Senate Standing Committee on Energy, Utilities and Communications

Committee on Energy, Utilities Communications to order. We're gonna start as a subcommittee. We ask our colleagues to come down so we can establish a quorum. We've got five bills on the agenda today. We're gonna start with Item One. That's AB 868 by Senator Wiener. Senator Wiener is here, and you may proceed, Senator, when ready.

Thank you very much, Mr. Chair. Colleagues, I'm here to present Senate Bill 868, the Plug and Play Solar Act, which will give Californians a shot at avoiding the debilitating explosion of electricity costs in California and give them a powerful tool to be able to lower their monthly electric bill.

First of all, I wanna thank the Chair and the committee for working with us, and we're happy to accept the committee amendments, specifically the reference to the National Electric Code as outlined on page 9 of the analysis, and also allowing electric utilities to require customers with plug-in solar generation devices to provide notification via a simple online form, including the device's address and size.

And we're we're gonna continue to work with the committee just to refine the language to ensure-- we wanna make sure that people are not prohibited from starting the device if the electric utility delays putting its form up. We don't want to allow them to use this as an ability just to never put the form up and so no one can actually deploy this, but we do accept the committee amendments.

SB 868 streamlines approvals and establishes safety standards for portable plug-in, or so-called balcony solar devices, so that Californians can use this simple technology to lower their monthly bills. This is fundamentally about giving people the ability to lower their electric bills. A few days ago, Virginia took action to adopt basically what we are doing here, and they did it as part of when Governor Spanberger was elected. She was elected on an affordability platform.

That was the core message of her campaign, and she worked across the aisle for a bipartisan cost-of-living reduction package. And this bill was part of that and it passed the Virginia House of Delegates unanimously by unanimous bipartisan support. Utah has adopted this, and we know that in Germany, it has been broadly, broadly deployed so that people can lower their cost.

The beauty of this is that it applies to many people who are not able to install traditional larger solar panels, either because they're renters, and right now renters are basically generally excluded from being able to benefit from solar in order to lower their energy costs, and many homeowners, who either have smaller homes or they have roofs that are not appropriate or they just don't wanna deal with the upfront cost of traditional rooftop solar. They can use one of these to lower their costs.

This will absolute-- there's been a lot of pushback against traditional solar that maybe it's more disproportionately higher-income people who are using it or benefiting. This is a way that we can expand access to solar to a huge array of Californians who are not benefiting now, including renters, including people who own smaller, more modest homes.

We know that electric rates have been exploding in California. PG&E rates jumped nearly 40% between 2022 and 2025 and about 100% doubling over the last decade. As a result, California has some of the highest electricity rates in the nation. And I wanna just say, when I introduced this bill, I thought to myself, this is gonna be a test for our utilities, for our monopoly utilities.

Are they going to oppose this bill, this simple bill that just allows you to plug something in, a proven technology that has safety standards that can lower your cost? It doesn't feed any energy back into the grid, no rebates or NEM, nothing; just allowing people to use less electricity from the grid. And are they really going to oppose that?

Of course they're opposing it, because they don't want Californians to have any ability to generate their own power. They don't want Californians to have any ability to in any way reduce their reliance on some of the most expensive electric in the country. We're in an era of very high cost of living that is having huge political ramifications in this country and that is causing people to lose faith in the system as a whole, and this is a very straightforward way to help people lower their monthly electric bills in a tangible way that they will see every single month.

I also wanna talk about safety because that was-- it's been a real focus of some of the opposition and it was discussed in the analysis as well. I wanna be clear. People can buy these today. People can buy them today. People are not generally getting interconnection agreements because it's complicated, but this is our existing products that you can get today, and you can, frankly, plug in today, even though you're not supposed to without an interconnection agreement.

This is not some newfangled technology. This is being deployed in other states, in other countries, and there are absolutely safety standards here. The analysis quotes the UL where it talks about some of the safety concerns, and absolutely those concerns are outlined in the UL document, but then the UL proceeded to look at those safety risks and to solve for them in the safety standards, so the safety standards issued by the UL, which will be binding on these devices to qualify.

Take into account the safety risks and solve for them. And we have with us today someone who will be here to answer questions: Pete Jackson from UL, who used to be the Chief Electrical Inspector in the City of Bakersfield. He's here today and will be available to answer questions.

The committee amendment also appropriately includes in the National Electric Code. So this technology will help people to lower their costs. It will be-- for the first time, safety standards will be incorporated into California law and mandated for people to be able to use this bill and use these devices under this bill. There are no-- those safety standards are not binding in California now. They will be binding.

And so this is a big step forward for energy affordability and for people to be able to control their energy future in California, and I respectfully ask for your aye vote. With me today to testify is Bernadette Del Chiaro, the Senior Vice President of the Environmental Working Group, a co-sponsor of SB 868, and Bill Brooks, an electrical engineer with Brooks Engineering. And as I mentioned, Pete Jackson from UL, the former Chief Electrical Inspector for City of Bakersfield is here for technical questions that people may have. I respectfully ask for an aye vote.

Okay. You may proceed. Thank you.

Thank you. Chairman Allen and members of the committee, my name is Bernadette Del Chiaro. I'm Senior Vice President with Environmental Working Group, California, and I'm really pleased to be here in strong support of SB 868. Balcony solar just might be the simplest form of solar energy ever created.

We brought a panel here today. It's stuck in the staff room waiting for permission to come into the hearing, but we wanted to show you just how these systems look and how simple they are to use. The panel we brought that's just on the other side of this wall is about the size of this gate, and it comes with two simple cables that plug into an inverter. The inverter acts as the brains of the device, shutting off should the grid go down to protect our utility workers, and also serves as a communication tool to the consumer.

So with these devices comes an app. So you can always see how much is your solar panel saving you all the time. If SB 868 passes, not only will we put in place mandatory statewide safety standards to address all the concerns expressed by the opposition, but we will basically bring this technology to scale and bring it to consumers.

We'll, in short order, be able to go to our local Home Depot, our Costco, our IKEA, and pull one of these off the shelf, bring it home, in less than an hour, set it up, plug it in, and start saving. We estimate that consumers with a single 400-watt panel will save $250 a year on their utility bill.

These devices are designed, as the senator mentioned, to be self-consumption-- to cover self-consumption. To give you a sense of that, a 400-watt panel is about the amount of energy that a standard fridge requires with a Wi-Fi router and a few lights. The largest size system allowed under this bill, a 1,200-watt system, is about the amount of electricity that a large window AC unit requires to cool a small home or apartment.

It will run off of sunshine alone, making energy affordability, but also cooling and addressing heat concerns and heat illness issues facing many of our inland families, affordable for people. There's an urgent need for this bill. Without it, there's just too much uncertainty and red tape, and there's an absence of statewide safety standards. So for the sake of energy affordability, for the sake of clean energy, and for the safety of these devices for consumers and for the grid and for the utility, we urge a aye vote. Thank you so much.

Thank you.

Chairman, members of the committee, my name is Bill Brooks. I'm a licensed professional engineer with over 38 years of experience, ensuring the safety of solar energy systems. I've written numerous technical manuals and articles about solar technologies, and I'm an active participant in nearly all the product safety standards that relate to this technology.

Also, sit on Code-Making Panel 4 of the National Electrical Code and I've chaired the Firefighter Safety Task Group and the large-scale photovoltaic electric supply station task groups for the National Fire Protection Association.

I was a technical facilitator for Rule 21 in the State of California, which is the utility interconnection rules for distributed energy resources, and I'm here to testify that SB 868 provides all the necessary safety precautions for consumers, utility workers, and firefighters.

They are simple appliances that meet a customer's on-site electric load and will come with all the necessary electrical, fire, and structural protections, which are part of the UL 3,700 standard that we'll probably talk a little bit about today, and I'm happy to answer any technical questions you may have. Thank you.

Thank you. Okay. Let's give folks who wanna voice their support for the bill the opportunity to come to the microphone and-- yeah. Yeah. Sure, sure.

Hi. My name is Susanna Porte, and I'm from Berkeley, and I strongly support SB 868. We are in a climate crisis locally, nationally, and internationally, and balcony solar can help us get out of our local crisis at the very least. Please support SB 868. Thank you.

There's so many people here. We're just gonna ask folks to just give your name and affiliation, but I appreciate your presence.

Rob Holly from San Jose. I support 868.

Thank you.

Charlene Maine Woodcock from Berkeley. I strongly support SB 868. Thank you.

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

Good morning. Allison Hilliard with the Climate Center and Vote Solar Today, in support.

Good morning. Kai Klassen with CERES, in strong support. Thank you.

Good morning. Environment California. Strong support.

Good morning. Grisheena Mohabir, California Environmental Voters, in support. Thank you.

Good morning. Jo Gardias with NRDC, in support.

Good morning. Jakob Evans with Sierra Club California, in support. Thank you.

Good morning. Graciela Castillo-Krings with the Abundance Network, in support.

Tom Kunhardt from Oakland, here in support for Sierra Club Bay Chapter of 20,000 members. Thank you.

Ruper Mayer from Berkeley, in support.

Dave Rosenfeld with Solar Rights Alliance, in support.

Chair and members, Jael Dantas, on behalf of the San Diego Community Power, in support.

Mick McGinnis, homeowner of Placer County, in support.

Hello. Paul Smith. I'm from Oakland, and I'm in support.

Laura Muther with the Lutheran Office of Public Policy and California Interfaith Power and Light, in support.

Good morning. Theresa LaVoie from Somerset, which is in El Dorado County, and I support SB 868.

Barbara Dubois from Mill Valley, in support. Thank you.

Carl Wolfersberger, Mill Valley, California, here in a strong support of 828.

Megan Shumway from Arden-Arcade Sacramento, on behalf of Climate Action California and Solar Rights Alliance, in support.

Kean Dansel, Solano County, in support.

Carol Kinser from Elk Grove, California. I'm here on behalf of Laudate Deum for Climate Healing Prayer Network, as well as 350 Sacramento. Thank you; in full support.

Robert Perry, Natomas Sacramento, in strong support.

Doctor Faith Boucher, retired from the University of California School of Medicine, Department of Public Health Sciences, now representing Third Act of Sacramento. We strongly support SB 868.

Elliot Appleton-Sackett, from Environment California, to voice our strong support.

Cameron Rogers, Hayward, California, strong support.

Good morning. Dave Shukla, on behalf of Long Beach Alliance for Clean Energy and 350 Southland Legislative Alliance, in support.

Hello. I'm John Aaron from Alameda County and I support this bill.

I'm Tom Edwards, Berkeley, California. Strongly support SB 868.

Brian Spencer on behalf of the Coalition for Clean Air, the Center of Biological Diversity, the Endangered Habitats League and the Western Center on Law and Poverty; all in support. Thank you.

Thank you. Alright. Let's hear from folks who wanna - oh, yes. Let's come up to the mic, but let's establish the quorum. So assistant, please call the roll.

[Roll Call].

Okay. Alright. We have a quorum. Let's now hear from opposition.

Good morning, senators. My name is Osha Ashworth. I've been in the electrical industry nearly thirty years. Eight years of which I worked as an electrical inspector for the City and County of San Francisco, working with San Francisco fire fire inspectors. GFCI receptacles are not designed to cut off when back feeding and older receptacles have an even higher rate of failure, creating a potential shock hazard for responding emergency personnel.

I personally inspected well over 10,000 electrical installations from buildings that were built and wired in the late eighteen hundreds through modern times, including eras where panels like Federal Pacific and Zinsco were prevalent and remain in many dwelling units to this day. For those who may be unfamiliar, these circuit breakers are well known to have a high failure rate. Have inspected existing knob and tube that had been over fused with insulation crispy, like the top of a creme brulee, and back feeding circuits that are not dedicated to for the use introduces additional current, not protected by the overcurrent protection at the source creating the potential for overloading conductors. This also creates a shock and fire hazard. I've had to go out and inspect dwelling units after fire, so I've seen firsthand why there's grave concern that the state of California ensure that all safety testing and appropriate regulations be established prior to authorizing a layman to feed into a building's electrical system when they may not even realize the wiring in their units are already problematic.

In San Francisco, the vast majority of the city has zero lot lines, buildings have no distance between each other, so when fires break out, they often spread to adjacent properties creating more risk to firefighting personnel and and responding utility workers. The National Fire Protection Association has not approved the use of these systems. UL has not set the state safety standards for these systems.

And I've also worked as an instructor at our apprenticeship teaching life safety. It would be horrific if, moving forward through, this were to go through and become a basis for changes to the NEC. A lot of the codes are written in blood. This bill does not ensure safe installation, maintenance, or inspection standards, so I urge this this committee not to move forward with this bill as currently written. Thank you.

Mister Chairman, Scott Wedge on behalf of the California State Association of Electrical Workers and the California Coalition of Utility Employees. This legislature has never adopted building standards through legislation. You're basically being asked to substitute your judgment for that of the Building Standards Commission. Universal Laboratories has just begun setting safety standards. It's gonna be at least eighteen months.

So, why the rush on the bill? The normal process is, if the legislature wants these types of devices to be looked at, would it be to direct the Building Standards Commission in their process to evaluate, test, and decide? You you must understand that there are a long list of devices that are allowed under the the universal laboratory set standards for that are illegal like these products in California. Unvented gas heaters; you can get those in Europe. Those are allowed those are standards in UL, not in California.

Uncoiled appliances, electrical appliances: there's a standard in UL for those, but you can't use them in California. It's the NEC, while we believe that amendment is very helpful in improving this bill, it's the California Electrical Code that governs electrical safety standards in California. The Building Standards Commission on a tri-annual basis takes the national electrical code and then updates it to meet California standards that are higher in energy efficiency and in safety. Because California has set its standards at the very - we're not opposed to these products.

But the precedent that this sets for for substituting your judgment for that of the fire community and the building standards community and the public health community that all participate at the building standards commission is reckless. And finally, I'd just like to point out that, at least, seven states have shot down proposals this year. Wyoming, Arizona, Georgia, Oregon, Alaska, and in Washington and in New Mexico: they put a pause for the very arguments that I just gave you on pushing forward. There's no need to rush this. It's reckless.

Please vote no.

Okay. Are there other folks who wanna, join in opposition and come to the microphone?

Good morning. Brandon Ebeck, Pacific Gas and Electric. Welcome to the committee of Mr. Chair. We have an oppose on the bill in print. We look forward to reviewing the amendments and doing a lot of benchmarking with what every other state is doing. Thank you.

Hi. I'm Margie Lie, Samson Advisors here on behalf of the Southern California Public Power Authority, in respectful opposition; I've also been asked to give a mee-too an opposed for the California Municipal Utilities Association. Thanks.

Good morning. Laura Parra on behalf of Southern California Edison. We have a opposed unless amended due to rule 21. Thank you.

Good morning. Antonio Sanchez on behalf of IBEW Local 11 and our 12,000 members in LA County; we oppose. Thank you.

Good morning, Mister Chair and members. Doug Subers on behalf of the California Professional Firefighters. We oppose unless amended. We'd like the California Building Standards Commission to look at these issues. Thank you.

Thank you. Good morning, Mister Chair. Israel Salas with San Diego Gas and Electric. We have an opposed position on the building front. Thank you.

Good morning. Mike Tilden, International Brotherhood of Electrical Workers Local 1245, on behalf of our 30,000 members, standing in strong opposition as written. Thank you.

Okay. Alright. Thank you very much everybody for coming in. You know, one thing to mention is that we did - we, we've put in some amendments that are are really grounded in the UL process that was referred to earlier. So, as to ensure that, as the science continues to change, there's gonna be safety. They will they will continue to update the safety issues with regards to these products.

But you know, I I will say that it it does seem that in some respects the proponents in the opposition are in agreement about, you know, systems that require changes to electrical outlets and the need for electricians to install them. That's come up a lot in the research that we've been doing. But you know, the bill is ultimately about a future time when and if there's a solar plug in system that that meets you well or other national testing facility safety certification with a standard electrical outlet. And you know, it's important to know that this is not the current safety certification framework for UL. But, and so we we've, you know, I know that we had a lot of back and forth with the author's office.

But you know, the idea is that we would allow this kind of product to move forward as long as there the development of technology meets the safety requirements of of both the UL and the National Electrical Code with, you know, with this kind of plug and play device in the future. I think we're all, you know, very intrigued by the possibility it's working in certain places but there's certainly we've listened carefully to the safety concerns that have been raised by the electrical workers and the firefighters and the utilities. And we really wanna make sure that the rollout of this product is very grounded in the UL certification process, their investigation, their work on examining all of the implications associated with this product. And, you know, while it doesn't feed into the grid, it feeds back into the home's electrical system. And and I know that will continue to raise concerns from for folks as long as if we're, you know. And so, what what we really don't want to replace our judgment for put our judgment in and replacement of others and that's why we're really grounding the amendments and UL's analysis of these products.

So, I appreciate you're working with us and I know I know some of it wasn't easy. But, love to ask folks for questions or comments from the committee. I know Senator Rubio had something she wanna say.

You know, I clearly, do understand why this bill is being brought forward. We acknowledge the high cost of living and the enough the unaffordability factor that we're trying to content and make sure that our families have support and help in reducing cost. But, you know, when I did a little bit of research, on this and and hearing some of the concerns, there's a lot there for me. And when I think back of, you know, we're we're talking about safety standards that many of you have expressed. You know, I have to contend with the professional firefighters having concerns and they're the fire experts.

They're the professionals. So, I have a lot of concern with that. But but trying to ensure that it's affordable, that cost is brought down. There's this other side of me that thinks back of when we started with electrical vehicles that, you know, it's working and it's worked well for those that can afford it. But those that cannot afford it are still having to contend with really high prices of oil.

And there's always this disparity of those that could afford it on the front end and those that cannot. And so, I'm just wanting clarification on the cost shift because we know it's happened. When we go, with other technologies. Can you share a little bit about how this is gonna impact low-income families?

Yeah. Thank you for that question. This is gonna help low income families lower their bills. There's no cost shift here. The argument that there's a cost shift here would be the same argument about, oh, if you let someone purchase a low energy refrigerator or dishwasher, they're gonna lose use less electricity and that will cause a cost shift.

I've never heard anyone make that argument. That would be an absurd, in my view, argument to make. This is about - this is not the arguments that we see with the big solar installations where it feeds back into the grid and there's NEM and they get credits. There's a huge argument, as we all know and this committee knows very well arguments, about cost shifts there. This is literally effectively an appliance that you can use to lower your costs.

It doesn't feed back into the grid and allows people to have lower electric bills, which is not a cost shift. It's helping people lower their electric bills. In terms of the the cost, these devices start at like five or six hundred dollars. You compare that to the upfront cost of putting a big solar installation or batteries, which is dramatically higher. And so, this is dramatically more affordable in terms of people being able to enter into generating solar and lowering their bills than traditional solar.

And they will be able to recoup that about five, six hundred dollar investment very quickly. And we heard testimony about that even if a very modest installation, they'll be able to recoup that quickly. So, this is so much more affordable for people to enter than other types of ways of bringing down their cost through clean energy. Is it gonna mean a 100% of people are gonna be able to afford that upfront cost? No.

I'm not arguing that. But way more middle income, working class, low income people will be able to make that choice, and lower their cost to recoup that upfront cost and then have long term cost savings on their electric. And that's really what this is about. It's expanding the ability of renters, of people who own modest homes that don't support solar to benefit from from solar energy.

And I'm I'm hearing what you're saying, but when you say it's only gonna be $500, as I sit here today on a single income, I would find a hard time affording the $500. So. I can tell you in my district, that is unaffordable. 500 is not something that people have in in their banks right now just to to spare. But I'm gonna put that aside. I do have a lot of like I said, the cost is still I'm still in my head.

I still feel that those that can afford it will end up being able to afford it. And the same people that are always struggling with the affordability crisis will continue to struggle. And and that's the balance that I'm always trying to meet here. But on top of that, you know, when I think of, you know, what I heard here, the risk to the workers, and and not going through the process of from the Building Standards Commission to to first evaluate, analyze, and see how we can make this safer; it is a concern for me because, we have a firefighters that are the professionals who are saying they have concerns, how they have, the breakers have a high rate of failure from those that actually install them and are exposed to potentially being, harmed.

And then there's that other side of me that's saying, I think someone said that it's gonna take eighteen months. I hope I'm not wrong. Eighteen months to go through the process of evaluating, making sure that it's safe, making sure that we go through the process that we've normally gone through. Can I ask why not wait until we have all this in place?

Yeah. So, first of all, I do just wanna I just wanna say in terms of the fire standards, we'll get to that on the safety standards because I respectfully disagree. But in terms of in terms of who's gonna be able to afford this, and if we look at the percentage of Californians who can afford traditional like rooftop solar and storage now, if that's x number, this is x times many times more. Many, many, more people are going to be able to afford this. I'm not saying that a 100% of people can do it.

I'm never saying that. But many more people will be able to afford a $500 upfront cost that will quickly be recouped that are able to afford the full rooftop solar now. And the 44% of Californians are renters. Almost half of our state rent, they are completely regardless of their income, they are completely boxed out of having solar now and this will allow that 44%, if they choose, to be able to benefit and benefit and lower their costs. So, this is absolutely a cost reducer for a large number of California families and it is no more of a cost shift than people buying energy efficient appliances now.

We wouldn't - I don't think anyone's proposing we should ban people from buying energy efficient refrigerator because it might be a cost shift. No one is arguing that. And I know you're not arguing that. In terms of the safety, as the Chair said, we, in order - these products, in order to qualify under this bill, have to comply with UL safety standards and with the National Electric Code. And so that's not gonna be an immediate thing.

There the industry is gonna have to conform, to that, and they will and we have a representative from UL here. I'd be happy to have him come up, if the Chair would like, to also answer Senator Rubio's questions or anyone's question. The UL is here and can talk about because there's been a lot said by some of the opponents, but we actually have the UL here and we'd be happy to bring Mister Jackson up.

Yeah. Well, let me ask you on that note. I know that you said that we are meeting the National Electric Code standards, but I think I just heard right now, a few mentioned that we are, I guess, bypassing the California standards. Why not align to our California first before we move forward with something that's new and that we can again, that you know, the professionals are cautioning saying it can be dangerous.

And there are many, many professionals who are saying that this is a good thing and it's not dangerous. I want, and we heard from one of them in our in the opening testimony who testified, a contractor who says it's not dangerous. We have the UL here. People wanna hear from him saying that this is not dangerous that we have safety standards. And I also just wanna address, yes, the opposition wants to wants to kick this to the Building Standards Commission.

One of the reasons why life is so expensive in California is that, sometimes, this legislature instead of solving problems tells another agency to do it. And then it takes 3,4,5,7 years to do it. We see this happen at the CPUC all the time. It happens, no disrespect, at the Building Standards Commission at times. And what happens is that the same opponents who were saying just kick it to the Building Standards Commission, they will spend time opposing it at the Building Standards Commission and trying to put so many conditions on it that it's unusable.

I just - we've all seen this movie over and over again. This is a simple technology. It's being deployed in other states and other countries. It has safety standards that are mandated in this bill, and it just makes sense for us, to move forward. And again, the UL is here. They can speak for themselves.

And I know that you say it's a simple technology, but I have actually - I was doing some research and I downloaded all the potential solar panels, how they look on buildings and condos and it's not that simple. I still have concerns on how that's gonna play out when you have HOA's. And it's just it's not that simple. Respectfully, I disagree with that. It's new technology.

And there's so many concerns right now that I'm hearing that are concerns of mine, but I'm just gonna let anyone else ask questions. But I still feel that the workers have concerns and they're the ones that install these. And when the circuits have a high rate of failure, that's a concern. And our professional firefighters are stating that they have concerns about the safety. And then I also heard the overload dangers of a system.

So, I'll just leave it there. I just, you know, I feel like that doesn't quite answer my concerns, but I'll I'll punt it over. Thank you, Mister Chair.

And Senator, would you be interested in hearing from the UL? Because you talked about the opposition; the UL is here? Yeah?

Why don't let's just bring them up because I think we're all -

Because there's another perspective here that -

I think we're gonna now have questions about safety and and and, you know, obviously, we you know, the bill significantly changed from how it was originally proposed to us. We were - the committee pushed back aggressively on on some of these safety standards. I know not to to the full satisfaction of the opposition, but if our where where is the person from the UL? Okay. Do you wanna make a couple comments about the discussion you've heard so far?

Alright. Can I ask you to submit your name? Yes. Thank you, Chair Allen and committee. My name is Pete Jackson. I'm the Lead Regulatory Engineer for UL Solutions. I'm also a former Chief Electrical Inspector for the City Of Bakersfield, California and a former member of code making panels 4-8 and the Correlating Committee for the National Electrical Code. In my years as Chief Electrical Inspector for the City of Bakersfield, I had the responsibility of the inspection and approval of over 70,000 rooftop solar systems. My previous experience, as a journeyman electrician and a contractor brings my total experience in the electrical business to 46 years. In 2025, UL Solutions produced the white paper interactions with plug in PV, with protection of existing power systems, to identify any safety concerns and develop a technical standard, UL 3700, an outline of investigation to address the unique hazards. The 24 page white paper can be downloaded at Ul.com/pipv.

UL solutions is neutral on this legislation, but I'm here to provide any information that you may have regarding the UL 3700 standard.

Senator Stern, you have a couple questions? Yeah.

Maybe it would help to just walk through a few of these issues. I know a bunch of members do. So, can we talk about 3700 and that standard? We know some of the issues. They're also...

And if you wanna sit up here, you'd be welcome to if if that would be more comfortable for you?

Or you can stay standing; either one.? .

So, in terms of the how the US market's looking and the technical challenges we face here in the US, things like the touch safe plugs, breaker masking, bidirectional, GFC, the kinds of things that will mitigate those issues: are those contained in your 3700 standard?

Alright.

That is correct. If the white paper, the research we did, identified three areas of concern, overcurrent because we now have two sources on a branch circuit that's designed for one, possibly; GFCI compatibility because reverse current flows can mask or prevent the GFCI from doing what it needs to do; and finally, touch safety: when you touch something, there should not be a shock hazard and something that can be unplugged from a wall.

You don't have the benefit of still being grounded. So, there's issues there. UL 3700, addresses all those issues. So, any system or product design in accordance with that outline of investigation would mitigate those risks.

So, under the current setup, if you're, if you're purchasing one of these systems, my understanding is that you you're not able to to do that without a professional electrician. But then if you, if the product were to evolve or the installation methods or however it worked to hit the new 3700, it would be, sort of in theory, plug and play. Is that the is that the difference like under the in the current market conditions in California, if you buy one of these systems, UL doesn't certify you to just simply plug that into the wall; is that correct?

That's correct. There are no current systems that have been certified to UL 3700.

And so you're taking on your own liability essentially by plugging that into the wall as an apartment, as a renter, or something like that. You're not gonna be. I mean, you at least don't have that risk officially certified by the Underwriters Lab.

Is that right?

You wouldn't have a product, US Product Safety Standard to stand on certification.

Right. And so how how in terms of the integration of that standard, the the 3700 standard, there's been a lot of talk about the the German market and that there's been, you know, massive uptake there and huge success. Can you talk about some of the the similarities or differences between our market and the the German market that that requires this sort of enhanced standard, say, in in The United States or or certainly in California?

Absolutely. UL Solutions is a worldwide company and something that must be recognized is that Europe's electrical systems are different than North America. They use a two wire 220 volt system ungrounded. We use a 122-40 volt grounded system. So, there are distinctions. There are differences. In addition, we do have higher thresholds in this country for shock, prevention of shock, ground fault.

And all the products and our electrical systems are designed and installed to align with that. So, in Europe, they have different a different electrical system and different standards. So, the products there are are able to work with those systems, but that doesn't mean they automatically work here.

Understood. And and so in terms of how the the new additional, the new amendment that's being proposed by the committee, in terms of alignment with the NEC, with the National Electric Code, how does that interface then with the UL standards process?

We're not here to speak on the installation standard, only the product standard. Traditionally, in the United States, safety of the built environment is dependent on a what we call a tripod of US product safety standards that are listed certified by national recognized testing labs like UL, along with an installation code like the ADC or the CEC; that is enforced by the local jurisdiction. Our part, UL Solutions part, in that tripod is the the product safety standards.

So, in other words, your your risk analysis and the mitigation the sort of standards you're proposing deal directly with the product safety, but not necessarily with the building safety associated with with installation?

The product certification standards have to align with the installation standards. So, the risks that are identified in UL 3700 and that are mitigated recognize the risks that would be, imposed by installation on existing systems. So, yes, that is considered. UL has a strong voice in production of the NEC and other installation standards. Therefore, the product safety standards that we produce will be in alignment with those requirements.

Understood. And, actually, could help if adopted the these news to state you're doing the the proper work on breaker masking or that you find a new way to have a touch safe plug associated with one of these devices. It could sort of ease the path to compliance for, say, the California Electric Code of Building Safety Standards, if adopted, but they're not gonna sort of supplant the the need for that what you used to do.

Thank you. Alright. Let's move on to item two. I see the author here. Senator Padilla is here to present SB 886. You may proceed when ready, Senator.

Thank you, Mr. Chairman. Mr. Chairman, with your permission, is it okay if my witnesses approach the table?

Sure. Sure.

Thank you, Mr. Chairman and Members. I'm pleased to present SB 886. I'm hoping either through my expert testimony or perhaps through the Chair. I wanna thank, your committee staff for being amazing and for working with us diligently on a set of amendments, which we will accept.

And hopefully, we can make those available for members of the committee because I think they directly go to a number of concerns and questions that were raised, that you may see in a prior version of the bill. As you well know, this may be a little bit of deja vu.

In the last year, I presented for this committee a similar identical bill to this one, which was SB 57, which unfortunately in the other house became a study bill. That was purely discretionary to the PUC and is yet to be completed on the question of whether or not there are in fact impacts presented to existing rate payers and non-large scale consumers because of data centers that are needed to empower the new frontier in AI technology and others.

This committee supported that bill, substantially what is in front of you but I think improved upon. During that time since last year, much has changed. Developers across our country are seeking to build data centers at an incredible breakneck speed and rate, creating demand on generation and on infrastructure capacity and cost at an unprecedented level in the state.

You may recall or you may not know that in California we are home to the third largest number of data centers. But mostly in the small to medium size, generally around an average of 35 megawatts in capacity. That has drastically changed. There is a lot of prospectors in areas of the state seeking large scale data centers to support the emergence of this technology.

Throughout the country, we have a lot of evidence that suggests overwhelmingly that unintended consequences and cost are being realized by consumers. A voter rebellion last November states who had initially put forth incentives and tax credits for investment and development of these data centers are now backtracking to make sure that costs are not shifted and that existing utility rate payers are not stuck with the burden of stranded assets.

Despite these assurances, we continue to have a scenario where hyper scale developers are amassing large parcels of land here in California to build projects that were here to for unprecedented in their size. In my district alone, for example, a 700 acre, 330 megawatt project is broken ground alongside a residential community and elementary school with zero public input. If ultimately built, this will dwarf all projects of a similar nature in the state.

Other states are farther along. But I will also note that even recently at the White House, a number of key AI developers and providers who rely on these data centers to support that technology made a public commitment to the President of the United States that they were committed to paying for their own consumption and infrastructure costs.

This particular bill operationalizes that in California. It makes sure that the PUC establishes a rate structure that addresses and prevents for large scale facilities a cost shift to non-participating customers. And has provisions that make sure we continue to incentivize the utility of renewable resources and doesn't leave consumers with stranded costs. There have been a number of amendments.

I'm gonna ask one of my witnesses to summarize some of those language changes and the issues that they address. And of course, following this, we'll be happy to answer any technical questions you might have. With me today is Matt Freedman with TURN and Sam Uden with Net Zero.

Thank you, Chair and Committee Members. My name is Sam Uden. I'm the Co-Founder and Managing Director of Net Zero California, a nonprofit organization that develops policies to support California's climate goals. We're proud to co-sponsor SB 886, which provides key protections for rate payers from data center driven load growth.

No one needs to look further than the East Coast to see what happens when data center expansion is left unconstrained or unregulated. Virginia and the entire PJM region has seen billions in cost increases to consumers in a short amount of time due to both the cost of building out the grid to support data centers and the increase in demand for generation.

California already has significant energy affordability challenges, and we don't want to add to that burden. And this issue will undoubtedly if we don't do something. Fortunately, because of what's been happening in other states, there's now no shortage of research and analysis that's designed to guide states and legislators.

Harvard, MIT, Duke, Princeton, and Little Hoover Commission all identified just the base strategies to protect rate payers. Such as the data center should pay for their grid costs, data centers are required to load shift or participate in demand response programs, and the data centers should be on the hook with a termination fees if the AI bubble is to burst and they want to abandon their projects.

And these are the policies in this bill. I also just wanna mention that we recognize the important economic opportunity of data centers, and we have an effort to incentivize high quality data center projects in the state. SB 887 is that bill.

It's not the topic for today, but just wanna express to the committee that we do have this broader perspective. SB 886 is just the base to protect rate payers. I want to thank the Senator for his leadership in this committee and the committee staff for being fantastic to work on the amendments, and we respectfully request your aye vote.

Thank you, sir.

Thank you, Mr. Chairman, Members of the Committee. Matt Freedman on behalf of The Utility Reform Network. The impact of data centers on the electricity grid is a hot topic of conversation at the state, regional, and federal level.

As noted in the recent report on data centers by the Little Hoover Commission, the rapid growth of energy hungry data centers presents both serious challenges and potential opportunities for California's electricity system. I think it's notable that the Little Hoover Commission has sent in a support letter for SB 886.

Forecasts of growth in new data center deployment have led to serious concerns about needed grid upgrades, the amount of electricity to be consumed by these facilities, cost shifting, and potential impacts on progress towards California's zero carbon electricity objectives.

The largest projected growth in California is within the service territory of Pacific Gas and Electric. And to put this into perspective, between 2014 and 2022, PG&E reported 16 retail electric customers interconnecting that had more than four megawatts of demand. That's about a 145 megawatts total between 2014 and 2022. Between 2023 and 2025, they had 43 requests for 10,000 megawatts of new demand.

93% of that load would be from data centers. Two weeks ago, a number of the largest technology companies in the United States attended an event at the White House, and they signed a pledge to build, bring, or buy new generation resources needed to meet the electricity needs of new data centers.

The state of California should be requiring at least as much from these companies as President Trump. SB 886 establishes a robust framework for preventing adverse impacts from data center load growth. For investor owned utilities, the key elements are, first of all, prohibiting cost shifting to non-participating customers relating to both interconnection and ongoing grid costs.

Second, requiring data centers to pre-fund long term contracts through its load serving entity for new zero carbon generation that will serve at least 50% of hourly needs and function as dispatchable resources. And data centers would have an option of installing those resources on-site as an alternative method of compliance.

Third, requiring participation in new demand response programs developed by the California Public Utilities Commission that would lower rates for all customers and support load shifting, resource adequacy needs, and greenhouse gas reduction objectives.

And then assigning all transmission facility upgrades triggered by the data center to these particular customers and limiting refunds to these customers in the event that they fail to meet initial electricity demand and consumption forecasts.

And then finally, ensuring that data centers connecting directly to the transmission system would be required to contribute a reasonable share of costs to wildfire mitigation, wildfire liability, electrification, and environmental programs. SB 886 provides reasonable direction to the PUC while allowing flexibility with respect to implementation of many of the key details.

TURN believes this approach would allow all customers to benefit from the downward pressure on rates attributable to new data center loads without being forced to absorb significant new costs necessary to serve these unique customers. We urge an aye vote on SB 886, and happy to answer any questions about the bill. Thank you.

Thank you. Thank you. Alright. Let's ask anyone who wants to voice their support for the bill to come to the mic. Just give us your name and affiliation.

Jonathan Clay on behalf of the City of Imperial in support.

Michele Canales with the Union of Concerned Scientists. Support in concept. Still reviewing the recent amendments.

You got long hair.

Good morning. Will Brieger, State Strategies, here today for Climate Action California. We support. Thank you.

Good morning. Jakob Evans with Sierra California, in support if amended. Hoping to see that procurement requirement be bumped up to 100%, not 50. Thank you.

Mariela Ruacho with Leadership Council for Justice and Accountability and Center for Biological Diversity, in support if amended. We appreciate the author's work and looking forward to continue to strengthen the bill.

Megan Shumway, representing Sacramento 350, in support.

Good morning. Alexis Sutterman, Brightline Defense, in support if amended. Just wanting to see stronger requirements against diesel backup generation and more investments in zero-emission infrastructure and transmission. Thanks.

Jo Gardias with NRDC, in support.

Grisheena Mohabir, California Environmental Voters. We have a support if amended position due to remaining concerns about the requirements for zero-emission energy, and we look forward to working with the author. Thank you.

Hello. Carol Kinser, representing Laudate Deum Prayer Network for Climate Healing, in support. Thank you.

Mr. Chair, Mark Fenstermaker, on behalf of Earthjustice. We have a support if amended position aligned with many of the previous speakers.

Dave Shukla, Long Beach Alliance for Clean Energy. Support if amended.

Cameron Rogers, 350 East Bay. Support if amended.

Thank you. Alright. Let's hear from opposition folks. We give you an opportunity to sit up here on the dais if you like. Just to be fair. Oh, it's up to you. It's up to you.

Okay.

Whatever you prefer.

Good morning, Mr. Chair and members of the committee. My name is Khara Boender, and I'm a Director of State Policy at the Data Center Coalition. Thank you for the opportunity to speak today in respectful opposition to SB 886. DCC is a national trade association, serving as the voice of the data center industry. Our members are leading data center owners and operators and companies that lease large amounts of data center capacity.

Appreciate the communication that we've been able to have with committee staff and with the author's office as well. Have not yet had a chance to look at the most recent amendments through our membership, but promise that we will take a look at those and continue the collaboration with you all. Based on how the the bill is framed in print, we are opposed.

The data center industry is committed for paying for its full cost of service for electricity and the underlying infrastructure that it uses. We just disagree with the approach that this bill employs, similar to the opposition that we expressed last year with SB 57 in its original form.

We believe that the CPUC already possesses the expertise and transparent processes to ensure fair cost allocation, and in the world's largest data center market, Virginia, an independent study found that rates are appropriately allocated across customer classes. In addition to that, we are seeing a growing body of evidence that large-load customers, like data centers, can help apply downward pressure on rates across the board.

Aligned with sound rate-making principles, no industry should be singled out for disparate treatment without verifiable cost-based reasoning. Unfortunately, SB 886 risks creating distinctions among similar large-load customers based on their end use rather than their actual impact on the grid and rates.

Finally, we do have concerns regarding the mandatory demand response and backup generation requirements. Data centers are designed for 99.999% uptime, and that reliability is required to support hospitals, government units, and the varied products and services that we use in our daily lives.

Mandating demand response while simultaneously restricting backup power to zero-emission resources, which are not yet technically capable of the instantaneous response speeds required to support these critical IT loads, places the stability of our digital economy at risk.

Highly regulated diesel generators remain the only viable emergency option today and the most commonly deployed option. We urge the committee to allow the CPUC to continue its work through evidence-based proceedings and to resist advancing SB 886. Thank you for your consideration.

Thank you. Yes, sir.

Chair Allen, Vice Chair Ochoa Bogh, and members, thank you for the opportunity to testify. My name is Ahmad Thomas. I'm the CEO of the Silicon Valley Leadership Group. We respectfully oppose SB 886. The Silicon Valley Leadership Group is the leading business association for Silicon Valley's most innovative companies.

Our members reflect the full breadth of the region's innovation ecosystem and play a major role in supporting the state's General Fund. Our opposition to SB 886 is based on three core factors. First, SB 886 is unnecessary. It risks undermining the CPUC's existing transparent rate-making process. The Legislature has already taken up this issue last year with SB 57, directing the CPUC to assess whether new data center loads cause cost shifts.

Those findings are due by January 1st, 2027. Second, SB 886 embeds complex policy mandates into a tariff, such as mandatory demand response participation and limits on backup generation to zero-emission resources. A one-size-fits-all demand response mandate poses real operational risk for facilities designed for 99% uptime and that support essential services in the public and private sectors: hospitals, government agencies, public safety, finance, and educational institutions.

And today, diesel backup generators heavily regulated and used only in emergencies remain the most reliable option for critical loads. Third, the bill introduces ambiguity around who is captured by the 75 megawatt threshold: a single building, project, customer, or entire campus, which creates uncertainty and could slow responsible investment.

This is a transformational moment for our economy, as new advanced technologies and industries are rapidly scaling. California's policy framework must support reliable energy and long-term investment if we want to sustain that leadership. However, SB 886 as drafted risks duplicating, complicating, and potentially destabilizing the very processes that protect ratepayers and keep the grid reliable. For these reasons, we respectfully urge a no vote on SB 886. Thank you very much.

Thank you. All right. Let's hear anyone else who wants to add their names in opposition to the bill. Come on to the mic and give us your name and affiliation.

Good morning. Brandon Ebeck, Pacific Gas and Electric. We have an oppose on the bill in print. We certainly appreciate the author's intent and align with even the sponsor's intent about preventing cost shifts. We will look to review the amendments when they are available in print.

In particular, we still have concern with making a data center-specific tariff. There is a-- that's discriminatory rate-making potentially. We would prefer to base cost allocation based on load profiles. If you're big and using a lot of energy and causing a lot of grid upgrades and generation, you shall be treated the same. Thank you.

Thank you.

Good morning, Chair and members. Jose Torres with TechNet, in opposition.

Good morning, Chair Allen and members. John Kendrick from the California Chamber of Commerce, opposed to the bill in print for the level of operational control it asserts over facilities. Looking forward to seeing the amendments. Still have concerns about what I'm hearing on the mandatory demand response participation, but again, need to see the amends in print. Thank you.

Good morning. Sarah Bridges, on behalf of the California Manufacturers and Technology Association, in respectful opposition. Thank you.

Good morning. Daniela Garcia-Hernandez with the Western States Petroleum Association. We are an opposed unless amended. However, we appreciate the author accepting the committee amendments, and once we see that bill in print, the amended language, we will reevaluate our position. Thank you.

Courtney Jensen, on behalf of TechCA, in opposition.

Chairman and members, Bruce Magnani, on behalf of the California Large Energy Consumers Association. We're in oppose unless amended, but with the committee amendments narrowing this to data centers, we'll be removing our opposition. Thank you to the staff and member.

Good morning. Lily Mackay, on behalf of Enchanted Rock. Opposed. Thank you.

Good morning. Jazmine Advincula with the CalAsian Chamber, in opposition. Thanks.

Good morning. Peter Leroe-Muñoz with the Bay Area Council, opposed unless amended. We look forward to reviewing the amendments. Thank you.

Thank you, Mr. Chair. Israel Salas with San Diego Gas and Electric. We have an opposed unless amended position on the bill. Thank you.

Okay. Thank you so much. Why don't I go-- folks were asking about the amendments and they are slightly different than those in the analysis, so let me go ahead and read them and we can give anyone who wants additional clarification more information.

So first of all, the bill, as mentioned, narrows the bill to apply to only large-load data centers with a peak capacity of at least 25 megawatts or greater, clarifies that the CPC must include the transmission and distribution tariff as part of a rate structure that addresses the potential cost shift posed by new large-load facilities taking transmission-level service, clarify that the bill applies only to those facilities for which a new transmission interconnection agreement is established after the adoption of tariffs required by the bill or a date specified by the CPC.

Require the CPC to ensure that costs assigned to transmission services can be assessed separately from items generally included in the generation component of a customer's bill, replace the bills behind the meter energy storage requirement with a requirement that the CPUC establish a process by which a large-load customer covered by this bill can pre-fund a fifteen-year contract for new, incremental zero-carbon energy resources to function as dispatchable reliability assets within the utility service territory.

Modify the bill's demand response requirement to require the CPUC to establish a demand response program for data centers subject to the tariff, which must meet certain reliability and climate goals while ensuring that other ratepayers do not experience any new costs, and finally, exempt publicly funded research facilities, public safety facilities, national security facilities, publicly owned facilities, and other utility facilities, including facilities' based telecommunications assets from the bill.

We can get this in print to all the members of the committee who wanna see it, and with that, let's open the floor to questions. Let's go to Senator Becker, followed by Senator McNerney.

Well, thank you. I wanna first thank my colleague from San Diego for his hard work on this last year and now this year, and I just wanted to add a few comments because this is a incredibly important issue.

The Little Hoover report was referenced, and I spoke before the Little Hoover Commission and-- because if we do this wrong, data centers could be a big burden on taxpayers and, of course, you know, require care because they do use a lot of energy as well as, potentially, you know, a lot of water in most cases. Well, this bill obviously deals with the electricity part of it.

But done right, the way our energy system is structured here in California, because we have so much excess capacity for most of the day-- I always talk about the Walmart parking lot analogy. We build the Walmart parking-- you know, you build it for the Saturday before Christmas, not, you know, January 10th, and so our grid is like this. We have massive extra capacity most of the day.

So if we can bring on beneficial load to the grid without a increase in expenses that is borne by ratepayers, then it can actually lower costs for everyone. So there are many ways to do this wrong, and we're seeing that in some other states, unfortunately. In California, we have the opportunity to do this right. And, again, I wanna thank my colleague for this bill and working also with the the committee staff. I think we have the potential to get this right.

And, again, very supportive of the goals. I did have a few concerns myself. I think the amendments move us very much in the right direction, and so I guess that's just an overall point to make. I think we're moving very much in the right direction. I think it's absolutely where we need to go.

We need to make sure, that-- you know, really two things are critical, that folks-- that the data centers pay upfront so that we don't risk the question of stranded assets down the load-- down the line, if we make lots of adjustments to the grid to get ready for data center and then the load never materializes.

We have to make sure that's paid upfront, number one, and then we gotta make sure those few hours, you know, estimates between 20 and 100 hours a year where our grid is really stressed, that these data centers will either curtail their own use or, you know, with-- by curtailing use or go to their own behind-the-meter resources, or if we have to procure excess capacity during that time, that they will fully pay for that.

And that's really where this this bill is and, again, why I'll be supportive here today. I do think that, you know, there's a question about 100% and 50% and the-- so there's still a few things that I'm, you know, trying to kinda work through myself, my own mind. I don't know if you have a comment on that. So, you know, I think there's still a few conversations to be had going forward, but, overall, just wanted to kinda put that framework on it, you know, that way I look at it, and why I view this bill is very important.

So again, I don't know if you wanna comment on--the author or the witness--on sort of that small piece of it, but again, really appreciate the direction we're moving here.

Mr. Chairman, if I might--and thank you, Senator, for your comments and your great questions--certainly on the criterion, particularly dealing with dispatchable resources and the service territory dealing with both the capacity threshold and the nature of new--I wanna emphasize new--zero-carbon resources, I think Mr. Freeman has argued that's almost a gold standard here, but I'll defer to Mr. Freeman to add any other comment, with your permission, Mr. Chairman.

Thank you, Senator. The bill-- the amendments that have been taken today require the data center customer to pre-fund a contract-- a contractual commitment of at least fifteen years in duration for at least 50% of the hourly energy needs of the facility. So the data center can go bigger. If they wanna honor the commitments that were made to the president, they could go to 100% under the structure in this bill. But even if they stay at 50%, the thing to keep in mind is the other 50% of that power would be provided by their load-serving entity.

And in 2030, that load-serving entity has to get 60% of that power from renewable resources under the Renewable Portfolio Standard Program. So just under the RPS program, plus the 50% commitment that would be required in this bill, those facilities would already be at 80% clean energy and probably even larger because there's procurement happening from the utilities that goes beyond the RPS.

So I think we are getting close to 100% in this bill, and certainly, we would like to see all measures taken to get those data centers to be completely clean, but this was seen as a compromise that made sense in the current environment.

Yeah, and I think, you know-- so just to make sure we're talking about the same thing, so I think there's 100% in terms of getting towards 100% clean energy--and you're saying this is gonna get us very close in that direction--and then there's, you know, just a point about making sure that 100% of any strain caused to the grid, you know, by these data centers, is mitigated by them, right?

And that's sort of the point I think that I'm trying to get at, right, which is just that, that again, for those peak-- you know, those very few peak load hours a year, we're making sure we have a plan in place, that they either curtail their use, you know, or if there's additional capacity as procured, they fully pay for that. So I think we're aligned on that 100%. Is that-- would you agree on that?

Sure. I mean, there's another provision on demand response in the bill that would establish a new program specifically for data centers, the idea being that they might have unique requirements and offer unique opportunities. So the data-- and the existing demand response programs might not be suitable for them.

So the bill recognizes that to try to deal with those peak hour issues and to maximize whatever flexibility those resources have. And the contracts that they would be required to execute with nuclear energy resources would be dispatchable. So those would be available to the grid as needed to meet peak needs.

And it has a specific no new net cost per exclusion as well-- provision.

In that language.

Yeah.

Yeah. Excellent. Well, you know, that sounds very positive and-- you know, because I think we're still-- I think as a body and as a Legislature, still trying to get better data really about the grid itself. And I have a bill on that this year that builds on some work we did-- you know, tried to do last year. Because I think, you know, once we have that better data, it also helps us in this situation.

Again, the data center may-- you know, we may-- you know, they require them to curtail their use or maybe eventually, they wanna pay their neighbors on the grid a lot of money during those, you know, few hours of strain last year. You know, we want to, I think, have flexibility here, and I think that's one of maybe the misconceptions of some of the opposition.

I think this bill, especially with the amendments, does build in a lot of flexibility. We really wanna have really strong requirements and be very clear, which I think this bill does, but then allow the data centers flexibility in how to meet those requirements. So I think that's the direction we're all moving, I really appreciate all the work of the committee and the authors, and look forward to supporting the bill. Thank you.

Well, first of all, I wanna thank the author. I think everyone recognizes data center energy uses is kind of a hot topic now. People are concerned. They're already paying very high prices for electricity in the State of California. Is this gonna make my bills higher?

Is this gonna cause brownouts or blackouts? And that's kinda what I think people are concerned about. This bill does a pretty good job, and I appreciate Senator Becker's comments. Very insightful about the grid being over-designed for most of the time and yet we still face these challenges.

One of the things that I don't understand clearly is the comment about the PUC's flexibility and rate setting. You know, we're hearing on the one hand that the PUC is gonna have some flexibility. On the other hand, we want this to be as tight as possible. What kind of flexibility are we allowing the PUC, and is that the right amount? Are people gonna trust the PUC to get it right?

Just generally, and I'll defer to my witness, the bill attempts to set the appropriate overarching guardrails within which through the rule-making process PUC can achieve those outcomes through one or more means. We don't wanna prescribe a regulatory process, but we wanna set policy objectives that are clear and achievable and provide the reasoning as to why they can be. With that, I'll let Mr. Freeman go into a little more detail.

Thank you, Senator. As Senator Padilla pointed out, the bill does have a couple of very hard guardrails where the PUC does not have flexibility, but when it comes to determining what kind of cost shifting is happening, this is fundamentally a fact-based exercise that really needs to happen at the PUC, and luckily, because of the enactment of SB 57 from last year, Senator Padilla's bill, the PUC is currently doing a study, and that study is gonna be released at the end of this year if the PUC completes its work on time, which is kind of a crapshoot.

But the results of that study will feed into the PUC's own process if this bill is passed to ensure that the tariffs that are developed do not result in cost shifting. So I do think it provides a good balance of binding direction from the Legislature with the commission's natural role in being able to do the fact finding and figure out how to ensure that the goals of the bill are operationalized.

Well, as a final comment, I mean, there's-- folks are having a lot of trouble trusting these institutions, and I wanna make sure that this is transparent, that people understand what's happening, and that it doesn't cost us more, it doesn't cause additional problems. In addition to that, is there a wildfire risk that we're seeing that can be helped mitigated by this process?

Excuse me.

I yield back.

Okay. Other questions? Thoughts? Senator Archuleta.

Thank you, Senator, for bringing this forward, and I do like the fact that the bill does include an exemption for national security in a data center. I think right now in our country, in the world, information, it's got to be now, and California having 31 military bases, we have to be in the know. So any data center that is in the making, that's functioning right now, we need to keep our governor informed, no doubt. But I also think about the ratepayer who is protected here and the old saying, it's the cost of doing business.

For those who want to operate the data centers, we welcome you in California, but you've got to pay your fair share, and I think this is what this does, and so I'm gonna support the bill and move it at the appropriate time. Thank you.

Okay. So the bill's been moved. I just wanna say how much I appreciate the work we've all done together. I mean, I know this is gonna be a lot more work. This is a long-- this bill's an ambitious bill and there's also another bill that we'll be hearing shortly on similar topic.

It's going to Appropriations if it gets out as amended here today, but I'm certainly-- appreciate the collaborative work that we've had together and your broad-based goals. And, you know, I think this is ultimately about fairness, and I agree with Senator Archuleta as to how-- you know, we want to encourage this economic activity. We also want to make sure that there's equity and it's an equitable system with regards to who's paying in. So with that, I'm prepared to support the bill and would like to--

I have a question.

Oh, I'm sorry. I'm sorry. Senator Richardson. Sorry. Senator Richardson.

No problem, Mr. Chairman. Just to clarify for members of the public who aren't privy to all the documentation that we have, could the author-- could you clarify, or through your witnesses, clarify the more stricter guardrails that you felt were necessary in order to protect the consumer?

Or another way of saying it would be, you know, how does this bill fill the gap of the commission to make sure that we're-- you know, that we as legislators are ensuring that the consumers are protected and not hoping that the regulatory bodies that, unfortunately, in my opinion, have taken more of our responsibilities than what they should? If you could just, for the public, make sure they all understand that?

Mr. Chairman, Senator, thank you. Excellent question and appreciate the tee up for an opportunity, and that's fundamentally what this bill is about, Mr. Chairman and members. It's about consumption and cost.

And data centers, particularly in the aggregate--we have the third highest number in the nation but they're smaller scale--but now we're gonna begin to see hyper-scale, larger scale infrastructure being proposed, and this is unique.

So the answer to the question is, we are faced with a unique new set of circumstances that presents new tech in supporting infrastructure, that whether you're dealing with consumption on the generation side or the demand for new infrastructure and what that costs, can create incremental increases to cost to consumers who are not the ones creating that demand, and even, are not able to keep up with the way we socialize those costs now.

So we have a new set of circumstances that we weren't-- we were perspective about a year and a half ago, and we look around the United States, and what do we see? We see example after example of empirical evidence and data where these have been established, or are being established, or have been established that create those cost shifts and leave a cost burden to ratepayers who are existing ratepayers, who, throughout this country and this state right now, are struggling with affordability.

So I would argue that while the PUC is doing a study, and that's great, and I would-- with all due respect to where my bill landed last year, we can always do studies to decide if the sky is blue or not, but sometimes what's right in front of your face is pretty obvious.

And we have a good amount of data that suggests these are the costs and these are the impacts. And so what we're trying to achieve to create stricter standards is to protect ratepayers, to protect ratepayers from being further overburdened with unnecessary costs. And I would argue again, the other watchword for me is, we can walk and chew gum. I miss the days when the American can-do spirit, the California can-do spirit, everything was-- we've now reduced every policy discussion to a binary choice.

Everything is mutually exclusive. You can either have one or the other but you can never have both at the same time. That's malarkey. We can support industry and innovation and tech, we can support providing infrastructure to support that tech, but we can also as the good senator, Senator Becker, said, who's been a great leader in this space, and I really appreciate your comment, Senator, we can do it right and we can do both.

We can walk and chew gum at the same time, so consumer protections within a framework. And the fundamental answer to your question, Senator, and I'll shut up, there is no standard.

There is no standard to address this unique set of circumstances that is statewide. We certainly have a Rule 30 pending case of PG&E, for example, that seeks to address this, but that would only address PG&E. And this phenomenon is something that we're gonna deal with on scale throughout the state.

And that is also what is necessary here, is that we establish some specific guardrails for a specific set of circumstances that are creating a specific set of adverse impacts on our ratepayers in California potentially, and so we need to create that framework specifically to your question to protect ratepayers.

Thank you. Thank you, Senators. Apologies for not getting to you. Okay. So do we have a motion on-- I'm sorry. Senator Grove. Sorry.

Thank you. I apologize that I had to step out to a meeting and do a Zoom call, but--that was scheduled. I really didn't anticipate the previous bill taking almost two hours, so I apologize for scheduling something in between that. I made a comment about putting a base--

Please don't make this bill go two hours.

Yes. No. I made a comment about-- I'll address the Chair. It was not my fault that--<laughing>. So, I made a comment during the last bill that we heard that we tend to, you know, require certain things on individuals and our technology, new advancing technology, which makes it more expensive, and-- but I do understand there needs to be guardrails.

But again, putting a band-aid on something or trying to move it forward in a way, that isn't, like, a root cause, and I'd like to consider a root cause, and I know the bill's gonna move forward, but I just-- there is technology out there that's going through CalGEM that is being approved, that has already got a concurrence letter, and it will allow us to bring data centers online in California at six in a kilowatt energy, a thousand hours of battery storage instantly dispatched to the grid, all in a self-enclosed system underground that doesn't catch on fire like batteries do, doesn't burn for days like batteries do.

Because we need to be able to offer industry a way to power these facilities, and they can be powered in these enclosed systems and all stored underground. And so, again, six in a kilowatt of energy unless the utility charges a wheeling charge of 0.50 cents a kilowatt and then we're all gonna be in the same boat that we're in right now. But, there is a way to make this work, and I have a concern about, you know, the industry piece.

And I know you're very business-minded, and I appreciate that, but I can't support the bill because I think that we do curtail what industry is. And if you look at the information and the data and all the models, just bringing 50% of those data centers online, they're probably not gonna come to California. Some of them might, a few of them might, but most of them are going to go to places where energy is a lot cheaper than it is here.

And-- but the ones that will come online will take away-- depending on what model you look at, if you look at one model, it shows that if we brought them all online, we would still need 18% of our capacity on the grid to take care of all the rest of Californians if all of those data centers came online because we don't have the capacity to sustain them. That's why I don't think they'll come online because we don't have the utilities here to do it. But, appreciate you bringing this forward and at least looking at a solution for data centers.

Okay. All right. Thank you very much. Do I hear a motion on the bill? Okay. That was from Archuleta. That's correct, yeah. Okay. So let's let you close and then we'll--

Thank you, Mr. Chairman. And to the Senator's comments, no doubt tech can play a role certainly in distributable resources and to smoothing, balancing the grid. I think we would all agree that we would like to see that happen if possible. I think this bill seeks to set guardrails that are anticipatory because we are gonna have large-scale applications coming online that are gonna be connectable, that are gonna draw on the grid and create new resource and infrastructure demands, and that's cost. So I think it's very necessary.

I would just, in closing, Mr. Chairman, say, the idea that this bill is unnecessary is just not supported by the facts. Again, I referenced the Rule 30 case pending with PG&E. In addition, our bill, unlike that petition, provides transparency provisions so that people can't break apart their projects and try to piecemeal it in a way that obfuscates what's really occurring in terms of its impact to ratepayers. So there's a lot of good reasons why this bill should move forward. Again, I wanna thank you, Mr. Chairman, and your amazing staff for working with us collaboratively on this, and I would respectfully ask for an aye vote.

Thank you. And Secretary, please call the roll. This is a do pass amendment to the Senate Appropriations.

[Roll call].

Okay. Thank you. We'll leave the roll open for members to add on. Thank you, Senator. All right. Let's go to Senator Perez, who's here with Item Three. That's SB 978. Please proceed when ready, Senator.

Great.

Good morning, chair and members. I'm here to present SB 978 the Data Center Community Accountability Act. I wanna begin by thanking committee staff for working with my office on this policy. We are accepting the committee amendments. SB 978 ensures that everyday rate payers are not forced to subsidize data centers, which are among the largest electricity users in the state.

Over the past few years, we have seen increased reporting on the rapid growth of data centers along with growing concerns from our constituents. In my own district, a recent data center proposal sparked confusion and outrage. Many of us once assumed that most data centers were concentrated in Silicon Valley. But proposals are now emerging across the state of California. Nationally, electricity demand from data centers is expected to double or even triple by 2028. With located in California, this issue is only becoming more urgent.

The operational pressures created by data centers created by data centers intersect with broader economic and public health concerns. Data centers pose a significant risk to rate payers if left unchecked. Their growing electricity demand will require major investments in transmission and distribution infrastructure. Without clear statutory guidance, these costs could be passed on to ratepayers and other commercial energy consumers, which is particularly concerning at a time when energy costs have already been rising since 2015. Another risk arises when infrastructure is planned or built to serve a data center's high energy demand only for that project to relocate or be abandoned.

Once utilities begin planning or constructing transmission lines to support that load, there's currently no requirement that a data center remain in place or reimburse those costs if it moves operations, secures a better rate elsewhere, or experiences project delays. Without safeguards, these stranded infrastructure costs could ultimately fall back on rate payers. Beyond cost impacts, data centers can also create public health concerns due to air pollution from backup diesel generators. Statewide public health costs associated with emissions from these generators are estimated to reach up to $266,000,000 by 2028. And even modest emissions can push local air quality beyond health based limits for nearby communities.

In response to these concerns, committee has suggested enabling data centers to fund net zero energy projects through the utility, which will create more reliability and decrease the likelihood of turning on backup diesel generators. SB 978 ensures that new data centers are built and operated responsibly support support their operations. The bill requires data centers to pay upfront for any new transmission or distribution infrastructure required to serve their facilities. This up front payment requirement is essential because it prevents stranded cost if a project changes plans or relocates after utilities have already begun planning or construction. It also directs the CPUC to establish a separate rate structure to prevent cost associated with data centers from being shifted onto other electricity customers, an issue that has already emerged in other states.

The bill gives the CPUC flexibility in designing the structure while clearly requiring that protections be put in place. Importantly, SB 978 prohibits refunds to data centers once they have made up their up front infrastructure payments, ensuring those costs cannot later be shifted back onto rate payers. The bill also recognizes the importance of strong labor standards to ensure these major infrastructure projects are built with a skilled workforce. Ultimately, this bill strikes the right balance, protecting rate payers while giving the CPUC the authority to manage this rapidly growing sector responsibility. With me to testify in support of the bill is Will Breacher with the Climate Action California, and Lane Smith, the postdoctoral scholar with the Climate and Energy Policy Program at Stanford University. At the appropriate time, I ask for your aye vote.

Thank you, senator. Why don't you come up and give us your arguments and support?

Hello. And thank you to Senator Perez, Chair Allen, and the committee for the opportunity to speak here today. My name is Lane Smith, and I'm a postdoctoral scholar in Stanford University's Climate Energy Policy Program and Department of Energy Science and Engineering. I am here my personal capacity and take a neutral stance on SB 978. I will highlight today three concerns that I see if large electric loads such as data centers were to be inadequately regulated, which can adversely affect local air quality, California's energy transition, and customer affordability.

First, large electric loads can lead to more air polluting backup generation such as diesel generators and gas turbines. California regulations help limit but do not fully eliminate local air pollutants released by traditional backup generators. Current non emitting resources like solar, wind, and storage cannot completely replace traditional backup generators as reliability solutions, but they can be a way to reduce the operation of backup resources. If large loads are required to install some behind the meter energy storage, which can also provide crucial demand side flexibility, that storage would be able to cover many reliability events without needing to run traditional backup generation. Second, large electric loads will strain California's grid, both in terms of available clean generating capacity and peak infrastructure headroom.

This can amplify affordability concerns and work against California's energy transition especially if new demand is interconnected faster than new non emitting supply. In response, many proposals have suggested that large loads be required to procure clean, additional generation capacity, support the build out of emerging clean firm generation, and fund the deployment of capacity increasing grid enhancing technologies. Finally and third, large loads can exacerbate electricity affordability concerns. If required, grid upgrades are recovered by the entire customer base. Large loads should pay for the upgrades they necessitate and additionally, for their share of system wide costs.

There should be safeguards against large electric loads leaving stranded grid assets for the rest of the customer race to recover.

I'm so sorry. I'm I'm gonna we're we're getting the time constraints now. Yes. So if you could wrap up.

Of course. Taken together, failing to regulate large electric loads poses a threat to Californians public health and personal finances. Thank you for your time.

Thank you. Okay. Yes, sir.

Good morning, mister chair and members. Will Brieger from straight state strategies on behalf of Climate Action California. I'm pleased to speak today in support of SB 978 at a really interesting time in our history. We've got a planet that's warming faster than humans have ever experienced, and we have a growing chasm between the haves and the have nots. SB 978 meets those challenges by looking out for people and communities.

Done right, as we just heard, large loads can bring good things, investments in the clean energy transition as doctor Smith mentioned, big companies shouldering infrastructure costs and good jobs in our communities. This is not an anti tech thing. We're streaming on the Internet right now. Done wrong, we'll see the same old movie again. Big customers teaming up with the IOU to build a lot of stuff that the rest of us have to pay for eventually.

So this committee is gonna hear a number of different data center bills. You've already started this morning looking at different facets of the this new phenomenon. This bill is the one that looks out for people. Don't make us pay for someone else's infrastructure and bring us some good jobs to our communities. Look, electricity is the most regressive tax we've got here.

The opposition's written in to say that, you know, trust the system. It's working. Really? You might wonder why is a climate group here talking about social justice? Then the answer is we need electricity to power our homes, our vehicles, and our industries. And we cannot ask people to do that with really pricey power. So thank you and thank you for bringing this, Senator Perez.

Thank you, sir. Okay. Anyone who wants to quickly voice their support for the bill, come to the microphone, please, and mention your name and affiliation.

Good morning. Antonio Sanchez on behalf of IBEW Local eleven in Los Angeles in support. Thank you. Thank you.

Good morning. Allison Hilliard with the Climate Center in support.

Mariela Rocha with Leadership Council for Justice and Accountability and the Center for Biological Diversity in support of amended. We are disappointed with the committee's amendments on backup generation, and we hope to continue working with the committee and the author, to have some safeguards on backup generation from, renewable energy sources. Thank you.

Joe Guardias with NRDC, support in concept.

Jacob Evans with the Sierra Club of California. Support if amended also for the participant to see the backup generation requirements taken out. Thank you.

Good morning. Grishina Mohaveer. California Environmental Voters also support if amended due to the concerns about backup generation. Thank you.

Hi. Alexis Sutterman, Brightline Defense. Support if amend echoing, the the desire for, amendments to, specify only clean energy backup generation. Thanks.

Megan Shumway in on behalf of Sacramento 350 in support.

Dave Shukla, Long Beach Alliance for Clean Energy. Support if amended.

Cameron Rogers 350 East Bay in support.

Okay. Opposition.

Good morning again, mister chair, members of the committee. For the record, my name is Kara Bunder. I'm a Director of State Policy at the Data Center Coalition in respectful opposition to SB 978. The Data Center Coalition is a national trade association for the data center industry. Our members are leading data center owners and operators and companies that lease large amounts of data center capacity.

We live in an era of unprecedented demand for digital services. From telehealth and online classrooms to the rapid scaling of generative AI, which cut out over $4,000,000,000,000 to the global economy, data centers are the essential infrastructure making it all possible. Again, the data center industry is committed to paying its full cost of service for electricity and the underlying infrastructure that it uses. Sound rate making depends on non discrimination. No single industry should be singled out for disparate treatment unless there is verifiable cost based reasoning.

And your rate design should reflect the actual cost of service rather than targeting a specific type of end user. The PUC already has expertise and transparent processes in place to ensure fair cost allocation across different customers. And just last year, SB 57 was signed into law, which specifically requires the PUC to assess data center cost impacts. We should allow that assessment to conclude to be delivered in early 2027 before layering on new potentially duplicative mandates. We appreciate the committee's work on the language surrounding backup generation.

As- As I highlighted earlier, backup diesel is one of the most commonly deployed, sources for backup generation, and these are already highly regulated and only used in emergency situations. Diesel generators, remain the most reliable and scalable technology capable of the response speeds required to keep our digital economy online in cases of grid failure. California's position as a global tech leader depends on this infrastructure. We urgently committed to a risk- resist advancing SB 978. Thanks again for your consideration.

Thank you. Yes, sir Ahmad.

Good morning. Again, Chair Allen, Vice Chair Ochoa Bogh, and members. Thank you. I'm Ahmad Thomas, CEO of the Silicon Valley Leadership Group, and we respectfully oppose SB 978. California's economy depends on reliable affordable power for facilities that keep our state online, supporting telehealth, education, finance, manufacturing, government services, and the cloud tools households and businesses use every day.

SB 978 directs the CPUC to create a special rate structure for large load data centers and hard codes how costs are assigned. PG and E's rule 30 proceeding is in its second phase right now with an interim decision already requiring prepayment of interconnection costs. California is competing with dozens of states to attract the next generation of data center investment. SBLG and our members are committed to paying the full fair cost of service and supporting a grid that is clean, reliable, and affordable. But stacking prescriptive rate mandates and long term procurement obligations in statute while the CPUC is actively building the regulatory framework to address these exact issues creates a chilling effect for investment and development.

We urge the committee to vote no and to allow the CPUC's ongoing proceedings to deliver the durable evidence based framework that rate payers and industry both need. Thank you.

Thank you, sir. Okay. We'll have other folks to weigh in in opposition.

Good morning. Brandon Ebeck, Pacific Gas and Electric. If I may, there's one additional very important point that's not been raised yet in in either this bill or the prior bill is applicability beyond just IOUs and this bill and the other one only applied IOUs. The vast majority of existing large load facilities are

in a public utility territory. Those projects have caused transmission upgrades. All utilities in California share transmission access charges. We additionally there are broad generation market impacts from all

of this development. We need to make sure that California policy applies to all utilities, all those urban entities equally. Thank you very much.

Thank you.

Mr. Chair and Members, Bruce Mignani on behalf of the California Large Energy Consumers Association. We had an opposed unless amended position, but with the committee's amendments, limited to data centers will be neutral on the bill. So thank you to the author and committee staff.

Thank you.

Thank you, Mr. Chair and Members. Joe Saenz with San Diego Gas Electric and SoCal Gas. We have an opposed unless amended position on the bill in print. Appreciate the amendments and look forward to continue working with you and the author, on this bill. Thank you.

Thank you.

Good morning. Jazmine Advincula, Cal Asian Chamber of Commerce in opposition. Thank you.

Daniella Garcia Hernandez with the Western States Petroleum Association, and we want to thank the author for accepting the committee amendments, that would narrow the bill down to data centers. That would narrow the bill down to data centers only.

And once we see the amended language in print, we will reevaluate our position. Thank you.

Hi. Lola McKay on behalf of Enchanted Rock. We were opposed to the bill in print, but with the amendments, specifically the backup generation amendments, we will be removing our opposition. Thank you.

Good morning, Chair and Members. Jose Torres on behalf of TechNet, and I was also asked for Tech CA in respectful opposition.

Good morning, Chair Allen and Members. John Kendrick on behalf of the California Chamber of Commerce. We were very much opposed to the bill in print. Looking forward to seeing the amendments. Likely, we'll be still opposed unless amended. Thank you.

Good morning. Peter Leroe-Muñoz with the Bay Area Council. Opposed unless amended. Thank you.

Okay. Let's bring the bill to the committee for discussion, questions, thoughts. Moved by Senator Archuleta. Gotcha. Okay. Without further questions, we'll let the senator close.

Yes. Thank you so much. You know, I- I- I think this is a big issue that us as a legislature needs to make movement to address. As I mentioned before, you know, this bill is really in response to community concerns that have come up around data centers. And recently, the first ever local ballot measure to ban data centers was proposed within my district.

I think local leaders are struggling to figure out how to navigate, these infrastructure, especially as we see them rapidly growing in our communities. And I think we have a responsibility as a legislature to provide some guidance here. We know that folks need reliable data services. And at the same time, people have real cost and environmental concerns. So I think our bill strikes the right balance of trying to address all of those things and making sure that we're providing some guidance as these projects come up for consideration in communities.

Thank you so much, and urge an aye vote.

Chair, please call the roll.

Do pass as amended to the Labor Public Employment and Retirement Committee. [roll call].

Okay. Great. Let's we'll- we'll keep it open for folks to add on. Let's now go to Senator Becker who's gonna present item four, SB 943.

Thank you, Chair and Members. This bill has the potential to achieve four good outcomes, just making two smaller forms the way we charge for electricity. So industrial firms are the source of almost 20% of our state's greenhouse gases and a similar share of air pollution that contributes to health problems like asthma.

Most of these emissions are caused by generating heat, often in the form of high temperature steam that is used to run the factory, process foods, drive chemical reactions, etcetera. State regulations are pushing these firms to transition to cleaner energy sources, and many firms are looking for cost effective options to do so.

But we wanna do so without putting them out of business. We can help by supporting clean energy pathways that make economic sense for these companies. Without cost effective options, the alternative if these businesses are shut down or move out of state, taking good middle class jobs with them.

And nobody wants that. One of the most promising solutions for reducing pollution from industrial firms is to use electricity make the same heat that they make today. Unfortunately, as we know, retail electricity prices are much too high. But there are several hours every day when electricity prices on the wholesale market would make it much cheaper to use electricity than natural gas.

At off peak times, we have plenty of cheap electricity as we just discussed that could be used for industrial firms to replace gas and save money. And they wouldn't be to be saving money for themselves. If we electrify heat, that would mean a lot of new off peak demand on the grid. As long as industrial firms pay more than incremental cost of serving that demand, every additional dollar helps pay the fixed cost of the grid.

Off peak load growth is like this, is one of the best options that we have for sharing the cost of the grid across more customers and low electricity rates for all of us. Again, has to be done right. Like we just had the data center conversation, it can be beneficial load. So how can we do that?

I'll let my witnesses discuss, but we just need to get the price right. So off peak electricity is cheap, providing a strong price signal for people to use it. With that, I'd like to bring up my witnesses, Teresa Cheng, California Director for Industrious Labs, and Jo Gardias, Climate Solutions Fellow for NRDC.

Please proceed.

Thank you. Thank you for the opportunity to speak today. My name is Teresa Cheng, California Director of Industrious Labs. As the Senator mentioned, California's manufacturing economy is made up of tens of thousands of facilities that employ over 1,200,000 people in the state.

It is the backbone of our economy and unfortunately also a major source of climate emissions and hazardous air pollution. Two thirds of gas fired industrial heating equipment is located in environmental justice communities, which harms the health of our most vulnerable residents.

What's remarkable is that this problem is solvable today. Industrial heat pumps, electric boilers, thermal batteries, these are alternatives that are commercially available and ready to deploy today. And many of these technologies are even manufactured right here in California.

Technology is not the obstacle. It's our outdated electricity rate structure. California's industrial electricity rates are more than double the national average. Nonbypassable charges and transmission charges alone cost manufacturers roughly one and a half times the equivalent price of gas. The result is that companies that wanna decarbonize are doing that.

They're just not doing it in California. The state has supported adoption of clean electric industrial equipment through successful programs like the CEC's INDIGO Program, the FPIP Program. But even the factories that clear the capital hurdle face long term operating costs from electrification that are five to 10 times higher than staying on gas.

And so no clean air regulation or cap and invest program amendment will be able to fix that. Only the CPUC can address electricity prices, and this bill is a smart way to unlock key barriers for the PUC to do that. These are smart and common sense reforms with co-benefits across the board.

They give manufacturers a sustainable path to operate clean electric equipment in California, keep good paying jobs here, slash emissions, improve air quality and public health, and put our curtailed renewable energy to work to drive down costs for all rate payers. We urge your support of this bill. Thank you very much.

Thank you. Okay. Jo, basically, this is support support the bill here. We've got another bill to present. So if there's something very pressing you wanna add, we'd love to hear your thought. But we are trying, we're trying to press through because we both have caucus. Right.

Sure. I will really briefly... Jo Gardias with NRDC. I'll just really briefly add that we're supportive of this legislation because it reduces cost for other customers that are not participating in this program by ensuring that marginal costs or the costs to serve those customers are still recovered, plus a portion of fixed costs.

And because these customers are new and they wouldn't otherwise come to the grid unless this tariff was available, that means that other customers are seeing cost savings. Thank you.

Thank you. Alright. Let's let's see if folks wanna just add on in support.

Chair and Members. Bruce Magnani with California Large Energy Consumers Association in support of the measure. Thank you.

Mr. Chair and Members. Delaney Hunter on behalf of Antora Energy Systems, manufacturing in Senator Becker's district, in strong support.

Mr. Chair and Members. Will Brieger, Climate Action California, in support.

Jakob Evans with Sierra Club California in support. Thank you.

Jared Getzoff, Project 2030, in support. Thank you.

Jonathan Young, State Water Contractors, in support.

Megan Shumway, Sacramento 350, in support.

Okay. Thank you. I don't believe this opposition registered, but is there anyone here? Okay. Yes, sir.

Good morning. Jon Kendrick on behalf of the California Chamber of Commerce with a bit of a tweener position here. Really appreciate the fact that we're looking at a concrete path to helping California achieve its climate goals that is not adverse to business interests. So I very much appreciate it. Look forward to seeing what this bill becomes as it moves forward. Thank you.

Thank you. Okay. Questions, thoughts? This has been moved by Senator Strickland. You may close.

Well, in interest of time, will thank our witnesses, and I respectfully ask for aye vote.

Thank you so much. Secretary, please call the roll. You are accepting the amendments is my understanding?

Yes. Do accept the amendments.

Great. So this is now, the motion is do pass as amended to Senate Appropriations Committee with the committee amendments.

[Roll Call]

Okay. Alright. We'll leave the roll open... Oh, Richardson, aye? Yeah. Okay. Can you say Richardson, aye, please?

Richardson, aye.

Okay. Alright. Great. Okay. Thank you. Not I don't wanna commit a felony by voting for you. Alright. Let's go to Senator Strickland. You come up to the dias right here and we will hear you the final the final bill on the agenda. That's sb 985 item five on your agendas.

Thank you, mister chair. Good morning, mister Chair and, Senators. I wanna open up but first accept the committee amendments and appreciate the cooperation with the chair and the committee staff. I know the staff and the chair worked very hard on this. I wanna personally thank you for letting me bother you over the weekend.

SB 985 provides much needed transparency, accountability, and legislative oversight to the 911 system. When Californians called 911 they, are connected to a dispatcher through a statewide 911 system. However, the technology is badly outdated and unable to support modern capabilities, like precise cell phone location tracking, which can be the difference between life and death. That's why in 2014, the legislature directed the governor's office of emergency management, or OES, to develop a plan to implement an updated next-generation 911 system. However, over a decade later, the next 911 project remains unfinished, plagued by a series of problems, expensive contracts and missed deadlines.

This is unacceptable, I believe when we, in the legislature have the obligation to oversee this process and make sure it gets completed. California should never have to wonder, if they call 911, if it will work or when they find themselves in a life or death situation. My bill, the fix 911 act, requires OES to provide the legislature with regular quarterly reports and their, progress until the 911, system project is completed. This requirement is in line with the recommendation from the LAO office. With adequate oversight, problems can be identified and fixed before they spread.

And we can make sure that, the failures of the past are not gonna be done in the future. And we could be a problem solver on on this issue. And for those reasons, I ask for your aye vote.

Great. Alright. Witnesses in support. Folks who wanna weigh in? Anyone who wants to raise opposition or concerns about the bill? Move the bill. I will bring it to the yeah. We'll bring it bring it to the committee, moved by senator Archuleta. Questions? Thank you. Concerns, thoughts? You are, accepting the amendments?

Yes. And again, chairman, I wanna really thank your staff. And I did bother you and mister Stern over the weekend. Yes.

And and of course, it is going to senator Stern's committee next, Senate emergency management committee, but let's let's call the roll. Unless you wanna No. No. I'll take those as your close.

I learned to be quiet when you

Alright. Secretary, please call the roll.

[Roll Call]

Okay. So let's go ahead and lift calls. We're gonna adjourn this meeting in ten minutes. So I members need to get here if they wanna vote. Because we all gotta get to caucus. So let's lift calls. We're gonna lift call first on item one, SB 868 Senator Weiner. Secretary, please call the roll.

[Roll Call]

Alright. We will leave that open. Is that What? 0. 120. Okay. We're gonna leave that open for folks to come in and vote. Please members, please come down to vote. We're gonna now go to item two, SB 886 by Padilla. [Roll Call]

Thank you. Thank you very much. Alright. Thank you. Thank you very much, senator. Okay. We are going to close the roll, but let the record reflect that senator Caballero was chairing another hearing. But we will be closing the roll. All of these bills have passed out as amended to their respective committees. Thank you to the staff for a challenging but great start to what's gonna be a wild and wooly bill season. Thank you.