. But I know you will be the champion, as you always are, in opening up the door for so many that need so much.

And at the appropriate time, I will go ahead and take it forward and vote positive on it. And you will get the aye vote from me.

Thank you.

Thank you.

Thank you very much, Senator Archuleta. Thank you, Senator Durazo. We would like to state that the chair, Senator Becker of the Energy Committee, is actually supportive of the Bill with the following added amendments that are not in the original analysis of the Bill. And at this time, I will be reading those amendments for the record.

Two items prohibit participating ISPs from upselling. Number two, require the CPUC to adopt rules to implement this Bill by July 2026. So the chair will be supporting this Bill with those additional two amendments that were not originally in the analysis. And we have read them on the record.

So at this time, Senator Durazo, would you like to close?

Thank you very much, Madam Chair. And yes, again, I accept the amendments as you. As you read them. I am grateful, Senator Archuleta, for your. For your comments. You know, this is something that's not a luxury. It used to be that getting on the Internet was a fun thing to do or something.

Our kids wouldn't laugh at us, older ones and say, oh, well, you don't know how to do it. But it was out of fun. It's essential now. It's absolutely essential, as essential a part of education in this state and in the world. So I appreciate those who came to support.

I'm disappointed that still the industry is not supportive of this. It's voluntary for the industry. There's already a surcharge in place to cover this. It would be a choice of the consumer to decide how they want to use it and if they want to use it. So with that, Madam Chair and Members, I appreciate your comments today, and I urge an aye vote. Thank you.

Thank you, Senator Durazo. We have not Been able to establish a quorum this morning in the Committee. So we are going to actually hold this Bill over for absent Members, and hopefully we'll be able to establish a quorum soon enough. Thank you. Thank you both. Thank you. Have a great day Senator Durazo.

Do we have any other authors? Senator Archuleta, would you like to present? Well, we do have our very illustrious Member of the Committee present. Senator Archuleta, who is actually File item number 11, SB804, will be happy to present. Good morning and welcome. Senator Archela, thank you so much for presenting this morning.

Thank you. And thank you, Madam Chair, and the Committee Members that are listening and those that are on their way in for allowing me to present Senate Bill 804, the hydrogen pipeline Safety Act. The Hydrogen Pipeline Safety Act. I would like to start by thanking the chair and the Committee Members, in this case, the substitute chair. But, Madam Chair, you're doing well. Thank you. And I would like to again emphasize that I do appreciate the work that the staff has done with me and the Committee, and I'm happy to accept the Committee's suggested amendments.

In addition, I would like to make a commitment to the chair and the Committee that I should take this Bill and should it go on to the Assembly, I plan to amend the Bill to remove the California Public Utilities Commission and insert the Office of the State Fire Marshal as the agency assigned with establishing these regulations if required.

Hydrogen is a key part of our state's climate strategy. And we know that there are certain applications where hydrogen use is absolutely essential, like aviation fuel, steel production, and heavy duty trucking. Dedicated pipelines are the best, cleanest way to transport large volumes of hydrogen from the point of production to these difficult to abate end uses.

However, the possibility of hydrogen leakage is a safety and environmental problem that needs to be addressed. Hydrogen is the smallest, most abundant material in the universe, and it requires transportation system designed for its unique chemical properties. The United States Pipeline and Hazardous Material Safety Administration is the federal agency tasked with overseeing pipeline safety.

They recognize that hydrogen has a unique characteristic and needs to be targeted with regulations, but failed to adapt specific hydrogen regulations before the New Administration in Washington took office and drew out and threw out even the most basic safety standards. So we must step forward and bring up the new safety standards.

Because of this, hydrogen is currently treated as the same as any other gas. This is a problem for our communities and the environment, but it's also a problem for the industry. If people don't trust that hydrogen projects in their community are safe, then it won't happen. We need to emphasize safety, hence the safety Bill.

With the Federal Government currently on the sidelines, California has the opportunity to once again take the lead. And that is where The Senate Bill 804 comes in. Senate Bill 804 requires the California Public Utilities Commission to adopt safety standards for hydrogen pipelines by January 12028.

These are standards that must be met to ensure the dedicated hydrogen pipelines are designed to prevent leakage. Require dedicated hydrogen pipelines to be constructed using materials that are consistent with the nation and international engineering standards and these national standards as well as international standards. This is what we're after.

Incorporate advanced monitoring systems capable of detecting even the slightest hydrogen leakage at real time and require pipeline owners to maintain comprehensive records of hydrogen concentrations and submit annual reports documenting any leakage, regardless of the size.

Now is the time that California needs to move quickly to ensure projects currently in the planning stages can prepare and that we don't build out leaky systems that will require much larger remediation costs down the line. By investing in our infrastructure now, we lay the foundation for hydrogen to deliver big rewards powering California's clean energy future.

In closing, Senate Bill 804 will keep our community safe, facilitate safe developments of hydrogen pipelines and provide international leadership on the emerging technology.

For these reasons, I respectfully ask for your aye vote and with me today in support I have Peter Miller, a climate scientist with over 35 years of experience and at the National Resources Defense Council, including almost a decade as the Western Region Director of Climate and Clean Energy.

For the last year he has worked on the Environmental policy Director for H2C safety pipe, a company situated in Santa Barbara based and that company is based there alongside many others to make our state's hydrogen supply the cleanest and safest in the world. And again, I respectfully ask for aye vote.

Hello, sir, and welcome. So I just want to be clear, you have one or two lead oppositions? Just one.

There's only one. Okay. So we can give them four minutes.

So the rule of thumb. Yeah, so the rule of thumb would be two minutes per lead witness. If there's only one, you have the grace of extending up to four minutes. But mind your audience and attention span.

Thank you, Madam Chair. Members of the Committee very much appreciate the opportunity to speak today and I'll try and keep my comments brief and I know you have a very full agenda today.

As the Senator said, hydrogen is a key part of our effort to deal with a problem of climate change which continues to grow day by day. In order to provide hydrogen to the end uses throughout the state, we're going to need to have dedicated hydrogen pipelines that are built. Hydrogen is a unique molecule.

It's actually the smallest molecule. It presents specific safety challenges to our communities. The risk of leakage poses a safety threat, fire and explosions, as well as a problem to the atmosphere. It's being increasingly. The evidence shows that it is itself a greenhouse gas. So we need to keep it contained.

When we build these pipelines, we need to ensure that they are as low risk and tightly constructed as possible. The Federal Government recognized that hydrogen poses unique risks and need to have specific regulations, but failed to move in that direction. We don't expect movement from the Federal Government anytime soon, certainly not within the next four years.

As a result, hydrogen pipelines are currently effectively unregulated. This is a problem clearly for communities and for the environment, but it's also a problem for industry. The lack of regulation is going to lead to delays, possibly litigation, a lot of contention and concern, and that's not helpful for an industry that wants to move forward quickly.

So the solution here is clearly we need to provide strong, clear and effective guidance that makes use of available technology that minimizes leakage from dedicated hydrogen pipelines. And I want to be clear, this is focused on dedicated hydrogen only pipelines, not on blending with natural gas. There are many companies operating in this space.

There's lots of great technology being developed and we can achieve very low emissions at a reasonable cost. This Bill would mandate the use of best available technology for these dedicated hydrogen pipelines, as well as continuous monitoring and reporting.

It would allow us to move forward quickly to facilitate and ensure safe and clean projects and to do so without exact, without excessive cost, while fostering continued innovation in the space. In summary, SB804 will help keep our communities safe.

It's consistent with other environmental Regulations it can facilitate safe and accelerated development of pipelines, avoid contention and delays and provide national and international leadership. And I certainly am here in support and urge your aye vote. Thank you.

Thank you, sir. Now we'll continue with any witnesses in support.

Madam Chair, Member Scott Wetch on behalf of the California State Pipe Trades Council and the California Coalition of Utility Employees in support.

Caitlin Rodner Sutter on behalf of Environmental Defense Fund in support. Thank you.

Morning Chair and Members. Faith Conley with Weidman Group on behalf of Air Products. We're a tweener. Wanted to say thank you very much for the shift to the fire marshal. We believe that the current regulations in. Place are providing an effective safety record. But we do look forward to working with you on that shift and as. The Bill moves forward.

Thank you. Do we have any other witnesses in support of SB804 seeing none will now continue with any witnesses in opposition to SB804 seeing none. So no lead witnesses. Do we have any additional witnesses in opposition to SB804? Wow, look at you. Senator Archuletta. We'll now bring it back to the dais. Any comments or questions? Senator McNerney,

Vice Chair, I thank Senator Archilla for bringing this forward. It's important. Hydrogen safety, it's a new. It's kind of a burgeoning field and we need to have control of what it's doing. I have one clarification. My analysis says the Bill is only for dedicated hydrogen pipelines or pipelines retrofitted to hydrogen transport.

So would it mean that the pipeline's retrofitted specifically just for hydrogen or retrofitted for multi use just.

If I may answer. Yes. We're only talking about hydrogen right now and those pipelines. Madam Chair, what happens is that this is evolving enterprise and hydrogen is a future in California. The regulations that we had now are thrown in our lap.

So it is our responsibility here in California to preserve what we have to protect what we have protect our environment.

So the regulations that that we're doing now and that's why the Hydrogen Pipeline Safety act is as we produce these pipes down the down the future that there are regulations in place today not being looking back, you know, we're being proactive with this and right now. So these pipes are only for hydrogen.

Okay, that answered my question. Thank you. I yield back.

Any other. Senator Caballero,

I just want to thank the author for doing this Bill. It's sorely needed and if we're really going to have the opportunity for alternative fuel development to be able to Keep people employed that currently are working in the oil industry. We got to be able to do. This and do it quickly. So I really appreciate this Bill and I'll support it today.

Thank you.

And I'll move the Bill at the appropriate time.

Excellent. Any other comments? Okay. Well, thank you, Senator Archuleta, for your. Your passion on this topic, for working with the Committee. I would. I know there are more discussions on this Bill. I certainly support efforts to further pipeline safety.

To that end, I'd like to request the authority commit to shifting the CPUs duties to in the Bill to the state fire marshal should the Bill move to the Assembly to ensure the correct agency develops standards under this Bill.

Does that. Yeah, that is 100% acceptable. Yeah. And I mentioned it in my presentation. Good. Excellent. Well, thank you. I recommend. We recommend I vote today. Please go ahead and close. Well, thank you, Senators. We're in the brink of the future of California when it comes to clean energy involving hydrogen.

As I've mentioned time and time again that we have a treasure chest of energy in California and whether it be wind, solar, but now also hydrogen electricity. But hydrogen must be included. As we do that, we have to have a safety mechanism to make sure that we protect the environment, we protect our communities.

And this Bill will do that. It is a futuristic Bill, but it is now, so we have to do it. So I appreciate your support and your aye vote. And I respectfully ask for an aye vote. Okay.

We are still one Member short of a quorum, but we will vote once we have the quorum. Thank you, Senator Archuleta. We'll now move to Senator Hurtado. This is file item 10, SB 647.

Thank you. Mr. Chair. Good to see you again. I am here to present SB647, the home energy Savings Expansion Act. At the outset, I would like to thank the chair and his staff for their hard work on this Bill. I will be accepting the Committee's proposed amendments as outlined on page five of the analysis.

This Bill isn't just about energy. It's about health. It's about safety and respect for California's hard working families. Let me take you to the heart of the Central Valley and paint the picture of what we see in Senate District 16. In summer months, temperatures routinely soar past 110 degrees.

And inside too many homes, especially working class neighborhoods, you'll find families doing everything they can to stay cool without breaking the bank. A grandmother running a box fan all day because she's terrified of the rising cost on her electricity Bill. A Farm worker family relying on a swamp cooler just to endure the heat of the night.

And let me tell you, I've experienced that in my family. We grew up with the swamp cooler and it's the worst. They're just not uncomfortable. They're also at risk. The homes that they live in were built decades ago with thin insulation, aging appliances and no central air, all contributing to their already high energy cost.

This is a reality for many low income households across the state. Most people in all of our districts work long hours just to make enough to pay their bills. And many have to make gut wrenching choices every month. Cooling or groceries, light or rent, medications or school. It's not just the lowest income families who are struggling anymore.

California's low to moderate income households are getting squeezed too. It's hard working folks who don't quite qualify for traditional energy assistance programs, but are still drowning under rising utility bills. SB647 streamlines the eligibility and, and prioritizes access not just for those in deep poverty, but those quietly struggling in the margins.

As we move forward in the energy transition, we need to make our energy programs work better for more people in more places with more impact. With me here today, I have Ortensia Lopez and Jose Antonio Ramirez, both part of the Energy Transition Collective, who are sponsors of SB647.

Thank you, Ortensia, go ahead. 1Right.

Can you hear me?

Bring it a little bit closer now.

Yes. Okay, thank you. And honorable chair, honorable Members. I'm nursing a bad cough, so I'm kind of losing my voice. More so to that degree, I'm gonna just make a few comments as Executive Director of the Energy Transition Collective, and then I'm gonna defer to Jose Antonio for the rest of my minutes, if that's okay.

And basically, I've been in the nonprofit sector 45 years, the last 30 included working with low income communities around energy efficiency and trying to help them reduce their energy burden so they could afford to live. I think right now Nationally, there are 42 million poor people in America and 7.3 million of those are in California.

So you can see the impact it's having in our low income communities. I just want to share that we came together as a group that's been working together about three years to advocate for low income residents of California by working towards. oh, thank you. Excuse me.

Take your time.

All right, thanks. We have for limit time. And thank you for giving that Senator. Senator Becker's the best Senator in the State of California. He represents. But anyway, advocating good Energy policies and programs that prioritize low income communities so that they can thrive economically and be able to live in their communities. Just a few things.

I think we all know that energy is a basic necessity. I think we all know that low income also are ratepayers so they should be entitled to whatever the benefits are. And also we know that electrification without weatherization and deep energy measures is a waste.

And we need to consider that as we look at the continued development of low income programs. And lastly I have a list but just that when these programs were instituted back in the 80s, they were designed for low income around health, comfort and safety. They are now converting over to energy efficiency based on kilowatts and therm savings.

And I think if you look at the drastic difference between the demographics of California, we have a third of the state is poor and then we have the most billionaires. Something wrong with that picture. So I just please submit that you consider SB647. Thank you.

Thank you, Ortensia. Jose.

Thank you Mr. Senator. You're not my center, but I agree with Ortensia whatever she says. My name is Jose Ramirez and I actually am wearing a few hats here.

With the Energy Transition Collective, Rural Communities Rising, and Regenerate California Innovation as well as had the honor of being a city manager for 22 of the five poorest communities in the Central Valley in the state. And for us this Bill is very important especially because it focus on accessibility and equality.

It provides the performance evaluation for the providers and then one other important is the intent to protect community service networks. Why is this important? Well, it's important because we should always look at how, you know, create pathways for participation. You cannot have inclusion without accessibility.

A quality focused approach is always important because our residents will become advocates and we always want people to be engaged performance evaluation providers. It's a critical component of ensuring effective and efficient service delivery to low income populations. We have a lot of farm working communities out in that neck of the woods and so it's super important.

Lastly, it is crucial because these networks are essential for addressing poverty, strengthening communities and empowering our low income individuals and families that we represent. So we encourage your support for this Bill. Thank you very much for the opportunity.

Thank you. Are there others in support of the Bill here today that want to weigh in? If not, we'll move to opposition. Are there any lead opposition witnesses? Go ahead.

Good morning to the chair and the Committee Members. Rocky Fernandez with the Center for Sustainable Energy CSE is opposed to the Bill in print for the reasons that are outlined in the analysis on page 7. However, we'll look at any amendments when they're in print to reconsider.

We assure the author and the Committee Members that both programs are coordinating very well already. Thank you.

Thank you, Chair Members. Good morning, Lourdes Ayon With San Diego Gas and Electric also in opposition to the Bill in print, however, want to thank the author, best author in the state as well. Sorry, Senator Becker, I just wanted to make sure.

I wanted to make sure that she knew as well because I really appreciate working with her and the sponsors on this Bill and the amendments resolve our issues that, that we have. But I do want to take this opportunity, if you don't mind, Chair Becker, to talk about state programs and provide a real world example.

And sorry that I'm breathing hard, but I just ran, so. Plus now I'm nervous. So. Okay, so I want to let you guys know that I qualified for a $2,000 rebate for H Vac improvements in my home. So energy efficiency programs in my homes. And I was really excited about it because I help take care of family.

So anytime I can save a dollar, fantastic. But I found that the H Vac companies were inflating their numbers to absorb the rebate and then charging customers the regular price. Now, I knew this because I'm a daughter of a General building contractor and I can always check in with my dad on hunches. And he validated my hunch.

I was really appreciative about that. And what that got me to think about is that even though this is a very well meaning program, separate from esa, separate from what we're discussing here, well intended state programs, public purpose programs, I think on paper sound great.

And then in practice they don't really work out as well as they're intended. You guys are sitting here, you're like, yeah, this is fantastic. And then there's people out there, you know, fraudulent practices, people getting taken advantage of.

And so I urge you Members to think about that, about these programs and consider maybe giving back, back unspent funds to ratepayers to alleviate the, the immediate crisis. One and maybe not think about these unspent funds as unspent, but maybe think about them as remaining funds.

Because I think the word unspent just triggers a, an action to want to do something about it.

And I think that there should be a system in which we can give back, you know, remaining funds and also a system where we can, there's some kind of a watchdog, maybe metrics, watchdog system or metrics that can protect against fraudulent practices and ensure that people that need these programs are actually using them.

So as you can tell, I've been thinking a lot about affordability as much as you all have. But thank you for your time. We will continue working with Senator Hurtado on the Bill moving forward. Thank you so much.

Okay, thank you. We'll have any add ons in opposition. Let's establish a qu first.

Thank you. Mr. Chair. Members, once the Melissa Cosio Pacific Gas and Electric, we were opposed to the Bill in print. The amendments addressed majority of our concerns. Thank you to the Senator, her staff. And then Committee staff for the work on this. Thank you.

Great.

Good morning. Chair Rod Brewer with Southern California Edison. We want to thank the Senator for. The Bill and for the amendments. We are reviewing the language, but we also pledge to continue to talk to. To the author and to the sponsors in trying to find a bright line. For income qualified programs.

Okay, well, thank you. Before we go further, I'd love to establish a quorum. Please call the roll.

[Roll Call]

Okay, we have a quorum. Okay, let's bring this back for discussion. Senator Archuleta.

Yes. Thank you. Senator, thank you for bringing this forward. Obviously, we all feel terrible about the constituents that you have that have to suffer in that heat and have to do that. But one of the questions that was brought up is about people who are an entity that receives money to turn around and help those in need.

And I might be out of line. Mr. Chair, if I may. There's an individual in the audience, Mr. Lazarga, who his company has worked with low to moderate income people who need help to subsidize things in their world, whether it be windows, roofing, air conditioning, whatever.

I wonder if I might ask him to come forward to see how his company has worked with subsidies that they've received to help others. Is that possible?

That's okay with me. Is that okay with the author? Okay.

Mr. Lizárraga, I know you weren't up, but I know your history and I think that your input from your company that has worked in this world, that would enlighten us in reaching out to make sure there are companies that do play by the book.

We'll ask you to keep it brief, but we would like to hear from you, very brief.

Thank you. I didn't know I was going to do this, but thank you, Senator Hurtado. We support your Bill and thank you for the amendments.

Both of these programs, the EISA program and the equitable building decarbonization program1 has been around the EISA program for 42 years. We've been a significant contractor in that it works well. It can really benefit by working in. Some way with this new program.

The new program is untested, but this Bill really sought to try to get those two programs to talk together. I think they can be a real benefit to the community if there's a way for them to work together in an effective way. But these are programs that are very, very important to the low income community. Thank you.

Thank you.

Thank you, Senator Archuleta. And if I may continue. And again, we're talking about. So let's assume this was implemented and I've asked this question with others. If this was implemented, turn the clock back a couple years ago, three years ago, whatever, what would that have done to your community and how would it affect everyone?

How would you enact it? What can we envision of the aid and help that would bring the community?

The question for me through the chair, I do a whole lot. I mean, I think we're kind of behind in supporting especially communities that are not only low income but also that are in high risk areas dealing with heat. We've seen in the Central Valley and beyond, you know, children who have died from issues with the heat.

Right. We have seen older adults die within their home when their AC or their cooler goes out. So ensuring that we have reliable energy and the right appliances in a home is so critical. It's becoming increasingly a matter of death nowadays.

And so I think that if we can build upon the work that has been established and improve it and make it better. Obviously, if there are fraudulent schemes out there, I think there's already agencies that can work on addressing that particular issue.

But I do think that we need to build upon the work that has been established to just quickly and more rapidly make it easier for these families in this climate Crisis.

Thank you, Mr. Chair. I'll move the Bill and I will support as well. Thank you. Thank you.

Okay. Any other comments? Well, I will go ahead. And first I just want to thank you for a very powerful opening statement and for really painting the picture of what's happening in the communities. I got flashbacks to my time in D.C.

when in the summer when I did have air conditioning and slept on the back porch a couple of Times, you know, try to dodge the heat. But as you say, this is. This is increasingly life or death. And it puts a fine point and a real focus on the affordability work of this. Of the Committee this year.

I do appreciate the comments made about making sure our programs are working and not being taken advantage of. We do have to be extremely vigilant in that going forward. So I do. I do agree with that. I think we all have to work together on that. I do appreciate you working with the Committee.

We have an I recommendation, and I'll. We have a motion from Senator Archuleta. Would you like to close?

Yes. I just want to say thank you once again to the best Senator here. Thank you for the opportunity to. And for working with us, our team, to make this Bill work and move forward with that. I respectfully asked for an aye vote.

Thank you. Thank you. Please call the roll. Yes. Amendments were accepted. Yes. Yes. Yes. Yes. So the motion from Senator Charletta do pass as amended, to the Senate Appropriations Committee. Please call the roll.

[Roll Call]

That Bill is 8 to 1. We will keep it on call. Thank you Senator Hurtado.

Sure. Why don't we open the roll before we go to Senator Stern for his three bills? We'll open the roll first on file. Item one, SB256. Senator Perez, please call the roll. Oh, we do need a motion on that Bill. Senator Wahab moves the Bill.

[Roll Call]

That Bill is also 8 to 1. We will keep the roll open. And we'll now move to file item 2. SB292. Cervantes. We do need a motion. Should I read the motion? We have a motion from Senator Wahab. Shall I read it? Why not? This would be do pass as amended, to the Senate Appropriations Committee. Please call the roll.

[Roll Call]

That one is 10 to zero. And we'll keep on call. We'll now go to file item 5, SB716 Dorazo. See, we. Do we have a motion? Senator Archuleta, the motion is do pass as amended, to the Senate Appropriations Committee.

[Roll Call]

That Bill is seven to three. We will keep it on call. And now, SB797. This is Senator Choi. File item six, SB797. Do we have a motion? Senator Strickland moves the Bill, and the motion is due. Pass. Amended. Senate. Appropriate. zero, sorry. No. Okay. To pass as amended to the Senate Appropriations Committee. Please call the roll.

[Roll Call]

That Bill is 6 to 1, and we'll keep on call. Okay. And we just did that. Yeah. So we will go to file item 11, SB804, by our very own Senator Archuleta. And we had a motion, I believe. Yes, Senator Caballero did move the Bill. Do pass as amended in the Senate Transportation Committee. That's where that Bill will go next. Please call the roll.

Okay. The motion will be do pass to. As to be pass as amended to the Senate Appropriations Committee. Yes, please. From Senator Caballero. Motion, please. Call the roll,

[Roll Call]

That is 10 to 0 and we will keep that Bill on call. All right. We will now move to Senator Stern for the. The first of his three bills today. The first file, item seven, SB453.

Thank you, Mr. Chair. Before I begin, I want to share with the Chair and Committee.

We discussed amendments on page three of the analysis and agreed to accept the Committee amendments, but maintain, maintain one amendment that was suggested in the middle of page three of the analysis to maintain the self generation incentive program provisions, but accept all the remaining amendments. SB yes.

That is consistent. Yes. Okay, thank you. So we're no longer removing the language related to the SGP program.

So with that said, SB453 will help ensure that all collected rate payer incentives for energy resiliency projects like battery storage and micro grids are maximized utilized for areas hit hardest, especially those areas affected by PSPS events and with wildfire risks.

There's nothing more disempowering than having the lights off, the power off, and no power of your own to help do it, especially with money sitting out there at the Public Utilities Commission that should be using, be being used for this, and yet it has not. There's currently $68 million in unallocated incentives in the self generation incentive program.

And those can be spent down now for another two years. And we want to prioritize them for vulnerable communities, especially those with access and functional needs, those who rely on electrical equipment to support their health and critical community infrastructure like schools, hospitals, water districts, grocery stores and health clinics.

Additionally, the bill will require the CPUC at the beginning of the next year to review how the Micro Grid Incentive program, which was established pursuant to a law I wrote, trying to remember how many years ago 56 years ago, where we have sort of had a delayed start to the program and we found that it's really not being administered particularly expeditiously.

So if the PUC were to find that IOUs aren't doing the job, they could prescribe corrective action up to and including a third party administrator to help take over this program and make sure funds are spent down.

I will say we've had some good updates even in the last 24 hours from SoCal Edison that the first of their Micro Grid Incentive Program Dollars have been awarded to a project. So appreciate already some signs of progress to make sure ratepayer dollars are being maximized for the use that they were intended for.

This program is instrumental in assisting communities hit hardest by PSPS and those with grid resiliency issues. It's important to get this money out the door to help our constituents and with us today. I believe we have Sharon Gonzalez here with City 1000 Oaks as well as Cyrus Devers representing the Las Vergines Water District.

The bill has no opposition, respectfully asked for an Aye vote.

Okay, thank you. You have two minutes. Go ahead.

Great. Thank you and good morning. Sharon Gonzalez on behalf of The City of Thousand Oaks in strong support of SB453.

First of all, I want to thank the Senator very much for introducing SB453 which would direct the remaining incentives under the Self Generation Incentive Program and the Micro Grid Incentive Program towards a distributed generation and storage projects within public safety shutoff prone zones that are that serve vulnerable communities.

Thousand Oaks, located in Ventura County is considered a very high wildfire severity zone. In 2017 the western part of the county was impacted by the Thomas fire and in 2018 during the Woolsey wildfire that resulted in a two day evacuation within the city.

IOUs can right now initiate PSPS events during hazardous weather like high fire winds, potentially leaving residents without sufficient power for extended periods. These events not only affect homes, but also businesses and essential services such as hospitals, public safety, grocery stores, gas stations and traffic lights.

These shutoffs has disproportionately impacted vulnerable populations including seniors, individuals with disabilities and those with medical conditions. Access to vital electronically powered medical equipment like ventilators, oxygen concentrators and dialysis machines have been jeopardized. Similarly, the refrigeration of essential medications such as insulin has become a challenge.

Existing mobility and communication difficulties for seniors and residents with disabilities are worsened during these outages. PSPS events not only disrupt crucial city functions but also force closures of essential facilities like cooling and heating shelters which are usually through our libraries and teen and senior centers and affect water service, wastewater treatment and signal protections.

In January, the city did have a PSPS event and it resulted in multiple circuits being down from anywhere from eight to 11 days. Many of these areas were residential, but they did, like mentioned before, impact several critical infrastructure projects, services, including our wild, our water.

I asked you to start wrapping up.

Oh, okay. Well, with that we would just ask the Committee for Aye vote. Thank you very much.

Thank you.

Thank you. Cyrus Devers for the Las Virgenes Municipal Water District, which is right next to the City of Thousand Oaks. And we're here for many of the same reasons. We're. We were badly damaged in the Woolsey fire and we're grateful. We only lost 108 homes in the Palisades fire. It could have been much worse.

So we are obviously impacted by public safety power shutoffs, which we of course support wholly in a way to protect the public, but understand they're also costly for us too. We have a very robust backup program and backup generation, but it's costly to us, the public and the environment.

So we would like to use it as little as possible. So. So the more that you can do to promote the stability of the grid, especially with clean energy, the more you benefit us and the more cost you save us and the consumers. So for that reason we're here asking for an aye vote. Thank you. Thank you.

We'll have add ons in support.

Thank you. Mr. Chair Members Jean Hurst here today on behalf of the Ventura County Board of Supervisors in support.

Thank you. In support, Ethan Nagler on behalf of the California Association of Recreation and Park Districts in support.

Excellent. Thank you. We now hear from opposition. We have a lead opposition witness.

Good morning Chair and Members. Brandon Ebeck, Pacific Gas and Electric. We do not have a position on the bill. We've had some good conversations with the author's office and Committee with regards to the SSHIP provision. We support recasting the direction to the affected customers as described.

Just want to go on record and note that we estimate that we only have a few $1.0 million of ratepayer funded SSHIP dollars available by the time this bill kicks in. We know that the state a few years ago committed to providing several $100.0 million for SSHIP.

We look forward to seeing if that plays out, but we look forward to all funding that's not customer funded for this program. There's merit there. And we do have some concerns with changing the microgrid program as it's currently in flight. So we just look forward to seeing that language too. But thank you.

Okay, thank you. Any others in opposition? Okay, we'll bring it back to the Committee. Senator Strickland, I.

I want to thank the author for bringing this forward. This is a region of California that I grew up in. And I'll tell you, it has wildfires ever since I was a little kid. Wildfires all around this, this region. And it's also a very windy region.

So this, you know, for example, Simi Valley's, Valley of the Winds, is what the Native American name of this city is. And so IOUs are almost forced to shut down this power. And as the City of Thousand Oaks came forward, Essential services. So this is a great program. I'm happy to vote for it.

And I want to thank the author for representing his district very well on this issue. And just I urge An Aye vote for all the Members.

Okay, great. Senator Caballero.

So I was trying to figure out what the amends were. The amends are coming to us very late. So it's a little bit disconcerting to come up with what I think the bill does, and then all of a sudden it gets changed.

But one of the concerns I have in a number of bills is the cost to ratepayers. We've put a lot on ratepayers and we've heard from them that they're very unhappy with it. The presentation that Senator Hurtado did was excellent.

It is exactly the same issue that I face in my district where it's excess heat and no resources for those families. And so can you tell me whether the amends that you took will impact.

So let me just say that anything that's going to increase the cost of repairs I'm not interested in today using resources that have been sitting in a fund is, to my mind, a good use of those funds and expediting getting them out, because it doesn't do us any good to collect money and then sit on it.

But I just wasn't sure if what you're looking for in this is, is to use up the funds. And then my understanding was to extend the sunset. In other words, they were set to end in 26.

And if you know how much that fund, how much is generated per household, that would be helpful as well, because if it's minuscule, then it's a good use of those resources. But I haven't abstained because it looks to me like this is a ratepayer funded type of program. And I'm wondering if that's the best use.

And I do appreciate what my colleague said in regards to an area that has seen high number of pspss. And I have the same issues in some of my areas.

Yeah.

So I want to get to. Yes is my point.

I appreciate. I'll give it a shot.

There's not necessarily new amendments, but we just, we refrained from taking all the amendments so the one that we did not take would have stricken the SGIP piece out of this bill that is both a ratepayer funded program for a few more years and then it's then shifted over to a taxpayer funded program with a budget commitment at least.

So we want to make sure, you know, dollars that were collected are spent down and used appropriately. But, but to your point, I think there's a fair debate as to how much we should be subsidizing self generation tax or ratepayer in areas that are not vulnerable to PSPS or not vulnerable to high heat events.

So hope that helps answer the question.

And I will say just for the record, the amendments do require the CPUC to require each utility by January 15th, 2026 to provide a status update on the projects and dollars awarded within the proceeding require the CPC direct the utilities if they are found to not have awarded a significant amount of the these are specifically the MIP program around the microgrids to consider a third party Administration for any significant funds that a utility has not awarded in order to meet the requirements of the MIP as well as to ensure these projects support vulnerable communities as characterized in this Bill.

And there is money already sitting there in that program, right? Do you have how much that is.

Or in total there were $200 million approved. SDGE has spent down all of its incentives, 17.5 million. PG&E has awarded over half of its incentives on nine projects. About 43 million out of about 80 million. And Edison has been lagging. They just recently awarded 17.5 million of there are 83 million under this.

So you know, I'm in Edison country. I have places like Chatsworth Lake Manor that are sitting in the dark constantly and frustrated and I said well I got you the micro grid money like let's do it and they're saying we don't see it.

So it's really that that's motivating it but not to try to go get new money or put a new ratepayer funded program, but just how to get this money out the door faster.

What I heard you say in regards to the question that I asked is that it's using current funds that are available and that in the future it would be funded by taxpayers money. I don't have a problem with taxpayers seeing where their money goes.

I just have a problem with hiding it in a rate paying system where people don't know what they're getting for making a small contribution. So that helps me feel better about the direction you're going in. And so I appreciate the explanation. Thank you very much.

Okay. Any other comments? Okay, yeah, I already mentioned the amendments.

I will mention, you know, I did visit one of the utilities you mentioned and they're very proud of the fact that they're using those Micro Grid Dollars because they know that in some of these far outwardly communities that they will be without power for significant periods of time when they have to reasonably do power safety shut offs.

So the micro grids allow these further flung communities to get access to power during those times. So I know you're very passionate about this. You've started this program and want to see that money get out the door and happy to consider it. So you can leave in the S CHIP language and that'll be a discussion going forward.

I will be supporting the bill today. Would you like to close?

No. I appreciate the work of the chair and I am committed to continuing to work on the SGF piece of this to Senator Caballero's point and how to sort of concentrate the benefits and not add new costs. Okay, so with that it's.

Do we have a motion on the bill? Senator Strickland moves the bill. Please call the roll. The motion is due pass as amended to the Senate Appropriations Committee. Please call the roll.

[Roll Call]

Okay, that is 9 to 0 and we'll keep it on call for absent Members. Now we go to file item 8. SB 500. Go ahead.

Thank you. I'd like to accept the Committee amendments on page four. Appreciate the Committee and the chair's work here. This is an effort to add a new tool to the regulatory paradigm that PUC is using to ensure affordability. We'd like to see better performance for fewer dollars spent on ratepayer expenses.

The current utility regulatory model is a traditional cost of service model. But in certain areas, the tendency is to always go to the big capital infrastructure projects and not look for the cheaper sources that may not provide a rate of return to investors, but may in fact provide greater benefits to ratepayers.

We want to pursue this affordability agenda through this performance based model. And we think that allowing for the pursuit of, say, demand Flexibility or other tools that sort of don't just put steel in the ground every time new demand appears and instead utilize better. Our existing system will provide greater financial benefits to our ratepayers.

And that there is a way also to make sure that that doesn't undercut utilities viability or profitability to the extent that they need to maintain that.

So we're looking for the PUC to limit these costs by rigorously scrutinizing how to support load growth with existing transmission distribution infrastructure through the use of tools like virtual power plants, demand flex, even time of use rates. So this bill would look to add those tools to the PUC's model.

15 other states operate these kinds of models and we think there have been some notable successes. But to the Committee's excellent work, there also can be downside risks. If you overemphasize performance based rate making and sort of cast that with too broad a brush.

We do get concern that we're going to, you know, undercut sort of the broader PUC authority to maintain just reliable and affordable rates. So we appreciate the amendments. I want to turn to my witnesses in support. I think here we've got Richard McCann with M.cubed and Ally Detriau with Reimagined Power, respectfully asked for Aye vote.

Okay, yeah, you can do it from there or from the table. No, that's just. Okay, go ahead. Two minutes each.

Should we go to the table or.

I think they're saying stay there. Okay, yeah, we'll keep it from there. Thank you.

Good morning, Senators. I spoke to you in February about underlying factors that are driving utility rates higher and higher. I told you about how rates, transmission and distribution components have increased four times the rate of inflation over the last 20 years. And, and that those increases have been driven one to one by utility spending over that time.

And that wildfire spending is in fact not the driving component. It's only about 12% of the revenue requirements for the utilities. Even Carla Peterman, Vice President of PG&E, said that undergrounding is only 0.5% of their own rate increases. So what we have now is had cost of service regulation up to this point.

Unfortunately, the PUC is not really does not have the resources or budget to do the close scrutiny and auditing that's really required to oversee what utilities are spending. And so it's now really time for us to move to a new regulatory paradigm in the future. And that's performance based rate making, which is what this bill is about.

It's really going to align utility performance and cost Recovery things that should be included in the performance metrics, which must be transparent and they must be easily measured by all stakeholders. And here's a few suggestions for doing that.

The utility rates might be benchmarked against other municipal utility rates or they might be benchmarked against alternative costs of other sources like solar and storage micro grids. And if the rates rise faster than the rate of national utility averages, they need to have detailed explanations as to why that is happening.

Investments returns should be measured against stock, the broader stock market, and also pegged against utility book value, not against some market value that's assessed beyond regulatory reach. Accounting practices need to move beyond the 19th century to be able to recover the costs in a way that other companies recover those costs.

And actually we account for future ratepayers paying a larger and more appropriate share of those costs and that those assets that they do invest should be assessed for whether they are used and useful and if they are found not to yet be useful, that there needs to be deferred cost recovery in the future.

So I'm going to urge you to support this bill available for consultation with the Members. Thank you.

Thank you.

Thanks Richard. Hello Members and Committee. Thank you for your time today. My name is Ally Detriau. I'm the Chief Strategist for Reimagine Power. I've been working on performance based regulation issues since 2017. I was involved in a lot of the Hawaii activity since 2018 when their bill passed.

And I'm currently also engaged in the Oregon legislation that's currently before their Legislature this session. So SB 500 will direct the evolution of the CPUC's oversight and approach to regulation of the existing cost of service regulatory framework and transition us to a performance based regulatory framework that is modernized for the 21st century.

For over a century, the utility business model has essentially been shielded from competition by the state under the current regulatory regime with cost of service regulation.

And performance based regulation executes a core function of ensuring that we have competition in the market otherwise would be have competition in the marketplace by allowing for more incentives and penalties to be assessed so that they are operating like they would be a competitive business as a regulated monopoly.

And so we really want to make sure that we are getting these costs under control where transmission, distribution, infrastructure, as Richard mentioned, is the main driver of rate increases.

And the utilities not only get to recover all of those costs, they get their guaranteed rate of return from shareholders for all of those costs, regardless of the need or any sort of scrutiny on those costs.

So it's really important that we look at incentivizing outcomes and performance and paying based on that rather than just on guaranteed infrastructure spend.

So moving to a performance based regulatory system that is based on key objectives and policy goals and fulfilling that through the procurement of services and other objectives rather than just the status quo of capital infrastructure investments will help remove biases in the current regulatory model and will help reduce costs for rate payers by by leveling the playing field between utility owned infrastructure and non utility owned infrastructure to Senator Stearn's point.

Looking at procurement of more virtual power plants, third party services, demand flexibility, etc. And this will improve.

Start wrapping up.

Yes, this will improve affordability more so this will facilitate greater investment in clean energy resources by all and allow us to meet our 21st century energy goals. We need to modernize our regulatory system for the 21st century for California's needs both today and in the future. Thank you very much. I'm available for more questions.

Thank you. Okay, anyone else want to add on in support?

Hey, Andy Schrader, IOU, ratepayer and climate. Concern, father of two. Thank you Mr. Chair and Committee for hearing this today.

Sorry, we just got to add on. Just. I know.

So I'm representing a bunch of organizations for this popular bill; 350 Southland Legislative Alliance in LA, Orange, Ventura and Riverside counties. 350 San Diego. 350 Humboldt, Senator Stern's home team.

350 Conejo, San Fernando Valley, US Green Building Council, California Climate Action Campaign from Orange County in San Diego, Climate Action Petaluma, Sonoma County Climate Activist Network, Northeast LA Climate Collective, California Real Energy Solution Coalition, The Palisades Fire Community Group, Resilient Palisades and the Eaton Fires Group, Indivisible Altadena, Pasadena. Thank you, Senator.

Okay, thank you for the list.

Santiago Rodriguez with California Environmental Voters in support.

Allison Hilliard with the Climate Center in support. Thank you.

Michelle Canales with Union of Concerned Scientists in support.

Janet Cox for Climate Action California in support. And also speaking for Climate Reality Project, Los Angeles, San Fernando Valley, Orange County and San Diego chapters. 350 Bay Area Action, Glendale Environmental Coalition, Ban Single Use Plastics, Urban Ecology, 301 Organics and Transition South Pasadena.

Thank you. Thank you.

Zoe Bennett on behalf of Ivy Energy and the Microgrid Resources Coalition in support. Thank you.

Thank you. We will now hear from opposition witnesses. Do we have a lead opposition to two lead opposition? Yeah. Okay, go ahead.

Thanks. Thank you. Mr. Chair and Members of the Committee. Valerie Torella with Pacific Gas and Electric. We do have an opposed position. We do Appreciate the author's interest in bringing forward this discussion. And you know, what everyone's interested in is affordable rates, affordable bills.

And we also appreciate the work of the Committee and in the analysis pointing out that, you know, we should look at unintended consequences of a proposal like this. Maybe there's promise here, but maybe it's not a magic bullet and all of that would be determined at the CPUC.

We've written in our comments that we have concerns about duplicative and overlapping and maybe processes that are would be in conflict with each other. And then just in a proposal like this, we want the Committee to understand that, yes, cost and the cheapest thing may not always be the thing that addresses risk or reliability.

And so all of these things have to be balanced. We appreciate again the Committee's amendments, which we feel begins to recognize the balance that's needed. Will review the amendments. We will continue having conversations with the author and we remain opposed. Thank you.

Thank you. Go ahead.

You also have two minutes.

I don't need that much time.

Okay.

Catherine Borg with Southern California Edison. Appreciate all that the Senator does to keep us employed here. We appreciate the bill's intent of the cost effective delivery, but we are concerned about limiting our utility flexibility and undermining our wildfire safety strategies. Thank you.

Thank you. Do you want to add on?

Chair Members Lourdes Ayon with. San Diego Gas and electric and SoCal. Gas also in opposition to the bill. Looking forward to working with the author to continue. See if there's some alignment there.

Thank you. Okay. Anyone else in opposition with that? Let's bring it back to the Committee. Senator Hobb will move the bill ultimately. Do we have any questions, comments, Senator Caballero?

Well, I would encourage you to continue to meet with the opposition. I think there's a sweet spot here. But the question I have again gets back to who pays for changing the metrics? I'm looking. This is, this could potentially be a way to understand costs better, but also to reduce costs is my take on it.

But in changing to a new system, who pays for that change in the system? And I guess where I'm getting to is it should be part of the budget. We should pay for it out of the budget if we think that it's such a good idea and not put it on the back of rate payers.

But again, that's my mantra for this year is that the ratepayers have had it and to add more uncertainty because anytime you move to a new program, there is uncertainty. And we've done it before and it hasn't worked in other settings. So anyway, two cents.

Any response to that or I can.

Address in my closer right now if you'd like.