Assembly Standing Committee on Utilities and Energy

Good evening. Good evening and welcome. I would like to convene the Assembly Committee on Utilities and Energy. Sergeants, please call the absent Members. I think actually we have a quorum, so we can go ahead and establish our quorum. Madam Secretary, please call the roll.

[Roll Call]

All right. Wonderful. Before we move to our agenda, I have a few housekeeping announcements to make. I will maintain decorum during today's hearing, as is customary. 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 one measure on the bill hearing agenda. We'll be hearing Senator Becker's SB 254. And immediately following the conclusion of our bill hearing, we will begin an informational hearing on my proposal, AB 825. That measure is currently in the Senate's possession.

It's not in our possession. So we will be hearing that item for informational purposes only. As a reminder, testimony is limited to two primary witnesses in support with two minutes each and two primary witnesses in opposition. For any additional witnesses on a measure, please only state your name, position, and affiliation.

So with that, I think we are ready to begin. I am going to pass the gavel to my very able Vice Chair. Thank you, Mr. Patterson. All right. And then I will join Senator Becker for his presentation of SB 254.

All right, thank you very much. You can proceed whenever you're ready, Senator.

Well, thank you all. Very pleased to be here with my joint author on both bills to talk about really one of the most significant things we've, I think, done in decades here in California to tackle the major parts of our rising utility bills. As you know, this is...

You've heard all these things before, but it's now significantly different after combining three things. Many of the best aspects of my original bill, Chair Petrie-Norris's bill, AB 825, original 825, and the provisions to strengthen the Wildfire Fund led by the administration.

This bill now includes a long list of important steps to reduce costs for electricity ratepayers, stabilize electric utilities in the wake of the terrible fires in Southern California this January, and make sure the utilities aren't holding back our other priorities for housing, electrification, and economic growth.

As anyone who tried to read the whole 361 page bill on Wednesday morning will know, this is a very long bill and I'm just going to try to give really a brief overview of the seven major topics of the bill before turning over to my joint author. The first topic tackles wildfire mitigation spending. Again, this is, as we've discussed, is the biggest component of rising costs according to the Public Advocate's Office.

It includes changes from SB 1003 last year to improve oversight and wildfire mitigation plans and to really strike that balance between risk reduction and costs. It also reforms to the call before you dig process coming out of the original 825 to improve the efficiency of planning for undergrounding of transmission lines.

Both these should help us get better bang for the buck in wildfire spend. The next, the bill has two major topics that do something we rarely get a chance to do here in Sacramento, which is actually build the same things we would have built but for less money.

The first requires utilities to finance $6 billion worth of future spending on fire mitigation capital investments using securitized debt. That allows projects to be financed at a lower interest rates and without any return on equity that adds to utility profits.

This is not as large as what was in either of our bills, but it's estimated it's going to save ratepayers more than $300 million a year still, between $300-400 million a year. The second part creates a program that Chair Petrie-Norris done a tremendous amount of work on on the public ownership.

It's under GO-Biz, focused on reducing the cost of building big transmission projects by leveraging public ownership or public financing, which is estimated to save up to 50% of the cost of these major new investments, or as much as $3 billion a year if a significant number of projects leverage this approach.

I won't go into the details of that. Happy to do that in Q and A if we want, but I want to give credit to Chair Petrie-Norris and her team, and also Senator Padilla who had bill on this as well, for all the great work that led to what's in the bill now.

The next topic is a provision that puts tighter scrutiny on utility profits. It was in SB 254 already, so I'll just say that allow us and also especially consumer advocates like TURN and the Public Advocate Office to be more vigilant about whether utility profits are just and reasonable or excessive.

The next big topic is a set of reforms to streamline the permitting of clean energy projects to help lower the cost for utilities to purchase new clean energy. I know that was a major focus of the Assembly this year is how can we get things built faster.

And we have a number of provisions. Again, happy to go through these. But including having the CEC create a set of program environmental impact reports that can speed up sequel review and a set of changes to the CEC's opt in permit authority.

The biggest new additions to the bill, not a surprise to you, are set of provisions to strengthen and extend the Wildfire Fund, which acts as an insurance program for the IOUs and is threatened to be depleted after the fires in Southern California this year. I think it's important to mention a few key aspects of that.

The bill creates a successor insurance fund to the current Wildfire Fund called the continuation account that provide coverage for any future fires. The new account will be capitalized with contributions from ratepayers and utility shareholders in roughly equal parts. It will raise $9 billion in bonds secured by extending an existing fee on electricity bills that would have expired in 2035 but will expand.

So this will not raise electricity bills it at all, this provision, in the near term. It just extends it starting in 2036. But it's also gets a significant amount of, I don't know what's called pain, but contribution from the utilities as well. 9 billion from shareholders money through extending the utilities annual contribution to the fund through 2045.

And their contribution will start to be raised in 2029. The bill also includes provision to prevent hedge funds from trying to profit off disasters and it gives utilities a right of first refusal that allow them to settle claims at whatever price the rights to a claim is being offered to a third party.

Both which should help. And it requires a report to the Governor and the Legislature that evaluates from a fund administrator and make recommendations about further actions that I'm sure we will all be discussing next year that we need to consider to reduce wildfire risk and how we can cover the costs in a more sustainable way.

Strengthening the wildfire risk will ultimately save repairs money and protects fire victims at the end of the day. Last topic that we've also been debated in both the Assembly and the Senate over the last few years is timely service to support new demand.

My bill SB 410 in 2023 set targets timelines for energizing customers because at that time people were waiting ridiculously long times, especially in PG&E territory, to hook them up. In my area, it was 50 weeks, 5-0 weeks to get new charging infrastructure, for example. I see Assembly Member Papan nodding our head here. That has made a lot of progress.

And this bill adds additional teeth to make sure utilities are speeding this up and are preparing to handle future load growth. Believe it or not, this is a much shorter presentation than I gave last night at the Senate Energy Committee. But this is a big bill for some big problems.

It's not going to solve all the problems. We're going to definitely be back next year to talk about more ways to improve affordability and for longer term solutions on wildfire liability. But again, this most ambitious bill in years to tackle energy affordability.

There's not one silver bullet, as you know, but collectively the provision of this bill can eventually save ratepayer billions of dollars each year. Want to again thank the Pro Tem, staff, Chair Petrie-Norris, the Senate working group on this as well, the governor's team here as well. And I want to turn it over to my co-author for some comments.

Well, thank you so much, Senator Becker. Pleased to be here with you this evening. And just really want to start by saying thank you for your leadership and your partnership. I know for me, for our entire committee, and really for the Assembly as a whole, electricity affordability has been a key area of focus for us over the past year. I think we recognize that so many of the Californians who we represent are struggling to make ends meet.

And we know that they cannot, we cannot continue to accept soaring electricity rates. And I think that what we have done together is take a really hard look at our constituents' bills and identify opportunities to lower them in the short and the long term. As you said, this is a big bill tackling some big problems. And we know that there is more work to do. But really, really proud of what we've been able to advance and urge my colleagues to support. So thank you.

Great. Thank you so much. Are there any questions from my colleagues? Oh, yeah, sorry about that. There were two of you. So I'm dusting off my committee. It's been so long. Yes. Two witnesses in support of this measure. Are their primary witnesses in support? Okay, great. Perfect. Are you saying okay, well...

Alright. You, you each have two minutes, and if you go beyond that, I start to look uncomfortable towards our Chair because she's the Chair and it's her bill. But generally it's two minutes.

Thank you. Is this on? Is this on? Yeah. Okay, great. Hi. Thank you so much, Madam Chair. Madam Chair and Senator Becker. Thank you, Vice Chair and Members of the Committee, for the opportunity to be here tonight to talk about SB 254. My name is Ann Patterson. I'm a senior counselor to Governor Newsom and also was a member of the Governor's Strike Team on Energy back in 2019 when we created, in partnership with the Legislature, the state's initial Wildfire Fund.

SB 254 continues the work of the Legislature and the administration over the last seven years to really ensure that Californians have access to safe, affordable, reliable, and clean power. This bill by itself will reduce utility bills by billions of dollars a year over the near, mid, and long term.

It's also going to speed up clean energy projects coming onto the grid, accelerate customer connections to the grid, and shore up the state's Wildfire Fund. I'm going to very briefly talk about the Wildfire Fund and then open it up to questions. The scale of the devastation that we saw in January in Los Angeles has devastated communities.

It has also jeopardized the solvency of the state's Wildfire Fund. Without a solvent fund, utility customers face the risk of sudden and severe rate spikes as a result of utility wildfire losses, and victims are exposed to to becoming creditors in a future utility bankruptcy that could leave them waiting for years to get compensation for their losses.

As a result, urgent action is needed this session to shore up the fund, protect ratepayers, protect fire victims, and stabilize the financial health of our state's utilities, which ultimately lowers costs for ratepayers. I want to thank the Legislature, in particular Senator Becker and Assembly Member Petrie-Norris, and all the Members of Legislature that engaged with us over the last six coming out of the fires to look at different possible solutions to this problem.

The proposal that has been incorporated into SB 254 does incorporate feedback from the Legislature and feedback from stakeholders. I do want to say that from our perspective, what the fund creates is an interim solution. It also incorporates a report that will come back to this body, the Legislature, in April to really look at what the durable long term solutions are to this problem of catastrophic wildfires.

I think LA in January was a wake up call for everyone that despite all of the work we have done to make California safer, through all the investments we've worked on with the administration and Legislature across the board, we have reduced risk. But the reality is that climate change is making our problem harder every year and making it harder for us to keep California communities safe.

We really need to look sort of step back and look at other solutions that help protect communities, harden them, reduce the risk of damage from these events, and figure out how to fairly socialize the cost of the losses. With that, I'll ask for your support and thank you.

Thank you very much. Do we have an additional witness in support?

Thank you. I'm Mark Toney. I serve as Executive Director of TURN, the Utility Reform Network. I was also very involved in 2019 with Ann Patterson to come up with the original Wildfire Fund. I'm very pleased to be here today to urge your support for SB 254 as an important first step in the right direction for ratepayer affordability.

I particularly support it because almost every recommendation that TURN made in discussions with the governor's office for how to improve the Wildfire Fund proposal, they said yes. When I said we need matching funds from shareholders, 9 billion to match every dollar of ratepayer, they said yes. When I said it needs to be bundled with affordability, they said yes. Who also said yes was Chair Becker and Chair Petrie-Norris.

And they really combined the best of both of their bills into SB 254. So I, you know, we like particularly the $6 billion in ratepayer securitization because that will save $3 billion over the next 10 years that won't go into shareholder pockets and will stay in the pockets of ratepayers. The transmission accelerator program. And this is something that Chair Petrie-Norris has been working on very hard.

We very much support that because of the cost savings to ratepayers. I'm not going to go through every part. I will just say that legislation is urgently needed to address the remaining affordability crisis faced by residential, agricultural, industrial, small business, and older customers. We have to identify additional savings to offset the $9 billion that ratepayers are putting into the fund.

We need to strive to limit annual bill increases to the cost of living adjustment provided by Social Security. And we need to set limits on strict liability for utility wildfire damages that creates unlimited ratepayer risk of future costs. TURN urges you to vote yes on SB 254. And we ask you to be prepared to roll up your sleeves next year to do more on the affordability crisis. Thank you.

Thank you very much. Next, we will open it up to additional support witnesses, public comment. If you can come up to the microphone, please state your name, affiliation, and position. We're going to try and limit it to that. Thank you.

Mr. Chairman. Mr. Chairman and Members. Scott Wetch on behalf of the California Coalition of Utility Employees, the State Association of Electrical Workers, California State Pipe Trades Council, Western States Council of Sheet Metal Workers in support of the bill. We wish it had had reforms of strict liability and inverse condemnation, as well as some reforms on contingency fees by trial lawyers, but we still strongly support the package. Thank you.

Melissa Romero, California Environmental Voters, in strong support.

Good evening. Scott Cox on behalf of the Building Decarbonization Coalition in strong support.

Sara Flocks, California Federation of Labor Unions, in support.

Jonathan Clay on behalf of the County of San Diego in support.

Mr. Chair. Chris Micheli on behalf of Silicon Valley Clean Energy in support.

Delaney Hunter on behalf of the Center for Sustainable Energy in support.

Rebecca Marcus on behalf of the Union of Concerned Scientists in support. Thank you.

Jan Smutny-Jones on the behalf of the Independent Energy Producers in support.

Mr. Chair. Annabelle Hopkins on behalf of the Public Advocates Office in support.

Nate Solov on behalf of Net Zero in support. Thank you.

Mark Fenstermaker for Peninsula Clean Energy in support.

Victoria Rome with NRDC in support.

Doug Subers on behalf of the California Professional Firefighters in support.

Good evening, Mr. Chair and Members. Melissa Cosio with Pacific Gas and Electric in support. Thank you for your work on this.

Dan Chia on behalf of Ava Community Energy in support.

Brady Van Engelen here on behalf of Southern California Edison in support.

Kent Kauss, San Diego Gas and Electric, in support.

Will Brieger, Climate Action California, Climate Reality Project Silicon Valley Chapter, 350 Sacramento, and 350 Humboldt. Thank you. Support.

Good evening. Jon Kendrick with the California Chamber of Commerce, support.

Hello. Mary Solecki on behalf of Clean Air Task Force in support.

Sean MacNeil, California Community Choice Association, in strong support.

Erin Niemela on behalf of the California Efficiency and Demand Management Council in support.

Kate Brandenburg on behalf of Sonoma Clean Power in support.

Trent Smith on behalf of the California Municipal Utilities Association in support.

Kelly Smith on behalf of the LA... Pardon me. Eaton Fire victims in support. And part of the 2019 cast of characters that was there at the beginning. If I could just briefly say we're very concerned about history repeating itself. This is what happened to PG&E. I'm sorry. Don't let history repeat itself. Thank you.

Thank you very much. Appreciate it. All right... One more.

Just really quickly, sorry. Melissa Romero on behalf of the Climate Center, who asked me to pass along their support. Thanks.

Thank you. Next we will open it up to main opposition witnesses. We'll take two witnesses, and you can have two minutes each.

We're going to be brief tonight because unfortunately, Ms. Becker... Excuse me, Mr. Becker and Ms. Petrie-Norris heard our lecture last night, and I want to keep it brief tonight. Michael Boccadoro on behalf of the Ag Energy Consumers Association. I'm reluctantly back up to offer some reluctant concerns with the legislation.

We don't feel like it goes far enough on affordability. We were in support of both of their affordability measures. This does not go far enough. The affordability savings will be more than offset by pending rate increases at the Public Utilities Commission from Edison and PG&E currently. We're deeply concerned about that.

And as it relates to the Wildfire Fund, unfortunately, the way it's structured as a volumetric charge, the overwhelming majority of the fund will be paid for by the business community, small business, commercial, industrial, and agricultural customers in the state. That's concerning to us. We have affordability issues. The crisis is real.

3.4 million customers in arrears on their power bills today and businesses that are leaving the state. We've lost five food processors this year to affordability concerns here in California. So we look forward to the interim report. We look forward to having a discussion.

And I will join my colleague Scott Wetch in calling for a real conversation about strict liability and inverse condemnation as we go forward. Because the liability fund is not sustainable for ratepayers to keep adding up $9 billion at a time and then putting that, baking that into rates in the future when we're going to be expanding the system. Thank you.

Hello. Audra Hartmann on behalf of the California Large Energy Consumers Association. The prior speaker spoke about volumetric charge for the Wildfire Fund fee. We're opposed to that provision in the bill. We really appreciate the efforts on affordability and we were in support of prior versions of the bills.

Unfortunately, because it's volumetric and because our members, the average CLECA member, pays over $1.0 million a year into the fund, we have to be opposed. We don't think it's too late because the fee for customers won't be collected until 2036. So there's time to fix it. And we hope that next year we can have the conversations about how to fix it, how to find more affordability in the future. Thank you.

Great. Thank you. I think to follow the committee rules, I think the rest are just name and affiliation only, please.

John Kennedy with Rural County Representatives of California, and also on behalf of the League of California Cities for very different reasons. We're concerned with the CEC provisions in the bill and undermining local authority. Thank you.

Caitlin Loventhal on behalf of the California State Association of Counties. Similarly, we're in respectful opposition due to the provisions in Section 26. Thank you.

Great. Thank you. Seeing no other opposition, we'll turn it over. Now we will turn it over to Committee Members for any questions. Assembly Member Boerner.

Yes. Thank you. And I really struggle with this. I think I respect both of the authors here, and I know you've both worked very, very hard on this. You know, I struggled in 2019 when Assembly Member Petrie-Norris and I first had our first end of session and we voted on 1054.

And I reluctantly voted for that bill then. And I think in retrospect we got it wrong. And I feel like this bill is putting us again between... Actually, I use only profanity with it. So let's say a rock and a hard place of saying do we choose between supporting our wildfire victims and bailing out the IOUs once again? And I'm worried about a little bit of the balance that we're striking in this bill.

So if the authors, I don't know which one, want to walk us through, I have a couple questions. What is the incentive for utilities to find a more sustainable way for paying for these disasters if the solution is to continually renew or as it was stated, keep moving out the end date of this fund?

And for utilities that have approved wildfire mitigation plans, which I think is all of the IOUs, it almost shields them against any continuing liability with the language in this bill. And it strikes me that we're putting the onus on the state to say that the IOUs are operating safely and it's saying that the ratepayers will pay for that.

Which like if you could walk me through the reason about that, because that's where my reluctance comes from, is like, are we striking that right balance? And I know it's hard to strike the right balance. I just don't think we got it right in 1054. And then I'm not sure we're going to get right then. But you see all the victims and we don't want to let them suffer for what's really I think IOU responsibility.

And thank you for the question. And I guess let me rewind a little bit and pick up on some of the comments of some of the individuals who offered testimony and me too support and me too opposition. Because of inverse condemnation. In the State of California, we have a very strict liability construct.

So if a wildfire is sparked by utility equipment because, you know, a child or Patrick Ahrens lets his, you know, Mylar balloons go and it goes into a power line, it's actually, in that case, the shareholders aren't on the hook for that. Do you want to know who's on the hook for that?

California ratepayers. So I actually think that the construct we've developed in 1054 and that we're building on with this measure, I actually think that it is the best possible deal for ratepayers because in the absence of this Wildfire Fund, ratepayers are 100% responsible.

And with the proposal before us, we are asking the shareholders to contribute 50% of the Wildfire Fund continuation. And we are asking them to make more investments to make our communities more safe. We're asking them, as you heard Senator Becker say, to invest $6 billion in wildfire mitigation work that doesn't earn a rate of return.

And I think that maybe the reason for your question is we are navigating a truly unprecedented crisis. We are faced with climate disasters that are getting worse and more costly every single year. And I think that's why the study, as Ms. Patterson outlined, is such an important part of this. Because right now we are both dealing with the ravages of the climate crisis that's both destroying our communities.

And, by the way, costing us a ton of money while we are making investments to try to build a cleaner grid and build a clean energy future. That is very, very expensive. No matter how we do this, it's going to be expensive. And so the challenge before all of us is to figure out how do we navigate that in a way that is most cost effective for Californians? Senator.

I think you covered it well. Yeah, you did. You nailed it.

Thank you.

Okay. Thank you. Assembly Member Rogers.

Thank you, Mr. Vice Chair. So I know most of my colleagues know this, but for some context for folks who are here and watching, I was elected to the City Council in Santa Rosa end of 2016. So I'd been on council for about nine months when the Tubbs Fire happened.

And for me, public service at the local level meant helping fire victims get home and try to help people be made whole. I led and chaired the Rebuild Committee for, I think, six years while I was on City Council and would not be sitting here had we not done a good job of trying to rebuild.

And I like to bring into these conversations for folks who weren't a part of the history that our survivors in Tubbs were compensated very differently than how the state has moved since then. That the creation of the Fire Victims Trust in 2019 shifted how they were going to make restitution.

And prior to that, Tubbs Fire victims, their fortunes were tied to the stock for PG&E, which meant that they would only recover insofar as PG&E was also protected. And that was part of the conversation was how do you keep PG&E alive out of another bankruptcy while also trying to help people to rebuild. And I understand why the Legislature did what they did at the time, knowing what they knew.

But the end result of that, as we look back, is that folks who are devastated in Tubbs received about 70 cents on the dollar for a settlement because PG&E stock had not recovered to an adequate level to be able to compensate them fully. I get it, it was a mistake in how it was done. It was an attempt.

But the creation of the Fire Victims Trust in 2019 systematically excluded those folks, excluded Paradise, and said, we have dealt with that. That is done. And it's been a challenge. And the Chair knows this. We've had many conversations about it. I wanted to make sure that a discussion was on the table in replenishing the Fire Victims Trust.

A look back to Tubbs and to other disasters to say we got it wrong. And if we are actually serious about trying to make our communities whole and keeping the commitment that every politician made when they came to my city and stood in the burned down neighborhoods and said we're gonna be here until you rebuild. That didn't happen.

And every day that goes by from that date is yet another day where I hear from people, well, that's resolved, that's done. We've already taken care of Tubbs. And I oftentimes tell people on a number of issues in this Capitol, LA has 27 Members of the Assembly. They have five counties in Northern California who get one.

And so our ability to organize and coordinate oftentimes means asking Members to put themselves in the shoes of the victims that they don't represent. Because there's fewer people in that area. That doesn't mean that the devastation has been any less. So here we are, we are going to replenish the fund.

My one request, I didn't want to get into the semantics of would the LA fires exhaust the existing Fire Victims Trust. As I've seen some analyses, some have said that it won't. I don't even need us to put Tubbs Fire victims or folks who have already experienced the fire in front of LA victims.

All I asked was that if there was anything left in the existing fund, that there was a recognition from the state that the way that Tubbs Fire victims were compensated was not adequate and that whatever was left, could be $0. But make that available to folks who still have not been able to rebuild and who are still struggling. That didn't happen.

And I was really disappointed to see that that didn't happen in the discussion. With that said, I also recognize that if the Fire Victims Trust is depleted and there is no successor that that adds additional cost to those same fire victims who are trying to rebuild. The Public Advocate Office has put out reports that every time a utility goes through a bankruptcy, it's billions of additional costs on consumers.

That weighs heavy on me. For a number of reasons, this Legislature has not been able to fix that. But that is the fact that, if folks are forced into bankruptcy, that's billions of dollars that gets passed on to my folks that are still struggling.

And at least with the Fire Victims Trust, there's a share between ratepayers and shareholders. And if that is not the case, it all falls on ratepayers, as my community has seen. So I will support moving forward. I won't be happy about it.

I'll continue to talk about the impact in my community and will continue to ask my colleagues when I stretch for you to address issues in your community, just remember we are missing a golden opportunity to make good on the promises that were made to mine.

I'll just say from my standpoint, I just, I appreciate the comments and the passion and your commitment to your, to your community. And yeah, I take that very seriously. I don't know if you have any comments from the...

I do, yeah. I think I was there in 2019. We saw the devastation from Tubbs, all the North Bay fires, Woolsey. Like I mean across the state there were fires, Camp that destroyed Paradise. All of which led, you know, for the Northern California is to PG&E bankruptcy.

When you go into federal bankruptcy court it is not great for fire victims. Because you're in there. There is a limited pool of cash and a federal judge is required by federal bankruptcy law to equally distribute that among all the creditors in the same class. Period. Full stop. The state doesn't have any control over that.

What we were able to do in 2019 is require PG&E to get out of bankruptcy within a year. So at least people didn't have to wait, which often could be 3-4 years. But how that money was allocated was up to the judge.

And I think is the point we're making is nobody ever wants to see a fire victim have to go through that again. So that was a horrible situation. What we created going forward was a we're not going to do that again.

We're going to create a different way to make sure that victims don't have to go through that. Right now if Eaton turns out to be an Edison fire, those victims, because of this fund, will not be waiting in bankruptcy court. That is why we set this up.

We do not want if there's another fund for the people in your district or anybody's district to have to sit in bankruptcy court and wait and get whatever's left. But I think because those are settled in bankruptcy court, they are put away in bankruptcy court.

We created an insurance fund with go forward that is the combined insurance pool of three different ratepayer bases. Right. So they're insuring future risk. They're all agreeing to put their money in together to insure future risk. They are not willing to go back and pay for the liabilities of any individual company that existed beforehand.

And kind of that makes sense. You're buying insurance for go forward events. But I want to say that, like, deeply, deeply understand what happened to your community, and nobody wants that ever to happen again.

May I give a response, Please? I appreciate, Assembly Member Rogers, you bringing this issue up. I spent an hour yesterday listening to Will Abrams, okay. Sitting down with Will. And he walked me through in very clear detail exactly what you were saying.

So what I want to say is that one of the things, one of the things that I suggested that was in, is in this bill is that there needs to be a report on sustainability. And that is what the Earthquake Authority is doing. And if you see it has, it includes stakeholders. And there's a list of stakeholders, ratepayer advocates, insurance advocates, wildfire survivors. That's my language. Okay. I'll be honest.

And what I will do and what I'm going to commit to you is I will ask that part of the report assess what happened to the survivors of the wine country fires and the Camp Fire, the 2017-2018 fires that were excluded from the 2019 original Wildfire Fund.

And at least that that should be part of the report so that we can have a better sense of how many people, how much is the shortfall, so that it is at least part of the public record of the report. I will do that. That's my commitment. I will ask for that.

Great. Thank you. Any. Anybody else? Yes, sir.

Thank you, Mr. Vice Chair. Just want to thank both authors, especially Madam Chair and, and the governor's office for working day and night on this for the past several months and just. How much you've done. And I will move the bill.

Okay. The bill's been moved. Thank you.

And there's a Sec Second as well. Mr. Hart, do you have response to that or. No response needed. Okay, great. Perfect. Assembly Member Davies.

Great, thank you. Thank you. Senator and semi Member, I was hoping you could kind of clarify for me. I know I spoke to the Assembly Member in regards to the local control when it comes to this to the bill.

And one of my concerns is that, you know, it leaves the IOUs at the mercy of basically whatever the government agency decides to do. And if you could kind of clarify that because it sounded like the local control should be in there and right now we have no control.

Yeah. At this one thing part we'll continue to discuss. The provision in there now is to prevent just sort of a blanket category of projects being excluded. So, you know, county saying, hey, we're not going to any this, any battery projects or any of these kinds of projects.

So that is really the, that's sort of the piece really that's, that's in there now. So it's really meant to exclude like stop a veto on a category or project.

But we're happy to keep, you know, we talked about this last night as well, and we're happy to kind of keep talking to the cities and counties to make sure we come to a good place.

I mean, I think it's the, been part of the discussion in both committees this year around permitting and streamlining is, has been to have that balance. Right. We want to move things faster, but we, you know, we also want to provide for that local input and such. So.

And I understand that one of the other concerns I have is, you know, the one size fits all.

And I can tell you we have, we have a project that they're trying to do in my area and you know, we're all for options when it comes to energy, but it has to make sure that it's a place that it should be. It's a safe place.

And I just want to make sure that's one of the biggest concerns is that, you know, what makes a project successful in here is basically talking about the money, the money coming in the economy and how it affects it. But I think that I just want to make sure that you're very careful with, with the safety procedures.

I had a bill and there was another Senator Laird that had a bill in regards to safety and making sure that.

Because right now, especially with battery plants, if you want to get a permit, you basically go forward and then after it's approved, then you go into the safety part of it, which is, you know, the cart before the horse. It doesn't make sense. So I'm grateful that both our bills have gone out.

And I just want to make sure, though, that that stays implemented with this, that any project that we're doing here, that that is over, you know, is just a priority. And that's really taking a good look at and especially when you just have one group now kind of looking at it.

And again, it is one size fits all. I just want to make sure that there's sometimes maybe not one size does fit all. And we, we know that. And so it's not so blanketed.

Yeah. And I'll just say that the current. Because this extends the 205 process. And, and even the 205 process, the first big project to go through, the Fountain Wind project, still has not been approved yet because there's been, you know, concerns, you know, raised.

So I think there is still, you know, there still will be oversight, but happy to keep working with you on that, too.

And, and I would just add, I think that the CEC permitting process that was established with 205, a really important component of that is the local consultation and local collaboration. And I know some of the folks who testified last night and tonight, I think the way that they read some of the language changes.

Their understanding was that that was removing the local consultation, which is certainly not the intent or I think anyone's understanding. As Senator Becker said, the measure that is being advanced before us simply says that a local jurisdiction cannot wholesale ban a type of technology or a type of project.

But certainly we want to make sure that local voices and local governments at the table as we're siting and permitting projects. And thank you for your focus on safety. I think we've made some good strides this year.

And so, I mean, is there a way that we can have something written into the journal, I think would be great because I know at this time this is not going to change as it is, but having something into the journal as we're talking like that, I think really would probably give people a little bit more comfort in regards to getting behind this bill.

Thank you.

Yeah, I'll take a look at that. I mean, I think it's I think it's pretty clear, but there's a lot in here that was relatively recent, so we'll certainly take a look at that.

And I just wanted to also sort of spoke with the CEC about this and, and you know, there is a robust. And no changes are made to the robust local consultation. Tribal governments and local governments and stakeholders like months of interaction to discuss their issues. Also, you still have a CEQA process here.

So as part of that checklist, they are looking at local land use and zoning requirements. That is all part of the process. So that none of that is actually changing under this bill.

So you're still going to have both that robust consultation process and, you know, the requirements within CEQA that they're looking at land use and confirming that the actual project is consistent with environmental standards and consistent with public safety and public, you know, and local.

So I just, you know, I think that maybe I understand that folks are concerned about some of the permit streamlining. This is a permit streamlining process. But those checks of making sure there's local government consultation and also looking at local government land use are still in the bill.

Great. Any others? All right. I have some comments and questions. You know, I appreciate Mr. Rogers comments. I, while I represent a much different area, I am from Napa and I have a lot of family that live in that area of the world and friends that, you know, suffered through those fires and very sensitive to that.

So I have some questions about how the fund works a little bit and I apologize if it's been answered because I was gone for a few minutes, but and not how it's funded so much. Really. You know, you. We have, obviously there's fires that could potentially be accessing this from this year 2025.

So is it possible that those funds would be depleted this year?

It's. I don't think it's possible that they would be depleted this year. It is possible that they would be on paper like essentially based on the assumed losses or projected losses, that they would be fully, fully spoken for, if you will, but the cash would not be out the door.

But then once they are fully spoken for, then that essentially makes the Fund no longer solvent to pay additional claims.

Yeah.

And if I may add, I think that that is one of the reasons that, that we feel such an urgency to act to ensure the solvency of the fund as we enter fire season and ensure that we have the resources to God forbid if there's a fire in any of our communities, make those victims whole.

It might be worth also in motion Basically the way the fund works is it ensures fires for an entire season. That season starts on January 1st. So as of we started a brand new fire season on January 1st. So all the way through until December 31st.

Any fires that happen during this year share equally in what is left of the fund. So right now you have the fires or some pre existing dixie that will pull from the fund. If there were another large fire then Eaton would no longer have access. It would have to share equally with any future fire.

So even right now people are at risk that we could potentially have if it was a big enough fire, two utility bankruptcies conceivably and two sets of fire victims that would be potentially not fully compensated through the fund.

Okay, so just, you know, I appreciate that and it clarifies. So you know, part of this bill is obviously an extension of you know, contribution that ratepayers are making. Right. With a significant portion, a significant contribution from the shareholders which I think is very important, you know, to identify and I know that's been said several times.

But important for me to say again it. So for the fires next year there's, there's. So it's on an annual basis for that time period. So not all the funds until 2045 are going to be encumbered. It's for that year basically.

I think it's also important, basically what we've created here is a successor Wildfire Fund. So as of the date of enactment of this bill, the prior Wildfire Fund will be responsible for any fires prior to it going forward. So the new fund will not cover Eaton or any fires that happened prior to the effective date.

This will be a new fund ensuring new potential risks and losses just like the last one was set up as only go forward. So it's essentially a new fund that would take over for covering future losses.

Okay, and what's the total fund size over that 10 year period or after this year?

I guess so the original wildfire fund was $21 billion and I can't remember, I think right now it has about $22 billion in claims paying capacity because it's actually gained a little bit of money through investment. The new fund will have $18 billion in it.

Net present value is different, but it's essentially $18 million and about half of.

It paid by the shareholders.

$9 billion and shareholders and said it's an extension of that same $2. $2.50 charge that will go from 2036 to 2045. So it won't actually hit rates For a decade.

And just one comment is, you know, I represent an area with IOU and then a public owned utility as well. Literally like across the street from people.

There's different experiences and I hear about it a lot in my office and you know, so it's kind of, you know, so when I was mayor of Rockland, for example, you know, I was very interested at that times. Probably not the best.

You know, there were some hurdles to it, but I understood that there could be, you know, we have a publicly owned utility, I mean, right next to us. Right. That's pretty cheap. And so I've always been somewhat interested in public investment in infrastructure. I don't know if the state necessarily, you know, we'll see, we'll see.

You know, I'm cautiously optimistic about it being as efficient as Roseville, but, but, you know, and if the state is going to invest in something, I've always felt that there has to be some environmental relief because that in and of itself, in terms of CEQA relief, that in and of itself costs billions of dollars just to, you know, basically paperwork, you know, because you can have a substantial environmental impact and still do the project.

And you know, so that I feel like that's an important part of this bill as well. But the state also did that with I think Prop 1 or basically legislation implementing Prop 1 to allow mental health facilities. And if they received a grant from the state, then that particular facility is sort of by. Right.

And it also included language in the bill that there must be local consultation. Well, just so you know, the state agencies have taken letters of support from not even the local governments like other local governments. And they're issuing millions of dollars of funding using letters of support from the.

Not, not the actual local government, not even people who live in the community. And so I would just, I kind of share my colleagues concern that we want to ensure that there's actual local consultation. I know that's the intent. I think that was the intent of Prop 1.

It's just sometimes when you get down into, you know, maybe the bureaucracy a little bit, things change. So if there is something more that we can kind of beef that up at some point, obviously I know we can't in this legislation now, something to consider.

Well, and I'll just say, and I think it's certainly something that I look forward to continuing to work with you on. I think that what you've just described is the tension and sort of the heart of the challenge in that we all know that we need to build things faster, have more efficient processes.

But we also want to make sure that as you're streamlining things, that you're doing it in a way that doesn't remove important steps that protect our communities and protect our environment.

So that is a big, big topic and big challenge and one that I look forward to continuing to work with you on as we look to certainly accelerate the pace of clean energy deployment across the state.

Well, you never know. I might not be Vice Chair next year, but I hope to work with you on it anyways. Okay, thank you, Mr. Vice Chair.

Okay, great. Well, we had a motion and a second and did you want to close?

All right.

I think we covered a lot of the issues. Really excited that this all came together. Thank you for all the input from both the Senate Assembly and respectfully asked for an Aye vote.

Yeah. Well, thank you, Senator. Thank you, colleagues, for the questions and conversation. And I do also want to say a huge thank you to our incredible Committee staff. Everyone knows incredible Laura Scheiba, and to Senators, the Senator's team as well. So with that, respectfully ask for your Aye vote.

Great. Well, thank you. With that, would you mind calling the roll?

The motion is due pass through the floor. [Roll Call]

Thank you. We'll see you soon in a different.

Okay. All right. So that this is a little bit of a double header. So that concludes the hearing of bills. That bill is out. And so we are going to adjourn the bill hearing and then begin our informational aspect. Okay. The. The vote on that measure is 16- 0. So SB254 is out. Thank you, Senator.

All right, so that adjourns our bill hearing. Okay. We're now beginning the second part of tonight's doubleheader. So we are going to begin our informational hearing. As I shared at the. At the start of the hearing, AB 825 is still in the Senate's possession.

So we will be conducting this portion of the hearing as we would a Bill hearing without a vote at the end. Okay. So I'm going to pass this on back to my Vice Chair. Okay, thank you. Thanks.

Well. Well, thank you. We have the informational hearing for AB 825. And as mentioned, we'll run it like a sort of like a normal hearing, but if you'd like to go ahead and open, that'd be terrific.

Well, thank you, Mr. Vice Chair. And I'm pleased to to once again be joined by my Senate counterpart, Senator Becker, who has been working on this proposal for most of this year. And the proposal before us would create and enable a westwide electricity market, which folks may recognize as being largely the substance of Senator Becker's SB 540.

So the people of California have tasked all of us with confronting and solving some very big important challenges. Lowering sky high utility bills, increasing reliability, and leading the country and the world in the fight for clean energy. Rarely do we have that opportunity to do all three of those things in one bill.

And we have that opportunity with the measure before us, AB 825. As I said, this bill will enable California to help establish and participate in a westwide electricity market.

Studies by the Brattle Group and Stanford estimate that an expanded western electricity market could save California ratepayers up to $1.0 billion every year, improve reliability, lower the risk of blackouts and reduce greenhouse gas emissions both here in California and across the west. We already have evidence of cost savings from expanded markets.

The existing western energy imbalance market has already saved California ratepayers an estimated $2.2 billion over the past 10 years. And an expanded day ahead market has even more potential for lowering costs. The reliability benefits of this proposal are also just common sense.

As we move toward weather dependent renewables to run our grid, it becomes increasingly more necessary for reliability's sake to have an area larger than the weather that we're drawing power from. This wider market will make it easier for California to rely on excess solar from Arizona, wind from Wyoming, when the weather in California is reducing our generation.

Stanford estimated 40% fuel fewer hours annually where the grid would be stressed and would need to call upon emergency resources. That wider market also helps the entire west reduce its GHG emissions.

Detailed modeling of the market shows how California will rely less often on our most inefficient and most polluting gas plants, resulting in 58% lower emissions in California.

California will also be able to export more solar to other states rather than curtailing it as we often do now, which would displace the need for generation from gas and coal plants in these other states. We can achieve all of these things if we partner with our neighbors to work together for mutual benefit.

As we enter into this regional market, it is certainly right for California to be mindful of the potential risks and to develop a governance structure and oversight framework to guard against those potential risks.

And that is why this bill includes a broad set of safeguards to protect California's interests and to ensure that we can continue to control our destiny to make our electricity affordable, reliable, and clean. The bill also ensures robust ongoing legislative oversight.

The Legislature will have the opportunity to monitor the evolution of this market and to make sure that we are getting the benefits that we anticipate. Colleagues, this is a rare opportunity to bring the country together all across the west for common benefits, cost savings, reliability, cleaner air and a more sustainable future.

This bill is supported by a remarkably broad array of groups, folks who rarely agree on anything. This proposal is supported by the Cal Chamber and many California businesses. It's supported by environmental leaders including EDF, NRDC, Cal Enviro voters and the Sierra Club.

The proposal is supported by utility labor unions and publicly owned utilities, who two groups who had important concerns about prior regionalization efforts. This bill is supported by IOUS and CCAs. It is supported by clean energy developers and big industrial electricity users. I could go on and on.

This bill, AB 825, colleagues, is an opportunity to make California's energy cleaner, cheaper and more reliable. I urge your support of this measure and look forward to your your questions once we hear from my co author and our witnesses. Senator.

Thank you. Thanks again to my joint author for the teamwork here and she did an excellent job laying it out. Just again I'll just say a few things. Three things. One, the benefits of west side market are clear and very large. $1.0 billion a year in potential savings.

Number two, we want to send a clear message to other states across the west that California's in. This has been a decade wide of a decade long of kind of fits and starts and we want to send that clear message to them which I believe this bill does. And this bill has national importance.

A few months ago speaking to Jigar Shah, some of you know from the loan program and he thought enabling a wider west market was the most important thing California could do this year to accelerate clean energy across the entire western half of the United States. Look forward to discussion and especially ask for an aye vote I guess when the time comes on the floor. All right.

We have main witnesses in support.

Hi.

All right. Well thank you. You'll each have two minutes.

Thank you very much. And good evening. I'm Katelyn Roedner Sutter, California Director for Environmental Defense Fund.

We are very pleased to co sponsor AB 825 alongside our labor partners and the Natural Resources Defense Council. I don't know how much, honestly, I can add after your presentations, but, I mean, this bill really enables California to lead the west into an organized electricity market that will generate more clean power, crowd out expensive and polluting resources, and give California new tools to prevent blackouts.

We really appreciate the significant work that has gone into the final version of this bill. We believe we have landed with a very thoughtful compromise that ensures California's partners across the west are able to join an electricity market with us and that the Legislature will have the necessary information and an important oversight role.

Collaborating with partners across the west, as you have heard, delivers significant benefits to us. Helping our electricity supply become more reliable. When our grid is under severe strain, having the widest possible source of power gives us more options to prevent blackouts. This will also unlock significant savings for California, you heard, up to $1.0 billion annually.

This is because we are going to curtail less clean electricity. Right now, we waste a lot of clean electricity and instead we will be able to sell it to our partners and because we can import more wind and solar, which are always the cheapest because they have zero fuel costs.

Lastly, this will help California achieve significant greenhouse gas emission reductions both here in our state, but also across the region, which is, of course, an essential step to realizing our clean electricity goals. Again, we really appreciate the significant work that has gone into getting AB 825 to this point from our authors, from staff, from all the stakeholders.

I'm really proud of the incredibly diverse coalition supporting this bill. Happy to answer any questions and urge your aye vote when the time comes.

Great. Thank you.

Thank you, Mr. Chair, Members. I don't. I hate to have my back to somebody, but I think I have to. Okay. Sorry.

You want to come sit over here? Greg's gone.

So, my name is Hunter Stern. I'm with the Coalition of California Utility Employees and the California State Association of Electrical Workers. We were co sponsors of SB 540 with others, and we're very proud to co sponsor AB 825 in its current form. A lot of talk.

A good, accurate summation, especially for Madam Chair, about the benefits of this bill and the benefits that will accrue to customers going forward. I want to through a broader regional market.

But I want to emphasize the opportunities. And particularly the work that IBEW members and other union members do today, building clean energy projects in the State of California and the continued work that they'll be able to do by utilizing this structure and this system contained in 825. The economics of solar are good, very good, but they could be much better.

We heard about containment, using and utilizing all the energy that we produce and then selling it as opposed to paying for it or curtailing it will help bills go down. Additionally, that economic growth or economic opportunity will spur growth of building new projects and projects that IBEW members tens of thousands today are working on.

So we urge you simply to allow our members to continue to do that work to help bring down customers bills and to make the grid more reliable from the point of view of supply so that our Members can best serve utility customers throughout the state. So thank you very much.

Great. Thank you. Are there any other witnesses in support, name and affiliation please? Oh, just a couple. All right, we're on a name and affiliation.

Good evening. Victoria Rome with NRDC also co sponsor and just very excited for this bill to expand California's clean energy leadership. Request your support. Thank you.

Good evening. Scott Cox on behalf of Ceres, here to grant our strong support. Thank you.

Good evening. Matt Klopfenstein on behalf of SMUD and Clean Energy Alliance, in support.

Good evening. Bruce Magnani on behalf of California Large Energy Consumers, in support. Thank you.

Delaney Hunter on behalf of EDF Power Solutions, EDP Renewables, Pacific Power, Portland General Electric, and the Solar Energy Industries Association. Go 825.

Good evening. Edson Perez on behalf of Advanced Energy United, in strong support.

Sarah Flocks, California Federation of Labor Unions, in support.

Jan Smutny-Jones with the Independent Energy Producers of Clean and Reliable Electricity. We support

Trent Smith on behalf of the California Municipal Utilities Association, in support

Molly Kroll with American Clean Power California, in strong support

Nate Solov on behalf of Net Zero California, in support.

Rebecca Marcus on behalf of the Union of Concerned Scientists, in support.

Melissa Romero, California Environmental Voters, in strong support

Kathleen Staks with Western Freedom, very strong support.

Alicia Priego on behalf of San Jose Clean Energy, in support.

Mark Fenstermaker, Peninsula Clean Energy, in support.

Mr. Chairman, Chris McCauly on behalf of Silicon Valley Clean Energy, in support.

Mary Sulecki on behalf of E2. Hopeful that 2025 is the year for grid regionalization.

Meredith Alexander with the California Coalition of Large Energy Users, a new ratepayer organization, in support.

Dan Shaw on behalf of the Clean Power Alliance, in support.

Annabelle Hopkins with the Public Advocates Office at the CPUC, in proud support.

Sean McNeil with the California Community Choice Association, in strong support.

Emily Pappas on behalf of MCE, in support.

Good evening. Jon Kendrick with the California Chamber of Commerce, in support.

Erin Nemel on behalf of Pioneer Community Energy, in support

Clean Energy Buyers Association, strong support.

Joe Zanzi of San Diego Gas and Electric in support.

Shane Levine, Northern California Power Agency in support. Thank you.

Brady Van Engelen, Southern California Edison in support.

Will Brigger for Climate Hawks Vote, Climate Action California, Climate Reality Project Silicon Valley Chapter, 350 Sacramento, and 350 Humboldt we support. Thank you for bringing this.

Great. Generally, good job everybody. Are there any primary witnesses in opposition? Would you like to sit up here or?

You can sit next. Yeah, you can sit next. You can stay.

I was keeping your seat warm.

It's sort of like a school play where everyone has to play multiple roles and.

Yeah, I'm very confused.

Mark's back.

Yes. Mark Toney, TURN. TURN appreciates the work of Chair Becker and Chair Petrie-Norris on this bill. TURN regretfully and respectfully opposes AB 825 because last minute amendments eliminated several critical safeguards that protected ratepayers and state clean energy policy.

To provide a single example, AB 825 no longer prohibits the regional market from forcing California ratepayers to subsidize expensive out of state coal plants. We're concerned because the Federal Government has recently forced customers in other regional markets to pay increased costs to prop up fossil generation facilities at risk of retirement.

We're concerned that since AB 825 no longer contains a safeguard, we run the risk of the new western grid operator forcing California ratepayers to subsidize the importation of coal power generation.

You already have a four page letter from TURN detailing all of our major concerns that the potential benefits of a regional energy market may be outweighed by ratepayer and environmental costs. I ask that each of you do everything you can to make sure that TURN's warnings of the perils of AB 825 never come to pass.

I would like nothing better than to stand before you five years from now and congratulate you for a successful regional market that benefits ratepayers and advances clean energy policy. I'd be happy for TURN to be proven wrong on this issue.

Great, thank you. Are there any other witnesses in opposition? Seeing none. Any questions from my colleagues? All right.

I don't really have a question. I hope TURN is proven wrong too. Certainly there are a lot of supporters in the room, but I just want to say you have done an extraordinary job. I was here when we went through the first effort with Governor Brown.

I think this has been a 20 year effort actually and that failed. And then a few years later the regionalization failed again.

And last summer or last year and a half or so, you started to hear about the different groups getting together and trying to figure out a way that all stakeholders would realize what the benefit of this was.

And I think there was some give and take and some problems along the way, but where we ended up with is a very good solution. And really rationally it makes sense that this will bring drive prices down as long as we have the right protection for California ratepayers and for the environment. So, again, commend you. What an incredible year.

Thank you. Assembly Member Boerner.

Yes, I would, I think there is a lot of potential. I think there's a lot of risk with this. It's, I was telling the chair yesterday and hopefully she can walk me through today. The question will be what exactly is the governance structure for entering the Western grid? What is the structure for pausing?

What is the structure for exiting? I studied political science in graduate school for 10 years and very rarely has ever been applicable until today. There is this theory of two level games by Robert Putnam. Did my master's thesis on it. And this is a classic theory like two level game problem. So he should have probably opined on it if he's still alive. I have no idea if he's still alive.

I'm gonna sound weird, but if you could walk through, because we want the western grid enough security that we're in and not enough fear from the western grid partners that we're gonna exit too irrationally or too spontaneously so they can't have reliability issues.

But we want to make sure that our California values are represented but not overrepresented because then they don't want to be overwhelmed. Right. So you're like trying to thread this needle. Right? Right? This is what it is.

And so if you could walk through how you've landed that plane, because it's something I did talk to the Senator for months about. And what is in the final bill on how you manage those, all those different parts.

Let me start by outlining some of the safeguards that are outlined in the bill. And then perhaps you would like to, Katelyn would like to add on. So I'm going to just rattle off some of the requirements that I think really deliver very strong protections for California and for California consumers.

So excuse me for the length of this response. Okay. The RO corporate documents and the tariff. Okay. The RO corporate documents & the tariff must respect California's procurement, resource adequacy, environmental reliability and other public interest policies. The RO governing board must have a public policy committee that is required to seek input from California to protect our policies, The RO governing board must continue its relationship with our regulators and POUs, to protect their policy.

The new RO must fund a consumer advocate organization. New RO must have an Office of Public Participation. The new RO must have an independent market monitor. The new RO must have an additional market monitor reporting directly to the board and focused on protecting consumers.

The new RO must share all market data with the CPUC and the Public Advocates Office. In addition to those, I would say just top line, that the rules of the market are designed to protect California's renewable portfolio standard and SB 100, our resource adequacy requirements, our integrated resources planning process.

I think it's also important to note that the bill says that this market can't start until 2028. And if over the next three years, we think, as Mark said, Mark hopes he's wrong. No? I hope, we all hope you're wrong, Mark. If over the next three years the promise that.

The promise that we think is represented by this proposal appears to be accurate, then California will win by joining the market as planned. If not, then the PUC and CAISO are able to make that judgment and decline to join the market in 2028.

And furthermore, even after California utilities have joined the market, one of the requirements of this bill is that any member, whether it's from California or any of the other states, can exit the market without penalties or barriers.

The bill also does require CAISO to maintain the systems and facilities to enable them to go back to running a California only market if for whatever reason, we decide to exit the wider market. So that that exit option is not just theoretical, but it is a very real, very real fallback.

And lastly, the bill also reaffirms the PUC's authority to order utilities to exit. Do you have anything to add?

I do not have anything to add to that. You checked off all my talking.

Okay, Those were great. That was a very thorough answer, Chair. Thank you. My question is, we don't have legislative authority to tell the CPUC what to do. So in a way, it's good because they're insulated and they're constitutionally independent. But if we see them going off track, there's nothing that the Legislature can do to intervene. What do you do about that case?

I would say, as I said in my opening comments, I do think that we have incorporated ongoing legislative oversight. So the bill requires, through both annual testimony from CAISO to legislative committees, requires an annual report to the Legislature from CAISO examining all of the issues of whether or not California benefits from participation in the market.

So I really do believe that we will have the opportunity to monitor the market. We'll have the opportunity not just to raise concerns, but to pass future legislation to ensure that we are getting the benefits that we anticipate from the market.

My concern around the CPUC, though, is we could ask them in, we can have them report, but we can't tell them what to do because they're constitutionally independent. How do we solve that if we think they're off track? I mean, we have lots of safeguards of what they have to do. Right? Like the western grid.

RO has to do all these things. But if we don't think CPUC is stepping in when they should or is stepping in too early, maybe a future Legislature, there's not really a safeguard there.

I guess that, that to me, I mean, we don't. This Committee doesn't. Alice Reynolds, doesn't work for me on any of the policy areas that we are responsible for overseeing. That's just the structure of the PUC. And so I don't, I don't exactly. I guess I don't know what. What is, what the concern is.

The concern is if the CPUC is going in a direction that we, as the Legislature or future Legislature does not want in either direction, and they're acting too quickly because they're the CPUC and they're not another organization that's under the direct purview of the Administration or the Legislature, then we don't have control.

The moment we pass this and the moment it goes into existence, we could call them in for reports, we can call them in for this, but we don't have control. And you may want that in a structure.

Do you think you have control of CAISO today, Assembly Member?

No.

I guess I don't know what you're saying.

I also didn't suggest CAISO for the thing. I'm just saying that's a problem with the constitutional independency of the CPUC is as the agency. And I don't know if. Senator. Okay.

I don't know if Katelyn wants to add something.

I was just gonna say, I mean, you mentioned the Administration and the Board of Governors is appointed by the Governor and approved by the Senate. So I, there is that level of legislative oversight over how CAISO and CPUC is run.

We also approved their budget.

I guess we can look at their budget. We could take away all their money. I try to do that every year.

Can I also add. I'm not sure I'm going to satisfy you, Assembly Member, but let me make a couple of, add a couple of other thoughts. First, we have a lot of business before the CPUC, including our labor agreements and benefit agreements that they have to approve in order for our Members to be paid.

So I can tell you that they do focus on money. It doesn't always seem that way, but as long as this proposed structure is implemented in a way that's consistent to save customers money in the long run and the middle run, the PUC should follow through.

And if they don't for some reason, in other words, if they don't act on opportunities to take advantage of those of those savings, then I think there is legitimate reason for both the Legislature and the Governor to ask why not through these hearings and maybe additional ones.

The CAISO, their market is to ensure both less about price, but absolutely about supply. And that is a critical function.

And again, and they are, and we actually represent some workers at the CAISO, and we know that they are very focused every day to ensure that there is enough electricity on any given day, no matter how hot it is, that everybody can keep their air conditioners on.

So those, those fundamental obligations that each of those entities have, I think, I hope, I trust, because what they do today, even before we join this wider marketplace, will continue to be their guiding principles.

It's their responsibilities, it's their obligation, and that they will function within the framework of this new western grid in the same way that they functioned maintaining utility operations, overseeing utility operations and maintaining electricity supply. Again, I don't think that's going to satisfy you, but I think that's.

That's a good answer.

Okay. All right. All right. We're making progress.

Okay. Any other questions? Well, thank you.

May I briefly. Briefly. I'm super quick. I want to thank. I'm pinch hitting for Mark Joseph, who represented us in this process from the beginning. And unfortunately, Mark is ill, but I just wanted to acknowledge his hard work as well as both Chairs and also Senator Stern who was engaged in this.

But I just want to make sure people are aware that Mark should have been in the seat and probably would have given you a better answer.

Phone to friends. Thank you. Great.

Thank you. All right. Seeing no other Members, excited to ask questions, you may close.

Well, and thank you for highlighting Mark and Senator Stern. For those folks who don't know, Kathleen Staks has been leading Western Freedom and the Pathways Initiative for the last number of years.

And I would say, I think that the proposal before us is really is a team effort, not just between Senator Becker and myself, not just between Senate and the Assembly, but really with an incredibly diverse coalition of, I think, not just supporters, but people that were around the table really trying to thread, which, as my colleagues very articulately described, is a very narrow needle to ensure that this proposal works.

So I am very excited about this proposal and about the potential that I think it entails for California. I really do believe that this is going to deliver energy that is cleaner, cheaper, and more reliable. And so at the appropriate time, I respectfully ask for your aye vote. Senator.

Yeah, I'll just close that. This has been the product of a lot of work, and it should be for something this important, but not just this year, not just in pathways, but in previous years to get it right. And I think we've struck that balance. I will just say two quick things.

I was at the National Caucus of Environmental Legislators in Boston and was cornered by a bunch of western legislators who always wanted this to happen. And then we got a letter from not just Senator Schiff and Senator Padilla, but also Senator Merkley, Senator Murray, and other Senators across the west who really want to see this happen.

And, you know, we're going to have to stay vigilant, but really excited for this to make it happen. Thank you.

Well, thank you. I wasn't invited to the National Conference of Environmental Legislators. Thank you for letting me know. All right. There. Thank you. I guess I don't know what else to say. Have a nice night.

That concludes. Yes. Gavel down.

Yes, this concludes the hearing. It.