Assembly Standing Committee on Utilities and Energy

Good afternoon and welcome. I'd like to convene the Assembly Committee on Utilities and Energy hearing. Sergeants, please call the absent assembly members. Before we move to the agenda, I have a few housekeeping announcements to make. I will maintain the quorum during the hearing as is customary.

In order to hear as much from the public within the limits of our time, we will not permit disruptions that impede the orderly conduct of legislative proceedings. Any individual who is disruptive may be removed from the room. Today, we have 21 measures on the agenda and eight are on consent. Testimony is limited to two minutes per witness. As a reminder, primary witnesses and support must be those accompanying the author or who have otherwise registered a support position with the committee.

Primary witnesses and opposition must have their opposition registered with the committee. All other support and opposition can be stated at the standing mic when called upon to simply state name, affiliation, and position. If we exceed today's hearing time, please submit your testimony through the email address on the committee's website. Before we begin, I wanna take a moment as the chair's privilege to recognize that today is Administrative Professionals Day. I'd like to acknowledge Vanessa who keeps this committee running day in and day out.

The hearings you see happen today because of work that starts long before anyone takes their seats at the dais. Vanessa does all this behind the scenes, work with professionalism and grace, and this committee is better for it. Please join me in thanking her. Okay. Today, we're gonna start as a subcommittee as we await, assembly members who are held up in other committees.

And the first item, today is AB 1813 by Assemblyman Ward. Please come forward whenever you're ready.

Thank you, madam chair and members. First, I really wanna thank our committee staff for their work on this bill and really and state that I'll be accepting all the amendments that are proposed in the back of the analysis. California, as you know, has some of the most ambitious renewable energy goals in the world, including 60% renewable energy by 2030 and one hundred percent carbon free electricity by 2045. While the state has made gains in the clean energy deployment, significant barriers remain to consumer participation.

For example, 45% of all California households and 70% of low income households are renters, which in nearly any situation prevents on-site solar opportunities.

And one way the state can address this issue is through the use of community renewable projects, which are typically smaller scale solar installations typically build on small parcels of private land. And these programs can operate in two ways. Customers can sign up as as subscribers to low cost solar power, paying a monthly fee and then earning credits on their electrical bills, or customers may purchase shares proportionate to their energy needs and own a set, the a set amount of a community renewable project's power generation capacity.

And that's why in 2022, I introduced and we passed AB 2316, which directed the PUC to establish a new community solar and storage program if it benefits all rate payers, compensating projects based on the full value of distributed energy resources. In the ensuing proceedings by the PUC, community solar and storage advocates introduced their net value billing tariff proposal, which received broad support from ratepayer advocates, environmental justice groups, labor, and others, and mostly aligned with the intent of AB 2316.

Now ultimately, the PUC issued a proposed decision rejecting this proposal and instead adopting what they are calling the community renewable energy program. The program does not fairly compensate project projects for their full value to the grid and ratepayers and relies entirely on external sources of funding, which have largely been canceled by the federal administration.

And that's why this year earlier, the speaker convened an outcomes review hearing that was facilitated by this committee to bring together stakeholders where it became very clear the current community renewable energy program adopted by the PUC was unworkable and would no longer would would result in no new projects being built.

I might add at this time, that in the last four years since AB 23262316 was enacted, about a dozen other states have actually also adopted community, solar programs, which are moving forward. And California has not produced one new program, one new job, one new benefit from the work that this legislature has done four years ago.

AB 1813 makes the needed changes to the program to ensure that it aligns with the original intent of AB 2316, specifically ensures the program does the following. It supports the implementation of state building codes requiring solar on most new residential units. It ensures that at least 51% of its subscribers are low income customers or low income service organizations.

It minimizes the impacts to non subscriber rate payers, and it provides bill credits to subscribers based on the avoided cost of the community renewable energy facility. These changes ensure that California has robust community renewable programs that expand access to solar to all Californians while providing a valuable tool for achieving the state's ambitious energy efficiency and climate change goals, all while creating high quality and competitive jobs.

With me to speak in support is Mary Anne Borgeson, the California Climate and Energy Policy Director at the Natural Resources Defense Council, and Matthew Friedman, a renewables attorney at the utility reform network. When time is appropriate after we've established a quorum, I would respectfully ask your for your aye vote.

Thank you, madam chair, members of the committee. Matt Freedman on behalf of the Utility Reform Network. AB 1813 would jump start the deployment of distribution connected renewable energy projects paired with significant amounts of energy storage. Many customers today cannot benefit from behind the meter solar because they don't own their property or because their property is unsuitable for solar. As mentioned by assembly member Ward in his opening statement, 45% of Californians are renters and over two thirds of of low income customers rent.

Net metering is primarily a policy for homeowners, but community solar would allow these customers to subscribe to shared facilities and receive benefits. In 2022, Tern worked cooperatively with the community solar industry and Assemblymember Ward to support the enactment of AB 2316, and this bill directed the PUC to establish a community renewable energy program and included specific direction with respect to the value of these projects.

And TURN's support was based on the recognition that the long standing voluntary green energy programs administered by the investor owned utilities were neither successful nor scalable. And by the opportunity to use community programs as a low cost alternative compliance option for the new solar home mandate under title 24 of the state's building code.

Despite the clear directives in AB 2316, the PUC issued one decision in 2024 and another that they're proposing to adopt next month, both of which embrace a non viable, non compliant, and incomplete program that is designed to fail and perhaps never even meant to launch.

Due to the extended delays in implementing 2316, key sources of federal, state, and federal and state money are no longer available to support this program. So the PUC's refusal to implement AB 2316, represents a huge missed opportunity and a failure of leadership. This bill would redirect the PUC to make changes to its flawed program that would unlock the development of substantial quantities of new local solar and storage that can place downward pressure on rates.

The legislature has a chance to require the PUC to do this program right, so we ask for an aye vote. Thank you.

Good afternoon, chair and members. My name is Merrian Borgeson. I'm the California director for climate and energy at NRDC. I'm here in strong support of AB 1813 as we were previously with Assemblymember Ward's bill previous bill. California urgently needs clean energy and storage that can be built quickly.

Today, too many solar projects are stuck in massive queues at a time when we have huge need for additional resources and growing electricity demand. Community, scale solar and storage offers one of the fastest ways to actually get store storage and solar built. These projects can be built in twelve to twenty four months, not years and years, like larger scale storage larger scale solar and storage. And the speed really matters of California's serious about reliability, affordability, and meeting our climate goals.

A v eighteen thirteen unlocks this opportunity.

It supports these local resources that can meet near term grid needs and provide benefits to customers who can't access rooftop solar. Community solar has also been shown to deliver meaningful bill savings, which can make a real difference as customers are struggling with high cost. And by delivering clean power closer to where folks live and in constrained pockets of the grid, these projects can help reduce reliance on peaker gas plants. AB 1813 is really a practical, equitable step forward, and we respectfully urge your aye vote.

Thank you.

Thank you. Do we have any additional support in the room? Please come forward and state your name and affiliation.

Good afternoon. Raquel Mason with the California Environmental Justice Alliance. ... action. Also asked to register support from GRID Alternatives and Clean Coalition. Thank you.

Good afternoon. McKinley Thompson Morley on behalf of the Solar Energy Industries Association in support.

Good afternoon. Christina Scaringe for the Center for Biological Diversity in support.

Good afternoon. Thank you. Derek Chernow with Californians for Local Affordable Solar and Storage, the bill sponsor. Obviously, urgent Ivo. Just wanna make sure that folks know this is not a new concept.

Can you It's just name and affiliation. Thank you.

Thank you. Jeff Neal representing the Contra Costa County Board of Supervisors, also in support.

Chair members, Alicia Priego on behalf of Nexamp in support.

Brandon Smith with Dimension Energy in support.

Good afternoon. Matt Klopfenstein on behalf of, Center for Sustainable Energy in support. I've also been asked to give support for the Climate Center. Thank you.

Good afternoon. Tyler Tratten on behalf of Coalition for Community Solar Access and Vote Solar in support. Thanks. Will Breager, climate lawyer and advocate in support. Thank you.

Thank you. Do we have any main opposition in the room? Please come forward.

Thank you. Brandon Ebeck here on behalf of Pacific Gas and Electric. We do not have a proposed position on the bill as in print. We have significant concerns of what we see in the committee analysis. First in process, I don't think I've ever seen a bill be substantially amended from a spot bill into a substantive bill as committee amendments.

So we will need more time to fully review what is proposed for us. We have spent more than four years talking about this program. Going back to AB 2316, we had concerns with the way the bill is constructed. We provided a lot of feedback to the sponsors and the author about how it would be essentially impossible to make a program that that is cost effective that meets all of the goals.

That's just given our experience running a variety of other programs that have failed as the author's, witnesses have mentioned, and we spent tens of millions of dollars trying to administer those programs.

So we're essentially back here again trying to fix programs that won't work. Ultimately, as utilities and load service entities, we procure the least cost best fit resource. We agree that there are certainly sections of our grid, as we'll talk about on utilization bills later, that are constrained where resources like small batteries and solar will have value. But we need to assign the cost benefit on each specific project, not a program that just pays the projects a rate above the wholesale energy rate. That will create a cost shift.

That's pretty much no way around that. The other concern that we've had going back to twenty three sixteen is according to the analysis that we've seen where there's the most benefits, the constrained boxes of the grids are most likely represented by CCAs where they're the default energy provider. So if the utility is trying to buy power for where our customers don't live, that's creates a problem with the program. So it's including the author's own district, our majority CCA owned.

So it's a little bit confusing on who's in the bill, why we don't have an option to opt out like other low serving entities if the program's not cost effective. Thank you.

Thank you, madam chair. Israel Salas with San Diego Gas and Electric, also not not positioned on record. The bill is substantially amended as was noted by my colleague from PG and E. On the issue of CCAs, about 85% of our service territory today is represented by one of two CCAs, so we are concerned about the cost impacts. We have a a small dwindling bundled customer base, and so we are concerned about any additional administrative costs of of standing up this program.

The CPUC, as was noted earlier, just issued, a proposed decision within the within the last two weeks to finalize implementation of the predecessor bill. So that has taken up a lot of time, a lot of resources, and so we are concerned about how this bill is gonna continue the potential of cost shifting, on a limited customer base. So not having had the chance to fully review the bill, it's been available for less than twenty four hours.

We will probably be opposing this bill on a going forward basis. Thank you.

Thank you. Do we have any additional support opposition in the room? Please state forward with just your name and affiliation.

Oh, hi. Again, Catherine Borg with Southern California Edison. Similar position, we don't have an official one based on the print time of the language. We'll be looking at it, but similar concerns. Thanks.

Okay. I'm gonna bring it back to the committee to see if you have any questions for mister Ward.

I'd like to be added as a coauthor, please.

Thank you. We'd love to have you.

Okay. Would you like to close?

Thank you. Aye, you know, I would acknowledge again that this committee had a very healthy deep dive into this issue during the speaker's, requested outcomes review of the, eighty twenty three sixteen bill. And while a lot of these terms, a lot of the, a lot of the math, was evaluated, over the last couple of years, were under question. Nothing is a surprise to advocates or myself who attended those PEC hearings. I'll admit I'll acknowledge as well too.

This was not something, unanimously adopted by the PEC and only passed on a three to one vote. But there was deep concern, by many of us that, the, direction that they were gonna go would, render any of these projects potentially, economically infeasible. I categorically, discount that that these, are gonna create opportunities that either one are gonna still add to any kind of so called cost shift. That is something that we are particularly, baking into the measure of the bill.

Continue, of course, as always to be able to meet with opposition to ensure that that is, underscored.

But, also, I draw your attention to page three of the analysis, Because if you'll see there under the explosion of community solar opportunities across the country right now, of all the states, the state of Florida is running away with these opportunities for community solar models. And so this is very much economical and workable, and we deserve to have the same here for California. If it's good enough for Florida and it can work there, we know we can make it work here.

We are behind in this opportunity and specifically for those that currently don't have access for solar opportunities. This corrects a lot of the direction that unfortunately was flexible at the time and allowed for everything to go off of the tracks, but let's get it back on the track.

California used to be the leader in solar opportunities right now. You know that our solar industry is deeply suffering right now from a succession of decisions that are being made both in the legislature, but more specifically at the commission. And we wanna get those back on track to be able to have those jobs and to be have and and to have a green energy opportunity for Californians that currently don't have that kind of access. And when the time is appropriate, I respectfully request your aye vote.

Thank you so much. Okay. Next up, we have file item 11, a v twenty three one three by Assemblyman Berman. Welcome, mister Berman. Hey.

Thank you, madam chair and colleagues. Hi. Good to see you. Good to see you. Thanks for meeting. Bless you. Thank you to the committee staff, for their work on this bill. I will be accepting the committee amendments as outlined in the analysis.

Gas utilities plan to spend millions of dollars in the coming years to replace aging gas service lines, a cost which is paid for by all rate payers. It'd be twenty third it'd be twenty three thirteen, the Home Energy Choice Act, would require each gas corporation to offer a gas distribution service line replacement alternative program. This program will give customers with a planned service line replacement the option to instead discontinue their gas service and use a portion of those funds to electrify their home.

AB 2313 will not only ease economic barriers to clean energy, but also reduce long term costs for all rate payers by avoiding long term investments in gas infrastructure. This will protect the environment, promote public health, and provide long term savings for all rate payers as California equitably manages our transition away from fossil fuels.

I respectfully ask for your aye vote, and I'm joined today by Merrian Borgeson with NRDC and Matt Vespa with Earthjustice.

Hello again. Good afternoon. As I mentioned before, I'm the, California director for climate and energy at NRDC. My name is Merrian Borgeson. We're here I'm here in strong support of twenty three thirteen.

I'm especially glad to be supporting this bill because I've experienced the problem that it addresses firsthand. About two years ago, when the gas service line to my home needed replacement, I wasn't given a choice. The utility notified me, dug up my property three days later, and replaced the line despite the fact that my family was more than halfway to electrifying my home.

I even asked the utility workers if they would delay the the, replacement so that we could electrify and was told that it was too late. That experience made very clear how limited consumer choice is today and how easily we continue to lock in fossil fuel infrastructure without asking whether it still makes sense.

Twenty three thirteen brings choice and common sense to this process. When a utility needs to replace an aging gas line, this bill allows homeowners to choose electrification instead of automatically rebuilding gas infrastructure. Replacing a single gas service line, that's the bit from the main to your house, can cost more than $20,000. Those costs, including utility profit, are spread across all gas customers and paid off over more than fifth five decades.

Locking in that expensive infrastructure, long after California has committed to a carbon neutral future and driving up costs for remaining customers.

The Home Energy Choice Act offers a smarter path forward by redirecting a portion of those funds that would have replaced that gas pipeline into a voluntary electrification incentive. This bill lowers the barriers for homeowners and protects ratepayers from stranded assets. Twenty three thirteen is practical, forward looking. It's customer centric. It helps families modernize their homes, reduce costs, and supports California climate goals all without mandating change. I respectfully urge your support. Thank you.

Good afternoon, chair and members. I'm Matt Vespa, senior attorney with Earthjustice, a cosponsor of AB 2313. I'm gonna briefly address opposition arguments to the bill. First, contrary to claims, AB 2313 would increase bills for gas customers. The energy choices set up under the bill will lower costs for all gas customers because it avoids more expensive pipeline replacement projects gas customers would otherwise have had to pay for.

This is also why opponents' cost shift arguments missed the mark. The transition to heat pumps and other electric appliances is already underway. Heat pumps are outselling gas furnaces, and awareness of the superior performance and health benefits of induction cooking is growing. People are moving off gas with or without this bill. What AB 2313 does is encourage customers to do that.

At the moment, it will save other gas customers money by avoiding adding cost to the gas system. This is what a managed transition looks like and what AB 32313 helps achieve. Second, rather than undermining SB 1221 zone of electrification projects, AB 2313 complements those efforts. Gas utilities in New York offer both types of programs because they target different opportunities. California should be doing the same.

And finally, the incentive levels AB 2313 can provide are meaningful. We looked deeply to this issue in PG and E's rate case, calculated the avoided cost was around $20,000, and that a $15,000 incentive will provide substantial savings to nonparticipants. PG and E agreed this was a reasonable incentive level.

$15,000 goes a long way to making home electrification affordable, and bill the bill requires coordination with low income programs to enable incentive layering, so low income customers are also able to realize the health, safety, and comfort benefits of all electric homes. For these reasons, I urge you to vote for Energy Choice and vote aye on AB 2313.

Thank you.

Thank you. Do we have any additional support in the room? Please step forward and state your name and affiliation only.

Good afternoon. Christina Scaringe with the Center for Biological Diversity and Support.

We gotta turn the mic on. I'm sorry. One moment, please. It's on. It's

Sorry. Christina Scrunch with the Center for

Behalf of Leadership Council for Justice and Accountability in support. Thank you.

Chair member, Jial Dentes on behalf of San Diego Community Power in support.

Dan Seeman on behalf of California Environmental Voters in support.

Bill Brigger for Climate Action California and 350 Humboldt in support. Thank you.

Good afternoon. Kiana Valentine on behalf of Sonoma County Transportation And Climate Authority is in support.

Michelle Canales with Union of Concerned Scientists in support.

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

Madison Vanderclay with the build with the building decarbonization coalition action fund in support.

Vince Ward Majo with MCE in support.

Craig Schuller on behalf of Clean Power Alliance in support.

Alicia Priego on behalf of the City of San Jose and San Jose Clean Energy in support, but we are reviewing the amendments. Thank you.

Mark Fenstermaker, Peninsula Clean Energy and Strong Support.

Sean McNeal, California Community Choice Association in support.

Marquis Mason with NRDC on behalf giving me two is on behalf of the Climate Center, Climate Future California, All Electric California, the California Green New Deal Coalition, the National Association of Pediatric Nurse Practitioners, Orange County Chapter, Carbon Free Silicon Valley, Clean Earth for Kids, Courage California, Efficiency First California, Fallbook Climate Action Team, and StopWaste. Thanks.

Good afternoon. Chris Rosa here to register support on behalf of Spur, Grid Alternatives, Resilient Palisades, Rewiring America, and Coalition for Clean Air.

Thank you. Do we have any main opposition in the room? Please come forward.

Madam chairman and members, Scott Wetch, on behalf of the California State Pipe Trades Council, the California Coalition of Utility Employees, and the State Association of Electrical Workers. I wanna appreciate the the amendments and the analysis make a very bad bill better, but we have two major points of opposition. The first one is just last year, we negotiated SB 1221 with the sponsors and with this committee and the Senate to create a pilot program for electrification and replacement of the gas system.

It has just gotten approved by the PUC and just gotten underway. So this is bad faith to us.

But more importantly, I too have a personal story, and I will look backward instead of looking forward. And that is the San Bruno tragedy that killed eight people in 2008 when I was here, and I attended every single hour of the Blue Ribbon Commission that looked into that because the then president of Q was on that commission. And the problem I have with this bill is that the fund that it takes, the re the repair and replacement fund is a fund that is there for safety.

And now you're using it to incentivize electrification. That may be a fine goal.

Don't take it out of the fund that is there to replace the highest priority pipelines that need to be repaired or replaced. To give you an example, in the last year, see for SoCalGas and San Diego Gas and Electric, the the utility asked for 360 some odd million dollars to go for that type of work. We went in with a list of how much deferred maintenance there was and replacement work to be done, and we thought it should be closer to 500,000,000.

That's what we did as interveners. Ultimately, the commission approved $93,000,000, a delta of a $122,000,000.

The point being is there's not enough money going into that fund every year just to do the identified work that needs to be done. So if you want to incentivize, if you wanna buy appliances, if you wanna do whatever this bill proposes to do, don't do it out of the fund that goes towards safety. It's reckless.

Madam chair and members, Kent Kauss with San Diego Gas and Electric and SoCalGas. We appreciate the thorough analysis and recommended amendments, but we remain opposed due to safety and affordability concerns as detailed in our letter. The analysis not only suggests significant amendments to the bill, but it also raises several implementation details that are yet to be determined. I would note that this increased workload at the PUC is on top of what is going on currently in SB 1221 as my colleague noted.

On safety and logistics, the bill requires an incentive offer to be made to all impacted customers with planned service replacements.

This offer could indiscriminately delay all pipeline safety work, including time sensitive safety work. Safety for us is priority for number one, so we are concerned about the impact to get that work done. On the issue of cost, we appreciate the committee's amendment acknowledging the impact of departing customers to remaining customers. This is an important flag given the affordability challenges in the state, and it's unclear to us how these cost savings will ultimately be passed on.

The other thing to note in this is the state over the last several years has invested about $1,000,000,000 in this transition out of a different bucket of funds.

This is using gas rate payer funds to electrify, which we do not believe is appropriate. On the electric side, we've experienced similar programs where these cost shift exists, and I point to net metering. I know it's controversial subject, but some consumer advocates have tagged that at $8,500,000,000 cost shift. We wanna avoid that on the gas side. We do believe that SB 1221 is a better path, more efficient, community based, not individual customer by customer base.

And in the end, when this repair work is being done, you're not avoiding all of that work. You still have to go remove the meter, probably the pipe. You got a pipe. You gotta cap the pipe that's going from the main to the service. You're not avoiding all of these costs.

You're still having to do this. That maintenance work is being done for a reason. Most often, it's safety. This doesn't avoid all of that work. There may be very small incremental.

With those concerns, we ask for your no vote.

Thank you. Alright. We're gonna open it up for additional opposition testimony in the room. Can I approach the microphone at this time?

Good afternoon, chair and members. Connor Gessman on behalf of the Utility Workers Union of America in opposition.

Okay. Bringing it back to committee. Questions, comments? I know that I walked in mid testimony from our opposition witnesses. It's one of those weeks.

I think all of us have had to be four places at once. But I I did want you know, I think you've raised some very real concerns regarding safety and affordability. Can the author respond to some of those opposition concerns regarding safety and affordability?

You bet. So a couple of issues in regards to concerns about the cost shift, which is something that we work with the committee very, very closely with and appreciate the dialogue with the committee staff and the amendments that I said earlier that we're accepting. But this bill is designed to save every rate payer money and reduce risk long term. The incentive level must be less than the total cost of the service line replacement. I believe that includes things like capping and and removing the meters.

If a dozen, we'll tighten that up, which will lower the cost that all rate payers would otherwise pay. And recent amendments also make it very clear that the incentive level must benefit remaining gas customers, and that was that came out of the the conversations with the committee. I'll defer to my witnesses if they wanna add any points on that. No. That'd be fine.

And and then in terms of safety concerns, there's typically there's there's typically there's typically a significant amount of time between when a service line is identified for replacement and when replacements actually happen. And and so for PG and E, the average time between the identification and breaking ground Yeah. And breaking ground for main and service line replacement programs is over a thousand days. The average time for so called gas is just shy of four hundred days.

This gives time to offer customers the choice to electrify and disconnect from the gas system.

The PUC can then determine what the appropriate deadlines are for customer responses to avoid delays to planned work, and the bill also includes an exemption for emergency replacement to ensure imminent safety issues can be addressed. And I'll once again let my my witnesses dive deeper into those facts. There it is. Yep.

Okay. And as we were in conversation with the author about this bill, I think the the big idea of this bill is that as we are transitioning from gas to electric, that rather than making investments in upgrades to the gas infrastructure, you, you know, use those funds to encourage electrification.

And what we tried to do with the committee amendments was make sure that that was, you know, kind of a one for one exchange rather than depleting, you know, funds for work that was still going to be necessary. I hear the opposition witnesses saying that we did not get that right. So I guess help help me understand.

Like, I guess, do you agree that there's sort of a concept where there's some work that could not be done and transferred to electrification? Are you saying everything is a fixed cost in the system until the system is, like, obsolete?

No. There could be some savings. For example, if you're replacing a pipeline service line, the capital cost of that pipeline you're no longer making. You still have all your O and M to go do the work to pull the pipe out of the ground, to remove the meter. All of that still continues.

The savings there could be some amount of savings. We don't anticipate it being this this high to provide the incentives for electrification and for low income customers. They're they're gonna pay the higher share of the remaining fixed cost when that customer leaves. If you have a customer leave, they're paying as part of their fixed cost or their operational cost, their their, usage cost. They're contributing to fixed costs.

That customer goes away, leaving the low income customer who chooses not to work, doesn't have the opportunity because that service line is not being replaced or they don't own the home and even in a position to make that decision, they're they're gonna be paying a higher percentage of the ongoing fixed cost.

My point was more about ongoing funding availability. So to go if if if Scott Wedge calls and says, I I don't I wanna electrify. I don't need my gas anymore. It's not it's it's really not that cost intensive. A crew goes out.

They don't dig up the pipe. They cap it in the street. Right? They go and they remove the meter. Doesn't cost a lot.

They can do a crew can do maybe half a dozen of those a day. It's and that fund funds that. And it and it's not funded annually to the point to perform all the work that could be done because we cash that out the general rate case and provide the data of how much needs to be done, and we got a fraction of what the what that deferred maintenance is.

So the dollars that are then also going out of that fund on the incentive side, I'm not saying you shouldn't fund that, but don't take it out of the safety fund. Because if not, those dollars would stay in that account and would be and we would be able to do more replacements and more repair.

That's also a repair and replacement fund. It's not just a replacement fund. And it's already underfunded in our opinion, so it's an inappropriate place to take the money, a fund, especially in light of the fact that we have a fairly recent tragedy on a distribution line.

Okay. Alright. Understood. Alright. Seeing no oh, Assemblymember Schulz.

Thank you very much, madam chair, and thank you to the author. I'll get to the safety point last, but I actually had a couple questions to the author and his witnesses. At least in my read of the bill, and please correct me if I'm wrong, there are some unanswered questions in terms of how exactly the financial incentive program would be offered, how long cuss residential customers with the amendments would actually have to opt into the program.

So do you have a vision in mind as you sit here today of where you're hoping to go with that? And as you move forward with the legislation, is that something that I can get your commitment to work with the opposition on?

So so first of all, you bet. And I've had some conversations with the opposition, and and obviously, we'll continue to. And and aside from philosophical differences, you know, wanna do what we can to to address concerns that they raise. The idea we we've kind of tailored the bill to leave a lot of these decisions to the PUC. And so in regards to the incentive amount, specific incentive amounts will be determined by the PUC based on utility cost data.

And it says explicitly that it cannot be greater than the average lifetime cost of the service line. So we try to bake in that, you know, this is really meant to for for homeowners who say, I no longer want natural gas. I wanna transition to to to electric I wanna go electric. You know, that whatever that amount was that you were gonna spend giving me a new natural gas hookup from the main line to my house, some of that money shut out the costs.

The that'll go into capping it and taking up the meter, and then have some of that money go to incentives and some of that money go to lowering the cost for all natural gas rate payers, across the whole system to make sure that everybody's, costs go down.

In terms of kinda some there are some implementation and logistical questions, The bill directs the PUC to consider a number of items as you alluded to, including notice requirements and coordination with other entities as they determine program design and implementation. So that is you know, the idea is rather than being overly prescriptive to give them the the flexibility to determine some of those details.

Okay. Thank you. The second question that I had before I get to the safety issue was, as I understand it, and again, correct me if I'm wrong, with the committee amendments, it would be targeted to residential customers. So we're talking about the owners of real property.

Have you given any thought to how renters could benefit from a program like this, and how exactly would they benefit? That's a little unclear to me. Yeah. I mean,

one way that everyone benefits is is the program will be specifically designed for rates to go down, and for some of this money to go towards lowering rates for everybody. I'll defer to my witnesses who might be able to talk about whether or not they've looked into that New York or, you know

Yeah. I mean, any any homeowner or property owner who has renters in that property would be able to participate. So it would be up to that renter or sorry, that property owner to decide, oh, with this additional incentive, I'm now gonna actually electrify my property. Maybe they think there's gonna be better, ability to get rents or, you know, their cost their their renter will have better quality of life in that home with some better heating and cooling systems.

So I think there's gonna be reasons for, you know, landlords to really consider this just like any property owner would.

Okay. Last question on the safety point. I I'll be honest. I think the bill continues. It needs a little work.

It need there are more conversations that need to be had. I think the point raised by mister Wedge certainly sets off some concern in my mind. But I I guess at at a top level, I see what you're trying to do, and I do think it's a fundamentally good thing to ease our transition as long as the runway is gonna be to where we need to go.

So my question is, are is there any flexibility in terms of looking at the sources of the of the funding to mitigate at least some of the concerns that the opposition has raised today?

Happy to take a look and happy to take a look at what other options might be out there. Absolutely.

With with that in mind, you'll have my vote today, but I'll look to see how this bill evolves. And should it make it to the floor, I'll have a conversation with you then. You bet.

Let me ask a follow-up question. So for the concerns, miss Rajway, raised by you, which if I understand it's that somehow this will end up, kind of rating the safety fund, which you feel like is already insufficient. Are there is there a way to put sort of guardrails or safeguards into the bill to protect against that concern?

We could look into that. I mean, in our view, the fund is already I mean, they approved 96,000,000 just for SoCalGas, and they were they had identified over $300,000,000. We had identified over $500,000,000 worth of work. And, look, I'm not anti, like, electrifying. I represent electricians who will do the electrifying and panel upgrades.

This is a serious safety issue. We will look at it, but nothing comes to mind immediately.

Okay. And I guess the last thing I would say kind of listening to the conversation, I mean, I think there are certainly, the safety question is, you know, pertinent to this very specific bill. I think that the concerns, mister Kaus, that you raised regarding the potential cost shift. That is kind of a larger question that I think, you know, this committee and this body is going to need to tackle.

You know, frankly, whether this bill becomes law or not, as we are moving to electrification, that is going to be a fundamental challenge that we've got to grapple with.

And I think it's really important for us, to keep that front of mind as we are navigating that transition so that, you know, the most vulnerable Californians, the ones who least afford it, aren't the ones who end up shouldering, an undue burden as we move through the next decade. So, appreciate your focus on that. And with that, would you like to

Yeah. Appreciate the dialogue, the the comments that were made by the opposition, the questions that were asked by committee members, and, you know, this is the first policy committee. So absolutely, we are far from fully baked in in the details of the bill, and, you know, we'll continue to work with opposition. We'll continue to work with the chair and committee, you know, as if the bill moves forward. And, you know, this is something that's been done in New York.

It's I I think helps, you know, pace out that transition that we're trying to accomplish as a state to meet the goals that we've set. But but obviously, don't wanna do that in a way that creates any any concerns around safety or or cost shifts. So, you know, those are two things that we've talked with the committee about and we'll continue to work on. Alright. Respectfully ask for your aye vote.

Well, thank you. And I believe we are still operating as a subcommittee, so we will take up that measure Sure. The appropriate time. Thank you. Alright.

All right. We are going to move to File Item Number Four: AB 1975, Assembly Member Schultz.

All right. Thank you very much, Madam Chair and committee members. I'm pleased to present today Assembly Bill 1975, and I'd like to begin by thanking the committee and their staff for the hard work on the bill. I accept all of the suggested committee amendments, starting on page two of the analysis.

According to electrification impact studies of California's three largest utilities, they project they will need to spend approximately $42 billion upgrading the distribution system between now and the year 2040 to handle the increased electricity consumption from electric vehicles and building electrification, assuming a status-quo scenario.

Fortunately, we are at a stage of technology development to reduce those costs. Solar charge batteries, electric vehicle chargers, heat pumps, and other customer devices are networked together and can flatten the curve on the times of day when we use the most energy. When utilities expect the peak amount of electricity consumption to approach the amount of electricity they are able to deliver, they build bigger substations and replace overhead wires with thicker wires and upsize transformers into other types of grid expansion.

But it's important to distinguish peak consumption from total consumption. The more we can coordinate the timing of local electricity consumption and shift peak usage to off-peak hours, the more total energy we'll be able to transmit over existing infrastructure.

That's our challenge. We want those electric cars and heat pumps that will use more electricity instead of gasoline and natural gas, but we want that to happen without spending $42 billion expanding the grid. We can do that by modernizing grid management. The first step is to establish data, and that's really the heart-- the thrust of this bill.

As proposed to be amended, AB 1975 would require the CPUC to develop a grid utilization methodology that is a straightforward measure of how much energy the utilities are transmitting compared to the maximum amount they're built to transmit--in essence, how full the wires are along with all the other equipment.

The committee amendments leave implementation details up to the CPUC. However, the bill does provide guidance to the CPUC to consider whether to direct the utilities to create and expand cost-reducing grid management programs. AB 1975 will help reduce electricity rates by requiring utilities to make better use of the electric grid that they already have built out and paid for.

By measuring grid utilization across the utilities distribution system, the CPUC will be able to identify the best opportunities to reduce system costs and make sure that we are making progress over time. With me today to speak in support of the bill are Dan Jacobson, on behalf of our sponsor, Environment California, and Joe McLean of White Pine Renewables. Thank you.

And before we hear from your witnesses, we are gonna take a commercial break to establish quorum. So, Madam Secretary, if you can please call the roll?

[Roll call].

All right. Mr. Jacobson, over to you.

Thank you, Madam Chair. You're very kind. My name is Dan Jacobson with Environment California. I wanna thank Assembly Member Schultz for two reasons. One is for introducing the bill--this is very important--but two is, that was really a great opening and really getting into the details of exactly why we need this bill.

AB 1975 will establish a metric to measure the utilization of California's distribution bill, and it'll take an important step toward California's future by building more distribution and allowing us to put more energy onto the existing lines. And that's, I think, really important. Currently, we have over 250 million home batteries in California, and according to the PUC, we're adding about 2,000 batteries every single week.

That's important because these batteries are already putting a downward pressure onto rates, and that's one of the key things that we wanna be able to focus on. There's two highlights from the analysis, which I thought was excellent here. The first is the evolving grid that we have. As the analysis points out, we used to live in a grid system where we had one point of power and it went in a one-way direction.

Now because of the solar and the storage and the smart meters, we have a way in which to move that around, and this utilization is so important to be able to figure it out. Second, and as the Assembly member has already pointed out, this program allows us to save billions of dollars for ratepayers, and that's gotta be a primary concern. When the appropriate time comes, urge an aye vote. Thank you very much.

Good afternoon, members of the Assembly. My name is Joe McLean, and I lead engineering at White Pine Renewables, a California based solar and storage developer. I was involved in building two battery projects and I'm here to tell you about today. The last two years, my team deployed two distribution connected battery systems in Kern County, working within PG&E's Distribution Infrastructure Deferral Framework, a pilot program that PG&E was mandated to administer.

Both projects solved real grid problems and both avoided the kind of expensive, time-consuming infrastructure work that ratepayers typically foot the bill for. At our Blackwell's Corner project, a local substation transformer was overwhelmed by midday solar generation every spring. The conventional fix would have been to replace that transformer, a costly months-long undertaking.

Instead, we installed a battery system that can charge during those peak springtime solar hours and discharge into the evening hours. During the couple of months where this transformer is overloaded, PG&E sends commands a day ahead requesting that our batteries perform. The transformer is still there and doesn't need to be replaced.

At our Lakeview project near Bakersfield, the distribution feeder was hitting its limits during summer peak demand. The traditional answer would have been to build out an additional distribution line. Instead, we deployed a one megawatt battery that, when given the day-ahead command, discharges for three hours during peak periods in the summer months to relieve stress on that line. Both of these projects reduced and deferred PG&E upgrades to save money for the ratepayer.

Because these projects were only done with a pilot program, PG&E is not soliciting these types of solutions that unlock more grid capacity. Without the pilot, PG&E would have defaulted to the transformer replacement and distribution line replacement and nobody would have questioned it. Given the success of these projects, we at White Pine are interested in doing more projects of this nature. Modern-day solutions exist that allow the grid to be used more efficiently, which reduces cost to the ratepayer, but only because the utility was mandated to do so.

These types of projects are replicable across more utilities via blueprint, utilizing the grid to the fullest extent possible. I'm happy to field any additional or more detailed questions about how the project works or any other details. Thank you for your time.

Thank you. All right. We'll move to additional testimony in support. If you'd like to testify in support of AB 1975, approach the microphone.

Good afternoon, Madam Chair and members of the committee. Brandon Garcia, on behalf of Advanced Energy United, in support of the bill. Thank you.

Good afternoon. Brad Heavner with CALSSA, California Solar and Storage Association, in support; also asked to express support from the Climate Center, in addition to Altadena Energy, Brighten Solar, Voltus, Derapi, Peak Demand, Excite Energy, CleanTech Energy Solutions, and Six Rivers Solar. Thank you.

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

Chair and members, Max Perry, on behalf of Q-Sales, also in support. Thank you.

Michele Canales with the Union of Concerned Scientists, in support.

Sean MacNeil, California Community Choice Association. We are support if amended. Strongly support the goals and intent of the bill, but wanna be eligible for the financial incentive portion of the proposal. Thanks.

Matt Freedman with Utility Reform Network. We have a support if amended position on the bill. We're still looking at the committee amendments to see if they address our concerns.

Thank you. Okay. Moving to opposition. Come on up.

Madam Chair, members, Brady Van Engelen, here on behalf of Southern California Edison. We are opposed unless amended to the bill, currently reviewing the committee analysis. We appreciate the thoughtful analysis conducted by committee. The amendments do seem to address and ameliorate a lot of our concerns.

So look forward to getting back to you and having a further conversation about this, but if I may really quickly, just, some of the concerns that we had, you know, we're-- at Edison, we're thinking about this as well, too, more from the perspective of beneficial load growth, you know, that it's the right customer at the right place at the right time, which doesn't require a grid build out, can save ratepayers money from that perspective, and also applies downward pressure to all of our customers based on the fact that we're adding, you know, significant load growth from the perspective of, you know, who these customers are. So that is something we've definitely been thinking about. Some quick numbers for you all, really quickly.

For every thousand megawatts of beneficial load growth that we're able to add to our system, it reduces the rates for all of our customers by 3 to 4%. So we have numbers in mind and targets in mind, and we'd certainly welcome the conversation and how we hit those numbers. You know, I think, you know, we'd love to be a part of that conversation and figure out how we can do that.

A couple of other things to note too here is that our customers have choices and, you know, we certainly respect that. So, you know, if they they seem to, you know, want to migrate toward a more energy-efficient appliance or install solar, those are good things, you know, and we want to see them do that, but that does kind of--I don't know if you will--it distorts the metric a little bit because their consumption is now reduced.

So we appreciate the deference that the amendments give to the commission to account for that, perhaps, you know, take a more nuanced approach in thinking about that because I-- you know, I certainly don't-- I don't wanna speak for the entire company, but, you know, Edison, I don't think, really wants to be in a position where we're knocking on a customer's door and telling them, sorry, you can't do that. That's-- I mean, you guys would hear from us immediately if something like that happens.

So we're, you know, welcome to that conversation, how we think about that moving forward, but, you know, those are a couple of the issues I wanted to raise really quickly. But, again, we appreciate the work of the author and look forward to continuing this conversation.

Thank you.

Hi, Chair and members. Lourdes Ayon with San Diego Gas and Electric. Appreciate this bill as well. It's very ambitious. There's a lot there to do, and we're on the same side. We wanna make our energy bills affordable, and I also appreciate the well-thought-out analysis. There's a lot of great amendment recommendations that we'll review and take back to see if they actually work for us as well. We do feel that AB 1975 treats higher grid usage as a goal, but it's not how we feel that reliable electric system works, and setting these rigid grid use targets could actually raise costs and undermine clean energy goals.

And the last part that I wanted to make sure we mentioned is that we just don't control how often and when our customers use electricity. So we wanna be able to-- and I know these are points that were already brought up in the committee analysis as potential amendments. We appreciate that. Wanna keep working with the author on this and see how the bill looks once the amendments are in print. So thank you so much.

Thank you. All right. Additional witnesses in opposition.

Yep. Hi. Good afternoon. Valerie Turella Vlahos with Pacific Gas and Electric Company. Oppose unless amended position and associate our feedback and comments with our colleagues from the investor-owned utilities. Thank you.

All right. Bringing it back to committee. Questions, comments? All right. Okay. I've got a question. So in your comments, you were talking about beneficial load growth, but I don't see beneficial load growth as being incompatible with the goals of this bill or--

No.

--the concept of increasing utilization as well.

Sorry, I didn't mean to cut you off.

Madam Chair, they're not. They're--

No, that's all right.

I mean, we-- yeah. We-- it's kinda-- it's two sides of the same coin. It's kinda how I would phrase it. You know, I think grid utilization trying to-- this bill at its beginning kinda set out a metric and was urging us, or, you know, pushing us to achieve that metric.

Okay.

It's-- you know, it's since moved from that, and kind of-- what we're hoping is the perspective-- you know, a different perspective will be taken where we look at, you know, how do we--to phrase it before--how do we add the right customer at the right place at the right time?

And do we, as the IOUs, have the right tools, or the commission--you know, deference to the commission here too--do they have the right tools in place to ensure that we're able to do that? Because, you know, the backdrop of all of this is we have a duty to serve.

So if a customer is, you know, on a transportation corridor and they need to be in that location, we have to accommodate and build out the, you know, the distribution system to accommodate that. But, you know, if there is something that could be done to maybe move them somewhere else where there's, you know, less capacity and it would actually afford all of our rate base opportunity a little bit of downward pressure, then I don't know. Maybe there's some-- I don't know. Maybe there's something that could be done there.

But we don't-- I don't-- we don't really have the tools to do that right now other than flexible interconnections, which, you know, we started working with a little bit, but, you know, those are pretty early stage.

Okay. All right. Thank you. I'll just say thank you to the author for bringing this forward. I think it's clear that we need to get more out of our existing grid infrastructure.

It's absolutely critical, and I think we also know that what gets measured gets done. And so I really do think that this is a super important step to ensuring that ratepayer goals and IOU goals continue to be aligned, as we are confronting a moment of truly historic investment and build-out across the State of California. So with that, would you like to close?

Yes. Very briefly, Madam Chair. I wanna again thank the committee for the amendments. I do think they substantially improve the bill. And I would just say the intent of the bill has always been that if we can establish the grid utilization metric, if we can measure and maximize efficiencies, that is something deliverable that we can all do to help reduce costs for everybody.

I echo the comments of the opposition, and I do think that we're very close to being on the same page. We'd love the chance to keep working on it, and at the end of the day, let's do something that could save a substantial amount of money for ratepayers across the state. Respectfully ask for your aye vote.

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

Item Number Four: AB 1975. The motion is do pass as amended to Appropriations. [Roll call].

Okay. 7-0 and that bill's on call. We'll wait for absent members to arrive. And you've got one more. So we are gonna move to file item number 18, which is AB 2612.

Thank you very much, Madam Chair. I am pleased to present AB 2612 today, and, again, wanna thank the committee for their work on the bill. The bill would require the Department of Housing and Community Development to research, develop, and propose for adoption standards to and propose adoption standards for a qualified plug-in photovoltaic system to function as an energy source within residential and nonresidential electrical circuits.

The Building Standards Commission may then adopt, approve, codify, and publish mandatory building energy standards for new construction, building electrical circuit features to enable a qualified plug-in PV system. These new standards could go into effect beginning with the first triennial edition of the building code adopted after 01/01/2031.

Therefore, this bill would work with AB 130, which was passed last year and included a six-year moratorium on the proposal or adoption of new state building code standards. Plug-in PV is attracting interest as a new low-cost pathway for households and businesses. This new technology allows electric customers to access affordable clean energy and helps take control of their energy costs by deploying small-scale solar to offset their electricity use without major electrical modifications to their property.

These systems can be bought today at your local Lowe's or Home Depot, and they can be used to lower your energy costs. Some of the cheaper systems can be purchased for around $500.

However, California currently lacks standardized requirements for how these systems should integrate with the building's wiring, raising both safety and consistency concerns. AB 2612 aims to close that gap by directing state agencies to establish clear, uniform electrical circuit standards for plug-in solar. In developing these standards, the commission and HCD must consult with stakeholders and encourage public participation in the standard development process.

In closing, by establishing uniform rules for plug in PV, the bill facilitates safer adoption of emerging renewable technologies, reducing barriers for households and businesses that are interested in deploying solar. With me to speak, in support of the bill today is Brandon Garcia, California director of Advanced Energy United.

Thank you.

Move the bill.

I'll be quick. Good afternoon, Chair and members of the committee. Brandon Garcia on behalf of Advanced Energy United. We are a national trade association of businesses whose members represent the full range of advanced energy technologies and services, including energy efficiency, solar, wind, energy storage, electric vehicles, enabling software, and operational procurement of clean energy. We've made a lot of progress in, the state has, a lot of progress in advancing deploying rooftop solar. Yet, as this committee has noted, many residents, you know, have access to this wonderful technology, as well as multifamily households and small businesses.

This bill aims to close that gap by directing state agencies to establish clear, uniform electrical circuit standards for plug-in solar. Establishing the standards will expand access to clean energy for these underserved customers while improving energy affordability and resilience. This type of plug-in-place solar can help customers offset their electricity consumption, reduce peak demand pressures, and support broader decarbonization goals. We feel that clear standards will provide regulatory certainty to the market and that will allow us additional support investment in the new distributed energy technologies.

As always, I'd like to note that we appreciate the committee analysis for outlining some of the processes that we still have to go through.

And we feel that with enough time, given that the bill will begin in 2031 and that there are processes enabled to focus on some of the safety and other concerns, we feel we can get there and we feel that this is achievable. But at the appropriate one, urge an aye vote.

Thank you. Okay. Additional witnesses in support. Go ahead and approach the microphone if you'd like to support AB 2612.

Yeah. Sorry. Support if amended. Brady Van Engelen from Southern California Edison. We just wanna clarify that, you know, we appreciate the work of the author here.

I think this bill is moving in a great direction. Look forward to getting to work with them. However, one thing we did wanna make clear is that we aren't, like the commission, by default, members of every proceeding effectively. The building standards commission where this would go, we are not.

So we just wanna get some clarification in statute that we would be part of that proceeding to ensure that, you know, worker safety, that our employees are covered and that their input is actually taken there.

Got it. Thank you.

Brandon Ebeck, Pacific Gas and Electric. I'll align my comments with Edison. Thank you.

Okay. Moving to witnesses in opposition. Do we have a primary witness in opposition? I don't think so. Seeing none.

Alright. Anyone wanting to provide additional testimony in opposition? Seeing none, bringing it back to committee. Assembly member Rogers.

Thanks, Madam Chair. Just asking the author if he's looking for coauthors. Always. Alright. I'd be happy to join you.

We'd be honored to have you.

Alright. Seeing no additional comments or questions, assembly member?

I'll quit while I'm ahead and respectfully ask your aye.

Alright. Madam Secretary, please call the roll.

[Roll Call]

Okay. 9-0. So that measure is on call, and we'll leave the roll open so our absent members can add on. Alright. I don't think we've got any noncommittee authors, so we will go to file item number two, which is AB 1849, Assembly Member Papan.

Thank you, madam.

Well, hello. Good afternoon.

Thank you, madam chair and members. Delighted to be with you. So in 1849, like the bill number, gold powered gold powered California's growth. In AB 1849, we're looking to power California's future. AB 1849 directs the California e Air Resources Board to conduct a study on the need for decarbonized gaseous fuels in hard to electrify sectors and for grid reliability.

California has made immense progress in decarbonization over the past quarter century, and we're a global leader in clean and sustainable power development. Renewable sources of power are more abundant than ever, and both public and private entities continue to find innovative ways to electrify and move towards our climate goals. However, we have to accept the reality that you can't electrify everything. That's where AB 1849 comes in.

Currently, California's power grid still relies on natural gas and diesel through peaker plants and backup generators to supply power during periods of peak electricity demand.

At the same time, we have certain industries such as cement and glass manufacturing, and they rely on high heat combustion processes that are difficult to electrify, which is why they continue to use fossil fuels. Trying to electrify these sectors would significantly strain the grid and be financially infeasible in the near term. If we wanna achieve California's climate goals of reaching net zero greenhouse gas emissions by 2045, we need solutions to reflect real technical and economic conditions in sectors where electrification alone is insufficient.

Decarbonized gaseous fuels may offer a pathway. They could replace fossil fuel use in hard to electrify sectors like cement and glass manufacturing while also helping stabilize the grid by replacing fossil fuels and industrial processes, peaker plants, and those backup generators.

The issue is that we don't have an understanding of the need for decarbonized fuels and the feasibility of a transition. We need to evaluate how much fuel we're using and how much we will need to replace. You may have heard a lot of chatter surrounding the bill about incentives. This bill doesn't create incentives. It studies them.

It directs the California Air Resources Board to evaluate what policies exist, what could exist, and what their impacts would be. The analysis could just as easily conclude that certain pathways shouldn't be pursued at all. My witnesses with me today are Katrina Fritz of the California Hydrogen Business Council and Julia Levin of Bioenergy Association of California, and they'll discuss the need to assess hard to electrify sectors and decarbonize gaseous fuels. Take it away, Katrina.

Thank you. Good afternoon, chair and members. I'm Katrina Fritz, president and CEO of the California Hydrogen Business Council. We're proud to cosponsor AB 1849. California cannot meet its air quality and climate commitments without reducing emissions from sectors that are not easily electrified.

Heavy industry, long duration, seasonal energy storage represent more than one fourth of the state's greenhouse gas emissions, and addressing them will require both reliable affordable electricity and complementary solutions. At a time of market uncertainty, AB 1849 provides clarity by affirming that California intends to continue advancing clean fuels, supporting in state jobs, and strengthening energy reliability and resilience.

AB 1849 fills a critical gap in state planning by directing a comprehensive data driven assessment of how much fuel is needed across end uses that with current technologies cannot be electrified, an analysis California does not currently have. This is not a mandate to define or incentivize any specific fuel. Instead, it requires the state to evaluate potential options in a technology neutral manner, ensuring that future decisions by the legislature are based on evidence rather than assumptions.

This type of assessment is foundational for infrastructure planning, capital deployment, and long term decarbonization. Companies across California are already investing in clean fuel production, infrastructure, and related technologies, creating durable, well paying jobs in manufacturing, construction, project development, and operations. These investments are supporting economic growth in rural, industrial, and disadvantaged communities that stand to benefit the most from new clean energy opportunities. A coordinated state assessment helps ensure these investments align with California's climate and economic objectives.

Ongoing federal uncertainty has made it increasingly difficult for emerging clean fuel industries to plan and finance projects at scale, and AB 1849 provides a stabilizing signal by directing California to evaluate its future fuel needs in a structured, transparent manner, ensuring that state planning keeps pace with technological market developments. Thank you.

Good afternoon, madam chair and members of the committee. Julia Levin with a mic that won't stay up. I'll just hold it. Julia Levin with the Bioenergy Association of California. AB 1849 takes an important step in meeting the state's climate goals by requiring an assessment of a long term need for decarbonized fuels.

The bill does not preclude electrification, energy efficiency, or any other tool to reduce fossil fuel use. Rather, it requires an assessment of how much decarbonized gas California will need in the future in addition to those other decarbonization tools and will provide recommendations back to the legislature for options to replace any remaining fossil gas use.

The assessment it requires is an essential step to reduce emissions both from hard to electrify sectors and the electricity sector itself itself, which continues to rely on natural gas for a third of California's electricity supply. AB 1849 is also completely consistent with the Air Board and CEC plans for climate change and for energy reliability.

For example, the AirBoard's 2022 climate change scoping plan specifically calls for scaling up renewable hydrogen and biomethane as tools to displace fossil fuels in hard to electrify sectors and natural gas use in the electricity sector itself.

The c e CEC has also recognized the need for hydrogen and biogas as ways to decarbonize these sectors. AB 1849 also does not define decarbonized gas because it is a study bill, not a procurement mandate. It does not establish or require any new incentives. In fact, several state laws already require state agencies to adopt policies and incentives to increase the use of renewable gas, including biogas, biomethane, and renewable hydrogen.

That includes incentives that were established in the state's short lived climate pollutant law, SB 1383, and multiple incentives across the public utilities code.

So what AB 1849 does is ask the air board to assess those, not to adopt new ones. Thank you.

Thank you. Alright. At this time, we'll hear from additional witnesses in support. Please approach at this time.

Good afternoon, madam chair and members of the committee. Alfredo De Redondo on behalf of the Green Hydrogen Coalition in support.

Emily Pappas on behalf of Monterey One Water in support.

You, Dylan Elliott on behalf of the Western Propane Gas Association in support.

Good afternoon. Audra Hartman on behalf of Utility Global, a clean energy industrial decarbonization company in support.

Thank you, madam chair. Israel Salas with SoCalGas in support.

Good afternoon, madam chair. Jack Yanos on behalf of Coalition for Renewal Natural Gas. Appologies for not getting a letter in on time in support.

Okay. Moving to witnesses in opposition. Please come on up.

Good afternoon, chair and members. Christina Scaringe with the Center for Biological Diversity opposing AB 1849. Three quick points. First, we dispute the assurances that this is and will only be interpreted as a study bill. For its basic statutory construction, the bill could be interpreted by an agency or a court as a directive for action to incentivize or accelerate the production and use of these fuels.

Second, to the extent that this is solely an assessment, it's flawed in its presumed bias, enshrining a presumption of benefit in statute before the study is begun. If these technologies are the panacea the proponents claim them to be, then that will bear itself out in assessment. But this Bill bakes in the outcome, its structural bias presumes without basis or even identifying what these fuels are that these are indeed decarbonized, appropriate, effective, beneficial and or necessary.

Any assessment that predetermines benefit regardless of the object of study is fatally flawed from the start. Third, this assessment is a narrower structurally biased version of assessments already underway.

It's duplicative and given its bias potentially contradictory to ongoing assessments. CPUC and CEC have ongoing proceedings to address electric grid reliability. That's their purview. CARB's SB 1075 analysis and report on hydrogen development, deployment and use is already underway and I believe overdue. The next AB, 32 scoping plan due out next year is a holistic multi agency decarbonization plan for the state.

And unlike this bill, these analyses consider potential air quality, health, and climate benefits or harms factors central to CARB's mission. California faces difficult decisions negotiating a critical transition during this dual climate and affordability crises as well as ongoing structural budget issues. It demands strict analysis of public funding priorities directed towards the most cost effective measures with proven return on investments. Every technology must compete for its place in the new energy economy. Thank you.

Thank you. Additional witnesses in opposition, if you'd like to register opposition on this measure, AB 2088.

Good afternoon. Jacob Evans with Sierra.

Eighteen forty nine. Sorry.

Jakob Evans with Sierra Club Club California under respectful oposition, registering opposition for Leadership Council for Justice and Accountability, positions for social responsibility SF Bay, San Diego Three Fifty, the Sunflower Alliance, Center on Race, Poverty, and the Environment, and the Santa Cruz Climate Action Network. Thank you.

Thank you.

Good afternoon. Kayla Robinson with Californians Against Waste, respectively opposed unless amended. Thank you.

Ada Welder with Earth Justice in opposition. I would also like to highlight the committee analysis's question about the, lack of definition of decarbonized gaseous fuels.

Thank you. Thank you. Alright. Bringing it back to committee. Mister Rogers.

Thank you, chair. So overall, I'm very supportive of what you're you're trying to do here, assembly member. I I think you and I have had many conversations about green hydrogen and, the role in trying to decarbonize, tricky to decarbonize industries. I did wanna ask you, picking up on the last comment that was made, but also a couple of the opposition letters that were submitted about the definition for decarbonized gaseous fuels.

I as I according to the letters in opposition that there was a commitment in its last committee to provide a definition.

Are you working on that definition? When should we see what that looks like? And would you like to respond to that?

I I'm sorry. I don't believe the author made that commitment in the last committee. The reason the bill doesn't define decarbonized fuels is we think as a study bill that it's appropriate to have the Air Board take the first step which to is to assess the long term need. And then once that is defined to bring it back to the legislature to determine once you know how big the hole is, what you want to use to fill it.

So we just think it's because there's no regulation, there's no mandate, it's an assessment.

It's about how much gas will California need in the future, gas or other fuels. It could be liquid fuels versus what can be done through electrification or energy efficiency or other tools. So it's really a needs assessment, and then the legislature can decide based on the amount of need where that need falls and what sectors, what you think would be the appropriate ways to fill it. It just seems premature, I think, and we want to give the air board flexibility.

I mean, I understand what you're you're saying in terms of looking for a fuel future. But if we are looking at decarbonized gas as fuels, shouldn't we have a definition of what that actually is? Like, regard regardless regardless of whether or not we are in our study determining what types of fuels we need and what industries for the purposes of the evaluation, shouldn't we have a definition of what decarbonized gas as fuels are if we're gonna be referring to them?

Well, I I think that what we're trying to do with some of it is once you determine the size of the hole, it may be that there's a certain kind of decarbonized gas that can be quickly manufactured and and it's the cleanest and the best or one that's not clean, but it's gonna fill that void faster to get us to twenty twenty forty five. So there are a lot of different variables that can come into play.

So I think what the witnesses are saying and what the bill is saying, let's let's let's get to the point of looking at how big the void is, and then it may turn into this type of decarbonized fuel is much better to serve an enormous need or a smaller need or a a need that only is really now by the time we get done with this in the manufacturing world. I mean, I don't know. Or we're jeez.

We're still using generators that are using so much diesel, and they're creating so much, then maybe we're gonna have to use x kind of decarbonized gas to fill that void. So we haven't defined it yet.

But I I feel like maybe I'm maybe I'm missing something. I feel like that might be part of the disconnect on this bill is if you wait to define what a decarbonized gaseous fuel is based on what the outcome of what you need is, then the study isn't really doing much other than telling us creating a definition that fits the overall objective of of pretending that what the need is is is decarbonized gas as fuels.

Okay. I get I get the intent of creating a study where you look at what types of fuels you need, but that can be separate from the idea of what actually qualifies as a decarbonized gaseous fuel. Maybe the study comes in and says that there actually isn't a decarbonized gaseous fuel that can fill it in this industry for the short term, and I totally get that. But writing a definition that captures everything that you end up needing kind of defeats the purpose of having that definition, doesn't it?

I think maybe the confusion is the the end goal of the assessment would be for the airport to determine how much gas will continue to be used. And what we want is for whatever remaining gas California needs, it needs to be decarbonized. But we don't even know how much that will be, how much can be electrified, how much really can't practically or even possibly, you know, some of the high heat manufacturing that the state does.

And then what do we do about the very significant amount of natural gas that we continue to use for electricity reliability? How can we replace that?

And so it really is an assessment of what the long term gas need is. And and we haven't talked about this, but maybe it'll be more clear if the bill approached it that way and then determine how to address that continuing gas need. And then the legislature can determine, okay. You know, do we use liquid fuels? Do we use gaseous fuels?

What what should be eligible to fill that remaining gap that can't be electrified or that we need for electricity reliability? So maybe it obviously, it's author and the committee is to say, but maybe

And if I if I if I may add so as as was noted, the now the committee analysis did highlight this absence of definition, but, you you know, I think where we've landed and is what's written in the committee analysis is that because the bill's primary output is an assessment rather than a regulatory mandate that it does seem reasonable to give CARB more discretion to determine what should be included and not foreclosed on fuels and pathways that could prove viable in the future.

So I think that was where we landed that and I as I listened to some of the opposition concerns, it does seem like there is some concern that this is some sort of camel's nose under the tent. But I think the language of the bill is quite clear that this is an assessment rather than a mandate, which is why, like, we thought it was reasonable to turn some of that investigation and analysis to CARB. Okay. Mister Hart or sorry. Go ahead.

And and just to be clear, because I I heard it from the witness, but there was no commitment in natural resources to add in a definition that some of the opposition letters that were say sent in that cited that that they they're just incorrect.

That's right. That's right. We've we've stayed the course on let's define the problem, and then we go from there. And the problem is supposed to focused on what? What is still carbonized? That's kind of where the focus of the study will be.

May I clarify that? What we did not say there? No.

I I wasn't saying you've some of the opposition letters, but to be clear, did not mean you.

Alright. Thank you. Okay. Mister Hart.

Well, this conversation helped, illuminate the questions that I had. But I I was also wanted to talk about was on page three of the staff analysis that talks about, you know, are we looking at this too narrowly? Are there are there alternatives to replace decarbonized gas, like, the the specific things mentioned, energy efficiency, waste heat recovery, and thermal energy networks? Are we making this too narrow to not consider those solutions as well?

Or do you believe that the parameters of the study are open enough to make sure that CARB looks at alternatives to non carbon gaseous fuels?

The intent is for CARB to conduct the technical analysis and make those decisions. Right? They would they would connect conduct the assessment, look at what, you know, how much gas is needed, and what are some of the viable ways to replace that gas.

Also, yes.

I guess. May I respond?

Yeah.

And I I do appreciate the very thoughtful analysis. One of the points, the analysis speaking of gas I very appreciate I very much appreciate the thoughtful analysis. One of the points and I I hope I can find I may not be able to find it right now, but is a note, and I'm looking here at the text. It doesn't say and and you heard the presumption in the response a few minutes ago. How much gas are we gonna need? Maybe we will need gas.

Maybe we won't, but the presumption is we will, and we're entering this with that. It doesn't ask, whether to incentivize the increased production and use of decarbonized gas, but how to and that's just one place in the bill. So there's a presumption built in that that is the answer even though there are all these other alternatives and many alternatives we have yet to discover. There's new technology moving every day.

Thank you. Assembly member Calderon.

Yes. I just wanna thank the author for your work on this and for bringing this forward. I understand what you're trying to do. I appreciate the robust discussion, and I'd like to be added as coauthor. Thank you.

And just I think one, you know, when final comment and question, you know, I think that the opposition raised some concern about language that could be misinterpreted.

It's, you know, my genuine belief knowing the author that you are entering into this in a very honest way and trying to dig in to get a data driven assessment and ensure that as we are planning for our fossil free future, that we're ensuring that we're doing that in, I think, a way that is realistic, a way that's thoughtful, that's strategic, and that asks important questions. So, with that, assembly member, would you like to close?

Yes. I I just thank you for the robust discussion, and, it it can't be disputed that we're gonna have some things we can't electrify. And so I I kinda look at this bill, and and I thank you for for your words, chair. I look at this bill as, like, can this be part of of, you know, what what we can select? What we can what select from the menu.

We're sort of creating how will the menu look given first, we have to assess the problem, and then what can we do to really get at these last ones that can't be electrified? So with that, I respect the request.

Alright. Thank you. Do we have a motion and a second? Second. Thank you.

Alright. Madam secretary, please call the roll.

[Roll Call]

Alright. Ten zero. So that bill is out, and we will leave the roll open for other members for absent members to add on. Okay. And we've got another item from miss Pappan. File item number 7AB2088.

Oh, that's

welcome to the hot seat.

That's nothing. Okay.

Okay. Thank you, madam chair and members. I'm I'm delighted to be here today to present AB2088. Can't do as much clever things as I could with 1849, but that's okay. So I'd like to first start by thanking the committee and the chair for their hard work on this bill.

And we, of course, will be accepting the committee's amendments today. AB 2888 provides the statutory authority for the investor owned utilities, to own and operate what we call thermal energy networks, otherwise known as TENS. Under existing law, there's ambiguity around whether utilities can deploy alternative technologies to deliver reliable heating and cooling to customers within their service territory. This lack of clarity is having an impact on our climate goals. California is committed, as we know, to achieving carbon neutrality by 2045.

Meeting that goal requires not just electrification, but a diversified set is there a theme here? Set of proven seal scalable technologies that can reduce emissions. So TENS can fill this gap by harnessing geothermal energy or captured industrial waste, waste heat that could otherwise just be lost. Massachusetts, New York, Colorado, Washington, Maryland, and Vermont have all introduced their own TENS authorizing legislation, and some are developing TENS projects as a result.

AB 2088 clarifies utilities' ability to provide thermal energy service through TENS while building in the following three safeguards.

Number one, the bill requires the CEC and the CPUC to develop technical standards to ensure that TENS can be deployed safely and efficiently. Number two, the bill protects jobs by ensuring that TENS will bolster utilities' existing, skilled, and trained workforce. And number three, the bill, asks that rate payer protections be considered to protect remaining gas customers and future TENS customers alike. TENS are just another tool in the toolbox, but, we won't meet our climate goals by leaving tools on the shelf.

So AB 282088 allows utilities to use TENS to build a carbon neutral energy system.

With me to testify today is Theresa Chang with Industrious Labs and Madison Vander Klay with Building Decarbonization Coalition. Please take it away. Teresa.

Madam chair, members of the committee, thank you so much for the opportunity to testify today. I'm California director for Industrious Labs. We're proud sponsors of this bill, AB 2088. Our organization is committed to helping meet our climate goals while supporting California industry and our existing energy workforce. This bill delivers on all of these fronts.

AB 2088 unlocks a resource that exists across the entire state, and that's the untapped and abundant geothermal and waste heat. These resources can provide a source of local and clean thermal energy that can provide heating and cooling for homes, businesses, and our industrial users. And they, very importantly, deliver affordable zero emissions heating and cooling while creating high road jobs for the skilled gas utility workforce we already have.

However, our current statute lacks the clarity needed for IOUs to help own and operate these clean energy systems. And so this bill modernizes our code by providing that clarity needed while preserving full PUC oversight and ensuring that these systems must be cost effective for rate payers before being developed.

In addition to climate, I just wanna note that tens have other significant benefits. Not only are they 30 to 50% more efficient than other air source electric alternatives, but once up and running, the closed loop system also requires significantly less water and can even replace cooling towers that waste thousands of gallons of water a day. Because of the very high efficiency of tens, they also mitigate the need for costly transmission build out, which we know is one of the greatest drivers of our rising electricity rates.

In fact, the DOE projected that nationwide widespread deployment of geothermal heat pumps, which are used in TENS, could save rate payers upward of $557,000,000,000 by 2050. We already have tens in California.

These are not experimental systems. This is not an emerging technology. They are already delivering cost savings and clean heating and cooling in California, including at Santa Rosa Junior College, connecting schools in a hospital in Northern California. But these are single owner models, and they're not utility based for multiple users. And so I'll just close by saying this bill unlocks the potential of TENS to deliver benefits at scale.

We still have federal tax credits of up to 50% covering virtually every component of this system. So this bill is a win for affordability, climate, equity, and workers

that are driving. Thank you. Next step. Thank you. Two minutes.

Good afternoon, madam chair and members. Oh, there we go.

Thank you. Good afternoon, madam chair and members. Madison Vanderklay with the Building Decarbonization Coalition. We are a nationwide network of advocates, businesses, and researchers supporting energy affordability and decarbonization. Buildings are associated with approximately a quarter of California's in state emissions, and reducing emissions in buildings is identified as the most cost effective pathway to achieving California's emissions targets.

We have made real progress in this sector, but there is still quite a bit more to be done. Thermal energy networks, otherwise known as TENS, offer a utility scale solution that can bring clean heating and cooling to entire blocks, including multifamily housing and commercial corridors. Instead of each building relying on its own equipment, tens are collective ambient temperature closed loops filled with water running through underground pipes with heat pumps in each connected building or plant.

The network then captures and delivers thermal energy with zero combustion, meaning no emissions and no pollution. The more buildings connected to a TENS project, the more cost effective and energy efficient the system becomes.

What makes TENS especially powerful is their ability to store energy daily and seasonally, charging bedrock with heat in the summer, discharging it in the winter, making tents not only a clean heating tool, but also a grid asset. Tents have the ability to bring clean heating and cooling to communities at scale while supporting industrial decarbonization and deploying high road jobs for workers of the utility gas system.

More than a dozen states as you heard of past, tens enabling legislation, AB 2088 would provide this framework in California and allow California to continue leading this transition. I respectfully ask for your aye vote.

Thank you. Alright. We'll open it up for additional testimony and support. Please approach the microphone if you'd like to testify in support of AB 2088.

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

Hi. Jared Getzoff with Project 2030. Support. Thanks.

Environment California, strong support.

Pardon Vindhall, on behalf of the Coalition of California Utility Employees and the California State Pipe Trades Council in support. Thank you.

Thank you. Moving to any opposition witnesses. I don't see a primary witness. Anyone wanna provide me too testimony in opposition to this measure? Seeing none, bringing it back to committee. Assembly member Rogers.

I just always appreciate a shout out for SRJC. Do we have any Bear Cub alums in the audience? Just just one? I'd like to be added ... got I got you covered there too. Just wanna be added as a co author, and thank you for bringing the bill.

My pleasure.

I too wanna thank you for bringing this bill forward. I would love to see us be able to deploy more of these systems across the state. This seems like, you know, something that's importantly missing right now to make that happen. So that, would you like to close?

Oh, I just respectfully request an aye vote. This is I wanna make it like Oprah. You get a 10, then you get a 10, then you get a 10. Then I appreciate the witnesses. I mean, I was like, where do I sign by the time you got done even though I'm authoring the bill? It's wonderful to hear that they're just win win win. So I appreciate it and request an aye vote.

Thank you. Do we have a motion and a second? Yes. Okay. We've got a motion and a Actually, I have somebody Oh, no. We need a motion and a second. Alright. Motion and a second. Madam secretary, please call the roll.

[Roll Call]

That's 9 0. 9 0. Okay. So that measure is on call, and we'll leave the roll open for absent members. Okay. We are moving now to file item 12, Assembly member ransom.

Good afternoon.

Good afternoon, Madam Chair. You might wanna grab the other mic. All right. Good afternoon, Madam Chair and members. I'm here to present Assembly Bill 2338, the FAIR Utility Rate Act.

FAIR is Fighting for Affordable and Informed Rates, which aims to bring greater transparency and accountability to how rates are set. On average, residential electricity rates in California are nearly double those in the rest of the country. Over the past decade, customers of California's investor-owned utilities have absorbed rate increases that far outpace cost-of-living adjustments.

These increases compound over time, impacting all Californians, but they hit low-income, hardworking families and seniors on fixed incomes the hardest, leaving more than 2.3 million households behind on their energy bills. At the same time, the California Public Utilities Commission has not consistently applied the cost-of-living considerations when evaluating utility-spending proposals and often fail to account for the cumulative impact of utility-spending requests across multiple proceedings.

AB 2338 is a common-sense proposal to help rein in rising utility costs by requiring utilities to provide an alternative cost-of-living constrained rate scenario and to provide evidence to support any proposed increases that exceed inflation. The bill also requires the commission to apply more scrutiny to the total rate increase request submitted by utilities. The status quo is clearly not working.

The bill provides a balanced approach that maintains safety and reliability while recognizing that California families are facing an affordability crisis, and utilities should at least put forward an alternative plan for review that outlines possible savings for ratepayers in California.

When the time comes, I respectfully ask for your aye vote, and with me today in support of this bill, I have representatives from our co-sponsors, including Mr. Peter Hansel, an AARP member, and Matthew Freedman, who is a staff attorney for The Utility Reform Network.

Good afternoon, Chair Petrie-Norris and committee members. My name is Peter Hansel. I'm an AARP member and a resident of Sacramento. Thank you for allowing me to speak today on behalf of AARP's 3.2 million members in support of this important bill.

I'm sure you're hearing from constituents all the time about-- concerns about never-ending rate increases for their utility bills, and I'm sure you're also hearing a good deal of confusion about the bills that they're receiving. Like many retirees, my wife and I live on fixed incomes, and we are constantly changing our practices to try to conserve energy. We've invested in weatherization, energy-efficient appliances, even turning up the thermostat in the winter, summer-- and down in the summer, and still our bills keep going up and up.

AARP is supporting AB 2338 because we support full transparency and accountability when it comes to the rate-making process. Ratepayers like me, my family, fellow AARP members deserve to know why we're getting charged more, especially when we're doing everything we can to reduce our energy usage.

AARP fully understands that protecting, maintaining, and improving utility infrastructure is costly, especially in an era of extreme weather and inflation, but this is another reason to support AB 2338 because the bill creates a new opportunity to build trust between ratepayers, the CPUC, and utilities by inviting more scrutiny and sunlight to the rate-making process.

Voting against AB 2338 today would preserve the status quo where utilities routinely request unconstrained rate increases and routinely get them with little regard for what ratepayers can actually afford. Conversely, voting in support of AB 2338 puts the burden of proof where we believe it belongs: on utilities to demonstrate that spending above inflation is genuinely necessary for safety and reliability. Thank you for giving me an opportunity to speak today on behalf of AARP members in support of AB 2338. We ask for a unanimous aye vote.

Thank you.

Thank you, Madam Chair, members of the committee. Matt Freedman, on behalf of The Utility Reform Network. As we know, residential electricity rates have skyrocketed in recent years, creating a crisis of affordability for customers. A recent poll of the governor's race finds that voters say that utilities are the second biggest strain after housing on their household budgets. That's above healthcare and groceries.

And then, future rate projections, unfortunately, are not encouraging. The California PUC's 2025 report to the Legislature forecasts annual rate increases of between 6 and 7% for each utility over the next several years, and the primary driver is massive increases in spending. AB 2338 addresses the affordability crisis by directing the Public Utilities Commission to prioritize the interest of customers when considering utility requests to increase spending and pass through new costs in the form of higher rates.

It would require each utility, as part of its general rate case, to submit an inflation-constrained spending scenario that reflects the highest priority needs of the utility. It also requires the-- permits the Public Utilities Commission to authorize expenditures in excess of inflation only if the utility provides clear and convincing evidence that the higher expenditures are needed to ensure safe and reliable operations, and it would require the PUC to apply heightened scrutiny to any utility requests outside of the general rate case that are likely to increase spending beyond inflation.

Currently, cases are considered on a one-off basis, really in a vacuum. This would require cumulative consideration of all pending rate increases. I wanna be clear. This bill does not prohibit the PUC from approving rate increases that exceed inflation. It simply requires a higher standard of proof and more scrutiny, which is what we would expect from the commission when looking to protect the interest of ratepayers. So we ask for an aye vote on this bill. Thank you.

Thank you. All right. Opening it up for additional witnesses in support. You can go ahead and approach the microphone if you'd like to register support for AB 2338.

Madam Chair, I'm Michael Boccadoro, on behalf of the Ag Energy Consumers Association, in support. And a reminder, PG&E has 44% rate--

--increase in spending.

We can only take--

I know. We can only take name--

I snuck it in.

Yes. Name, affiliation, and position, please.

Audra Hartmann, on behalf of the California Large Energy Consumers Association, also known as CLECA, in support.

Thank you. Okay. Opposition witnesses, please come on up.

Madam member and-- Madam Chairman and member, Scott Wetch, on behalf of the California Coalition of Utility Employees. We have a great admiration for what the author's attempting to accomplish. We used to have a very real practical, real-world problem that this presents. If the investor utilities are forced to provide a inflation-constrained alternative TRC, it's gonna make this impossible for us at the bargaining table to ever get anything beyond whatever the CPI is projected to be over the next three years.

Thank you.

We're gonna go into bargaining with the utility, and they're gonna say, we have to put this constrained GRC over here, so, two and a half percent. Two and a half percent for three years. And that's gonna be what they say. And it's gonna make bargaining extremely, extremely difficult, and it's gonna end up hurting the wages, hours, and working conditions of my members. We wouldn't put inflation constraints on the state's bargaining with SEIU 1000 when we have huge budget deficits. We wouldn't think of that.

We wouldn't put budget constraints on the Correctional Peace Officers or the California Highway Patrolman or anybody else when we have huge deficits. So it's not the intent of what they're trying to accomplish. It's what the real world impact would be, and that's not solved for here. And so, unfortunately, that's why we're opposed. Thank you.

Thank you.

You could call me.

Good afternoon, Chair Petrie-Norris and members. Jon Kendrick from the California Chamber of Commerce. We respectfully oppose SB 2338. We appreciate the author's focus on affordability, but the mechanism in this bill risks underfunding the investments needed to keep our energy system safe, reliable, and capable of meeting the state's ambitious goals.

AB 2338 requires utilities to anchor proposed spending increases to Social Security COLA benchmark and requires a heightened showing to exceed it. The problem is that utility costs do not track general inflation. They're driven by wildfire mitigation, grid heartening, system modernization, compliance with state mandates, and funding of public purpose programs.

By anchoring spending to this arbitrary benchmark, the bill creates a bias against forward-looking investment. Over time, that could mean deferred maintenance, delayed upgrades, and ultimately higher costs and reliability risks when those needs can no longer be postponed. Put simply, AB 2338 risks a less reliable and more expensive system over time. Now, this is obviously coming from a place of good intentions, and we've seen how well-intentioned policies can impact ratepayers. Net metering, for example, began life as a way to drive consumer adoption of rooftop solar.

It succeeded, but today, its legacy is a significant cost shift that harms non-solar customers. A more effective path to affordability is to address the growing share of costs driven by state mandates. For years, the Legislature and the commission have used ratepayers to fund programs that go beyond providing affordable, safe, and reliable service and instead serve broader policy objectives. Today, nearly 37% of the average residential ratepayer bill are those state policy costs.

That's nearly $800 a year for the average residential ratepayer. That share continues to grow as new mandates are added each and every single legislative cycle. You hear them in this committee all of the time. If the Legislature wants to improve affordability, the focus should be pull-- on pulling those costs off the bills, putting them into the General Fund or funded through GGRF.

Thank you.

Thank you. For those reasons, we respectfully oppose the bill.

Okay. And I am sure you're gonna have some questions, so plenty of air time. Okay. Additional witnesses in support-- in opposition. Go ahead and come on up.

Hello. Valerie Turella, Pacific Gas and Electric Company, also respectfully oppose.

Hi. Lynn Trujillo with Southern California Edison, in opposition.

Hi there. Lourdes Ayon with San Diego Gas and Electric, also in opposition.

Thank you. Okay. Bringing it back to committee. Assembly Member Calderon.

Thank you, Madam Chair. To my colleague, I know how important affordability is for your constituents and all of our constituents, and I know this is something that's been top of mind of you since you, you know, first got elected to office. But I do have a question for, I think, the opposition and the support. What is the definition of clear and convincing evidence needed for the CPUC to approve the above-inflation GRC?

Thank you for the question. The commission uses both a clear and convincing evidence standard and a preponderance of evidence standard depending on the type of proceeding. And historically, the commission--it's noted in the analysis--used to apply clear and convincing evidence as a standard much more frequently. It was the default. In recent years, meaning the last decade or so, they've gravitated towards a preponderance of the evidence.

Preponderance of the evidence essentially means it is more likely than not to be true, like, 51% chance that it's true. That's the standard that they typically apply. Clear and convincing--and I can quote from a commission decision--requires that the evidence be so clear as to leave no substantial doubt in the mind of the trier of fact. The commission understands this standard.

The clear and convincing evidence test has been used in many proceedings. We think it just establishes a higher bar and forces the utilities to really demonstrate that the money is needed to support safe and reliable operations of the system.

Can the opposition please respond too?

Yeah. I think that you clearly articulated the standard, so, yeah.

Okay. Thank you.

Thank you.

Okay. Assembly Member Zbur.

So, obviously, I think the goal of this is obviously a laudable one. I mean, one of our key goals is really to try to make sure that electric rates and gas rates and, you know, all the things that consumers are facing, that we're focused on that, you know, with laser focus. So I just wanna, you know, acknowledge that that-- understand that that's the focus of the bill. I just don't understand how this works, I guess. What is an inflation-constrained scenario?

I mean, we basically-- we, through the laws that we pass, require certain-- the utilities to do certain things: wildfire mitigation, you know, public programs, all of those things. So if-- and we also know that what's driving electric costs are not the price of bread and eggs and the kinds of things that a household would face, even though that's what our constituents are facing, obviously. So I just don't understand what the inflation-constrained scenario is.

Are you basically saying, okay, well, we're not gonna do-- if you're exceeding CPI increase, we're not gonna do wildfire mitigation and that's gonna be taken off the plate? Or we're not gonna do, you know, public programs?

I mean, how does that work? I just don't understand how this overlay-- you know, we have a regulatory program which is supposed to be looking at costs for the benefit of our ratepayers and assuring that the costs are, you know, only those that result in a-- you know, in a fair return for the utilities. And so I guess I just don't understand how this overlay works.

Right. So-- well, hopefully, I can try to clear this up for you. So there is no mandate with this. It's the-- in regards to the-- the constrained rate case is to basically show us inflation. Just like we have to live within means, we wanna make sure that our utilities are within means.

So that is a scenario. Of course, they're gonna show additional, you know, scenarios, as to your point about making the investors whole when it comes to wildfires and things like that, but we wanna make sure just-- so think about water utilities. We don't allow-- we don't charge over the price. And when you when you speak about these things and we talk about how our-- you know, our price of eggs and et cetera, those things are happening, we've also seen that in our case where utilities have actually, you know, come to us and they've needed to ask for investor returns, as example.

So we need to be able to justify things because we are--inflation is not keeping up-- the cost of living is not keeping up with our utility bills, and we're outpacing inflation, and people's income is not matching. So, when you're asking how it works, there will be a constrained rate case, and then you can with-- as we said with the clear evidence, we wanna be able to see what you're getting. I think of it the same way as we would run any other household.

My kids come to me, they ask for something, it costs a certain amount. If there's an alternative, let me see why you have to have this particular brand versus that. Give me the information. Let me be able to see if we can get something, you know, that will still keep you-- give you what you need, but maybe it doesn't cost as much, but we want transparency. The entire goal of this is to be able to have the transparency.

So we want fair and informed rates. Right now, we don't get that transparency when we are paying these bills, and so that is something-- we wanna know what we're getting for our money. And I'm gonna give it to the witness who can probably be more eloquent. Sorry.

Thank you. Thank you for the question, Assembly Member. The way that it would work in the general rate case is the utility presents their preferred scenario, which is what they typically do. Here's how much they want. But they would also need to present an alternative scenario, and that alternative inflation-constrained scenario is designed to force the utility to prioritize their spending.

Part of the problem we face when we litigate cases in front of the Public Utilities Commission is if you ask a utility, what is your highest priority spending in this particular proposal, their answer is all of it. Everything. This is designed to force them to separate their needs from their wants in an inflation-constrained case.

They don't need to argue for it. They can argue against the commission adopting and say, no. Adopt our preferred spending scenario. And the commission is not required to adopt the inflation-constrained scenario. It's designed to give us a benchmarking approach, to understand what would it look like if we prioritize spending and limit it to inflation. And it would give parties in the case an opportunity to then argue for or against that.

But without the utility presenting it, it then forces all of the other parties to sort of guess at what would be the highest priority spending. I think that's what we're really trying to do in the regulatory process.

So could you just give me--and I don't wanna belabor this too long--but could you just give me examples of how a inflation-constrained scenario-- what kinds of things would be omitted? I mean, if you actually need to engage in wildfire spending, would you basically have a scenario that you're just doing less of that or delaying it? I mean, it seems like most of what's in the rate cases is a combination of things that we've mandated the utilities to do.

And so, we would have a scenario where they're not doing things that we've mandated or we would delay them? I guess I just don't understand, I mean, what this constrained scenario-- how that's different from basically saying, okay, they want an x percent increase in the rate, which is 10%, and the inflation rate is 3%, and the PUC says, okay, it's 7% above inflation. I mean, so how is the constrained scenario different? What would be eliminated from the scenario?

And if I may interject? Sorry. Then I'll let--yeah--you comment. If I may interject, because I think the question you're asking is exactly the conversation that this is meant to force.

That's what exactly it is.

And I-- actually, I feel like I'm having deja vu because I think we've heard this bill a couple times, so I think that the issue right now is that I think it feels for many of us that we're sort of missing the forest for the trees. And everyone says, oh, we're about to bend the cost curve. We're driving down rates. And they continue to accelerate.

And I will say the opposition is right, that this is not just because IOUs are making crazy business decisions. This is because of some mandates that have been passed by this body. But in the absence of forcing this conversation and these trade-offs, we don't have that visibility to understand, oh, shucks. Maybe we do need to make some changes. So I feel like this is like-- you know, the conversation that would be had is like, okay, here's my inflation-constrained scenario.

Here's my preferred scenario. Here's my inflation-constrained scenario. Here's what I'm spending with wildfire investments in my inflation-constrained scenario. My preferred scenario, I'm gonna spend more, and this is what you're getting for it.

You know, here's-- and I would actually not mind if y'all included in your inflation-constrained scenario is you can zero out the public purpose programs or zero out the state mandates and make people understand what is driving these costs. Because right now, we're trapped in this situation where many of the-- you know, many of the same people who are, like, lambasting the IOUs for runaway rates are supporting programs that are driving the runaway rates.

So I think this is incredibly important as a step to force that transparency, to force a meaningful conversation about trade-offs, maybe to force a conversation about, hey, does wildfire spending even continue to be in rates, or do we pull it out? So that is why I've supported this proposal for my time as chair and will continue to do so.

And similarly, Mr. Wetch, I think, you know, a conversation we've had about this issue has been when the proposal was initially, we're just gonna mandate an inflation-constrained scenario, I understand why that is deeply unfair, but I think forcing that conversation, I think that makes sense. So I interrupted our amazing author and her witness. If I can turn it back to them?

And I have no more questions, so, yeah.

Okay. Did you want to respond? I think, Mr. Freedman, I interjected.

Okay. Thank you, Madam Chair. The-- in response to your question, Assembly Member, there are state mandates, but the state doesn't mandate exactly how much the utility needs to spend. I think that's a misunderstanding of how it plays out.

The utility has plenty of discretion in how it meets any state target that has been established and the utility has many pathways to getting there, some of which are more cost-effective than others. And, of course, the general rate case covers all areas of operations. It covers everything the utility does, many of which have no specific mandates.

And we are looking to ensure that the utilities tell us what it would look like for them to spend less, not just sort of an across-the-board cut, but more surgically on particular areas of operations. And I don't think that it has any impact on wage negotiations. Certainly, the utilities would be able to argue in their case before the PUC that certain costs were needed to ensure the safe and reliable operation.

That's actually in the bill. It refers to safe and reliable operation of the system, costs that are necessary for that purpose. So I really feel like we've identified the safety issues as paramount here, but the utilities have so much discretion in what they propose and there's a lot of fat in these applications. We do our best to try to knock out the stuff that we identify. For everything we find, there's 5 or 10 things we don't find because the utilities have superior information.

I'd like to understand and answer the same questions. What-- how would this play out, I guess?

The-- what you need to have happen, which is not in this bill, is you'd have to require that in this constrained-- to get to your point, to-- in this inflation-constrained GRC, you really would have to have them list everything that's not going to be done, right? So-- so that-- you know, because this all goes before an administrative law judge, you know, and it's like baseball arbitration.

It's really about trying to come to a settlement amongst the parties, and then it gets to the commissioners. The commissioners aren't doing the deep dive on this. So to really have that value assessment that the chair spoke to, you really have to require that that includes: okay, here's a CPI-constrained GRC. What's not in it? What's not happening that should be?

And to give you an example of how this works, just a number of years ago, when we were looking at pole replacement--I think it was PG&E's GRC--you know, the company came in and said, we need to replace x amount. Let's say 800 poles during this-- or 1,000 poles during this cycle. We came in with the data that showed that really double that needed to be replaced.

And, ultimately, TURN and others came in and said, no, that's-- both of those are way out of line. It should only be a small percentage of that. So what got adopted was a pole replacement of about 200 years per pole. The life cycle for each pole under that scenario is 200 years. They don't make poles that last 200 years.

Then we wonder why we don't have reliability. So you really have to look at the qualitative pieces of that too, not just getting to CPI. And on the wage issue, this is what will happen. You go to negotiations. They'll say, we can only do two and a half percent because we're mandated to provide this.

We'll reach an impasse, a mediator will come in, and they'll show them the law and say, see, the Legislature is mandating that we have to provide a contin-- so that means we can't-- and if we get a bad mediator, which we often do, we're gonna be stuck with that two and a half percent. That's how that will play out.

Thank you. I appreciate the answer on both of those. I guess the other thing I was just sort of say is, I'm very-- this doesn't seem like it's just a transparency thing to me because we're changing the standard.

So I don't understand how the clear and convincing and the standard changes don't push the PUC away from being able to make decisions that they think is in the best interest of the public and the ratepayer because they are sort of pushed to the rate-constrained scenario because of the standards that are being imposed. So--

So can you explain that when you say you don't see-- I'm sorry. Madam Chair, is that okay? Can you-- you said you don't see-- you feel like they would be pushed. Why would they be pushed if they can do the-- we're asking for the constrained rate and then we're asking them to basically show the other rates-- the details on the other rates? So you're telling me that--- can you explain what you mean with that comment?

I just, I'm nervous about the higher standard that would be put in place. For example, look-- just going to what Mr. Wetch said about a rate case where you actually are-- you know, what they're trying to decide is how many poles need to be replaced in a certain amount of time. I mean, what is clear and convincing evidence about whether or not it should be 300 poles or 600 poles or 1,200 poles?

I mean, I just don't-- and those-- if the inflation-constrained scenario basically says that it's-- you know, that only certain amount of poles are consistent with CPI, a CPI increase, then it's gonna be hard for them to basically approve what is actually needed for the public because we got-- not only have we provided more information, I think, along the lines of what the chair has said, but we've actually changed the standard in terms of what they can approve and not approve. So anyway--

We're not changing the standard. We're giving them an opportunity to provide an alternative and to show how they are prioritizing the ratepayers in their decision-making. So at the end of the day, we're not saying they-- we-- we're not saying there's a 30% cap. We're not saying there's a-- you know, you cannot-- you have to go with the constrained rate, but we want transparency. We wanna see, like, what efforts did we make to put the public first.

Great.

Thank you very much.

Thank you.

All right. Mr. Rogers.

Thanks so much.

Did I deep sigh? Sorry.

No. You're all good. Look, I think this is one of those bills where there's just so many different facets to it that it's tough. I'm gonna give you a lot of grace and a lot of latitude on it because I know what you're trying to do. I think you heard the concerns around the employee negotiations. I didn't see any letter that referenced it, but maybe I just missed it--

I got no-- I did not hear from any opposition in regards to this until right now.

And so, I hope that you'll work with the opposition on that piece after because I know that that's something that probably you'd be interested, knowing you--

Oh, 100%.

--in helping to--

Oh, 100, 100% be willing to, especially-- I definitely understand concerns about our workers, right? And we can't do this work. We can't have a solid utility infrastructure without the workers, so we thought that we'd kind of made that clear in the bill, but, to Mr. Wetch's point, he feels that there's concerns.

That's something that we will wanna ensure that when we are making these considerations and-- you can't do this work without the workers, right? So if your rate scenario needs to say, you know, we have to make sure that we have the workers and they clearly are-- we're not gonna ask for people not to be paid a fair wage. So this bill does not seek to take away any of that.

Yeah. And I just wanna give you a chance to say that because I assumed that that was the case, and I think that that does allow some of us to feel a little bit better if this bill were to move forward that you'll-- you've made that commitment to work with those folks on that.

Absolutely.

I think part of the challenge for me in reading the bill is I think that there's a significant portion of the public who feels like some of these IOUs, that the investors did well at certain times and maybe cut corners, and that now we're playing catch-up in a lot of ways and that's part of why we see the rates happening the way that they are, and now feel caught between a rock and a hard place where somebody else already got theirs, and now our only options are either to have inadequate infrastructure or pay more.

I think that that's where this is a challenge, and I understand what you're trying to do. My question was actually about the choice for the CPI. And I know in the analysis, it explains that you chose a broad CPI consistent with Social Security because lots of folks are living on fixed incomes, and that certainly makes sense to me that that's what you were looking at, but from a practical standpoint, things cost more in California. Things cost more in the Bay Area than they do elsewhere.

You have different metrics for CPI that each region can use based on the actual cost to deliver a service or a good. So if this goes directly back to how much you pay your employees, it goes back to how much it costs for you to procure the equipment. In my mind, it makes-- I understand from the senior perspective in protecting people on a fixed income why you went the direction you did, but from a service delivery perspective, it seems to me like it makes more sense to have CPI tailored towards the area that we actually are gonna be delivering these services. But wanted to give you a chance to respond.

Sure. I can give you the rationale, or I can pass it over to Matt to expand on, you know, what you're saying, but I will tell you, one of the things that we were considering is the max amount of income increase most ratepayers perceive each year. You know, if the ratepayers have a budget, then utilities outpacing their budget-- like, you know, it's not sustainable at this point.

And then number two, the COLA's based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, which is a measure of inflation. But, you know, we definitely are happy to continue working on that, and then I will give it over to Matt to please expand on that because I knew you were gonna ask that question.

Thank you, Assembly Member. To reiterate what was just said, the Social Security Cost-of-Living Adjustment is actually based on the Consumer Price Index. It is the CPI-W, which is the Consumer Price Index for Urban Wage Earners and Clerical Workers. So we think that this not only reflects the annual increases in benefits received under the Social Security program, but also the actual wage increases that typical urban workers would receive. So we think it's a good proxy in that respect.

Okay. That's helpful. Thank you. Like I said, I'm gonna give you a lot of latitude and leeway because I know what you're trying to do. I reserve judgment for when it comes to the floor, assuming it ends up coming to the floor.

But I did-- I was struck by a line that was in one of the opposition letters that I think-- I don't want this to be a cut off your nose to spite your face for the public on something that feels good but ultimately harms them long-term because they're so frustrated with the system, and the line was that, as written, the bill doesn't discipline shareholders and only ends up hurting the workers, and I know that that's something that you take very seriously.

I definitely do, and I thank you for bringing that up. And as mentioned, we'll be happy-- I was gonna bring it up, so thanks for asking the question. We'll definitely be happy to continue that conversation. It was already our intent, but if they don't feel that it was clear enough, we wanna make sure that it's clear. And this bill is not putting any caps, right? We just-- we need to fight for transparent information, right? So we're not putting a cap. But thank you for that, and we will continue that conversation.

Thank you. Mr. Chen?

Thank you, Madam Chair. I appreciate the time, and I certainly appreciate the intent of our author, and I think if you look at any type of legislator in the State of California, our constituents, one of my issues is affordability. One of my concerns is that, what was earlier alluded to, that this is not a legislative mandate. I'm not 100% in agreement with that.

In the very least, I believe that there's gonna be additional programs and regulation, and I believe that sometimes when there's additional layer of process here, that is not going to be something that is commensurate to see taxpayer or ratepayer relief.

One of my questions that I have, specifically, actually, with the opposition that they may answer is, whenever you're going to enforce and create a new program or to have a new requirement upon the CPUC or the IOUs, what do you foresee in terms of additional costs, and will that end up going to the ratepayer?

Yeah. I mean, look. State policy mandates are obviously a significant portion of rates today. It is a growing portion of rates. I don't know how in this process, right?

You know, certainly, they've presented this-- you know, the process that they're looking at is you present your inflation-constrained scenario and you also present your general rate case. It's possible that, you know, in that inflation-- you know, as the chair noted, you might just zero out the thing that the state's telling you to do. Is that an optimal solution? I don't know. I-- again, I look at this.

This feels like it's kind of nibbling around the margins when we should actually be tackling the real cost drivers, the things that are actually pushing rates up. Those are things-- you know, I mean, if you look at it, I think the average across the IOUs, the NEM cost shift is the on average, 14.2%. That's massive. That's much more than, for example, is being paid for for Karen Farah, right?

It's substantial. It's multiple times more. And those benefits are going to people who are in higher income brackets, right? So let's focus more on pulling back those state policy mandates out of rates rather than this, you know-- hey, we've got this balance of an inflation-constrained scenario with the heightened standard that's trying to serve as an anchor to pull things down. Let's actually address the meat. So those are my thoughts.

Thank you for the answer. I do have one last follow-up question. I noticed in that--at least I didn't pick up on it in terms of the legislation and the verbiage itself--is there an off-ramp for environmental causes as it-- is still part of the consideration in terms of the financial impact for the IOUs and CPUC?

When you say off-ramp, can you-- you mean--

Right, right. Because right now, it's limited to safety and reliability, but I think it does ignore some of the costs that are added to the system.

So-- and when you say offer, so when we're looking at the constrained case, and then there's kind of this prioritization, it's gonna give, like, clear transparency, clear priorities, things that, like, must be done versus things that we don't have to do in this particular rate increase. As far as, like, an additional, like, way to off ramp, maybe Matt can speak to that.

But, we wanna make sure-- so as you were speaking about, you know, some of the-- how we identify what some of the problems are, we can-- I really think it's important for us to see where regulations are, some of the things.

When you make this transparent, you can say, well, unfortunately, we can't leave this out because it's a regulation. Really-- I think this is really another tool to help the Legislature be able to say, well, this is where we're actually not helping the PUC when it comes to our rates. So this is not about just putting the onus on utilities.

This is about making things so transparent that we completely understand what are driving our costs the same way you do when your costs at home are out of control, and you're like, wait a minute. Why are now all my bills are so high? I was just walking over here. I got a text from the insurance company. I'm like, my daughter must have done something because my insurance just went up $300, right?

So, like, with information, we can make changes, and so that's what-- you know, those are the type of things that we're expecting, but as far as, like, off-ramping, I don't really have context for that. Matt, can you speak to that, please?

Sure. Well, I-- the bill has two components. The first component deals with the general rate case, which you would think includes everything, but in fact, it does not. There's a lot of spending that is outside of the general rate case. The second part of the bill refers to other proceedings.

And a lot of the environmental mandates that the utilities have to comply with, the clean energy standards in the state, those are dealt with through different proceedings outside of the general rate case. And there, the PUC would be directed under this bill to apply heightened scrutiny. So it provides kind of a general off ramp but directs the commission to take a harder look at increases cumulatively across other proceedings that would exceed inflation.

So I think it leaves wide latitude for the types of off-ramps that you are identifying, and it does not specifically link the commission's review to safety and reliability.

Thank you so much, Madam Chair, and I promise this will be my last question. Just to piggyback on that, what I meant specifically, the off ramps when it comes to environmental programs. Because when environmental programs are assessed or accounted for, I imagine there will going to be an increase potentially to rates specifically for the reliability programs because this--excuse me--the environmental programs, because this one is specifically for reliability and safety, as I understand it.

Well, yes and no. The general rate case one looks at safety and reliability as a legitimate basis for going above inflation, but in the other proceedings, there's no similar limitation. And, again, many of the utility spending programs that deal with environmental policies are outside of the general rate case. That's very typical, and that would be subject to a heightened scrutiny standard.

That's the idea behind the bill. So it's designed to recognize that there are legitimate state policy requirements that the utilities have to comply with. This is not attempting to get around that.

Is that the opposition's understanding as well?

Look. I think that it's been stated correctly. You know, we've got to reconcile all of these different things that we're asking the ratepayers to bear, right? And so, the logic of what you're saying, I don't necessarily disagree with.

But, again, my fundamental objection here is you are dragging down. The idea of this is to anchor as low as possible, right, to use a negotiation term, and increasing the heightened standard over the long-term that has the potential to really start pushing deferred maintenance into the system, right, to delay upgrades. And so, that's kind of the overall concern. The main point here, though, for me at least is, let's start taking the things that don't belong in rates out of rates. That's where we should be putting our focus. So, thank you.

Well, thank you so much for that sage advice. This committee, over the course of the last many, many years, has been really deeply engaged into digging into the drivers of rate increases and identifying opportunities for legislative intervention to address that and bring rates down.

I guess what-- well, I'll first say, I'm quite shocked to have the Chamber opposed to this measure because one of the number one things that I hear from businesses, large and small, across the State of California is their deep anxiety, frustration, and concern about runaway electricity rates. And then second, you know, you continue to say that we should be focused on pulling state policy mandates out of rates. I actually don't dispute that.