Senate Standing Committee on Energy, Utilities and Communications

Senate Committee on Energy, Utilities, and Communication will begin in 60 seconds. Senate Committee on Energy, Utilities, and Communications will start in 60 seconds.

Senate Committee on Energy, Utilities, Communications will come to order. Good afternoon. We're holding our Committee hearing here in the O Street. We ask all Members to be present and move 1200 so we can establish a quorum. We have 15 bills on today's agenda. Agenda Item 6, AB 420, by Petrie-Norris has been placed on consent.

And that's file number 5. Yeah. Agenda item number five. And we're going to start with file item one, AB 13, by Assemblymember Ransom. Thank you and please start when ready.

All right. Good morning. Thank you, Mr. Chair, and thank you, Members. I want to begin by thanking the Committee for their work on this Bill. This has been a long time coming for this Bill. This is a Bill that made it out of the Assembly with bipartisan support, no objections.

And to be clear, this is Assembly Bill 13, which aims to reform the California Public Utilities Commission for accountability and transparency. This Bill aims to enhance the California Public Utilities Commission oversight capabilities by promoting a more diverse and accountable board.

Increasing transparency on rate hikes, therefore increasing transparency and public trust and giving consumers access to information that they deserve. It is no secret that Californians pay some of the highest utility costs in the nation. And we cannot address unaccountability.

We cannot leave accountability unaddressed as well as the cost of utilities unless we address the PUC, which is the unelected body that oversees rate decisions. My district in the Central Valley pays some of the highest rates in California, which is added when we look at California's cost compared to the rest of the nation.

So year after year, as we are hit with rate increases, and we just had another rate increase last month, our constituents are frustrated. They are struggling. They are looking to us for an explanation. These hikes have outpaced inflation, often with little explanation, little justification and transparency. That's really hard to decide.

Both residential and commercial rates have been impacted. These costs have affected our families, our businesses, and every sector, both public and private. Our schools, our manufacturers, our health care facilities and more are all feeling the strain. And no one is exempt. Ultimately, this means that we are paying more for goods and services.

As the cost of utilities is being passed down, families and businesses are being forced to make very difficult choices. Meanwhile, the Public Utilities Commission has been asked to approve rate hikes to adequately pay investors. In what world does it make sense to raise costs of necessities just to increase someone's bottom line.

What kind of board allows that to even be an option. So let's be clear. The Public Utilities Commission is tasked with regulating private businesses that provide public utilities that we all depend on. CPUC has the authority and responsibility to oversee rate setting cases for utilities that Californians rely on.

The work of the commissioners carry the weight of law. Yet they have not the same accountability to the public as we elected officials have. As legislators we have the responsibility to represent and answer to constituents. And if we want to be more responsive to our community, we have to make some substantive changes to the Public Utilities Commission.

In many cases, the work of the Commission, like I said, carries the weight of law. The rate increases happen and it has damaged public trust, in the manner that it happens. We as elected representatives are not able to answer the questions of our constituents. And we also have a concern about equity.

Across the State of California, the Public Utilities Commission has five commissioners that are supposed to represent everyone's interest. But unlike elected officials and unlike other boards in California, including the Energy Commission, the Air Resource Board, the State Water Control Board, they are not equitably divided amongst California.

They are all in One district, the PG&E district in Northern California. That's why AB 13 is needed to reform the PUC to increase oversight to provide more timely and transparent reporting and responses. Because that is also part of the Bill ensuring that we have enough time to repeal and appeal decisions by getting timely information.

And we want to ensure that all Californians are fairly represented. This body, this Bill mandates that the PUC has a report within 15 days after an increase for rate setting decision, which is significant because as I stated, we are often blindsided and confused about some of these rate setting cases.

And, and we want to have an opportunity, ample opportunity to respond. We know that this is impacting us throughout the state in every sector. But it is really important that we have a clear understanding that these are not just things that are happening in, you know, in silos. This has a huge impact.

So here with me today to serve as a witness, I'm happy to invite up Ms. Michelle Huntun, who's the Associate Superintendent for Stockton Unified School District to speak about why this is important to our students throughout the State of California.

Good morning. So I'm Dr. Michele Huntoon, the Associate Superintendent of Business and Operations for Stockton Unified School District under the leadership of Superintendent Dr. Michelle Rodriguez. My experience spans 25 plus years as an Auditor, auditing school agencies, as a chief business official and Superintendent.

AB 13 will provide the oversight necessary to ensure predictable costs for school agencies across the state. School operating budgets require and rely heavily on utilities for gas and electricity. Enhanced oversight of rate increases will lead to better forecasting of utility costs and eliminate unexpected budget surprises. We like birthday surprises, not other surprises.

A lack of predictability disrupts school planning and impacts student learning. Utility costs for Stockton Unified School District have increased upwards of 45% since 2021. These increases impact programs, curriculum and computer purchases for student learning. We need an intentional, thoughtful process that requires reporting and analysis to ensure the increases we are experiencing are necessary and appropriate.

The fiduciary duty that we have all taken on in our jobs and our actions impacts the future of our students. Thank you.

Mr. Chair Members. Paul Yoder on behalf of The San Joaquin County Board of Supervisors, in support of AB 13. Urge your aye vote. Thank you.

Thank you. Any other witnesses in support.

Thank you. Okay, we'll turn to in support.

Adria Tinnin with turn the Utility Reform Network, and support.

Excellent. In opposition. Any witnesses in opposition. See none. We will come back to the Committee and I just want to check on a couple things. You are accepting the amendments?

So. Yes - and thank you, Mr. Chair, for that. As I mentioned in the beginning, there is a lot of work that has gone into this and I definitely do appreciate the Committee's work. For the public's edification. I think it's really important that I am clear about the amendments. I am accepting the amendments.

I'm not excited about the amendments. The amendments have gone from making this the requirement that four commissioners serve throughout the State of California to from something that's mandatory in the Bill to something that is allowable in the Bill.

And I want to be clear that the reason that we are pushing for geographic diversity is because we have no representation in the Central Valley, and Southern California makes up over 50% of our population and they also don't have any representation.

We think it's very important that people who are representing us making decisions have the understanding of how these utilities are affecting not only the families but also the businesses in the community. So we are accepting the amendments that have changed the geographic representation to permissible as opposed to mandated.

Great. Just to read those amendments just for clarity. Delete provisions requiring geographic districts for CPC commissioners. Add language of Governor and Senate. Consider regional diversity when making appointments to CBC. A language from AB 1960 Villa Pudwa and again, just to be clear, as we discussed, that's a Bill that I supported last year.

The Governor vetoed it saying the Bill is unnecessary and therefore I cannot sign this Bill as part of his veto message. So again, we're going to try this, but again, just noting that the Governor did veto that last year, even the permissive language. Let's go to our Vice Chair first.

Thank you, Mr. Chair. Good morning and welcome. Thank you. You know, it's very interesting to see this Bill and I completely understand some, I agree with probably 95% of what you just said. I think the only concern I do want to express, and I think this is why there's hesitation on making a geographical.

I had the opportunity to sit under Rules Committee and as we were appointing Members into different commissions throughout the state, one thing that I learned in serving that short period of time was that we have a hard time finding qualified people for different specific commissions.

There are Commission positions that are open and have been left open because we can't find the specialties behind that.

And though I completely agree with the fact that we need people to understand what we are, you know, going through in different areas, such as the Inland Empire, we always talk about how the Inland Empire is not quite well represented in legislation in California. You know, LA dominates a lot of, you know, what goes on legislatively.

San Francisco dominates quite a bit too, but the Inland Empire doesn't. So I completely understand when you talk about geographical representation in that. But I think the one area where we do have is that when it comes to very specialized commissions, the skill sets and the knowledge are hard to find.

And those are, I think that's one of the reasons why we have a hard time finding applicants to actually apply to be appointed to that.

So I understand your, your hesitation about the amendments, but it's, I know what it's like when your Bill is taken, modified and not quite exactly what you want. Trust me, as a super minority in this Legislature, I know exactly how you feel. So I empathize.

But on that, you know, I will be supporting the Bill and happy to move it when the time is appropriate. But I just did want to mention those concerns that I have seen when trying to find qualified people for the actual commissions throughout the state. So something to consider and ponder.

Thank you.

Thank you chair. I want to thank some of you, Member Ransom for bringing this forward. And you fought hard, you believe in it, and we've had discussions. I think you're on the right track. There's no question in my mind that the PUC needs a little change in direction.

You know, geographic distribution or diversity of commissioners is an important concept and I certainly want to see Central Valley better represented not only in that Commission, but all the commissions here in the State of California. And I think you're bringing a lot of good stuff forward. Just the accountability.

And as we've had discussions, I'd like to see them in front of us more than once a year. I think that would be helpful. But I'm going to support the Bill and I do urge you to continue to work with the chair here on this geographic diversity issue.

On the chairs, I think that's important to get it right. And we want the Bill to be something that the Governor can sign, too. So that's if we put something beautiful out there and the government vetoes it, we're not getting anywhere. So anyway, I'll yield back.

Thank you. Well, again, thank you. I appreciate your passion around the districts and representation. And, you know, we hear you. We're, you know, appreciate you trying this effort again, which was vetoed last year. But we'll see if we can, you know, make progress in this way. Just a, you know, a couple pieces.

One, I just want to acknowledge your witness who spoke about the impact of rate increases on school districts. And that is very compelling to me. I will say, and you know, when we have energy costs cutting so deeply into school budgets, obviously that's money we can't spend on teachers, facilities, everything else.

And that's why last year I had a Bill that made it to the governor's desk that would at least restore fix some of the, I think, of damage we did to solar on schools and multifamily.

Whereas right now, when we change the rules, if you put solar on your roof, you have to sell it back to the grid and then buy it back simultaneously at four times the price. And we tried to fix that last year. Unfortunately, that didn't make it through.

But we continue to work on other ways that we can help schools. And just want to clarify a couple things. One, just that there aren't different rates across the PG&E territory, the same rates. Obviously, we're sensitive to different needs of the state.

And certain regions pay a lot more that have to run the air conditioning more and are hotter.

And I think that's why we're also working through this Committee to try to including in a Bill that we'll see later today to target the climate credit more to those who need it, who pay the highest bills and at the time of year coming up that they do pay the highest Bill rather than at a time of year that they don't right now, and it's not targeted in that way.

And just also clarification, the CEC Energy Commission is not in districts either. So the CEC is not. I think that was something said, just wanted to clarify that. California Education is not. Does not have districts. But again, look forward to.

As you and I discussed this morning, the core work of this Committee is holding the PUC accountable.

And I take Senator McNerney's point well, that we should have them in front of us, actually more often so we can debate things that they're doing and things that we agree, with hings that we don't agree, with things that we would like to see.

And we of course, have many bills on that this year, and I know many bills in the Assembly as well, that would direct the PUC in various ways. So look forward to working with you on those. And with that, would you like to close.

Yes, I would. Thank you very much. So, again, thank you for hearing this Bill and for your support of the Bill. When I was elected to the state Legislature just recently, one of the top concerns across my district and across the State of California was utility rates.

And unlike anything I've ever seen in my last 20 years in public service, people know the name of PUC. They know the name of PG&E, and it's not a name that they take fondly. And when we talk to those people and we dig down and we ask them, you know, well, what are your concerns.

Their concerns are that they don't feel that these agencies are working for them and that these agencies care about them and their pocketbook and what their families are struggling. And as I mentioned, my district, the Central Valley, pays some of the highest rates in California and highest rates in the nation.

And our rates throughout the state do vary depending on who your service provider is. And we are feeling the brunt of that. When we talk to the schools in our community, we've heard that $5 million is the difference in between what they are paying now and what they were paying previously.

So we are charged with really making sure that we are stepping in to take care of our people, to take care of our community. And that's what this Bill is about. I don't know why the Governor vetoed previous bills because I was not part of those conversations.

I do know that our Governor is a Governor for the entire state.

So it is my hope that he will look at how the entire state is impacted and that we can do the work to ensure that that we have people that are qualified, because for what I know so far, we've not tested to see if we can find people from other places throughout the state.

And so it's going to be imperative that we do build a bench so that people do have an opportunity to have equitable representation. I feel that this Bill is a step in the right direction as far as transparency, giving us an opportunity to repeal some of the decisions and really holding our utilities commissions accountable.

I do appreciate that some places we did have an analysis that gave us the names of the agencies that had the geographic representation.

And just like we're in districts so that we can represent the needs of our community, I do think that it's important that we push for equity throughout our state, whether it's through this Bill or through other bills. So with that, I just want to appreciate you guys for your thoughtful analysis and weighing in on the Bill.

And I want to thank those who gave the Me Too testimony. And I just want our constituents across the state to know that we're going to continue fighting to make sure that we can bring down the cost of utilities for Californians. Thank you.

Great. Well, thank you. Again, Just one last point of clarity. The rates are the same across PG&E territory, but we do have many bills. And I'll be presenting 254 tomorrow to try to bring down those rates.

But overall, you know, no dispute with anything else you said in terms of the high rates that people are paying and the across PG&E territory, and really across the state and the work that we need to do to bring those down. Well, thank you.

We do have a motion, and we are operating as a Subcommitee right now, so we won't take a vote at the moment, but when we do, we have a motion from Ochoa Bogh. And thank you for being here.

I appreciate it. Thank you.

Okay, thank you. We will move on to file item two, AB 39, by Zbur. Oh, thank you. Welcome, Assemblymember Zbur. You can start when you're ready.

Good morning, Mr. Chair, Members. So, first of all, I'd like to start out by thanking your Committee staff for working with my office to strengthen this Bill, and I will be accepting the Committee's suggested amendments.

Today, I'm proud to present AB 39, which will empower local governments to engage in the planning that they need to develop strategies for our clean energy future.

California has committed to ambitious climate and energy goals, including a transition to electric vehicles and the electrification of appliances and equipment in homes and businesses, efforts that necessitate critical infrastructure upgrades throughout our communities. Across the state, we will need roughly 1 million vehicle chargers to support the 8 million passenger electric vehicles projected on the road by 2030 and even greater infrastructure required to meet the state's 2035 electric vehicle mandate.

In the building sector, while many jurisdictions have adopted ordinances promoting electrification and new construction, increased efforts are necessary to assist homeowners and businesses in converting to electric appliances and equipment in the as built environment. A major barrier to EV adoption is the lack of accessible charging infrastructure in our communities.

Renters and residents of multifamily housing often face limited options or access to install charging and make necessary upgrades. Although many single family homes can afford to install EV chargers, we must proactively plan to ensure that those who live in apartments, in multifamily dwellings, or who may rely on street parking also have access to charging.

In order for us to meet these targets, we must ensure our local partners are developing and implementing solutions that advance California and support our most vulnerable communities. AB 39 aims to address this by requiring local jurisdictions with populations of 75,000 or more to create and adopt a plan to meet their electrification goals.

Additionally, this Bill provides guidelines to ensure that plans adopted as a result of this policy focus on the needs of disadvantaged communities, low-income households and small businesses for equitable and prioritized investment in zero emission technologies that directly benefit these groups.

AB 39 recognizes the leadership that some of our local partners are undertaking in their planning processes and allows them to build on existing plans, rather than developing new ones. Many jurisdictions have climate action plans. Many jurisdictions have elements in their general plans. Many jurisdictions already have plans that are not part of those plans.

This Bill allows extreme flexibility to actually add the elements of this plan into something that they're already doing and gives these jurisdictions a long lead time to allow them significant time to do that. Our local jurisdictions are essential partners in meeting the state's goals because they're best positioned to assess the needs of their residents and businesses.

And many of these issues are basically local land use decisions. With proper planning and strategies across California, we ensure all community members have the resources and support they need to participate in our state's transition. Thank you and I respectfully will ask for an aye vote at the appropriate time.

With me today in support of the Bill is Brandon Wong, on behalf of CalStart, and Madison Vander Klee, with the Building Decarbonization Coalition.

Excellent. Welcome. We both have two minutes.

Thank you. Good morning, Mr. Chair. Brandon Wong with Environmental and Energy Consulting, on behalf of CalStart, a California based global nonprofit dedicated to the growth of the clean transportation industry.

As the Assemblymember noted, AB 39 is designed to help cities and counties set local goals for the decarbonization of our transportation and building sectors.

And as Members of this Committee know very well, California's transportation inspector specifically is responsible for almost half of our greenhouse gas emissions in California, but also probably more importantly, the overwhelming majority, if not all of our NOX emissions and our diesel particulate matter pollution.

And so, when we're talking about transitioning California's cars, trucks, and other vehicles to zero emissions, we're not just talking about an effort to fight climate change.

We're really talking about a public health imperative here, which is particularly acute for families who are living in these communities along high traffic corridors, high traffic freight corridors, who have really been historically burdened by high air pollution.

And so, we know that one of the biggest barriers to EV adoption even today continues to be access to charging infrastructure.

And that ranges this gamut between people who live in multifamily dwellings and who need access to public charging infrastructure, but also for fleet owners who just need to be—who need to know—that their vehicles are able to charge on route.

And so, we really think that although there's been a lot of progress with the Energy Commission by way of grants to help build out California's charging network, it's still estimated that we'll need to about quadruple that network over the next few years.

And so, the support of local governments to identify potential charging sites, but also to identify and resolve local permitting, planning, and zoning barriers, many of which are unintentional, but can actually really, really slow down the construction process.

And we've seen in some jurisdictions that an unintentional zoning barrier can really lead to delays of over a year for a single site.

And so, we're really hoping that with this, thanks to the Assemblymember's work here with AB 39, that this is one way that we're able to help accelerate the build out of our EV charging infrastructure throughout the state. And so, with that, we urge you for your support. Thank you.

Thank you.

Good morning. Mr. Chair and Members. Madison Vander Klee with the Building Decarbonization Coalition. First of all, would like to thank the Assemblymember for carrying this Bill. We're very excited to see it move forward.

As Brandon stated, according to the California Air Resources Board, the building and transportation sector are collectively responsible for the vast majority of the state's annual greenhouse gas emissions. To that end, Governor Newsom has set a goal of creating 7 million climate ready homes by 2035 and installing 6 million heat pumps by 2030.

The state is moving to encourage the adoption of these zero-emission electric space and water heating appliances including through establishing programs, like the Equitable Building Decarbonization Program and TechClean California.

Over 60 jurisdictions in the state have also adopted ordinances to require or encourage electrification in new construction, but more really needs to be done for existing buildings and existing homes. Meeting these goals really does require that government at all levels partner in developing and implementing strategies that support Californians in retrofitting their homes to install electric appliances.

AB 39 will direct local governments to identify and address those local barriers such as permitting, siting, et cetera, to building electrification and support cities in meeting their communities' energy needs, particularly for renters, low income, and disadvantaged communities, communities who face the greatest barriers in electrifying.

So, we're very excited to sponsor this Bill alongside CalStart and respectfully ask for your aye vote. Thank you.

Okay, thank you. We'll now have others in support.

Members, Paul Yoder, on behalf of the City of Santa Monica, in support of this Bill. Thank you.

Hello. Laura Parr, on behalf of Southern California Edison, in support.

Good morning, Mr. Chair and Members. Israel Salas, with San Diego Gas and Electric and Southern California Gas Company, in support.

Good morning. Meagan Murray, on behalf of Electrify America, in support. Thank you.

Good morning. Allison Hilliard with the Climate Center and Civic Well, in support. Thank you.

Fatima Iqbal Zubair, with California Environmental Voters, in support.

Ellie Fenton-Sutliff, on behalf of the California Solar and Storage Association, in support. And I've been asked to register support for the Asian Chamber of Commerce as well. Thank you.

Good morning. Joe Gardias, with NRDC, in support.

Good morning. Laura Dehen, with Environment California, in support.

Good morning. Michelle Canales, with Union of Concerned Scientists, in support.

Good morning, Mr. Chair, Committee Members. Brian Maramontes, with AFSCOM California, in support.

Mr. Chair and Members, Dan Cho on behalf of two CCAs, Ava Community Energy and Clean Power Alliance. Thank you.

Good morning. Audra Hartmann, on behalf of the California Electric Transportation Coalition, in support.

Good morning, Chair and Members. Sean Bellach, on behalf of the California Association of Realtors, here in support. Want to thank Assemblymember again for those amendments in the last house.

Thank you.

Rocky Fernandez, with the Center for Sustainable Energy, in support. Thank you.

Good morning, Chair and Members, Molly Corcoran, on behalf of Rewiring America, in support. Thank you.

Good morning, Chair and Members. Jacob Evans, with Sierra Club California, in support. Thank you.

Good morning. Katie McCammon, on behalf of Climate Action California, in support, as well as support from 350 Bay Area Action, San Diego 350, Climate Reality Project, and California State Coalition. Thank you.

Good morning, Mr. Chair. Dylan Hoffman, on behalf of Advanced Energy United, in support.

Okay, we now turn to those in opposition. Do we have any opposition witnesses, lead opposition or me too opposition? Seeing none. We'll bring it back to the Committee. Senator McNerney.

Well, I thank the Chair, and I thank the Assemblyman for bringing this forward and we are facing a transition and it's good to put things in place that will help that transition along well.

A couple things I really like about the Bill is the flexibility and the fact that we're not going to force this on communities that are smaller than 7,500. Makes a lot of sense. I do have a question. Is this going to cause any push delay of hydrogen except hydrogen implementation?

It shouldn't. I mean basically what this is is a planning document to have local jurisdictions. They've got to 2030 to do something in, in a manner that they choose.

I think the only restriction really on the plan is that it's got to be a plan that is one that they will analyze under CEQA if there's a discretionary action before them. And that is really sort of some of what results in people doing things that move towards, you know, the clean energy future.

So, there's not mandates, there's not penalties. It's a planning exercise where we're hoping that jurisdictions will, for example, on the electric charging infrastructure, we'll look at, okay, where are people in our, in our community going to be able to park? Is the infrastructure there?

Thinking through sort of a planning exercise and thinking about how that will happen, thinking about policies as well. You know, what are—thinking about the land use policies when we're building a new apartment, are our codes such that there's chargers going to be in the apartment building, those kinds of things. But it should not delay.

I can't think of any reason why this would delay anything on that.

Thank you. Maybe next year we can put a hydrogen bill like this that will encourage localities to plan for hydrogen.

Well, we—well, I mean, we actually, the Bill doesn't, if you look at the language carefully, it actually, while it's focused on electrification, it actually also has jurisdictions thinking about all zero energy options. So, it's not restricted only to electricity.

Okay, well, I'm going to support the Bill and I'll move it at the appropriate time. Thank you.

Thank you.

Senator Ochoa Bogh.

I think you probably just answered one of the concerns that I had with regards to, you know, one, is the goal to be fully—to full electrification—for all cities. Because I have a concern with that.

I know that is the goal of the state, but the reality lies in the fact that that may be the goal when we have communities such as mine in my district, Grand Terrace, who, you know, where we suffered quite a bit of PSPs and we had a city with no electricity for nine days and we had buildings that were fully electrified and some of them with seniors in those communities, in those homes, it really played quite a hassle.

So, I am actually very supportive of just a variety of energy sources within our cities and having plans to ensure that we have a variety so that when we don't have electricity, we can depend on the gas, or we can depend on hydrogen, or whatever it may be.

But especially with the innovation that's going on in different spaces with energy, I think it's important to ensure that our cities do have the ability and the flexibility to meet the needs of their localities in Southern California, Inland Empire, the windstorms all the time. So, what do we have?

We have the power shutoffs that are happening in order to ensure that we don't have fires in our local mountains, in our local hills. And so, with those, with that in mind, and when I think about our communities in the Inland Empire, the notion of having fully electrified cities just really doesn't work.

And so, that, that's why I was just, you know, I am glad that you have—you kind of posed the statement that it does allow for flexibility because I think many, many of our cities do need that flexibility to be able to navigate the natural environment in which they're living in and also, the needs of their constituents.

So, thank you.

Thank you. I think one of the advantages about a bill that's been in its third year is that we've gone through multiple committees in both houses of the Legislature now. And so, it really is very fine tuned. Your concern is one that's been raised a number of times.

And actually, if you look at the language of the Bill, just to give you an example, one of the key metrics is identification of opportunities to expand electric vehicle charging and other zero emission vehicle fueling infrastructure. When you go down to the building part, identification of strategies for public electrification and decarbonization of new and existing buildings.

So, it is not focused only on electrification. It's focused on, on zero emission technologies, with hydrogen specifically in mind.

Okay. And where does gas fall into all of this?

Well, the goal is really to sort of move towards the things that need to be done under our scoping plan. And so, the scoping plan envisions that many, for example, in homes that over time, natural gas appliances will be converted to electricity. And so, that is one of the things that would be encouraged by the Bill.

I see, through the Chair, with the utmost respect, that is a huge problem for me, especially for established homes. I can see new construction going that way, but with current and I mean we just saw with the intent right now with the Commission trying to in implement that the trans—transition—of gas appliances to electric appliances.

In order to do that, those households, especially older homes, have to be re, re—what's the word? Restructured. Restructured.

They do.

In order to be able to plumb for electricity, you know, from gas to electricity, that's a huge cost for households. And so, I literally let the effort, you know, in my, in my district to ensure that people were aware and that they would be engaged.

So, I'm not a proponent of changing, you know, or expecting households, everyday Californians who are having a hard time, meeting many seniors that own these homes for, you know 20, 30, 40 years to expect them to, you know, fork out $40-60,000 to literally replumb their, their homes, to be able to be that.

So, I understand that the state's goals on that end, but I think the reality, the more pragmatic, the reality of many Californians is that it doesn't work. It doesn't work.

And that's why I have, you know, when I see these, you know, well-intended bills like, you know, you've been working there for three years, working on every concern on that end. But to expect, you know, the full electrification or zero emissions, it's hard. In the real world, it's hard for the average American.

And so, that's why I have concerns and why I ask very specific questions. Because we talk about the cost of living. We talked—we just had a Bill that, you know, was really concerned about how electricity costs have increased exponentially. Why? Because we're expecting to build that infrastructure and that infrastructure is going to cost money.

So, all of these goals are very well intended, but they have a direct cost to the everyday consumers. And I'm thinking about them. We have ideals—great, they're wonderful, lovely.

But in the reality, you know, in a time when the number one concern for constituents throughout the state is cost of living, you know, bills like this are well intended and well, you know, thought of, it—you're working through it—you know, goal oriented, it still is going to eventually create a cost for, you know, for those, those Californians.

And so, that's the concerns that I have when I see these bills is.

I mean, I look like I share your concerns, frankly. And frankly, you know, I, moving to, to electrification for the ads-built environment is a huge challenge because those are costs that normal families can't afford.

But when someone actually ends up having a natural gas appliance and it's at the end of its useful life, if you had a program at the local level that said you can get a new heat pump and we're going to have a subsidy to allow you to do that and you're going to end up having someone who's going to come in and do the conversion for you and that's a subsidized thing, that's the kind of thing that this envisions, that if you actually had those kinds of programs in place, there's nothing in the Bill that is going to mandate that someone convert, you know, something in their home.

We understand the cost of that. I understand that that is a huge barrier. I don't think anyone has advocated that we have a mandate in that place.

But as we're trying to move over to that, if we're starting to think through when, you know, when appliances, things come to their natural life, we should be thinking ahead and see whether there are, whether we can put in place programs that will assist and even provide economic advantage to low income households to sort of move in that direction.

And that's what this envisions.

No, and I, and I kind of understand your thought process on that, but we have a little bit of a pickle now when it comes to, you know, the solar panels that we've been able to subsidize. It's still taxpayer money. We have to ensure that we have the funding.

And I would like to see, you know, the Legislature, if that is the goal. Let's put those plans in place first with the funding to make sure that we have that available before we're expecting the consumers and the local jurisdictions to be able to do that.

So, I think we need to ensure that we have the funding first and then say, okay, we have the funding, we've allocated this, this should be our route, and this is how we're going to facilitate the implementation of this goal, rather than going, okay, this is the goal.

But we don't have any, with the state funding that, you know, that we don't normally have at this point, it's going to be very hard to, to say okay, and to have the trust of the public to say, here's the plan and eventually, we'll allocate funding for it.

And that's the concern that I have, is that we don't have the financial backing for these programs. I get the vision, but we don't have that right now.

And in the state right now with a huge deficit and for the foreseeable 2, 3, 4 years, you know, it's hard to, to support something that potentially could literally impact the pocketbook of, of constituents. So, I completely see the vision. I see where you're going.

I think financially, I think we, we need to wait to see how we do and see where we're going to be getting that funding to be able to create this program first before we're expecting our local jurisdictions to create these plans and expect our constituents to rise up to the occasion of, you know, changing their appliances and replumbing their homes, which is very costly.

Yeah, I guess what I'd say is, you know, we have set climate goals that I think enjoy broad support because I think everyone understands what happens when our earth is getting hotter and you know, people can't go to work. We actually have to start air conditioning things.

You know, we see the wildfires, we see the sea level rise. And so, you know, we have a plan that's in place to try to address that.

All this does is it basically says we're going to engage our local partners to try to help us meet those goals in really the softest, most flexible ways by saying, look it, we know that we're going to try to convert to electric vehicles and other hydrogen vehicles for certain applications.

And so, we're just asking you to sit down and plan ahead for what is coming, rather than playing catch up, having—coming—to a place where some jurisdictions don't have charging, where people in their jurisdictions want to buy an electric car, but they're worried about it because they can't charge it at their home, there's no charging on the street.

It really is just engaging our local partners in sort of an all of government approach.

Okay, great. Senator Stern.

Thank you, Mr. Chair. I want to applaud the author for your persistence year after year. We have a slightly different Senate Energy Committee now and finally you get a hearing and we're going to keep moving here. I guess I approach the issue somewhat differently.

I'm still reeling from the vote we took on the budget, or at least one piece of the budget, where we essentially tie the hands of local governments. We heard about flexibility from my colleague and preserving that flexibility for local governments to plan for energy sources and protect their constituents.

But essentially, now under AB 130, we've told local governments, you can't do that work on reach codes and buildings until 2031. I don't know why that decision was made. I didn't support that measure. I think this measure is some consolation that at least we'll get a planning process started and thinking ahead.

But I truly do worry about a future where we just bank on gas and that we force everyone to stick with gas. Right now, the President is exporting record amounts of gas out of this country to foreign nations. And we, meanwhile, import about 90% of our natural gas.

And so, when a war breaks out in somewhere like the Ukraine, consumers right in my backyard in Southern California's Bill goes up $1,000. I don't like the fact that our economy is dependent, set aside even the climate risks and even the indoor pollution and public health risks.

Just from an energy security perspective, I think it is a fool's errand to make us dependent on one source of fuel to power our lives, to cook our eggs for breakfast, to, you know, heat our showers. You know, the fastest growing heat pump market, by the way, is not here, it's in Texas. So, there's nothing purely democratic about a heat pump.

It's something that we know we can generate that energy here in California to fuel.

And when we're creating a system where, you know, schools, local governments, our constituents, have to depend on imported fuel, just like when we drive, but when we heat our homes and when we, you know, when we try to get, you know, that power to fuel our daily lives, when it's coming from foreign sources, I think that is a huge vulnerability.

And I, I wish this Bill, frankly, went a little further. You know, I was disappointed, although I guess realistic about the amendment added in local government that recognizes that there are other prohibitions now in state law under AB 130.

I hope that local governments out there will hustle and look at opportunities for reach codes before that shot clock stops.

But you know, when I look in my backyard and over 20,000 people getting poisoned and are still sick from Aliso Canyon blowing out the largest methane leak in US history, and then, we're going to go permit a bunch of new housing developments and force those to be dependent on that gas, it is such a, you know, a cruel irony right in the shadows of Aliso to force gas into our lives that isn't even our own.

So, I know there's some really positive aspects of this, especially on the transportation front and I think that could yield some benefits.

And I think there have been a lot of barriers and so, I appreciate some of the utilities, the IOUs being here to really accelerate our zero-emission transportation infrastructure planning. Because I do think local government's got to, got to get with the program there and got to expedite.

But I, I hope we can revisit that handcuffing that we've done for local governments when it comes to the building sector.

Because you know, when I wake up every morning and I turn, you know, turn that stove on and my two-year-old sitting there like waiting for scrambled eggs and I'm thinking about benzene and my wife's like, oh, come on. You know, she's not a wonk like me. She's like, you know, it's fine, right?

And it's like, yeah, because it's invisible. You wouldn't know it, you wouldn't see it. But where's all that asthma coming from? You know? And you look at the science of it, if you don't have a good vent or a good fan on your hood of your stove, our kids are sucking in benzene at breakfast and I don't know, the fact that that comes from a foreign source on top of it is just too much to bear.

So, I think this is the minimum we should be doing. I'd love to be added as a coauthor.

I appreciate you coming back again and again and I hope we really can build on this because I think we can't afford to make ourselves reliant on one source of fuel for our future. So, with that, I'd move the Bill at the appropriate time.

Senator Grove.

Thank you. I know that, I know there are some concerns regarding electrification and transition and all that stuff, but you know, I am the benefit of representing a county that has, I think it's 84 binders that are 4 inch thick on a Kern County EIR, Environmental Impact Report, that where we approve...we have 80% of the state's battery storage.

We have 53% of the state's renewable energy, wind and solar. And we're the only state—or the only county, not—we're the only county that has transmission lines. So, we're way ahead of you. You could adopt our EIR statewide, and you'd be like on it. So, I don't.

But I feel uncomfortable taking a vote that supersedes local control for other parts of the state, even though my county is in the area I represent is way ahead of this Bill. And I'm not trying to be sarcastic about the Bill. I mean like we're just way ahead of it.

And our EIR does include, I mean when we say we have shovel ready projects, when you look at Tejon Mountain Village and you look at the beautiful outlet malls and all that stuff, they got a...called a permit in three days. It's like it's the EIR is there and available for usage.

Watt EV got a permit for, you know, building, I think it's 55 electric charging stations. They did it right off of 65 where the Amazon facility is there, that's transitioning to electric vehicles. You see their vehicles parked there overnight. So, we're there.

But I do feel uncomfortable imposing an unfunded mandate on my friend Megan Dally's district or my friend Tony Strickland's or your district. So, I have an issue with that.

Is there—I know you gave them till 2030, and I know it's just an option, but is it an option for them to develop a plan or is it an option for them to mandate the usage of the plan?

No, it requires that the—that a plan with the criterion that are outlined in the Bill be embedded in some plan that the county has adopted. So, it could be a specific plan that is to comply with AB 39. It could be a climate action plan in which they've thought about building decarbonization and EV charging and other charging infrastructure.

It could be an element of their general plan. It could be the housing element and the transportation element divided up into two. They have extreme flexibility in how they do that. There's not a mandate for something specific.

It just—there, there needs to be a planning document, a plan, resident in the documents the city has adopted that actually meets the elements of this Bill. And it's extremely flexible.

What's that?

It's each city, not a county?

It's each city or county with over 75,000.

Or county?

Yes.

Okay. I, I know my colleague said 7,500. I was going to ask you that.

No, 75,000. We, we took that, that amendment in the Senate Local Government Committee last year.

Okay. Thank you sir, very much for answering my question.

You're welcome.

Okay, well, I just have a few comments. First of all, thank you. Thank you for working on this Bill, bring this forward. This is going to be helpful because we need this planning at the local level. I've been on the advisory board for many years, including before being in Legislature for Menlo's Park.

So, that's our effort to Menlo Park to be zero carbon by 2030 and been part of that, I guess starting probably starting seven or eight years ago. And, and actually, Menlo Park did the first all-electric reach code.

And now, one in five Americans I think in the country live in a, in a jurisdiction with an all-electric reach code.

So, I know you were, I know you had to exempt cities under 75,000, but I hope that cities under 75,000 will also do this because it's this kind of planning that's important now because when a, you know, gas furnace goes out, then that's when somebody needs to then make the decision right away.

Are they going to go with a gas furnace or say an all electric heat pump? And we want to make sure that the infrastructure is there so they can make that decision. We've upgraded the grid where necessary.

We know where that has to happen and also, that we can identify in cities, you know, if we, I think one of the things that's going to be helpful going forward as we lower the cost for some of these installations, whether it be solar, whether it be household infrastructure, that if we get, you know, neighborhoods and blocks, for example, to all agree, then it's just cheaper.

Right? You know, companies roll the truck once and they can serve that area. So, I'm looking forward to in my—some of my cities too, seeing some more of that coordination, having put in a heat pump, despite the name, not everyone realizes, but heat pump, you get air conditioning. And that's been transformative.

When I moved to our area, we didn't need air conditioning, that was very hot, maybe five to 10 nights a year. Then, it became 20 to 30 nights a year where it was really kind of unbearable. And we had one unit and another unit and then another unit, mobile unit.

And then, now, we have, with heat pump, we have a whole house air conditioning. And I hope that as we weatherize other homes, as we look to help people, you know, in communities that are really suffering from some of these heat, that we adopt heat pumps. And again, this plan will be helpful.

I also just want to mention that across the country, the average US driver would save $943 in fuel costs from driving an electric vehicle. And drivers in the top 10% of mileage saving reached an average of $2,721 annually.

So, there is that kind of advantage from driving an electric vehicle, especially if you can charge at home and charge off peak hours. And again, this Bill will be helpful to that by letting cities plan and make sure that the infrastructure is there for folks who want to adopt.

One of the very first bills I passed was around electric ready homes. We want these homes to be electric ready. So, people do make that decision, then that, that—it is the opportunity is available to them. So again, want to thank you for that.

We do have some clarifying amendments to require local governments to coordinate and collaborate with respect to electric utilities where appropriate. Are you accepting the amendments?

I'll be accepting the amendments.

Great. Well, we, we do have a motion from Senator McNerney. We will take that up when that—when we have a quorum. Thank you for being here.

Thank you. Thank you, everyone. Oh, sorry, did you want to close?

Just respectfully ask for your vote. Really appreciate the conversation today.

I guess the last, you know, last thing I'll say is we've spent a lot of time really massaging this Bill to address the concerns that have been raised and making sure that local jurisdictions have the flexibility to do what makes sense in their jurisdiction, but is ultimately moving towards our clean energy future.

And so, with that in mind, I respectfully ask for your aye vote at the appropriate time. Thank you.

Okay. Thank you.

All right, we will move on to—well, let's—we had an author. It may not at the moment. We got on hold here while we wait for an Assembly author. We'll take a brief recess while we wait for Assembly author.

Okay, we are back in session and we have an author, Assemblymemeber Schiavo. Thank you. You're here to present file item 13, AB 1020. Thank you for being here. Go ahead and ready.

Thank you so much Mr. Chair and Senators. Very happy for the opportunity to present AB 1020 today. As we all know, electricity rates are increasingly unaffordable in California and ratepayers just can't keep up.

Almost one fifth of households in the state are being behind on their energy bills by $500 or more and it's even worse in the hotter regions of our state like the Central Valley. Simply put, the primary driver of these substantial rate increases is climate change.

Wildfire mitigation measures and grid infrastructure investments needed to secure clean energy futures are sending electricity rates through the roof. Unaffordable rates risk discouraging households from pursuing electrification and consequently derailing our state's climate goals. Recognizing this problem, investor owned utilities have increasingly sought non traditional funding for government such as government loans.

For example, this past January, PG&E finalized a loan from the Department of Energy for $15 billion for load growth and reliability projects. Alternative financing mechanisms such as these publicly financed loans or grants are a key recommendation from ratepayer advocates because they will lower utility borrowing costs and shareholder equity returns offering potential savings to ratepayers.

This is a welcome new strategy, but proper oversight to ensure funds are spent responsibly and accounting is transparent is essential if ratepayers are going to receive the savings that they are due. AB 1020 sets up a quarterly reporting structure to do just that.

This Bill ensures IOUs disclose to the CPUC any taxpayer funded loans or grants of over a million dollars or more and that they are pursuing or have secured and requires them to submit detailed spending plans of the funding that goes to the commission.

This measure also requires the Commission to promptly deliver financial benefits of these financial mechanisms to ratepayers in the form of prospectively adjusting revenue requirements and rates. The bottom line is that we have to do everything that we can to protect our ratepayers because public dollars must benefit the public and not shareholders.

Here with me to testify in support of AB 1020 and is Adria Tennin from the from TURN.

Excellent. Thank, welcome. You have two minutes.

Great. Thank you Chair and thank you Committee. Adria Tennin, Director of Race Equity and Legislative Policy at TURN the Utility Reform Network.

With electric rates sky high and the cost of clean energy investments on the rise for profit, investor owned utilities are increasingly seeking different funding streams like grants and loans. For example, as the Assembly Member pointed out, PG&E received a $15 billion DOE loan commitment and for reliability and clean energy projects. It is great to seek external funding streams to reduce the cost burden on ratepayers, but these benefits can only be realized if utilities are actually passing on the savings to ratepayers and bringing down the utility bills.

AB 1020 protects against double dipping in taxpayer and ratepayer funding sources for the same projects by requiring strict reporting to the PUC of all public grants or loans received. AB 1020 reporting does four things. First, it centralizes utility reporting of all public funding secured.

There's currently no central reporting or regulatory mechanism to ensure that utilities disclose all the benefits that may come from public loans and grants. There's just an advice letter for federal loans, but nothing for grants or state funding. The Bill would simply expand existing requirements to include more funding source types and details on ratepayer benefits.

Second, it requires utilities to report relevant secured public funding in each application where it is seeking ratepayer funding for the same project, which is important for the regulator, the Commission to approve an appropriate level of ratepayer funding.

Currently, there's no way to be sure that ratepayers are receiving all of the benefits from taxpayer funding sources, particularly from loans and significantly reduced interest costs for the utility. Third, AB 1020 requires utilities to actually quantify potential cost reductions and then adjust revenue requirements elsewhere to ensure savings from alternative financing flow through to ratepayers.

In other words, utilities have to demonstrate how lower interest costs and direct grants will impact their cost of service and and then make sure that the savings reduce what ratepayers have to pay, for example by adjusting the utilities interest costs between the cost of capital proceedings.

Fourth, the Bill ensures the enforcement by the PUC and reporting to the Legislature, helping give both the Commission and the Legislature the necessary information to do their respective jobs.

The Bill requires the CPUC to provide an annual report to the Legislature on the public funding pursued and secured by IOUs, including ratepayer savings. To address the ongoing affordability crisis this Legislature has encouraged the IOUs and the IOUs generally agree. Procuring lower cost alternative financing options like public grants and loans is vital.

However, for this to work properly, we need to make regulatory updates like AB 1020 to be sure that the benefits are realized for ratepayers. We strongly urge an aye vote on AB 1020. Thank you.

Thank you. Other witnesses in support or add ons in support.

Jamie Minor, on behalf of the California Efficiency Demand Management Council, in support.

Fatima Balziwayer, with California Environmental voters, in support.

Okay, witnesses in opposition or tweeners. Let's have tweeners first.

Mr. Chairman, Member Scott Wetch on behalf of the State Association of Electrical Workers. And the California Coalition of Utility Employees. With the amendments to narrow this to merely a report, we are neutral. Thank you.

Okay, any witnesses in opposition. Seeing them bring it back to the Committee. Senator Grove, thank you.

I just wanted to make a comment that you know and I appreciate the author taking the amendments, but I think that we need to understand that with IOUs and with every piece of legislation that comes through this Bill, our comments and our intentions and the comments that we make matter.

As soon as this Bill and two other bills came out, I was immediately notified of a text and it says corporate bond types to avoid or to be cautious with California investor owned utilities. Why the exposure to strict liability for wildfires. Political wildfires, Political regulatory risk and increasing CapEx for climate resiliency and undergrounding.

Examples of organizations to avoid in investment: PG&E, Southern California Edison, San Diego Gas and Electric or SRE. It gives the examples of what the stock market is. And I just think that if we're going to keep holding our utilities, our IOUs accountable, but requiring them to do all this stuff undergrounding, fire resiliency.

The previous Bill we just listened to, it's accumulative. It's not just your Bill, it's accumulative. You know the previous Bill we just listened to in my area, you go outside and a leaf is blowing on a tree. They shut the power off for five days for these PSPs shutoffs.

People are putting water in their bathtub to use the toilet. And we're the fourth largest economy in the world. So I just think that we need to be cautious when we introduce legislation because if we're not going to have.

If you can't and I don't think we should raise rates, obviously we pay the highest rates in the country, but there's got to be some type of balance to where we can reduce rates without causing so many offsets or catastrophic losses for investor owned utilities.

If people aren't going to invest in their stock where they can offset some of the losses that they have in other areas, we're going to continue this issue of higher rates. I get your intention, I really do. I think I really appreciate you addressing the ratepayers. My rates are higher. Central Valley on the coast.

It can open a window. Central Valley, 110 degrees, 100 degrees. You have to have air conditioning. So I really do appreciate it. I'm going to stay off the Bill today because I'm very concerned about the attack on the utilities, which we need to.

And not that you directly attack them, but accumulation of bills and it creates instability in the market and there's huge advisements not to invest in our utility companies, which is catastrophic for them as well. So thank you for letting me make those comments.

Sure. Would you like to respond.

Yeah. I mean I don't imagine our Bill specifically does anything to discourage investment in public utilities or investor owned utilities, you know, simply a reporting Bill. And you know, and at the end of the day.

Our goal is that if taxpayer dollars are being used to finance utilities, then rate payers should benefit from that lower percentage rate. Right.

If you're on the private market getting a loan for 4 or 5% on $15 billion and you can get it for 0% through a government loan, that's a huge savings for ratepayers and ratepayers should see that instead of it going to the company, right.

And so we, as I think a Legislature are struggling so much to try to figure out how we can bring utility costs down, right now. And this is a very tangible way that does not cost utilities anything. They're not having to pay for these savings to the public.

They're just passing through the savings that they are receiving to make sure that the customer also gets the savings of the benefit of what taxpayers are helping to Fund them to be able to do.

Great, with that. I think we're, do Vice Chair has something. Senator Ochoa Bogh.

Thank you Mr. Chair, and welcome. Glad to have you here. So a couple of concerns, comments/question, concern and would love to hear your feedback. It says here that the Bill would require each utility to promptly deliver to ratepayers the financial benefits of taxpayer funding received and provides.

And provides that the PUC may require the utility to adjust the utility's revenue requirements and rate applications to accounts for ratepayer savings. How are the utilities supposed to promptly deliver financial benefits that are based on expected savings and estimates. The expected benefits may not occur or may be lower than expected.

It is unclear how the exact benefits can be determined and promptly delivered to rate payers. Are revenue requirements and rate applications going to be adjusted based on estimates so.

There's flexibility for the CPUC to kind of determine what promptly deliver means. But you know, generally speaking, because ratepayer or utilities are going through multiple rate cases a year usually, some have up to 4 to 6 every year. There's ample opportunity to make adjustments through those rate payer cases if they need to.

This is something that would, you know, be a clear amount. It's not an estimate, but really a clear amount that you see in savings. If you were expected and approved at rates that were going to have a higher percentage and then you end up getting a lower interest rate on a loan.

So that needs to come back and make an adjustment. Because if you're charging people based on a higher interest rate and you did not get, and you got a loan at a lower interest rate, then you don't need to charge those higher rates to be able to cover the cost of a higher interest rate loan.

And I'll also let my witness answer any additional things.

The delivering of benefits or passing that through promptly would be determined by the Commission, but it would not be based on estimates. It would be based on what is received. So not just sort of what are they applying, like passing on savings that they've applied for a grant.

It would be once they've received the grant or the loan, then they can calculate what the difference is. So if you get a loan with a 5% interest rate that's significantly lower than the interest rate from shareholder funded bonds from shareholder loans, so they would calculate the difference there and make sure that that's come through.

So it's only on funding that has been secured, not just applied to.

So is that, I'm sorry, Mr. Chair.

Yes, go ahead. Thank you.

So is that expected to be immediate? I don't know how the financing works on the utility side, but when they have these loans and they. Depending on what the loans are for, are you expecting the results or the impact of those loans to be kind of immediate or long term.

Depending on the projects that they're implementing the funding for.

So that varies depending on the type of loan and what the project was for. The timeline may vary, which is why it was not prescriptive in the Bill to say something as definitive as a certain number of months or something like that.

So promptly would vary depending on the context, and that would be worked out at the Commission with. Of course, you know, the IOU would be participating in that conversation.

Okay, thank you.

Great. We just had to take a quick moment and establish a quorum since it's a busy day. Please call the roll for the quorum.

[Roll Call]

Excellent. We have a quorum. Okay, well, just want to note that there are no amendments on this Bill in our Committee. I know you did take some amendments in previous committees. Do we have a motion. Well, first, would you like to close.

Appreciate the questions. We are very hopeful that this is going to lead to real savings for rate payers and respectfully request an aye vote.

Okay. We have a motion from Senator Stern. Please call the roll.

Do you want to read the motion?

Motion is Do Pass to the Senate Appropriations Committee.

Senators Becker. Becker, aye. Ochoa Bogh, not voting. Allen. Archuleta. Archuleta, aye. Arreguin. Ashby. Caballero. Dahle. Dahle, no. Gonzalez. Gonzalez, aye. Grove. Hurtado. Limon. McNerney. McNerney, aye. Rubio. Stern. Stern, aye. Strickland. Strickland, no. Wahab.

All right. That bill's five to two. We will keep it open. Thank you.

Thank you.

Having a sense of the next bill may take a moment. We're going to open the roll and on the first two items, so file item one. We'll have some votes on AB13 by Assemblymember Ransom. Please call the roll. The motion was by Senator Ochoa Bogh, our Vice Chair. Do pass, as amended, to the Senate Appropriations Committee.

[Roll Call]

The vote is nine to zero. We'll keep that open. Let's now vote on file item two, AB39, by Assemblymember Zbur. Please call the roll. The motion is by Senator McNerney. Do pass as amended to the Senate Appropriations Committee.

[Roll Call]

That is five to four. We will leave that open for absent members. Okay, now we're going to turn to file item.

Mr. Chair. Do we have a consent? Do we have consent?

Actually, we do. Thank you.

I'd like to move the consent.

Yeah, we have a motion from Senator Strickland on the consent calendar.

[Roll Call]

All right, that is nine to zero. Thank you again, reminder, Senator Strickland. And thank you. With that, we will go to file item four. Oh, sorry, sorry. Not file item four. This exact file I'm on here. Well, we have a something member of McKinnor. Oh yes, file name seven, AB470, please come to mic. Thank you for being here.

Thank you. Good morning, Mr. Chair and members. I would like to begin by thanking you and your staff for working to strengthen this bill, and will be accepting the committee's proposed amendments in the following committee. These amendments include a commitment to expand access to lifeline voice services and amendments to address concerns by 911 dispatch operators.

Amendments to address concerns by our digital equity partners. Various clarifying amendments and amendments to address concerned raised by our labor partners.

Specifically, the labor amendments that have been worked on this committee on in this committee include protections and commitments to any transition or construction, maintenance and installation of communications infrastructure authorized by this act is not intended to result in the involuntary elimination of existing union represented technician positions who build and maintain the legacy copper network without first offering these displaced technicians either retention, retraining or placement in another union represented position.

Job titles and employee classifications in a collective bargaining agreement without an existing job preservation guarantee shall not be entitled to the benefits provided under this section. Number two.

All construction, maintenance and installation work related to the deployment of advanced technology infrastructure pursuant to this title when performed by regular full time workers employed directly by an employer responsible for the construction, maintenance and installation Such workers will be paid prevailing wages or their bargain contractual wage rates upon commencement infrastructure, construction, maintenance and installation work of advanced technology.

The provider shall submit to the commission of workforce compliance plan, which shall include the following: number one, documentation of compliance with all workforce provision. Number two, a plan for utilizing union labor, and number three, a description of any retraining programs for current workers.

I will also point out that CWA, who represents AT&T workers, recently approved a four-year legally binding contract with AT&T. This means that an advanced fiber build-out directed by this bill will be done by union workers.

I welcome continued conversation with my labor partners to ensure that the proposed fiber deployment works in concert with the unionized workforce needed to build this transformative infrastructure. Members, the January 2025 fires in Los Angeles County destroyed over 18,000 structures and forced the evacuations of over 150,000 people.

No copper landline customer was able to receive a single emergency evacuation text alert as the fires raced towards them. No copper landline customer whose home or business burned down or who were evacuated by fires were able to use that technology to connect with family members, neighbors, their insurance provider, or necessary emergency services.

Not one. Copper landline phones have served the public for generations, but no longer meet the modern telecommunication needs of the 40 million people that California call home. Just as telecommunication needs are evolving, it's time for our telecommunication laws to evolve.

AB470 creates a framework to facilitate the largest union-built private investment in advanced fiber optic networks in the state history and to ensure that all California households will continue to be able to make affordable, reliable telephone calls and connect with emergency services when they need it. Members, customer demand is driving this technology evolution.

With less than five percent of Californians still using copper landlines and most residents using either a wireless phone service or a fiber-based VoIP phone service for their telecommunication needs. Members, AB470 will change telecommunications in California, and it will change it for the better. A more connected, globally competitive economy is needed now more than ever in California.

Let us not be limited by reliance on obsolete technology of the past. Let us look to the future and build a future that will keep all Californians connected. Today, my witnesses are Mark Ghilarducci. I hope I didn't mess up your name too bad. Emergent Global Solutions and Terry Nicole Baca, AT&T. Thank you.

Thank you, Assemblymember. Okay, let's have our witnesses. You each have two minutes. Go ahead. Thank you.

Good morning. Thank you, Chair Becker, and honorable members of the committee. My name is Terri Nikole Baca, and I'm Vice President of Legislative Affairs for AT&T. I would like to say a special thank you to our author Tina McKinnor for her countless hours on this important legislation.

To put things plainly, our current carrier of last resort policy no longer reflects the reality of today's competitive communications landscape in California. The copper landline peaked in popularity over 25 years ago.

Since then, we have seen hundreds of thousands, if not millions, of customers every year move away from their legacy landline services in California today, we just have a few 100,000 lines remaining. The Kohler framework, which was rooted in a monopoly era model, does not reflect today's reality.

Applying the Kohler construct to modern communications is not technically or legally feasible. This results in Kohler's directing investment away from the services that meet customer needs and into a network that less than five percent of people use. AB470 is a thoughtful approach to solve this problem.

It is thoughtful because it provides a path to Kohler reform only in areas of the state that are well served by other providers or have no population. This legislation is carefully crafted, ensuring no one is left behind. It requires interoperability, backup power, compatibility, affordability safeguards, and prohibits providers from walking away from customers.

With the process now firmly within the authority of the PUC and the significant build-out requirements, this bill guarantees a plan that protects the public benefit while maintaining reliable voice services for every Californian. AB470 is a balanced, stakeholder-informed solution that protects consumers while enabling investment in California's communications future. I respectfully urge your aye vote.

Good morning, Chair. I'm retired commissioner Warren Stanley filling in for Mark Ghilarducci. To the Chair and committee members, thank you for being here today.

Okay, thank you. Go ahead.

I proudly served the California Highway Patrol for more than 38 years and had the honor of working with 11,000 uniform and civilians and employees of the California Highway Patrol who helped keep California safe. I began my career in August of 1982 as a cadet and retired as commissioner at the end of 2020.

I would like to take a moment to think about the evolution of technology that I witnessed during my time with the CHP. I witnessed the advancement and evolution of communication from the first handheld radio, clunky cell phones and mobile digital computers to today's handheld devices that we now try to persuade motorists to ignore while they're driving.

I've also seen firsthand the evolution in technology has played an invaluable role in enhancing safety for officers and the public at large. The the connection between officer and public safety is tied directly to their communications capabilities.

That is why one of the largest projects I oversaw towards the end of my career with the CHP was to overhaul and modernize the CHP in-vehicle communications capabilities. Online functionality had not been supported by the limited technologies of the past, meaning officers did not have the ability to stay connected in the ways that they can today.

Ensuring law enforcement personnel have the tools they need to keep the public safe is critical, and that is why I support AB470. This bill prioritizes innovation, modernization, and investment in building resiliency and expanding access.

As AB470 requires modernization process be overseen by the CPUC in consultation with CalOES to ensure that first responders and public safety's input is reflected in any process adopted. Additionally, this bill will spur investments which will expand fiber optic networks, especially among communities who need it the most.

From a public safety standpoint, AB470 has covered the right basis, and I encourage you to take meaningful step today in supporting the bill to help foster life-saving communications for the communities throughout the State of California. Thank you.

Thank you. Oh, sorry. My, my pager's going off, but okay. No, thank you. We'll take others in support now, me toos.

We'll start with the first row, first couple rows and then work our way back so that not everyone's standing up at the same time. Sound good? Yep.

Good morning, Chair and members. I'm CC Yin, the owner of McDonald's and the founder of APAPA. I strongly support AB470. Thank you.

Thank you for being here.

Chairman and members. I'm Regina Yin, owner of McDonald's restaurants local, and also board member of APAPA. I support AB470.

Thank you.

Good morning, Chairman and honorable members. My name is Felicia Bhe. I'm a licensed, California licensed attorney and also a lifetime member of APAPA. I'm in strong support of AB470. Thank you so much for your consideration.

Thank you.

Good morning. I am having here support AB 470.

Thank you.

I'm Stephen Carlson, retired building inspector and in charge of residential county Sacramento and I'm in support and I'm also a member of APAPA but I'm also in support of the 470. Thank you.

Great. Thank you.

Hi, I'm Mayue Carlson. I'm a Former President and CEO for APAPA and President for Sacramento Chinese Cultural Foundation and I support AB 470. Thank you.

Thank you.

I am Nian Chun Thu. I support AB 470.

Thank you.

Good morning. My name is Dr. Tom Bei. I'm just retired rocket scientist and I support AB 470 because it's important we have the technology with all the satellite up there it's better to utilize that. So I do support it. Thank you.

Thank you.

Morning. My name is Amy Xiao and I'm finance manager. I'm here, support AB 470. Thank you.

Thank you.

Hello, my name is Tammy Ma. I'm retired. I'm here to support AB 470. Thank you.

Thank you.

Good morning. My name is Chuck Ma. I retired. 100% support 470.

Thank you.

Good morning everyone. My name is Sonny Mehrtash. I am the National President for APAPA and I support this Bill. Thank you for your time.

Thank you.

Good morning everyone. My name is Joe Johal and I'm a Chairman for national governing board Member for APAPA and a Wendy's owner and I support Bill 470. Thank you.

Thank you.

Good morning. I'm Jing Ya Chen. I work in the semiconductor industry over four years and member of the ACE. I support AB 470. Thank you.

Thank you.

Good morning. I'm Dr. Ethan Nguyen. I'm also on the national governing board for APAPA and I'm in support of 470. Thank you.

Thank you.

Good morning. My name is Janet Jones. I'm a family nurse practitioner. I'm in support of AB 470. I'm a member of ACE. Thank you. Thank you.

Thank you.

Morning. My name is Lawrence Jones. I'm a structural engineer along with ACE. I'm in support of 470. Thank you.

Great. Thank you.

Good morning. Ryan Joy on behalf of on behalf of Equality California in support. Thank you.

Good morning. My name is Krista Oberth. I am a chemistry professor emeritus from the Los Rios Community College district. I support AB 470 and I'm here on behalf of ACE.

Excellent. Thank you.

Good morning. I'm Jorge Santana, Dr. Santana, Professor Emeritus from Sacramento State and I do support AB 470.

Thank you.

Good Morning Chairman and Members. Well, my name is Douglas Hsia. I'm President of the APAPA Delta Chapter. I support the AB 470. Thank you.

Thank you.

Good morning everyone. I'm Dr. Winsome Jackson representing the California-Hawaii NAACP and we are in support of AB 470. Thank you.

Thank you.

Hi, my name is Kevin Chow, President/CEO of Triple S, member of ACE and we support 470.

Thank you.

Hello, my name is Jerry Chen. I'm an educator. I support AB 47. Thank you.

Good morning everyone. My name is Ken Chen. I work for developer and a Member of ACE. I support AB 470. Thank you. Thank you.

Good morning. My name is Yvonne May. I'm in financial services industry. I'm here to support AB 470. Member of ACE.

Okay, great.

Hello, my name is Anika Tillery and I am in support of AB 470.

Thank you.

Hi, I'm Myra and I support AB 470.

Thanks for being here.

Hi, my name is Tarini Chintakindi. I'm a student at Rockland and I support AB 470.

Excellent. Thank you.

Good morning everyone. My name is Akhil Sheikh. I'm here with the APAPA and I support AB 470.

Thank you.

Good morning. I'm Sai Dasari. I'm with APAPA and I support 470.

Thank you.

Good Morning. I'm Srian Boothpur with APAPA and I support Bill 470.

Good morning. I'm Nikhil Pasio with APAPA and I support AB 470.

Thank you.

Good morning. My name is Chung Yi Lee. I'm from Central California. Small business owner and I'm a Member of ACE. I support AB 470.

Thank you.

Hi, good morning. My name is Arthur Jiu. I'm the retired federal engineer. I'm supporting AB 470. Thank you.

Good morning. My name is Keely Chu. I'm a retired accountant from state agency. I support AB 470. Thank you.

Thank you.

Good morning. My name is Gory Lee. I retire from DMV. I support AB 470.

Thank you.

Good morning. My name is Wendy Hong. I'm support AB 470. Thank you.

Thank you.

Good morning. My name is Xiao Hua. AB 470.

Thank you.

Good morning everyone. My name is Hai Xi. I support AB 470. Thank you.

Thank you.

Good morning. My name is Feng from US Tatang Association. I support AB 470. Thank you.

Thank you.

Good morning. My name is Zhi Hui Chen and I'm supporting AB 470. Thank you.

Thank you.

Good morning. I am Stephen Ho. I support AB 470. Thank you.

Thank you.

Good morning. My name is Hui. I support AB 470.

Thank you. Good morning. My name is Shravya. I'm a high school student in Folsom. I'm with APAPA and I support AB 470. Thank you.

Thank you.

Good morning. My name is Ken Lai. I'm retired. I support AB 470. Thank you.

Great. Thank you.

Good morning. My name is Krishna Bachina. I'm with the APAPA. I support AB 470. Thank you.

Hi. Good morning. My name is Anna Wong and I'm in support of AB 470.

Thank you.

Good morning. I'm Angie Sheh. I support the AB 470. Thank you.

Thank you.

Good morning. My name is King Tong. I here for us strongly support AP 470.

Thank you.

Good morning. My name is Ton La. I am a member of Biotank Association. I strongly support 470. AB 470. Thank you.

Thank you.

Good morning, everyone. My name is Jie Zhi-Ni. I'm with American Golden Realty located in Napa County. I'm a member of the CCNR and I highly, strongly support AB 470. Thank you.

Thank you.

Hi. Good morning. My name is Yani Su. I support AB 470. Thank you.

Thank you.

Good morning. My name is Alex Huang and I support AB 470.

Thank you. Thank you.

Good morning. My name is Andrew Huang and I am in support of AB, AB 470. Thank you.

Thank you.

Good morning. I'm Dee Goganini and I'm from APAPA. I support AB 470.

Good morning. Good morning. I'm Atiya Mishra and I support AB 470.

Thank you.

Amy Fabi with the Chinese American Association of Solano County and we support AB470.

Good morning. Ardine Dozier and I am with the Chinese American Association of Solano County working to close the digital divide and I am in support of AB 470. Thank you.

Good morning. Patrick Faubi with the Chinese American Association of Solomon County. I support AB 470.

Thank you. Good morning. Ethan Hunio, the Chinese American Association of Solano County. I support AB 470. Thank you.

Good morning. Leonardo Lopez with the with the Chinese American Association of Solano County. I support AB 470.

Great. Thank you for being here.

Good morning. Fable Yeza with the Chinese American Association of Solano County and I support AB 470.

Thank you for being here.

Good morning. My name is Valentina Lopez and I'm with the Chinese American Association of Solano County. I support AB 470.

Thank you.

Good morning. My name is Dr. Richard Shaw. I'm a veteran and an anesthesiologist and also Board Member for the Chinese Association - American Association of Solano County and in support of AB 470. Thank you.

Thank you.

My name is Gemma Chao and I am with the with the Chinese American Association of Solano County and working. Working to close the digital divide. And I support AB 470.

Thank you for being here.

Erwin Ramirez with the Chinese American Association of Solano County in support of AB470.

Thank you.

Good morning. I'm Ryan Lee with the Chinese American Association of Solano County working to close the digital divide. I support AB 470. Thank you.

Good morning. I'm Karen Robinson with the Chinese American Association of Solano County and I support AB 470.

Thanks very much.

Good morning. I'm with the Chinese Association of Solano County and I support AB 470.

Thank you. Good morning. Gavin Pasillas with the Chinese American Association of Solano County and I support AB 470.

Good morning. My name is Edward Fabi and I'm with the Chinese American Association of Solano County working to close the digital divide. And I also support AB 470.

Thank you.

Good morning. I'm Stella Chao. I'm with the Chinese American Association of Solano County and I support AB 470.

All right. Thanks for being here.

Good morning. My name is Jiaxing Yu with Chinese American Solano County. I support AB 470. Thank you.

Thank you.

Good morning. My name is Dr. Tecoy Porter. I'm the President of the National Action Network Sacramento Chapter in support of AB 470.

Thank you.

Hi. Good morning. My name is Teresa Lai. I'm Member of ACE. I strong support AB 470. Thank you.

Great. Thank you.

Good morning. My name is Amar Bornkamp. I'm the Director of Development for the Filipina Women's Network working to close the digital divide, and I support AB 470.