Assembly Standing Committee on Utilities and Energy

Good afternoon. Good afternoon, and welcome to today's hearing of the Assembly Committee on Utilities and Energy. Before we move on to our agenda, I have a few housekeeping announcements to make. As is customary, I will maintain decorum throughout today's hearing.

In order to hear as much from the public within the limits of our time, we will not permit conduct that disrupts or otherwise impedes the orderly conduct of legislative proceedings. Any individual who is disruptive may be removed from the room. Today we have 13 measures on the agenda. Five are on consent.

As a reminder, we will hear from two primary witnesses in support and two in opposition. Each witness is allocated two minutes each. If we... And all other support and opposition can be stated at the standing mic when called upon. And as a reminder, when you're providing me to testimony, please simply state your name, affiliation, and position. All right, we do not have a quorum, so we are going to go ahead and get started as a Subcommittee.

We have no Senate authors currently in the room. If you're a Senator who has a bill in U&E, please join us in room 437. However, Senator Stern is not available today and has asked me to present his bills on his behalf. So we are going to go ahead and jump to file item number eight, which is SB 613, and file item number nine, which is SB 614 by Senator Stern. And I'm going to pass the gavel to Assembly Member Rogers.

All right. Well, thank you, Members. Today, on behalf of Senator Stern, pleased to present Senate Bill 613, which addresses methane emissions from fossil fuels. This is a bill with no registered opposition. Senator Stern has been working on this issue for the last three years. As some background, methane is a short lived climate pollutant that is 87 times more potent than carbon dioxide in the short term.

California continues to be a leader on reducing methane emissions. Over the past years, the Air Resources Board has adopted a strong oil and gas regulation that governs in state production, limiting flaring, venting, and leaking of methane. Former Senator Mark Leno authored Senate Bill 1371 in 2014 that has reduced methane leaks when moving natural gas within our state's gas pipeline system.

This bill looks at upstream emissions in a cost effective manner. California currently imports about 90% of its natural gas, mainly from Colorado, New Mexico, Texas, and Canada. On the petroleum side, we import approximately 50% of our oil from Iraq, Saudi Arabia, Ecuador, Brazil, Guyana, and Canada.

We are still amongst the largest users of fossil petroleum and gas in the world. This bill before us will move the Public Utilities Commission and other agencies to prioritize strategies to reduce methane emissions, including emissions from imported petroleum and natural gas.

The bill empowers the PUC and Air Resources Board to assess and apply approved monitoring, measurement, reporting, and verification protocols such as the Oil and Gas Methane Partnership, Biden era standards, or state satellite tracking efforts in order to reduce emissions and send market signals.

This bill will encourage natural gas procurement to shift to low leakage natural gas where feasible, cost effective, and in the best interests of ratepayers. This is important, as the previous federal administration's methane emissions reduction program was recently repealed by the recent congressional bill.

Industry actors were actually embracing technologies to reduce leaked methane because it saved them money from wasting their own product. The COP28 Global Methane Pledge to reduce flaring, venting, and process emissions by 30% by 2030 as compared to 2020 levels continues to go unmet.

This bill will show that California can continue to take steps to be a leader in methane reduction while continuing to prioritize affordability and practicality. On behalf of Senator Stern, I, at the appropriate time, respectfully ask for an aye vote.

Thank you, Chair. Do we have any me toos in support? Name, organization, please.

Hi. Katharine Eger with the Weideman Group on behalf of PureWest in support. Thank you.

Do we have any opposition? Great. I'll bring it back. Any questions or comments from my colleague? Go ahead.

Great bill. Love to be added as a co-author when we have a quorum and would love to move the bill when we have a quorum.

Thank you, Assembly Member Zbur. And I will certainly share that with the Senator.

Great. All right, Chair, do you want to close?

All right, well, thank you, Members. At the appropriate time, on behalf of Senator Stern, I respectfully ask for an aye vote on SB 613.

Great. Great. We'll take a vote on that when we establish a quorum. Let's go ahead and move on to our next bill. Item number nine, SB 614.

All right. Once again, I am pleased to join the Committee and present this bill on behalf of Senator Stern. This is a bill that I have been working with him on for the majority of the year in a bicameral fashion. As you may, as Committee Members may recall, I am the author of AB 881, which this Committee previously heard and supported. Today I am presenting SB 614, which recent amendments by Committee staff makes the bill now in fact mirror the language of AB 881.

This bill will ensure that California can meet our climate goals by supporting the safe transport of carbon captured by industrial projects. Carbon capture technologies are a necessary and important part of California's strategy to achieve our climate goals. Recognizing the importance of CCUS, California has set ambitious carbon removal goals.

20 million metric tons by 2030 and 100 million metric tons by 2045. In 2022, as Members may recall, California passed SB 905, which established a framework for carbon capture in the state. As part of that, and in 2022, California decided to place a moratorium on building new carbon dioxide pipelines because the federal government was in the process of developing federal regulations.

The state established a moratorium that was to remain in place until the federal guidelines were complete. In January of 2025, a draft of these federal regulations was released by the Biden administration. Unfortunately, three days later, Donald Trump was inaugurated and that regulatory process ground to a halt. So what comes next from the federal government is uncertain, but what we know is that it's important for California to take our destiny in our own hands.

This bill, SB 614, directs the fire marshal to build upon the draft federal guidelines and allows the state to lift our moratorium in a responsible and safe way. With that, I am pleased to be joined by our witness, Mr. Scott Wetch, joining us on behalf of the Carbon Capture Coalition.

Mr. Chairman and Member. Scott Wetch on behalf of the Carbon Capture Solutions Coalition, as well as the California State Pipe Trades Council. I was very involved in all the negotiations around SB 905, which was a budget trailer bill. Everything the author stated is exactly on point.

I will say that that bill and those negotiations anticipated a potential problems with PHMSA issuing the guidelines in the time frame needed. And so it had a component that had the state fire marshal provide a report to the Legislature by February 23rd of 2023 stating their ability and capacity to promulgate safety regulations for pipelines in the event that we needed to do that. Unfortunately, we find ourselves in that situation.

The money that the Biden administration set aside for carbon capture is evaporating quickly. There was a 10 year moratorium. 905 had a 10 year moratorium. We have a number of projects and pilot projects in the pipe, literally in the pipeline, and without this fix, none of them will come to fruition. So this is super urgent that we get this done, and we would urge an aye vote. Thank you.

Thank you. Do we have any witnesses in opposition? Excuse me, sorry. Me toos, go ahead and join. Me toos in support.

Hi again. Kate Eger with the Weideman Group on behalf of Bloom Energy in support.

Great. Now, do we have any witnesses in opposition? Any me toos opposed? All right, I'll bring it back to the Assembly Members. Any questions or comments? Nope. Great. We'll keep that one, and we'll take a vote when we have a quorum.

All right. And just in closing, on behalf of Senator Stern, respectfully ask for an aye vote. And I guess on behalf of myself, as Assembly Member Petrie-Norris, I would just say I have really, really been grateful for the Senator's partnership and leadership in this critical issue.

I really appreciate when our two houses can work collaboratively to forge solutions in confronting some of our state's most urgent and pressing challenges. So appreciate the Senator. And on his behalf, respectfully ask for an aye vote at the appropriate time.

And I think I heard you say you were accepting the amendments on behalf of the Senator.

On behalf of the Senator, I am pleased to accept the Committee amendments. Yes. Thank you.

Perfect. Now, I think what the Chair is going to say when she gets back around to the her seat on the dais is that if you're a Senator who is presenting today to get down to the Committee room. We have no authors at the moment.

Good afternoon. Welcome, Senator Wahab. Alright. We are moving now to file item 4, SB 332. Senator, as you are ready.

Thank you. Chair and members. I want to begin by accepting the proposed committee amendments. And I want to thank the team for their engagement on this bill. SB 332 is about putting prior and prioritizing ratepayers for corporations over corporations. Sorry. Right. California IOU.

Investor owned utility electricity rates are more than 50% higher than rates charged by public owned utilities. Under our current framework, customers pay for all the costs of infrastructure projects and then they pay an average 10% to the utilities so they can profit. This dynamic incentivizes investor owned utilities to make their projects as expensive as possible.

SB 332 examines and addresses the issues that arise from the inherently flawed system. Tying executive compensation to affordability metrics. Studying whether or not the IOU structure is the best form of a utility for Californians. Increasing the transparency of utility disconnections.

With utilities passing on cost to ratepayers unabated, it is time for the state to make changes that shift the balance of power toward the people. Here to testify in support of SB 332 is Maria Stamas, Policy Director at the Ubuntu Climate Initiative.

Good afternoon Chair Petrie-Norris and members of the committee. I'm here today in strong support of SB 332. For decades, California's investor owned utilities have operated with a primary obligation to maximize shareholder returns.

Meanwhile, our communities have experienced some of the largest utility caused devastating wildfires in the nation and also face the highest electricity rates in the continental U.S. we're stuck in a cycle where corporate neglect leads to unnatural disaster and ratepayers are asked to foot the bill.

Today, with SCE's probable connection to the Eaton fire, we're facing this pattern yet again. SB 332 offers a responsible path forward. It simply directs the state to conduct a public study, just a study to assess which ownership and finance models, if any, could deliver safer, more affordable energy.

In addition to the study, the bill includes two common sense reforms. Linking Executive pay in part to bill affordability, not just shareholder returns, and to require better data on utility shutoffs to inform future affordability decisions. If California had this information in 2019, when PGE went bankrupt, we would have had better options.

And we need that data now to make smarter decisions moving forward. I want to emphasize that SB 332 ensures labor is protected. The study would be conducted with a university labor center to assess how any potential transition can safeguard and even improve pensions, salaries and union jobs.

A previous version of the bill included a best value procurement model that has been removed. So in Short, in summary, SB 332 is about conducting a thorough review. It is simply primarily a study bill. It protects workers and it will help all of us plan wisely for California's energy future. It's due diligence and it's long overdue.

I respectfully ask for your yes vote today.

Thank you. Alright, we'll go ahead and open it up for additional testimony and support. If you'd like to testify in support of SB 332, please approach the microphone.

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

Good afternoon. Shira Spector with Stone Advocacy on behalf of the California Solar and Storage Association in support thank you.

Tina Gallier with 350 Sacramento in support.

Doris Nguyen with Clean Earth for Kids in support. Additionally, these organizations support North County Equity and Justice Ecosystem Peeps, Interfaith Coalition for Justice, Activist San Diego, Empower San Diego.

Katie McCammon on behalf of Climate Action California in strong support. Thank you.

Madam Chair, Mark Fenstermaker for Earth justice and support.

Hi. Keely Chambers with the Party for Socialism and Liberation in support.

Colin Miller, Reclaim Our Power Utility Justice Campaign in support and also with Proxy Me too. Support of Recult Energy, Gopal Shankar Solar, United Neighbors Action, Courage California, Sacramento Environmental Justice Coalition and Yolo Climate Action Commission 350, Humboldt 350, Bay Area Action, California Green New Deal Coalition and People's Climate Innovation Center.

Hi there. Emily Ross with the Reclaim Our Power Utility Justice Campaign providing some additional proxy me toos to for San Diego 350, the Center for Community Action and Environmental Justice, the Energy Coalition, Climate Equity Policy Center, Glendale Environmental Coalition, Green Bank Associates, Youth vs. Apocalypse and I'll leave it at Agroecology. Comments. Thank you.

Thank you.

Dave Shukla, Long Beach alliance for Clean Energy strong support.

Febi Bodiarto, the California Environmental Justice Alliance Action CEHA Action in support.

Emi Yoko-Young, Reclaim Our Power.

And I also have several proxy yes votes from Ban Single Use Plastic, Bay Area System Change Not Climate Change, Indivisible Alta Pasadena Sunflower Alliance, Activist San Diego, Media Alliance Oil and Gas Action Network Center for Biological Diversity, Communities for a Better Environment Frontline Catalyst, the Local Clean Energy Alliance, People's Clean Power Alliance, Third Act Clean Health Now Action Fund, Climate Action Campaign, Mayor Christina Fugazi, Mayor of Stockton 350 Bay Area Action Poder, SAPI Genie Sacramento DSA and DSA California Interfaith Power and Light.

Thank You.

Isaac Cassala, Party for Socialism and Liberation, Sacramento. Strong support.

One more proxy organization in support of SB 332, Indigenous Justice. Thank you.

Thank you. Alright. Moving to witnesses in opposition. Our primary opposition witness wants to approach the dais. Thank you. Do you have someone. Is there someone else coming as well?

Not as far as I know right now. Fine. Good afternoon, Chair Petrie Norris and members of the committee. John Kendrick, on behalf of the California Chamber of Commerce, we appreciate.

Number one, I'd just like to express a lot of appreciation for the work that committee- committee consultants put onto this and all of the bills that are for consideration today. Considering the holiday, some really good analysis was performed. Overall, we appreciate that the amendments have narrowed the scope of SB 332.

But even in its amended form, we view it as a costly and destabilizing measure. It sends a destabilizing message that the future of California's energy landscape will entertain the notion of dismantling the state's existing IU model.

The IOU transition feasibility study injects long term uncertainty that could discourage investment in critical infrastructure, raise the cost of capital and slow progress on decarbonization reliability improvements. The result is higher long term costs for ratepayers who bear the consequences of the regulatory unpredictability that SB 332 introduces.

Now, I heard you talk about the study framework, and this is just a study. And it's a study, but it's not a neutral study. Right. It's one that puts the thumb on the scale. It assumes that public or non profit ownership of utility, that public or nonprofit ownership of utilities is the preferred solution.

And it, you know, it dictates specific research institutes that will be used. At a time when Californians are struggling with affordability. Taxpayers should not be funding $5 million policy experiments that assume the problem and the answer before the analysis even begins. The bill creates a biased process that undermines trust and objective policy making.

Now, linking Executive compensation to affordability metrics creates perverse incentives. For example, by linking executive pay to disconnection rates that could pressure utilities to avoid service terminations altogether. Even for chronic non payment. That undermines basic bill collecting and encourages non compliance. Suppressing disconnections may lead to a rise in uncollectible debt which ultimately gets spread to other customers. And.

Thank you. If you can wrap up. That was two minutes.

Thank you. You know, it may look modest after amendments, but it still threatens ratepayer affordability. And we have some serious concerns.

Thank you. Thank you. Alright, we'll turn it to additional witnesses in opposition. You can approach the microphone at this time.

Thank you. Good afternoon. Laura Parr on behalf of Southern California Edison, aligning our comments and opposition. Thank you.

Good afternoon. Brandon Ebak on behalf of Pacific Gas and Electric, also opposed. Thank you.

Ryan Pesa with Western Wood Preservers Institute, Treated Wood Council and North American Wood Pole Council, opposed.

Joe Zanze with San Diego Gas Electric, also opposed.

Alright, bringing it back to committee members. Questions or comments? Alright, Assemblymember Zbur.

A couple questions. So first of all, I'm going to, I'm going to support the bill today, but I had some concerns about the way this was framed. I almost was going to lay off of it because it, I think presupposes the outcomes of the study.

So when I read the bill it was sort of like, well, that might be the case, but I don't know that I agree with this. And it seems like we're codifying in the law a bunch of conclusions that are should be the outcome of a neutral study. So I do think it is a fair question.

You know, did we get it right when we went to a model of investor owned utilities that were regulated over publicly owned utilities? Right. And you know, the question I have is where are we going to come up with the, I don't know, is it 40 billion, $60 billion to buy out the utilities?

But before we go there, I think there needs to be, before we were able to go there, we need to have, I think a fairly neutral study that actually doesn't assume that that's the best outcome for ratepayers and for the public.

So, you know, when I look at this, you know, it's just past the president experience demonstrates that prior use, prioritized profits over the safety and well being of ratepayers in residents of California. I don't know that I necessarily agree with that. I think maybe the structure results in high rates.

But you know, statements like that in a- in- in a bill, to me give me a lot of heartburn. And they'd have to be, it would have to be something that's more neutral when it comes back to the floor. I do have some nervousness about the signal this sends.

You know, at a time when we've got financial markets, I mean, we do need to be careful about doing things that, unless we're really, you know, about doing things that destabilize the cost of capital for utilities because that actually has rate impacts too.

So, so that's the, the first comment is sort of just the, this does seem like it puts the thumb on the scales. It's concluding the things that a study should be seeking the answers of.

And then the second part was just questions about is the executive compensation language still in the bill or is that out of the bill now?

There still there. So I guess the question is, I thought executive compensation was already tied to safety performance outcomes and is reviewed by OEIS as part of the safety certification process. So how would what's in the bill be different?

Yeah, so it has been adjusted, actually, a little bit. So it's not exactly what we originally had. It amends the bill to basically include ratepayer affordability alongside safety as metrics for assessing executive compensation.

And there is a component that in 2019, it was done as you stated. But it defines right now ratepayer affordability as a review of data related to customer disconnections and uncollectibles that the Commission already collects pursuant to section 718 and 910.5 and proceedings implementing those sections.

So what we also require is compensation documentation to include specified dollar amounts more specifically. And as far as the feasibility study, there are actually several phases, and phase one is the rough framework of what they're going to be reviewing and how. But then also... Give me a few seconds.

We are also phase two does not presuppose that the best form. It could potentially be an IOU is the best form. Right. And so we are not, just like many of the things I do, I'm not necessarily married to the way we're doing things right now, and I'm also not married to one particular outcome. The study is to find the best option for Californians across the board. In my district alone, we have a city that actually provides utility services to their district, and they're doing a fabulous job.

And there are also some smaller utility organizations throughout the State of California that are doing a very solid job themselves with a very different formula and model. And, you know, I think that there's a lot of local organizations that are looking for different avenues, and that's why we talk about the community energy. And, you know, there's so many different forums out there that we're just looking to see what what would potentially be the best for Californians.

Yeah, I guess what I sort of say, I mean, I'm looking at sort of the so two things. So taking a step back on the bill as a whole, I hope you will continue working on the language so that it's a more neutral study and doesn't have all of these conclusory statements. Because I was trying to find it here.

But one of the things in the bill is that we have concluded that moving away from our system is the correct outcome. And I don't know that that's the answer. Maybe, but it may not be. And if that's in the bill, I don't know that I can support it.

And I'd like to see a commitment that you're going to actually revisit that because I think that that will send a terrible signal to the financial markets if what comes out of this bill today is that we have decided that we're basically undoing all our IOUs. So I'm hoping he'll say that on the record that that's not the intention. This is an even handed study.

Yeah, it is a fair study. And the whole point of a study is honestly to get a neutral outcome out of it as to what is coming, what is the best for Californians. And maybe for more fire prone areas it's a different model and for metro areas it's a different model.

And you know, the study is largely to take a look at that and everything in between to see what is the best model for the residents. And obviously we live in different environments. This is not a bill that... And I've been very transparent with some of the opposition folks. I'm not interested in completely dismantling the industry.

That is not a goal ever. The goal is to find the best outcomes for the problems we are seeing, which is these wildfires that we have also seen the industry not invest as much as they can. And I will give an example. You know, there's 10,000 miles of critical lines that have been identified by PG&E in particular to underground. And the reality is they also have 100,000 miles of line in the State of California. But the focus has been on the 10,000 and we're nowhere near hitting that mark.

It's going to probably take us 10 years to get to just underground the 10,000. So there's clear failures that we are seeing. We are seeing more and more fires throughout the State of California. We are seeing people struggle to get their housing, property, and lives are in danger. The study is a neutral study.

We will continue to work with opposition and folks to make sure that we're addressing all the concerns. But the goal of this bill, the goal of the study is to prioritize the needs of California residents. So I'm committed to that and I think that that's what we all are committed to first and foremost. And of course, as much as possible, find it the most affordable way. That's something I personally am very committed to. So more than happy to work with all stakeholders involved.

That's great. I mean what I'm hearing is this is not a signal to the financial markets that California has made a decision to move away from our model. This is simply an even handed study to look at that issue. And then I think the last thing I would ask you to do is I know that there's some privacy concerns that the IOUs have raised related to the executive compensation. I'd just like a commitment that you'll continue working with them and understanding what those are.

Yes, I'd love to know more about that. And there are some companies that are obviously publicly traded as well. And so there are some things that are live, reports that they have to share. So there's a lot of information that's already available to the public too.

Thank you, Senator. Appreciate it.

Thank you. And I would also, just for point of clarification, so the amendments do, you raise a couple of concerns I think about the legislative findings. So the bill as amended narrowed the legislative findings to verifiable facts and then it modifies this study to require an interim report after one year on threshold legal issues related to transition of IOUs to each nonprofit corporate form. So I think that addresses some of the concerns that you raised. And appreciate working with the Senator on those. Assembly Member Calderon.

Yes. Thank you, Madam Chair. You know, I'm going to align my comments and concerns with Assemblyman Zbur. Some of the language in this bill text is really, really strong, and I think he may have mentioned this. The past and present experience demonstrates that the IOUs prioritized profits over the safety and well being of the ratepayers and residents of California and goes on and on and on.

And so, you know, that was not my experience working for an IOU for 25 years. I can tell you it was always the ratepayers affordability and the safety of their workforce and reliability. And so... And I'm also concerned about potential signals to investors.

I mean we sit in this little room here, but people all over the world are watching what California is doing, are watching what California is doing. And we may not realize it, but it does signal to the markets and it does affect ultimately the ratepayer if the cost becomes too great to borrow. And so for that reason I'm not going to be able to support the bill.

Okay. And I appreciate that. And I again want to highlight that in the LA Times just this past May, Edison's safety record declined last year. Edison safety record decline last year. The number of fires sparked by its equipment soared to 178 from 90 the year before and 39% above the five year average. Serious injuries suffered by employees jumped by 56% over the average. Five contractors working on its electrical system died.

In an April 1st report, Edison told regulators they cut executive bonuses awarded for the 2024 year. In the report, Edison said that because its safety record worsened in 2024 on certain key metrics, its executives took a total deduction of 18 points.

But cash bonuses for four of Edison's top executives actually rose last year by as much as 17%, according to a separate March report by Edison to federal regulators. I also want to highlight that PG&E has specifically come, even this past year, for rate increases specifically to pay out their shareholders. That was the actual request.

Over and over we are seeing this. So I understand the concerns. And like I made the commitment just a minute ago, we are more than happy to work with all stakeholders involved because we do know that it's important to provide power to residents, first and foremost. Right? But we also have to make sure that we are holding these key stakeholders accountable when necessary. We need to prioritize affordability, safety, and, you know, building for our future.

And so I want to remind everybody that early this January. January, a winter month. We saw on January 7th one of the most massive fires that we have ever seen in the State of California. Lives as well as property were lost, which is going to take years, not only to clean up that mess, but then also rebuild.

And there is a toll on the public, the cost, the city, the county, the people, and the community and the State of California when we are talking about what we are going to prioritize, what we are going to do.

So as much as I'm sensitive to industry and making sure that we don't rock the boat too much, I also want to be able to proactively and aggressively see are there other options that better serve our community when we are talking about safety metrics, when we are talking about affordability, when we are talking about our future and the environment. I know that both houses have made commitments about wildfire packages.

This is something that I think is incredibly important when we are talking about what we saw. And I know that distance makes the feeling a little bit more dull, but I have gone to the LA wildfire area, and it's devastating to see that. And the families and what we are fighting for on almost the majority of our bills is really to kind of make sure that people are whole. So I respectfully, I think that this is a good bill. I think it's fair, and I think it's what the public wants.

All right, seeing no further questions. I will again just note that, as amended, the amendments narrow any of the legislative findings not to matters of opinion or subjectivity, but to verifiable facts. I will note that before we move. All right. Would you like to close?

Respectfully ask for an aye vote.

All right, we are one short of a quorum, so we will use this as an opportunity to urge Members to join us in room 437. And Senator, we will take up that bill for a vote at the appropriate time. Moving to file item number one, Senator Padilla, SB 57. Good afternoon. Welcome.

Good afternoon, Madam Chair and Members. I am pleased...

Senator, I am so sorry to interrupt you. But I'm just going to seize this opportunity to quickly establish quorum so that we can conduct in case I lose a Member. All right, there we go. Madam Secretary, please call the roll.

[Roll Call]

All right, with that, we have a quorum. Senator, back to you.

Thank you, Madam Chair and Members. Happy to present Senate Bill 57. I'd like to begin by thanking you and the Committee staff for working with our office, and we will be accepting Committee amendments. This bill will create the Ratepayer and Technological Innovation Protection Act, which would require the PUC to establish a tariff for large energy users to prevent cost shifts to other ratepayers and to also try to avoid stranded assets costs being left with non-connected ratepayers.

US is undergoing, as you know, an AI revolution, which is powered by massive at times data centers and other large consumers. These consume large amounts of energy and water, putting strain and creating a sudden and often immediately temporary scarcity in supply of energy, which then has a direct result on incremental cost to ratepayers.

They require massive investments, massive infrastructure, and increased reliance on fossil fuels. Virginia, which has the highest concentration of data centers in this country, is facing an energy shortage and increased energy cost. It's not just affecting their state, but the entire eastern grid managed by PJM.

To get a sense of scale, Microsoft signed the largest ever power purchase agreement to reopen Three Mile Island power the company's data centers. And Amazon is building a 2.2 gigawatt data center consuming the same amount of energy as 1 million homes.

Analysts warn this rapid build out of data centers may be outpacing demand, and with innovations in energy and computing, some of these centers may close earlier than expected or use less energy than initially projected. This is a rapidly evolving industry.

Large energy users closing before contract terms end puts ratepayers at risk of footing the bill for their transmission and interconnection costs. Other states such as Ohio, Georgia, Texas, and Indiana have already taken steps to protect their ratepayers, varying from exit fees, minimum contract terms, minimum demand requirements, and upfront payments.

In fact, the New York Times recently reported that large energy users often did not pay the full cost of the equipment needed to serve the demand, forcing homeowners and small businesses to foot the bill. Ratepayers are already struggling with affordability. They should not be forced to pay for stranded assets of wealthy, well performing companies. With me today I have Matt Freedman with TURN and Marquis Mason with California Environmental Voters.

Thank you, Senator, Madam Chair, Members of the Committee. My name is Matt Freedman. I am a staff attorney with The Utility Reform Network, and we're here in support of SB 57. The bill in print contains specific and meaningful direction to the California Public Utilities Commission for investor owned utility electrical tariffs serving large data center customers.

The bill is intended to ensure that these tariffs protect non-participating customers, ensure a fair sharing of costs by all consumers, and promote greater use of clean energy and distributed energy resources by these facilities. Forecasts of huge growth in new data center loads have led to concerns about the need for grid upgrades, the amount of electricity to be consumed by these facilities, cost shifting, and potential impacts on progress towards California's zero carbon electricity objectives.

SB 57 addresses these concerns in a manner that balances the interests of data centers and the broader needs of all electricity consumers. And although the Committee amendments weaken the elements of the bill designed to achieve these objectives, and we would prefer more meaningful and binding direction to the California PUC, the amended language still addresses many of TURN's core concerns. In particular, we appreciate several of the key elements. First, the requirement to minimize any cost shifting to non-participating customers.

Second, ensuring that data centers connecting directly to the transmission system are required to contribute a reasonable share of costs relating to wildfire mitigation, wildfire liability, electrification and environmental programs and other societal costs. And finally, directing the PUC to consider how to prioritize the use of on site energy storage, reductions in greenhouse gas emissions, participation in demand response programs, and increased use of zero carbon resources.

These elements of SB 57 provide reasonable direction to the PUC while allowing flexibility with respect to the implementation of the details and TURN believes this approach would allow for customers to benefit from the downward pressure on rates attributable to new data center loads without being forced to absorb significant new costs necessary to serve these unique customers. So with that, we ask for an aye vote.

Greetings, Madam Chair, Members of the Committee. My name is Marquis King Mason with California Environmental Voters. I hope to keep this short and sweet like Sabrina Carpenter's last album of the same title. So yeah. The explosive growth of AI comes with a corresponding rise of massive data centers, which consume large amounts of energy and water.

These data centers put enormous strain on the electrical grid in other states such as Virginia and the Eastern states. PJM are dealing with severe energy shortages, higher risk of rolling blackouts, and skyrocketing energy costs. SB 57 would task Utilities Commission with creating a large energy user tariff to prevent these cost shifts onto repairs given the cheaper rates high energy users are often given. These large energy users unchecked growth threaten our clean energy goals as well as the reliability and affordability and leaves utilities scrambling for more energy that could even be dirtier.

Moreover, it's a real risk that these data centers would close before they pay the full cost of their share of infrastructure investment if there is no tariff, which leaves regular customers on the hook for funding these major costs. Other states such as Georgia, Ohio, Texas, and Indiana and many more have already seen the risk these large energy users pose and have implemented proposal similar to this to protect the ratepayers from covering the cost of these energy users. Super connection to the grid.

California must put policies like these in place to encourage clean energy adaptation and ensure reliability and ratepayer affordability. Just like Sabrina Carpenter said, please, please, please pass this bill. For these reasons, we respectfully request an aye vote. Thanks.

All right, moving to additional testimony in support. If you'd like to testify in support of SB 57, please approach the microphone.

Madam Chair and Members. John White with Clean Power Campaign in support of the bill.

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

Doris Nguyen with CleanEarth4Kids, support. Also supporting are North County Equity and Justice, Eco-Sustainability Peeps, Interfaith Coalition for Earth Justice, and Activist San Diego.

Dave Shukla, Long Beach Alliance for Clean Energy, support.

Katie McCammon, Climate Action California, in support.

Good afternoon, Madam Chair and Members. Chris Shimoda on behalf of the California Trucking Association. We are neutral on the bill as amended on June 30 and just want to thank the author and sponsor, or excuse me, author and staff for working with us on the eligible customer issue. Thank you.

Thank you. Moving to opposition testimony. Go ahead and approach the chairs here. All right, we can only have two. There's three. I don't know who registered. Do like a little Roshambo and let's get this going. All right, the floor is yours.

Madam Chair and Members. Brandon Ebeck here on behalf of Pacific Gas Electric. Let me begin by emphasizing that PG&E strongly supports the goals behind this bill. Protecting existing utility customers, leveraging California's and PG&E's climate leadership and clean energy grid, and enabling all the significant new electrical demand, something we haven't seen in decades.

We are concerned that the bill's rigid requirements could limit stakeholders, PG&E's, and the CPUC's ability to respond flexibly and effectively to meet these goals. We've been doing our best to keep the author's office updated on everything that's transpired over the last seven months. It's moving at a pretty fast pace.

At PG&E, we refer to new demand from data centers and large EV charging facilities as beneficial load growth. We believe every gigawatt of new demand can help lower rates by about 1% while investing hundreds of millions of dollars in tax revenue and high tech jobs.

We're currently seeing several gigawatts of potential new demand in our cluster study queues ready to develop in our service area. This is load that could easily relocate to Nevada, Texas, or Virginia. So this is a very rare opportunity to invest in California and improve affordability.

Many of the challenges SB 57 aims to address are already being worked on through existing regulatory processes. For example, last year we submitted a proposal called Rule 30, which would create a new agreement for large customers to connect to the transmission grid and share in the costs.

Just last week the CPUC issued a proposed decision that would allow us to begin implementing this rule on an interim basis. It includes requirements for those customers to pre-fund necessary grid upgrades and it may be voted on in the coming weeks. On electric rates.

We already have a rate structure called B20 for customers using more than 1 megawatt, whether they're connected to the transmission or the distribution system. We believe this rate adequately protects existing customers, and since most of this demand won't come online for a few years, there's some time to refine our approach.

Last month, as part of phase two of our general rate case, we joined the Public Advocates Office and jointly asking the PUC to consider whether a new rate specifically for large customers is needed. That includes a discussion of what rate design measures would be implemented similar to this bill. Briefly, on generation costs, we're looking to the IRP. We're talking about data sharing with the CCAs to improve generation. All I have to say. Stay available for technical assistance.

Thank you.

Thank you, Chair and Members. Bruce Magnani on behalf of the California Large Energy Consumers Association. Our members are, if you think about steel, cement, industrial gases, they use electricity in a very large scale. Amendments to the original bill on data centers, which we're focusing a lot on, actually then captured us potentially within the scope of the bill.

I do want to give the Senator, his staff, Committee, and staff a lot of credit for their transparency and openness to hear our concerns. We have a lot of requirements coming towards us for decarbonization and electric certification that are going to be mandated to meet the goals of AB 32.

And so the author and Committee staff, the latest amendments address those concerns. But there is still one outstanding concern. We have a member that is actually in the process of constructing a steel mill in California to operate an electric arc furnace.

And if you'd have asked me five years ago would someone invest capital in California to do industrial manufacturing, I would have said absolutely not. But this member of CLECA is in this process. They've completed CEQA. They have started their load survey study. They have broken ground.

The date for implementation of this bill is not adequate in that they may not have a contract in place for service, so they might be captured by this tariff. And so we would love to see some language in the bill that would exclude them from the provisions of the bill since they did their studies and their investment decisions years ago. So with that, would love to continue to work with the author Committee moving forward. So thank you so much.

Thank you. Okay. Opening it up for additional witnesses in opposition.

Good afternoon, Madam Chair and Members. Timothy Burr on behalf of the Data Center Coalition, opposed. Thank you.

Kris Rosa on behalf of Silicon Valley Leadership Group in opposition.

Jon Kendrick on behalf of the California Chamber of Commerce in opposition. Thank you.

Hello. Sophia Quach on behalf of the Chamber of Progress in respectful opposition.

Good afternoon. Jennifer Roe on behalf of the California Hydrogen Business Council in opposition.

Bringing it back to the Committee. Questions? Comments? Assembly Member Irwin.

Yeah, maybe I missed this. Because I know there's been some changes made to the bill. So initially I thought that the bill was about data centers. So did you mean to capture new manufacturing and potentially industry that is trying to utilize carbon capture?

Madam Chair, Assembly Member, thank you for the question. The intent is not to be overly broad. The intent is to deal with large consumers that put sudden demand on the grid. There was some objection to specifying data centers. Data centers is the obvious near term industrial development that is proliferating as we speak and is actually proving the concept.

But we were going to, we will continue to work with stakeholders and look at refining the definitions in terms of applicability. But the intent of the language is to capture, is to avoid calling out data centers alone specifically but to deal with those who put a sudden massive demand on the grid.

But you, but you could have, you could have an industry that wants to add carbon capture, which would definitely...

Have an offsetting benefit. Yeah. And Madam Chair, Member, I hear that concern, and as I indicated, I'm willing to continue to continue to work that issue.

And again, just for the clarity of the Committee, the amendment that expanded the scope of the bill beyond data centers to include all sort of large scale users, that did not happen here. That was an amendment that happened in the Senate. So that is how the bill arrived to us. Assembly Member Zbur.

Thank you, Senator. Nice to see you. So I think the, you know it's a good thing I think to get ahead of... We're not even ahead. I guess we're sort of playing running along with the growth in these data centers and the energy needs that they are requiring of us.

Couple things on the details of the bill that I just don't know if they've changed or not. One of the opponents raised the issue that the, that the implementation date was unrealistic in a year out. Is that, just knowing PUC timelines, that seemed to be a reasonable comment. I just wonder if you want to speak to that if that was if you thought about that.

Madam Chair, Member, and I'll give my expert here opportunity as well. I can't speak to the lack of timeless on the part of the PUC and I wouldn't dispute the underlining assertion that that may be a question.

Assembly Member, I'll just note that the bill in print has the date July 1, 2026, but the Committee amendments would push that date to December 31, 2026. So adding approximately another six months to implementation, we think that's reasonable. It directs the PUC to get this process going quickly, and we think that's an achievable time frame given the PUC's process. And we would be concerned that pushing the date significant sends the wrong signal to the Commission. That signal would be you don't have to front load this, put it on the back burner.

And then the other, there were some other, to me sounded like some implementation things that were in the PG&E letter that I'm just wondering if you... It sounded to me like, you know, the outcome of the bill, which I think is a good thing, could actually disrupt some...

It seemed like they had some reasonable comments related to the eligibility definitions and what you were capturing. I was just wondering if you've actually worked with them already on those definitional pieces or not and whether you thought they were reasonable.

I think, Madam Chair and Members, I would probably partly reject the premise that we would prospective proposed decision on the rulemaking on the question of the submittal on 30. That statutory language would do anything other than preempt appropriately as but any statutory directive to the PUC.

So I don't see that as a real issue in terms of the proposed rule or the proposed decision on the rule. And again, we are in the rulemaking process with respect to some of the details laid out in the rulemaking that are prospective and preliminary and proposed. And as those of us who've ever practiced or worked with the PUC, we know that that isn't always a guarantee of what the final outcome looks like. And that's why a statutory approach we believe is appropriate.

No, I don't, I don't dispute a statutory approach is appropriate. What I'm commenting on is there what they're saying. I think in some, in your definition on the eligible customers, they're thinking that it may be too narrow or prescriptive, and you may, it may have some unintended consequences. So I'm just hoping that you'll understand those and take them into account as the bill moves forward. Yeah, I wasn't sort of saying that the statute shouldn't define it. I just want to make sure that what you do is has the right, has the right outcome.

No, apologies, Assembly Member, I misunderstood you to raise a concern about a conflict between what ultimately ends up in the final rulemaking decision and what's being prescribed in statute and creating unintended consequences around that. Respect to your comment about, you know, continuing to refine the definitions, on it's face, absolutely.

All right. Seeing no other Members wishing to ask a question. I'll just, I guess, sort of share a comment in sort of the way that I'm conceptualizing this bill. So I think there are sort of two potential risks that you're trying to address. The first is the risk of stranded assets.

And there are examples in other states where you've had, you know, potential large load customers kind of like rate shopping between states and they get commitments from utility to make huge investments and then decide to set up shops somewhere else. So, you know, really appreciate you thinking through a way in which we get in front of that potential risk. I think that's important. I think there's the other potential risk, and I consider it an open question, around a cost shift.

So as you heard from our IOU representative, there's this concept that actually there's beneficial load growth and that load growth actually ends up lowering rates for all of us. And so that's why I'd say the bill as amended, in my view, it does not presume some sort of punitive approach.

The first step is to really ask the CPUC to assess the, you know, whether or not there is a cost shift implication to these large load customers. And I think that that is really going to be foundationally important as we craft policy and approaches as we move forward. So with that, would you like to close?

Thank you, Madam Chair. And I would add an additional thanks for partially contributing to my closing remarks. And I appreciate that with respect to the assessment provisions and with the modification and the language dealing with distributed storage on site to provide backup and the ability to encourage the use of renewables there. That's a change in the language as well. So those two things were important to point out. I appreciate you pointing them out. And with that, I would very much respectfully ask for an aye vote.

Thank you. All right, Madam Secretary, please call the roll.

Item number one, SB 57. The motion is do pass as amended to Appropriations. [Roll Call]

9-0. Will put that bill on call and wait for absent Members to add on. Thank you. Okay, moving to file item number two, SB 256. Welcome, Senator Perez.

Hi, senator.

Hey. Thank you. Good afternoon, Madam Chair and members. First, I want to thank the committee staff's incredible work on SB 256. I would like to start my presentation by accepting the committee's amendments reflected on pages 9 and 10 of the analysis.

SB 256, 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 50- 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 LA County could reach 131 billion with up to 45 billion in insured losses and 279 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 or PSPs. It has also authorized a long term program to underground power lines. However, the recent wildfires revealed gaps in our state's mitigation efforts. Altadena in my district, for instance, was not classified as high risk.

Yet the destruction caused by the Eaton fire underscores the urgent need to rethink how we assess wildfire risk. Media reports also revealed delayed response time for firefighters during the wildfires, raising the need for better coordination with emergency services. This includes assessing PSPS to ensure decisions on power shutoffs are transparent and and clearly communicated.

Following the wildfires, Governor Newsom ordered an acceleration of underground utility systems and fire damage areas like Altadena and the Palisades. While undergrounding of high risk power lines is a well established wildfire prevention strategy, participation in the state's program remains voluntary even after communities rebuild from wildfires.

Additionally, a few months after the Eaton fire, investigators began examining whether a defunct zombie line or decommissioned line contributed to the wildfire. Engineers from the Southern California Edison, or SCE, suspected that an electrical charge may have jumped from active high voltage lines to an idle line that had not been live for more than 50 years.

SoCal Edison's Chief Executive Officer Pedro Pizarro, stated that the company is investigating every possibility, including the potential involvement of of SoCal Edison's equipment. SB 256 strengthens California's wildfire and emergency response policies by expanding mitigation planning to include wildland urban interface areas where homes are built near forest or wildland, and addressing past communication failures to improve future coordination.

It also mandates utilities to collaborate with regional emergency centers and enhance PSPS notifications. Finally, it ensures undergrounding is actively considered during the recovery process rather than left entirely to voluntary participation, and requires IOUS to create a removal plan for permanently removing abandoned lines.

The bill originally included language requiring large electrical corporations to cover the cost of wildfire mitigation without passing those costs on to consumers through higher electricity rates. At the request of this committee, we are removing that provision also found in other bills under consideration to allow for consistency and alignment across the various related measures.

In its place, we are adding language to clarify the legislature's intent to decommission electrical infrastructure that is no longer in use and support the undergrounding of electrical distribution lines in ways that limit the financial burden onto consumers, avoiding increases in electricity rates.

The inclusion of language in the findings and declarations intersects with other bills that restrict IOUS from earning a rate of return or profit on certain wildfire mitigation capital expenditures. Join me- Joining me to testify in support of the bill is Nic Arnzen, an Altadena Town Council Member. At the appropriate time I respectfully asked for your aye vote.

Madam Chair. Thank you. As often is the case lately, I kind of throw out what I was about to say and I speak a little off the cuff to your advantage. I tend to leave things out, not say too much. So you've laid it out well. Senator, I am a Council Member in Altadena.

I'm also the chair of the ACNA, which is Altadena Coalition of Neighborhood Associations. I'm the chair of our Communication Committee. I'm a father. I ran the theater program at my kids school.

This is all to say that I feel like I'm entrenched in the community and I can give you a kind of a human look at what Altadena was through and the reason I'm doing that. I think it's a valid point to think about investment in California and it's certainly valid to make sure we keep afloat.

But I would argue what's the biggest investment is the investment in the people and the investment in our safety and we can set standards that go far beyond just bringing people into California to put their money into California. Not a big concern of mine because I'm one of the people that lost everything.

My children lost their childhood home, they lost their school. We lost our church. My daughter was coming out of a depression through Covid I mention all this because there are 6,000 stories like mine. Out of that depression, she created a safe space. She lost that space. She lost those neighbors. We're in a strange neighborhood now.

We won't be able to build back the way we wanted to build back. So even though my Marine son is gone, he had all of his treasured belongings kept at our house. If you are military like our family, you know that you don't drag everything with you. He lost everything. He lost medals. He lost commendations.

My oldest son lost all of his artwork as he's in his first finishing years of art school. The loss is overwhelming. So when we look at that tower that was left for 50 years, that's what this bill speaks to me highest about.

To have any sort of bill with bite that can actually force people to take away a hazard like that, which undoubtedly had to do with the firearm. I just strongly support this bill and I hope you do as well.

Thank you, Council Member. We appreciate you being here to join us today with that. We'll go ahead and open it up for additional testimony in support. If you'd like to testify in support of SB 256.

Thank you, Mr. Chair. Eduardo Martinez, on behalf of the County of Los Angeles, in support.

Alright. Seeing and hearing no further testimony. We can go ahead and move to our opposition witnesses. If you'd like to testify in opposition. If you're a primary witness, come on up.

Thank you, Madam Chair and members Joe Zanzi with San Diego Gas and Electric. I want to begin by thanking the senator, her staff, and the committee for their work on the bill, especially the removal of the 5 billion return on equity restriction, which was a big deal for us. We do still have some concerns.

We're trying to go through the amendments and understand exactly what they do, but we really want to make sure that there are no redundancies to current processes. We just, we don't want utilities to have to recreate work that's done through detailed and separate emergency preparedness plans, wildfire mitigation plans, and PSPS program plans.

Requiring us to comply with new blended mandates from multiple agencies will ultimately cause confusion, inefficiency, and real risk of operational breakdowns during emergencies. And secondarily.

Other concern that we, that we still have, you know, without seeing the amendments in print yet, is that the bill still requires the public disclosure of detailed transmission infrastructure information, including locations, conditions and vulnerabilities.

The CPUC has warned that disclosing this kind of data could allow a bad actor to attack California's energy Infrastructure we don't have issues with, you know, a plan to remove idle, abandoned lines. Just posting that information publicly is a safety concern for us.

And just to be clear, we're not against, you know, improvements to our PSPS operations and plans. We've- This has been a iterative process throughout the years. I know when these things first started years ago, our post event report was four pages long and the most recent one was over 100 pages.

So we've been working and we learn from each wildfire season. So hoping to continue to work with the author as we move forward. Thank you.

Thank you. Alright, additional witnesses in opposition. Come on up.

Laura Parr with Southern California Edison in opposition, but we are continuously working with the author. Thank you.

Brandon Ebeck on behalf of Pacific Gas Electric. Same position as Edison and San Diego. Thank you.

Ryan Pesa with Western Wood Preservers Institute. Treated Wood Council and North American Wood. Pole Council opposed.

Bringing it back to the Committee. Questions or comments, Assemblymember Rogers?

No, thank you so much. And Senator, I just want to give you a chance to sort of respond to the safety question or assertion that was made by the opposition.

Yeah.

So first of all, definitely, you know, understand the concern that they're raising in terms of making sure that we don't have bad actors that are taking advantage of figuring out where these decommissioned lines are. You know, I think our office is very open to continuing to have conversations, conversations around how we, how we handle that.

I think we need to communicate and just understand with the CPUC what kind of protocols that they have in place currently to safeguard some of the critical energy infrastructure that's already in place. And, you know, willing to continue discussing with you all what that might look like.

You know, I think the goal for, for us at least is making sure that these decommissioned lines are coming down to know that the main focus now of the investigation into the Eaton fires are lines that are older than I am, that have been sitting north in Altadena and that have been De energized for over 50 years is really concerning.

You know, we don't. Making the public aware of where those locations are isn't as big of a concern. It's about them being taken down. That's, that's my goal and that's the purpose of this so that we don't have more fires like this.

Yeah.

And I, I just want to punctuate that point and thank you for, for saying that, that if these are such a security concern, then they shouldn't be sitting there idle, that they should be removed so before I turn it back over, I just want to say thank you again to the Council Member for being here, having been in your shoes.

I appreciate everything that's in this Bill in terms of coordination with local governments as well as during an emergency. You are the front line. You're the trusted face, the trusted voice for your community that oftentimes doesn't know what is happening.

And so even though there are policies that have been put in place to make sure that the IOUS are providing more information to the public, it really is more meaningful when it comes from their local representatives that they see day in and day out at theater helping to rebuild the community to know what's going on.

So I really appreciate that being in the Bill, then I'll, I'll move the Bill.

Thank you, Assemblymember Schultz.

Thank you very much, Madam Chair. If there's a need for a second, I'd gladly. Second Senator, I wanted to thank you for bringing the Bill. And sir, I wanted to thank you for your testimony today. You're right.

There are 6,000 plus stories just like yours and I can imagine it does not get any easier to tell that story. But for you to be here in our state Capitol today, I just want to thank you for sharing that perspective. I think this is a good Bill. I think it's a common sense strategy.

I will support, support it. And Senator, should you need a co author on the Assembly side, I'd be honored to help in that capacity. Thank you, Madam Chair.

Thank you, Assembly Member Zipper.

So first of all, I want to thank the Senator. I mean it's so impressive the, your leadership really protecting your community around the wildfire of, you know, you came into office and within days you had to deal with a real crisis in the community.

And I know this is part of the, you know, inspiring leadership to protect your community. And just so I want to recognize that and also I've met your, your witness before and just want to thank you for being here in the Capitol as well.

When I look at the, the comments on the Bill, a lot of the comments really look to are really around the whole issue of the fact that the PUC has already established some, you know, fairly comprehensive requirements around PSPS programs.

And I think a lot of the concern is about how the current programs might overlap with things in the Bill.

And so just wanted to it sounds like you're already working pretty closely with that, but I think it would be good to make sure you're sort of aligning what's already there with the new stuff and you know, and understanding where we've got cases where the existing requirements just weren't being followed versus not having requirements there.

So I just wanted to sort of ask if you'd continue working with the sponsors to try to sort of tighten that up and make sure we don't end up having sort of duplicative requirements where we're actually, you know, providing like duplicate burdens on the, on the, on folks that result in, you know, rate increases, frankly.

So, yeah, absolutely. And yes, I mean, you have my commitment. I think our office has been working very closely with several, I think, of the IOUS you heard from here today and those that are in opposition, and we're trying to figure out where to plug some of those gaps.

I think one of the issues that came up that was new for us and that we felt was really important that I highlighted in my talking points were when the Pasadena Fire Department had shared with us as well as expressed in reports to NPR, that there were delays in power shut offs as they were going around to homes to try to put out fires.

Obviously, that creates a fire risk for them as well. And so I think it's just about coordination and wanting to make sure that we're preparing for these events before they happen. It is so sad to me and devastating that we have to think about these things as a part of normal life here in California.

I mean, just a few days ago, we were dealing with a major fire out in San Luis Obispo. And so this is very much our new reality. And I think we're continuing to look for ways to better prepare, to better strategize around power shutoffs and just make sure that we're coordinating with different agencies.

And especially for a district like mine of 19 cities, that becomes really important. So thank you.

Thank you, Assemblymember Papin.

Well, thank you for including bringing the Bill and thank you for being here today. It is a constant reminder that while we may have lost stuff, we lost a part of ourselves as well. So I appreciate your comments and you're speaking with such an open heart.

My question really, because Southern California, I mean, San Diego Gas and Electric is here when we talk about, as a Senator testified to, a tower that may have been 50 years old and abandoned, do you have this may not be a part of the Bill, but do you have processes in place that prioritize not only abandoned, but abandoned for a sufficient amount of time that requires some urgency to its removal?

And where are you? And I recognize you don't want to reveal your inventory as to abandoned lines and that's okay. But are you yourselves keeping those and getting, getting the work done as it needs to be done? You know, it really does beg the question, we can legislate all day long what's really happening in the field.

Yeah. So we're required under geo95, I believe it is, to have a plan for what we're going to do with our abandoned lines. I, speaking for sdge, I know if we have lines that we aren't planning to use, we, it's our best interest to get rid of them as fast as possible.

We have a process that we send out letters to land owners and typically happens very quickly. Also we're required to maintain those lines as they are active lines. So you know, if we have an abandoned line out there that's not being used, we have to maintain it just like it was a regular line.

Some of the reasons for like prolonging it a little bit would be just, you know, there for the future load growth that we could have. And those lines could be used to, you know, connect different generation facilities.

And if we take them down and then there's something that happens later on that we need them for, then we have to rebuild them again. We don't want to do that with the cost and affordability crisis and transmission costs that we all know about very well. So we do have a process to go about that.

But I think IOUS kind of see that differently in what they consider an abandoned line when they're going to take it down right away or if there is seen as something that could be used in the future for an additional project or a connection to something else.

So that answers your question, Madam Chair, what do you define this? Very quickly I've been told that we like within like 18 months, there's so many different size projects and lines or different lengths and everything.

But I know I've been told that we send out a letter within like six months and then up to a couple of years we'll have it down. So, and I mean that's just for SCG and E. I can't speak for the, for the other IOUS. Yeah.

Thank you. Thank you, Madam Chair. Assemblymember Rogers.

Yeah, just as a point of clarification, while you have a requirement from the CPUC, you don't have a timeline, correct?

Yeah.

Yeah.

All right. Seeing and hearing no additional Members wishing to speak. Senator, would you like to close?

Yeah, absolutely. And appreciate, you know, the questions that have been asked today and, and also just want to thank Nick Arts and for taking the time to Come up here as well. He has been so tremendous.

I want to highlight that Altadena Town Council is entirely volunteer, entirely unpaid, and he has done an insane amount of work over the last six months to fight for his community. And it has just been so impressive, Nick, and even just being here today. So thank you and respectfully ask you all for your aye vote. Thank you.

Thank you. We have a motion and a second. Madam Secretary, please call the roll.

Item number two, SB256. The motion is do pass to emergency management with the commitment to adopt amendments and emergency management. Petrie, Norris. Aye. Petrie, Norris. I. Patterson. Berner. Calderon. Aye. Called around. Aye. Chen. Chen. No. Davies. Davies. Not voting. Gonzalez. Gonzalez. I. Herbidian. Hart. Hart. I. Irwin. Erwin. I. Kalra. Cholra. I. Pappin. Pappin. I. Rogers. Rogers.

I. Schiavo.

Schiavo, I. Schultz. Aye. Schultz. I. Taw. Taw. No. Wallace Zabur.

Aye.

Aye.

Zabur. Aye.

11-2. So that bill's out, and we'll leave the roll open for absent Members to add on. And I have been reminded by my team that I neglected to get a motion on file item number one. So we are going to go back very quickly to file item number one, which is SB 57 from Senator Padilla. All right, we've got a motion and a second on SB 57. Madam Secretary, please call the roll.

[Roll Call]

11-2. That measure's out, and we will leave the roll open for absent Members to add on. I will also note that file item number three, SB 330 has been pulled at the request of the author. Moving now to file item number 10, SB 647. Welcome, Senator Hurtado.

Good afternoon.

Good afternoon, Madam Chair and Members of this Committee. I'm here to present SB 647, the Home Energy Savings Expansion Act. I want to start off by thanking the Chair and her team for working with my, with my office on this bill.

I will be accepting the suggested Committee amendments outlined in the analysis, and I look forward to continuing to work with the Chair and her staff to ensure these provisions are still incorporated into statute through AB 825. SB 647 is about more than energy. It's about health, the safety, and the respect for California's hard working families.

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. Whether it's cooling or groceries, lights or rent, medication or car payment. That's today's reality. California's low income households are getting squeezed with high cost of living.

These are our farm workers, our teachers, small business employees, caregivers. People are falling through the cracks of a system that hasn't kept up with today's economic reality. SB 647 looks to close those cracks and to bring fairness, access, and dignity back into our energy programs by ensuring individuals are aware that these programs exist and can utilize them for real savings.

It does this by strengthening the coordination and oversight of California's clean energy programs for low income communities and establishing standardized statewide performance metrics to evaluate the effectiveness, equity, and accountability to ensure that our programs are doing what they were intended to do. This bill is about making sure California's clean energy future doesn't leave anyone behind.

Not the single mom in a leaky rental, not the low income couple barely making ends meet, and not the senior on a fixed income deciding whether to make their home or buy medication. As we move forward in this energy transition, we need to make sure our energy programs work better for more people in more places and with more impact. With me here today is Ortensia Lopez and Jose Antonio Ramirez, both part of the Energy Transition Collective, who are sponsors of this measure.

Sorry, vertically challenged here. Well, I'll do my best. I hope you can all hear me. Good afternoon, Madam Chairperson, honorable Members. First and foremost, I want to salute you that you have the courage, the commitment, and the endurance to be a public servant for California. Sitting here and listening, everything you have to deal with, I commend you.

So thank you for that. My name is Ortensia Lopez, and I am a half a century community based organization director. And so I have been involved with programs for 50 years for low income communities and in the private sector of energy for 30 years. So I've worked in the low income communities for a while.

The Energy Transition Collective is a coalition of statewide members, including community based organization, environmental social justice groups, small businesses, faith based groups, and individuals that are concerned about low income getting the benefit of all the programs that are out there for their well being.

And for also they want to also stay with the 2045 mandate of zero emissions. As I sat here today hearing all these discussions, some of these low income people don't even understand all that, and that is our responsibility to get that information to them, but also to include them in this cleaning transition that has to go through.

So we think that our goal is to champion the needs of low income Californians, and we do that by promoting good energy policies and advocating for good energy programs so they prioritize low income communities so they can strive economically and be part of self sufficient. We think that SB 647, as our incredible author here has said, addresses a lot of these issues that low income people face every day that I'm blessed and I think everybody in this room is blessed not to have to deal with.

And so our goal is to reduce the complexity of programs, also to ensure they have the benefit of all the programs. Also PUC 2790, when these low impact programs became legislated, the intent was to ensure that they have measures hold that reduce energy use, but also to be concerned about the low income communities and the hardships they go through in energy. And I thank you and I ask your support of this bill.

Yes, Madam Chair, thank you very much. Again, I applaud all the great work that you guys do here. The area that we represent of course is the entire state, but a little bit of focus on the Central Valley. Given that, you know, the Central Valley is one of those hardest hit areas where we have a number of different issues that, challenges that is. And you know, and so we want to make sure that now that with climate change that's happening before our eyes.

And the greater use of energy. And a lot of these families that live in these different rural communities, that they're not forgotten because these are lifelines for them. And as much as they don't, they're not looking for handouts. What they're looking for is assistance. And so we want to make sure that they have a voice in the vote. And that's why we're here this today. And we've been here the way through and we appreciate our Senator for championing this cause. Thank you.

Thank you. We will now turn to additional support testimony. If anyone in the room would like to testify in support of SB 647, you may approach the microphone at this time.

Good afternoon, Committee Members. Wilfredo Cruz. I'm the executive director, Community Resource Project, provider of low income energy and DOE for Sacramento and several other counties. And we fully support this bill. Thank you.

Good afternoon and thank you. My name is Anna Camacho from the Bay Area, and we at West Coast Builders support this bill.

Gloria Flores-Garcia in support of Senate Bill 647. Alameda County resident.

All right, turning to opposition testimony. Go ahead. And if we have a primary opposition witness, you may come on up.

We're kind of tweeners. Sorry. Hi. Lourdes Ayon with San Diego Gas and Electric and SoCalGas. We're tweeners in the sense that we didn't submit a letter of opposition but have been working diligently with the author and their sponsors to try and meet a middle ground. Because we feel that this bill and the intention of the bill is great. It's good. I think helping low income households is important and I absolutely understand it.

However, the way in which we go about that, I think we have differences in which we want to approach that, in particular the metrics. I think that we want to talk about that a little bit more the way that we're looking at. Because the bill right now calls for performance metrics that includes looking at household income as well. And I think that's really hard for IOUs to collect that kind of data. So I think we need to talk a little bit more to see how we can go about doing that. But we want to continue talking to them and figuring out where our beautiful middle ground will be. Thank you.

Good afternoon, Madam Chair and Members. Rod Brewer with Southern California Edison. Like to align our comments along with my colleague from San Diego Gas and Electric. We have been neutral with on the bill since it left the Senate, and we've been working with the Senator and her staff and sponsors during this entire process. So we thank Senator Hurtado on her leadership on this issue.

Knowing how the Central Valley is a hotspot and a lot of the communities are under the SB 535 disadvantaged communities. And so we have one more thing that we'd like to work out and we're going to work with the sponsors and the author to make sure that we achieve that bright line, as my colleague just mentioned. But we want to thank you for your leadership on this and thank the Committee for indulging our time. Thank you.

All right, so that was a new, we have had a tweener category on that one. So if we have any witnesses in opposition, you can approach the microphone at this time. Seeing none, we'll bring it back to the Committee. Assembly Member Papan.

Well, I just want to thank the author for bringing the bill. Ms. Lopez happens to hail from my district, so you're welcome. I will say that if there's anybody that actually has tried to make sure that those that benefit from these programs do get the word out, it's Ortensia Lopez. So we can review the programs.

And I know that sometimes they haven't always been as effective as they should be, but I feel confident I got one person in my district that's on the ground that tries to make it happen every day. So thanks for traveling up here to be here, and thank you for the bill.

Assembly Member Rogers.

Thank you so much. I did just want to ask a question about the fiscal impact of the bill, understanding that this will go to Appropriations. But if you're explaining to constituents, it's noted $145,000 per year moving forward. What are they getting for that? Because it says it is being paid for by ratepayers. You already have a group that's of 11 people that has this charge and this oversight. So in this bill, how would you explain it to constituents? You're going to pay an extra $150,000 in rate payer dollars and you'll get this for it that you don't currently have.

Well, I'll start off by saying that we're trying to work on that piece to ensure that it's as low as possible. But I'll also say that we're trying to make the program more... Make it work for people. Right. And that means we got to check it, ensure that it's efficient, that it's working.

And I think that a lot of the individuals that know about this program know how wonderful it is and how helpful it is. And so I think that that's, that would be my answer to them. It's something that we're continuing to work on. I don't know if our sponsors want to add to that.

All right. Seeing no further questions from Committee Members. Senator Hurtado, would you like to close?

Respectfully ask for an aye vote. Thank you.

And we do need a motion and a second for this measure. Okay. Assembly Member Zbur, seconded by Assembly Member Papan. Madam Secretary, please call the roll.

Item number 10, SB 647. The motion is do pass as amended to Appropriations. [Roll Call]

9-0, we'll leave that bill on call and let absent Members add on. All right, turning to our final measure of today's hearing, SB 12. SB 787. Welcome, Senator McNerney.

Good Afternoon. Well, good afternoon. Chair Petrie-Norris, Members of the Committee, I'm here today sitting in front of you to present SB 787, which coordinates California's development of in state supply chains for three key clean energy industries. Those industries are electric vehicles, building, decarbonization technologies, and lastly, offshore wind.

California is a hub for green tech innovation and research and we have ambitious goals of reaching 100% clean energy by 2045. However, there's a gap in our green economy and that's a lack of in state manufacturing for clean energy technologies and equipment.

SB 787 formalizes partnerships between the state agencies, labor, environmental organizations and clean energy industries to create a unified approach to building out California's clean energy supply chains and workforce. This Bill will help California meet our clean energy goals while creating family, supporting jobs, boosting affordability and advancing economic development.

With us today to testify, I have two witnesses, Samuel Appel of the United Autoworkers, and Egon Terplan of the California Forward. So with that, I'll turn it over to Samuel.

Chair and Members, thank you so much for having me. Samuel Appel, Policy Director with United auto workers region six, that encompasses the Western states and 100,000 Members in California. Our membership has three large bases in California. Manufacturing workers across different energy supply chains, higher education and research, and state service employees working at state agencies.

The goal of our membership is fairly simple when it comes to the clean economy. We want to grow the base of manufacturing jobs in California, want to accelerate climate solutions, and we want affordable energy.

We think that right now is not the time to take our foot off of the pedal and we need to make sure that we're accelerating delivery on our climate goals affordably and creating high quality jobs at the same time.

SB 787 takes a very deliberate and strategic approach to accelerating growth in these three industries, which California has unique strategic advantages in, but which at this point we are not delivering on to create high quality in state jobs. For one, we know that public money going to these industries is not well coordinated around a long term vision.

The companies and industry stakeholders we work with tell us this and that it's preventing long term industry growth and competitiveness. Secondly, SB 787 creates a forum for the CEC agencies and stakeholders to consider the full breadth of industrial policies that can grow these industries, make energy more affordable and accelerate on our climate goals.

The Bill sets up a process for CEC to develop this holistic strategy. And finally, we know that there's no ongoing public place to track developments in these three key industries. And SB 787 sets us up under clear structure and authority of one lead for industrial policy at the CEC.

So, as a union that's highly invested in growing our clean economy and doing so strategically and especially with regard to manufacturing, we respectfully request your support on this Bill.

Thank you.

Good afternoon, Chair and Members, thank you very much for the opportunity to testify today on behalf of SB 787. My name is Egon Terplan. I'm a fellow with California Forward, a statewide nonprofit working to build a new California economy that's sustainable, resilient, and inclusive across every region in the state.

This Bill supports all of these goals, recognizing California's unique economic advantages across three critical growth industries. Building decarbonization, battery manufacturing, and offshore wind. Now, you might ask, why do we need this Bill. Isn't California already a clean energy leader.

Well, the reality is that while we've led the world on climate regulation and energy innovation, we've not realized our full potential to drive the energy transition. We're home to the raw materials for electric batteries, including vast stores of lithium in the Salton Sea, but we've barely begun to build the battery manufacturing sector.

We have powerful offshore winds, but lag behind countries with smaller populations and lower wind speeds. We lead the country on building decarbonization regulation, but not in the manufacturing of the materials for green buildings.

In short, California, we're really good at innovation, and we're good at building the consumer base for clean energy through good smart regulation and lots of installation.

But to launch California as a clean energy leader, we've got to do better on manufacturing, and we have to be able to build out the full supply chain of the Clean Energy Industries. To achieve that kind of leadership requires vision, but it also requires coordination.

And our current approach to clean energy energy industry growth and manufacturing is fragmented and dispersed across multiple agencies and levels of government. We lack a hub where different aspects of economic development needs cross.

Infrastructure, workforce financing, land use can be coordinated and delivered in a coherent way to support the building of a clean energy supply chain and have an overall transition strategy. So this Bill takes a major step in that direction at the CEC by having a hub where all this can come together.

And I ask for your support for this. Thank you very much.

Thank you. Opening up for additional testimony and support. Please approach the microphone at this time.

Hello, my name is Allison Hilliard with the Climate Center. Apologies for not getting a letter in time, but we are in support of this Bill. Thank you so much.

Dan Cha, on behalf of the Port of Long beach, thank you.

Good afternoon. Scott Cox on behalf of Ceres and strong support.

Doris Nguyen with Clean Earth for Kids, in support. Also supporting are North County Equity and Justice, Ecosustainability Peeps, Interfaith Coalition for Justice, Activist San Diego.

Madam Chair, Members, Andrew Antwih with Shaw Yoder Antwih Schmelzer & Lange, here today on behalf of Advanced Energy United, support and thank the author.

Thank you. Good afternoon Chair Members. Elmer Lazardi here on behalf of the California Federation of Labor Unions in support. Thank you.

Good afternoon. Michael Monaghan on behalf of the State Building Trades, in support.

Frankie Gracie on behalf of the Blue Green alliance and the United Steel Workers, in support.

Good afternoon, my name is Dan Jacobson on behalf of the Sierra Club, the Green New Deal Coalition, and Brightline Defense in support. Thank you.

Good afternoon Members Jose Carmona with Comite Civico del Valle. We're an organization based in Lithian Valley. Here in support.

Dave Shukla, Long beach Alliance for Clean Energy and support.

Katie McCammon, Climate Action California in support.

Turning to opposition testimony, do we have any primary witnesses in opposition. Seeing none. There's any, me too's. Testimony in opposition. You can approach the microphone at this point, seeing none. Let's bring it back to the Committee. Assembly Members Zbur.

Senator, thank you, for bringing this Bill. I think it's a really important one. In my first year here, I brought a Bill AB 5, which was a Bill that was focused on the same things that I think this takes the next step on for offshore wind.

Looking at what were the benefits to California if we actually had 50% and 65% of the component parts for manufacture for offshore wind manufactured in this in the State of California. And the CEC is actually working on a report now and should be ready soon.

But frankly, you know, getting to that point is an effectuating that, you know, that vision of what this could do to improve the lives of Californians requires us to plan ahead and actually take the steps to do it.

You know, I have been here long enough that I remember when the aerospace industry was such an important employer in Southern California and throughout the State of California and we sort of let that go away.

When you look at all of these battery technology, offshore wind has the capacity to both help us meet our clean energy goals and and bring high wage, high skilled union jobs throughout the State of California. And this is one of those areas where it's a win win for workers and for the environment and for our business community.

So I would love to be a co-author on the Bill strongly Supports it. Want to thank you for doing this. I think it's a really important one and is visionary, so thank you.

Assemblymember Zbur. I couldn't have said it better myself.

Assemblymember Irwin. I think this is a great Bill and it's very important to look at supply chain. I had a Bill that was unfortunately held in appropriations that looked at transformers. If you look at what is really holding up our electric system build out, it's the often five year, six year, seven year wait list for transformers.

So you might look at incorporating something along those lines in the Bill that you're doing.

All right. I too would like to thank you Senator for bringing this measure forward. When we look at California's climate goals, it's both an enormous challenge for us to deliver on those goals. It's also an enormous opportunity really for us to forge the next chapter in California's economic growth development.

There's every reason that we should have climate innovation happening here in the State of California. There's every reason we should be building this in the State of California. But we also know that's not going to happen by accident. We need to be strategic and intentional. And I think it's an incredibly important step.

And I too would love to be added as a co-author.

Thank you.

Senator, would you like to close.

Well, I would. I like all the praise the Bill is getting. Thank you. California has had the secret sauce for developing cleantech and for all the high tech industry. Let's make that happen with cleantech as well.

Let's make it happen with wind energy and batteries and decarb and then adding consider adding other industries later as we have the opportunity in following sessions. But with that I will ask for an aye vote.

Thank you, Senator. We've got a motion from Assemblymember Zbur. Second from Assemblymember Papan. Madam Secretary, will you please call the roll.

Item number 12, SB 787. The motion is Do Pass to Transportation. Petrie-Norris, aye. Petrie-Norris, aye. Patterson. Boerner. Calderon. Chen. Calderon, aye. That was so confused. Okay. Chen. Chen, aye. Davies. Davies, aye. Gonzalez. Harabedian. Hart. Hart, aye. Irwin. Irwin, aye. Kalra. Kalra, aye. Papan. Papan, aye. Rogers. Rogers, aye. Schiavo. Schultz. Ta. Ta, not voting. Wallace. Wallace, not voting. Zbur. Zbur, aye.

10-0. That bill's out and we'll leave the roll open for absent Members to add on. Thank you, Senator. All right, Members, so that does conclude our bills for the day. We are going to go ahead and dispense with the consent calendar. We're going to dispense with the consent calendar.

If I can get a motion and a second. All right, we've got a motion and a second on the consent calendar. Madam Secretary, please call the roll.

Item number 5, SB 500. Due pass to appropriations. Item number 6, SB 533, do pass as amended to appropriations. Item number 7, SB 544, do pass as amended to appropriations. Item number 11, SB 767, do pass to Natural Resources with the commitment to adopt amendments in Natural Resources. Item number 13, SB 842. Do pass to Appropriations. [Roll Call] 14-0. This is a consent file. Schiavo. Schiavo, aye.

All right, 15-0. The consent calendar is out. We'll leave that open for absent Members to add on. All right, here's what we're going to do. So there was a couple of bills that were heard before we established quorum.

We're going to do a roll call on those, and then we'll go back and do a lap on bills to enable absent Members to add on. So beginning with File item number four, which is SB 332, that is by Senator Wahab, we do need a motion and a second, I believe.

All right, Madam Secretary, please call the roll.

Okay, that's item number four. SB 332. The motion is due pass as amended to Appropriations. [Roll Call]

10-5. We will leave that open for absent Members to add on. All right. Now moving to File item number eight. SB 613 by Senator Stern, I believe we need. So moved and seconded. All right, Madam Secretary, please call them.

Item number 8. SB 613. The motion is due pass to Appropriations. [Roll Call] Item number eight. SB 613. [Roll Call]

14-2. That measure is out, and we'll leave the roll open for absent Members. All right, continuing. It's Votorama here. We're moving to File item number nine, SB 614, by Senator Stern. If I can get a motion. Alright, Madam Secretary, please call the roll.

Item number nine, SB 614. The motion is do pass to Natural Resources with the commitment to adopt amendments and Natural Resources. [Roll Call]

Alright, 16-0. That measure is out, and we'll leave the roll open. All right, we're now going to do a lap on bills that Members may have missed if you were absent when they were heard. So beginning with File item number one, SB 57.

All right, we are going to start with the consent calendar. Madam Secretary, please call the roll.

[Roll Call]

17-0.

Item number one. SB 57. [Roll Call]

12-4.

Item number two. SB256. [Roll Call] That's 12-3.

Okay. SB256. Davies. From not voting to no. That is 12-4.

12-4. Mr. Padilla pulled file item number three, so we only heard file item one.

Item number eight. SB 613. Harabedian.

Item number three was pulled by the author.

Where are we now? File item number 10.

SB 647. [Roll Call] 12-2. Item number 12, SB 787. [Roll Call]

14-1. All right. So all Members who are present. You're good. Your Votorama is done.

Really?

We are waiting for Assemblymember Harabedian if you would like to come vote. The roll will be open until 3:40.

All right, Madam Secretary, let's reopen the roll on our bills. Let's start with the consent calendar.

Harabedian. Harabedian, aye. That's 18-0.

18-0. The consent calendar is out.

Item number one, SB 57. Harabedian. Harabedian aye.

13-4 that bill's out.

Item number two, SB 256. Harabedian. Harabedian, aye. That's 13-4.

13-4. That measure is out.

Item number four, SB 332. Harabedian. Harabedian aye.

11-5 that bill's out.

Item number eight, SB 613. Harabedian. Harabedian, aye.

15-2. That Bill is out.

Item number nine. SB 614. Harabedian. Harabedian, aye. 17-0.

17-0. That Bill is out.

Item Number 10, SB 647. Harabedian. Harabedian, aye.

13-2. That Bill is out.

And item number 12, SB 787. Harabedian. Harabedian aye.

15-1. That Bill is out. And that concludes the business of today's hearing of the Assembly Committee on Utilities and Energy. And with that, we are adjourned.