Senate Standing Committee on Energy, Utilities and Communications

We have two Republican colleagues to present, so let's just do that. Let's get this started as a subcommittee. We will now ask Senator Jones to come to the dais to present SB 929.

Thank you, chairman. And, on time members, I will add an item of discussion to our caucus lunch agenda today, for those members that aren't here yet

on time. I appreciate that. Chairman and members, I'm presenting SB 929, the California Energy Commission reporting, which establishes an annual appearance and report requirement for the chair of the California Energy Commission to provide updates to the legislature on the commission's activities, plans, and public outreach efforts. In recent years, the authority and responsibility of the CEC have expanded significantly, but legislative oversight has not kept pace with that growth. Today, the commission oversees major programs that affect California rate payers, drivers, and consumers.

These programs influence energy costs, housing affordability, and the overall cost of living in California. Despite this, the CEC is not subject to a regular appear and report, requirement before the legislature unlike other major energy and regulatory agencies are already currently required to do. SB 929 addresses this gap by establishing a consistent annual opportunity for the legislative oversight.

This bill requires a chair to report on the commission's core responsibilities, including research and development, building and appliance standards, energy demand forecasting, renewable energy development, and clean transportation infrastructure. This approach aligns the CEC with existing practices already in place for agencies such as CPUC, California Public Utilities Commission, and CARB, California Air Resources Board.

Importantly, this bill does not increase utility rates, create new fees, or impose additional costs for rate payers. I ask for your aye vote on this very simple and important bill.

Alright. Let's ask our witnesses in support or folks who wanna come to the microphone, voice their support for the bill. Anyone who wants to raise concerns or opposition? Okay. Questions from the committee?

Yes. Senator McNerney.

I think Senator for bringing this forward and I agree with the idea. The Energy Commission has a missed responsibility and doesn't have enough account oversight and accountability. Any particular reason why this has not happened before now?

Well, no. I I'm sure there is an answer. I don't have that answer prepared for me today, but I can certainly get back to you on maybe prior legislatures just didn't have the interest in overseeing it.

Do you know if the CEC wants to do this?

I don't think we have any letters in opposition to this, bill. So, they're not here to testify. Yeah. So I wanna speak on their behalf, but we haven't heard any pushback from them.

Alright. Thank you. I'll yield back. Great. Thank you, Senator.

Other questions, thoughts? Okay. I'm I will entertain a motion. This certainly enjoys a do pass recommendation from the chair. Thank you.

And but when we have a quorum, we'll entertain a motion. So if you want to close her.

Well, I thank you that Senator McNerney, thank you for your excellent questions. If you'd like, we can get back to you on that on those two points. Actually, it's good research for me to be familiar with anyways. And mister chair, thank you for the do pass recommendation and look forward to affirmative action on this bill when everybody gets here.

Appreciate it.

Thank you. Appreciate your support for affirmative action. And we will we will now go to our friend Roger Nilo who is here to present a bill. Roger's here with, SB 1197 on permanent standard time. Let me proceed when ready.

Well, thank you, mister chair. And as my former as my colleague formerly said on time members, we'll have to talk about that at caucus lunch. Yes. Of course. Thanks for the opportunity to present SB 1197 dealing with the with a very timely issue.

Our long standing debate about ditching the switch of time that is, and which switch to ditch. That's my own little doctor Seuss quote. Now, you've heard this before. I think this is, my third or fourth attempt at that and it I think it must be the charm. But the difference is, that I have a new proposal, that I think strikes a good balance.

The bill is about how California can control our own destiny, regarding time. How standard time is the healthier choice for our bodies. And how we can finally ditch the time switch, something our constituents have long expressed to be in favor of. In 2018, voters approved proposition seven, which allows legislature to change the rules relating to time. Since the passage of proposition seven, there's been, some confusion.

Many voters actually thought they had decided this issue, but like so many bills and propositions, the devil is in the details. So proposition seven actually authorizes the legislature to implement full time, daylight saving time by a two thirds majority if authorized by Congress. The proponents which in of that proposition which included the author also stated in the ballot statement that the proposition could be used for going to permanent standard time also.

Currently, federal law only allows for states to authorize permanent standard time or to utilize daylight saving time for part of the year, which is what we are currently doing. We switched our clocks a couple of weeks ago, and I think I might be used to the time change somewhere around Halloween.

So, considering the lack of action by the Federal Government, and the desires of our constituents clearly to ditch the switch, I think it's imperative for California to consider another option to address the issue. The only option we have currently is moving to permanent standard time. Now, a recent Gallup poll nationwide admittedly, but it shows that at a more majority of Americans say they are ready to do away with the practice. Obviously, California voters said that.

But the same poll also showed a plurality of Americans say they would prefer to have standard time the whole year, including summer.

This bill will accomplish those sentiments as it will move California to standard time. And if Congress ever approves permanent daylight saving time, then we would move to that federal standard at that time. I've worked with lawmakers in bordering states. I've been chatting with them for a couple of years now. Washington, Oregon, Nevada, even, Utah and, Idaho.

And we've been working on hopefully moving in the same direction so we'd have Western states on the same time, which I think is

important. So not only does SB 1197 eliminate the inconvenience for Californians, but there are multiple health and safety implications as we all approved in my SCR 7 of, I think, last week or the week before. And that is the issue issue to which my witness will speak. We have doctor Ken Yoon, an adjunct associate professor at Stanford and UCSF, who is a sleep medical physician and has been for over twenty five years in the Bay Area.

Thank you so much for the chance to speak. I wanna thank the chair, the committee, and also of course, Senator Nilo for the chance to support SB 1197. As mentioned, I've been a sleep medicine physician for well over two and a half decades. And I learned from my medical training and those of my patients how wreaking havoc daylight saving time can be with that one hour's time change.

And I was also one of the co sponsors for the position paper for American Canopy Sleep Medicine to support permanent standard time.

I want to point out three facts. Number one is that going to sleep an hour earlier is unnatural. Try it. It's really hard and typically it takes us a while to adapt as Santo Nilo had pointed out. In particular, our teenagers are most effective because their internal clocks are longer than twenty four hours.

And as the way it stands, they lose about thirty two minutes of sleep per night during the March daylight saving time season. Their parents also lose sleep on top of that. Secondly, those that are under the lower economic strata, particularly in the Bay Area, in the Oakland area lose more sleep. A third of Americans have reported they lost sleep. In addition, in Oakland areas, we report to be about forty, forty one percent.

So those that do not have flexible schedules are severely affected by this change in addition to sleep loss that they have accumulated. Some never recover. I know it says a joke, but some do not recover during the eight months when daylight saving time is in effect. Lastly, it's the simpler and safer way to go simply because we know that by ending daylight saving time, we are reducing the risk for heart attacks, strokes, arrhythmias, lessening the burden for obesity and insulin resistance in our general population.

Therefore, I urge that you say yes to SB1197 so that we can help both the patients and myself achieve better physical health, mental health as well as better sleep.

Thank you for your attention.

Thank you. Thank you so much, doctor. I appreciate it. Other folks who wanna come to the mic and express their support for the bill? Folks who wanna raise opposition or concerns?

Yes, sir. Go to the microphone.

Good morning, chair members. Morris Thomas with the Southern California Golf Association, and representing the California Alliance for Golf. The California community golfing community fully respects the scientific studies cited by the sleep disorder specialist sponsoring this bill. Those studies ought to be part of a fully informed decision as to which is the better option for ditching the switch, permanent standard time or permanent daylight saving time.

However, before overturning the California electorate's clear 2018 decision to move to year round daylight saving, we urge the legislature to consider all of the relevant factors necessary to reach a public health considerations associated with reduced time, public health considerations associated with reduced time for and after school sports and recreation programs, and three, public safety concerns due to increased crime and increased traffic accidents.

We wanna highlight the caution in the bill analysis that adopting permanent daylight that adopting permanent standard time likely requires voter approval because it may not be consistent with the passage of proposition seven in 2018. We also concur with the recommendation that regarding the benefits of a measured approach that would allow for a full assessment of all the implications and interests of residents, communities, schools, businesses, and neighboring states, public safety and impacts on energy systems, considering all relevant factors as opposed to just one.

The voters who approved Prop seven Deserve a careful analysis before reversing their decision. For these reasons and others that are in the lengthy letter filed with the committee, the California Alliance for Goff opposes the bill but would support the informed analysis that the staff analyst suggests would be the prudent course before making changes whose full implications have been fully vetted. Thank you for considering our views.

Anyone else who wants to raise concerns or express their opposition?

Good morning, chair and members. Nicole Quiniones registering opposition for the following organizations who couldn't be here today. The Southern California PGA, the golf, California Golf Course Owners Association, Northern California Golf Association, Northern California PGA, San Francisco Public Golf Alliance, Golf Course Superintendents Association of America, Hi Lo Desert Golf Course Superintendents Association and the Latino Golfers Association. Thank you.

All right, thank you very much. Okay. Why don't we give the author just a quick opportunity to answer this question of whether this would require a return to the voters for a vote? Because I I'm not I'm not sure that proposition seven was as clear as it was just announced, you know, in terms of support for permanent deal, you know, the daylight savings time.

I will, quote from the, argument in favor of that proposition in the voter pamphlet at the time. This was, signed by Assemblymember Chu, Assemblywoman Gonzales, now Senator, Gonzales, and a doctor Sione Roy, all, signing the argument in favor. And I quote from their statement, a yes vote on proposition seven allows California to consider making daylight saving time or standard time our year round time. That's a clear indication that proposition seven allowed for either one. Yeah.

And the problem with the former is that we cannot go to permanent daylight saving time in unless and until the Federal Government authorizes that.

Yep. Okay. That's my understanding too. Okay. We don't have a quorum yet.

I'm gonna just tell I'm gonna lay off the bill. You know, I I absolutely agree that if we ditch the switch, we should do a permanent standard time. I've become convinced of that from the sleep scientist.

The concern I have is that getting rid of the status quo will move us toward a situation where we're gonna have some times of the year the sun coming up, you know, before in in the 04:00 hour, 04:45 in the morning, and it and other times of the year, it's gonna come up at 08:15. And I just I don't know that people fully grappled with what that entails.

And what we with our current system allows for Sunrise to happen pretty much within the 06:30 to 07:15 range depending on where you are in the state consistently through the year. And that's one of my concerns about making a change. Though I understand that a lot of people hate the time change. Everybody hates the time change, especially when you lose an hour of sleep. But I'm not asking the members to vote against this or lay off.

I I think that everyone's got a strong opinion about this, and I'm happy to have the the bill passed out of committee if that's the members will. Yes. Senator Ray. And then Senator Richardson.

Thank you. And thank you for bringing the bill. I was in the assembly when then assembly member Kancin Chu attempted this bill almost every year and brought forward the sleep study experts, brought forward safety experts to talk about the increased accidents, traffic accidents, a number of things. And we would get it out of the assembly, and then it would get stuck somewhere.

Oh, those senators.

But I I I do appreciate that you brought it. I think that I hear from my son. I hear from from my constituents how tired they are of this change over and over again. I I did see the legislative analyst's comments regarding having to take take it back to the voters. I agree with your interpretation.

Of course, we will have to see exactly what will happen. My question was whether it had to have congressional approval. And your interpretation is that that is only if we go to daylight savings time?

Yes. Congress has authorized states to go to permanent standard time but has only authorized states to recognize daylight saving time limited time during the year. If they specify up to six months or seven months, something like that. I think we're at five months, but not permanent daylight saving time. There have been proposals in Congress to do that and they haven't moved out of the house where it originated which was the Senate.

So there doesn't see there does not appear to be any near term legislative momentum in Washington DC to settle this other than for us to go to permanent standard time at this point.

Thank you. Thank you, mister chair.

Thank you, Senator. Senator Richardson.

Thank you, mister chairman. Mr. Nilo, I applaud your persistence and diligence. I always respect that in someone. Unfortunately, in this particular case, I'm actually one who prefers more daylight savings time.

So I'm not gonna vote yes for the bill, but I won't vote no either. I'll lay off just so your record is a little clear there and hopefully you'll you'll have enough to get there. But I have spoken to you about this. I have said what my preference is and you have shared an openness either way. But the congressional issue seems to be the challenge with daylight savings time.

So, maybe you can work with the administration and he might be open, to your thoughts. And with that, just wanted to share my comments. Thank you.

Well, our president at differing times has stated that he's in favor in one or the other. So the administration hasn't given any clear direction either. But still, it would have to originate in Congress and there doesn't appear to be any consensus there.

Well, he does a lot without Congress. So I tell you, go for it.

That's certainly true. Alright. Let's go to Senator McNerney.

Well, I thank the author for bringing this, but also clearing up the misconception I had that the voters of California settled this a while back and why that has

That is a consistent confusion among a lot of voters also, but it was that was an advisory proposition.

Well, I've supported this bill in the past. The change is disruptive for different reasons. Once in the fall and once in the spring. So I'll be supporting this and I yield back.

Okay. Great. Thank you, Senator. We still don't have a quorum, such a big committee, but happy to have you close and respond to any concerns.

A few things. The opposition to this proposal is entirely from the golfing community. But I'd like to add that I have a lot of friends who are golfers. They're retired and they golf a few times a week and they are frustrated when we change the clocks to daylight saving time and they can't tee off early because the sun's not up. So that argument quite frankly cuts both ways.

And that I was looking at a note that I made. The they are calling for a study. And I would point out that in the legislative process, the best way to avoid doing something is to call for a study. But essentially, the debate in the golfing community is the one stated here and the one that's not stated here, and that is more light in the morning versus more light in the evening. And basically, that's where people come down on what they prefer.

And I always like to point out that with regard to the morning light, yes, the sun rises earlier under standard time. But we went to permanent daylight saving time in the early seventies. It was intended to be for two or three years and it was abandoned after about ten months because it was dark when kids were going to school in November, December, and January. It was dangerous. That is a bigger downside than a little bit more light in the morning, number one.

And number two, even in the summertime, it's light until almost 08:00. That's that's hardly the sun dropping into the horizon prematurely early. So the the point of my measure is that voters want to stop switching time two times a year. We can do that, but we can only do it by virtue of going to, permanent standard time. Now if the Federal Government acts and the proposal there has been that the nation would go to permanent, daylight saving time.

And at that time, we would go to permanent daylight saving time. I think we'd have to because the Federal Government mandated it, but this bill specifically states it so that there isn't any confusion that that's what we do if Congress so acted. So in the interest of ditching the switch and making the decision now as to which switch we ditch, I request an aye vote.

Well, thank you, Doctor. Seuss Nilo. We will we will absolutely entertain Senator McNerney's motion when there's a quorum.

Thank you. Thank

you. When

when he when he officially makes it. Yeah. Okay. Thank you. Thank you.

Alright. Let's go to Senator Padilla, who is here to present item number two in your packets. Members, that's SB 1138.

Good morning, Mr. Chairman and Members. I'm here and pleased to present SB 1138. I'm gonna begin by accepting committee amendments, which I hope you have before you. And I'm thanking committee staff and the Chairman for your diligent work with my office on this matter. It is no secret that California is experiencing energy bill affordability crisis.

We have heard it from our constituents who are struggling to get back as they deal with some of the highest bills in the nation. What we've learned over the last few years as we've worked to tackle energy bill affordability is that there is no silver bullet.

Much of these cost increases are driven by the need to increase or upgrade transmission infrastructure and distribution infrastructure to supply the growing demand, vegetation management, grid hardening, reducing wildfire risk, and investments to the grid to meet our clean energy goals. Eliminating these costs are not entirely avoidable.

But we can also take a look at the fact that we've learned in recent years that we can push practical consumer focused solutions that can bring down cost while still achieving our goals and maintaining reliability. That's what I'm bringing you today in the form of SB 1138. For the past four years, as many of you know, the CPUC has been working on reforms to the resource adequacy or RA program.

One of those reforms that was first implemented last calendar year requires the investor owned utilities, CCAs, and direct access providers, any load serving entity, to procure enough energy capacity to meet each hour of the peak day in each month, otherwise known as the slice of day framework as referenced in your analysis.

This is a deviation from previous compliance requirement, which set a monthly requirement based on the peak day of that month. The purpose was to make RA procurement more accurate and to better ensure grid reliability. While the programs appears to be on the right path for liability purposes, unfortunately, leads often to excessive and unnecessary procurement of resources.

As a result customers are often paying, for something they don't need. Additionally, these excessive purchases are also creating artificial market scarcity and driving up prices that these require. This bill proposes to address the problem by allowing load serving entities to trade their hourly obligations to prevent these over purchases and do so in a manner that is not a threat to grid reliability.

This is a common sense solution that would have saved rate payers, for example, approximately a $180 million in 2025 and a solution that should have been adopted with a new hourly compliance program went into effect last year.

I'm pleased to state that with me today are Lauren Carr, Senior Manager of Regulatory Affairs and Market Policy for the California Community Choice Association, and Ted Bardacke, CEO of Clean Power Alliance. As many of you know, a CCA aggregator that provides services across Los Angeles and Ventura Counties.

Why don't you come to the microphone, please?

Good morning, Chair and Members. I'm Lauren Carr, Senior Manager of Regulatory Affairs at the California Community Choice Association. CalCCA is proud to sponsor SB 1138 and thanks Senator Padilla for authoring this important legislation.

The state's 25 community choice aggregators are nonprofit local government agencies that procure energy for over 15 million Californians. California's resource adequacy program ensures sufficient electricity supply to meet customer demand. The California Public Utilities Commission recently implemented a new slice of day compliance framework, which better aligns the system, the RA program with system reliability needs.

However, under current rules, RA products must transact monthly even though the obligations are unique to each hour. This forces LSEs to purchase more RA than needed and unnecessarily drives up RA prices. This inefficiency largely explains why RA resources achieved a 23% reserve margin in September 2025 when the requirement was only 17%.

The cost of unnecessary RA purchases fall directly on California ratepayers, totaling tens of millions of dollars annually. SB 1138 supports energy affordability by allowing LSEs to transact RA load obligations hourly to align with the granularity of the requirements, reducing the need to purchase additional RA beyond what is needed to meet the requirements set by the CPUC.

In 2025, hourly trading could have saved rate payers approximately a $180 million. At a time of rapidly rising costs, policymakers should provide LSEs maximum flexibility in how they contribute their fair share to system reliability. These reforms could save tens of millions of dollars each year, lowering customer costs while maintaining reliability and supporting California's clean energy goals. CalCCA respectfully requests your aye vote on SB 1138. Thank you.

Thank you. Hey, Ted.

Good morning, Chair and Senators. Thanks for having me. My name is Ted Bardacke. I'm CEO of Clean Power Alliance. We are the largest CCA in the state. The number one green energy provider in the country and serving over 3 million residents and businesses across 38 communities in Los Angeles and Ventura Counties.

Last year, resource adequacy comprised about one quarter of our energy costs to the tune of $287 million. Lowering the cost in this area would have real world impact on our customers. Under the new slice of day resource adequacy program, we have to demonstrate that we have enough energy capacity to meet the peak forecasted demand in each hour of the day of each month.

The problem is that energy capacity is not tradable in those one hour increments. Currently, with few exceptions, the smallest increments we can trade is monthly. That's just a mismatch. And this mismatch forces us to procure more, spend more than we need to meet that forecasted peak hour. There is a solution to this problem. We are a big state with a diverse climate. So for example, in San Francisco, the peak is in the winter because of a lot of homes have electric heat.

In LA, the peak is in the summer because of air conditioning. Allowing us to trade those obligations among different load serving entities would be more efficient while still having that, while still ensuring the system has enough capacity to maintain reliability throughout the year. Last, we already have systems in place to make these trades. There are request for offers. There are bilateral negotiations.

There are transaction through brokers. These are well developed platforms to make the trades. We would just be doing it at a more granular level. So last year we at Clean Power Alliance estimate we could have saved between $10 million and $13 million in RA costs if this program had been in place.

This is almost equal to the total amount of we dedicate to our customer programs, which serves currently assisting over 16,000 households to lower their energy bills and increase their resiliency through rebates and incentives for home hardening, backup batteries, and efficient AC units for low income multifamily renters. This is real money that could be invested if we could just be more efficient. Please allow us to be more efficient. Thank you.

Thank you. Fantastic. Are there folks who want to express your support for the bill?

Good morning, Chair and Senators. Will Brieger, State Strategies for Climate Action California. We support. Thank you.

Thank you.

Good morning to the committee and Chair. Claire Sullivan on behalf of the City of Belmont and the Town of Hillsborough in strong support. Thank you.

Good morning. Jean Hurst here today on behalf of the Santa Cruz County Board of Supervisors in support.

Good morning. Andrea Deveau on behalf of CalChoice Energy Authority in support.

Emily Pappas on behalf of Pioneer Community Energy and MCE in support.

Katherine Brandenburg on behalf of Sonoma Clean Power in support.

Good morning, Members. Jason Ikerd on behalf of Clean Power SF who are very strong supporters of the bill. Appreciate the author bringing it forward.

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

Vanessa Flores representing San Diego Community Power in support and also asked to provide a me too for Clean Energy Alliance.

Morning, Mr. Chair. Mark Fenstermaker for Peninsula Clean Energy and Valley Clean Energy in strong support.

Craig Scholer on behalf of Ava Community Energy in support.

Thank you. Alright. Opposition, folks who wanna raise concerns about the bill. Okay, seeing none. We will go to the committee. Let's go to you, Senator Richardson. And then followed by Senator Becker after Senator Richardson.

Thank you, Mr. Chairman. I'm in support of this bill and would be prepared to make the motion when deemed appropriate. I do though have a question from my colleague, Ochoa Bogh, for the author and I agreed to ask the question for her.

But I am in support of the bill as it is. Her question was, how would you address the concerns that the CPUC expressed regarding the limited evidence of need, uncertain benefits, and heightened implementation risks?

Specifically, is it appropriate to pass this bill when the CPUC has stated that this framework needs time to mature and that the potential gains don't outweigh the complexity and risk of unintended consequences. Her staff is here to listen to the answer. But thank you, author.

Mr. Chairman, Senator, thank you for the question. And for the my esteemed colleague who requested the question, I would say twofold. One, before you, the amendments address that by providing the flexibility for the CPUC to suspend this option if it can be demonstrated that it undermines the RA schematic and does not achieve those goals that are obviously important for grid stability and reliability.

Secondly, I think I would note just refer you to page four of the and refer the Senator to page four of the committee analysis, which clearly indicates sort of the some of the critiques about the PUC's report and that if, permission to cite your own analysis, Mr. Chairman, and I quote, the end of the first paragraph, staff reports focus on ability rather than the cost to comply.

The state, they state that the report materially understates the avoided excess procuring and associated cost savings. So again, I think I would conclude I would concur in their argument and critique of the report by the PUC, and I think we've addressed it in the amendment.

We'll go to Senator Becker.

I wanna thank the author and I think we've been in touch with your team and look beyond as a co-author. And just as we moving to hourly RA requirements, it's kind of makes sense that we allowed to be contracted for hourly rather than, well, in hourly chunks. And I think it's pretty clear anything we can do to meet these requirements more efficiently will get passed on to rate payers. So grateful for the bill.

We're gonna go to Senator McNerney and then Senator Stern.

Well, I thank the Senator and I think it's a great find to find this. I have a couple of questions, comments. First of all, we talked about all the savings that are going to be coming forth. I just want to make sure those savings go to the rate payers and not to investors or other sorts of pockets. Do you have a comment on that?

Mr. Chairman, Senator, I think I would also refer both to the testimony of my witness. But based on the schematic and how we regulate the rate case per se, there are elements that deal with satisfying of these requirements under RA, and these are long demonstrated passed directly on as a component to the consumer on the consumer end, on the rate payer end.

So if you can reduce the over purchasing of unnecessary resource, you're not having to capture that. So that's an extra capture that's not passed on to the rate payer. So there is, I think, ample evidence that demonstrates this achieved savings for the rate payer.

My other question is concerned with the technical aspects of this. Where's the ISO fit in? I mean, this has gotta go through ISO in one way or another if you're trading. And does, I mean, do the, I think one of your witnesses said the systems are in place.

But for hourly trading, do they have the capability to keep up with that? Are we putting ourselves, would we be putting ourselves in risk for system issues, like, when Enron took over back in the... Just a little concern I have about system stability and trading at that frequency.

Mr. Chairman, Senator, thank you for that word. My god. I don't wanna ever hear that word again ever in my career. But thank you, sir. You might recall that in the early 2000s when the legislature responded by establishing the RA requirements and framework was a direct response to the energy crisis that we suffered, I think a lot of us miserably at that time.

And as you know, the Cal ISO and even some of the component of the federal regulatory oversight had to make sure that we were in compliance and alignment when we established the program. So the program provides for those parameters to begin with.

And, again, I would just refer you to the amendments that we're accepting here, which gives some flexibility for that determination, if it is made, has to be demonstrated. That's a standard in the amendments, the committee amendments that we're accepting.

Okay. You have answers.

I'm sorry, sir?

You have answers.

I try.

Alright. I'll yield back.

You may not always buy them, but I certainly have them for you.

Alright. Let's go to Senator Stern.

Thank you for your answers and always bringing your diligence this, Senator. I appreciate your efforts here and the sort of the push to drive down costs as best we can. I think the amendment makes sense. Just to add some more flexibility. I guess my central question is maybe more of a local one.

So it might not might not be about the entire framework, but in my in my backyard where your where your lead witness represents. And maybe I could even bug him to come back up. But my my central concern is that we're relying right now on a gas peaker to meet a lot of local reliability.

We are the softest part of the Southern California grid in the Moorpark sub area. And that community in Oxnard has been suffering for too long. And I'm just worried about under procurement in that region. So I mean, it might be, again, more of a regional question.

But I don't want to see us in a place where we sort of, you know, we squeeze as much efficiency as we can out of the RA market and then we we don't have our CCAs buying any local generation capacity. We're desperate for getting batteries cited in that area. Unfortunately, one of our cities just rejected a couple 100 megawatts of batteries.

It's been a slog to get the peaker replaced with batteries. And I know Mr. Bardacke and I have had many conversations over the years about wanting to install more generation capacity because we're the PSPS heartland of Southern California as well. So maybe if you could, if you don't mind, for the witness?

Yeah. Mr. Chairman, I would defer to my expert witness to...

Yeah, please. So I just want to get some clarification from you on the record. Do you anticipate this reducing the amount of local generation you're going to be procuring if we went forward in this framework?

So on the generation side and on the storage side, no. We know that there's a lot of value for relieving congestion, for increasing in that area. The RA program in the local capacity is actually centrally procured by the IOUs for the in those local sub regions.

So what we're talking here about is trading on the system level across the state. So there's going to be, this would not impact those, that local capacity framework. If Lauren wants to get into sort of how the there's three RA products.

There's system, there's flex and then there's local. And the local was given to the IOUs to centrally procure, I don't know, 3-4 years ago. Something like that. So we're, we don't see this as any disincentive to increasing our battery...

Because you're saying this is just limited to the system procurement? And so that...

Not just system and flex.

Right. But there's not a sort of local benefit to the system in the flex RA markets in any way?

So it's not how we look at it when we make our procurement decisions. We can offer additional resources to the central procurement entity. And that's, you know, but they're often, they're often well procured and don't need it from us. So I really see this as more of a statewide thing than a local capacity.

Because, and right now you're not able to do that inter regional trading.

Only on a monthly basis.

On the monthly basis, not on the hourly. But but I mean, I'm just thinking about, yeah, around the Goleta substation, around the Moorpark substations, all these areas that have been left in the dark during fire events. It's been really bad, and relying on fossil fuels to back that up just is a problem.

So you don't see any sort of, any impact on that. I mean, if you were bidding in, if you were offering say to Edison more, if you actually wanted to do a battery project that was significant. I know you've done small little couple kilowatts here, a megawatt there, some community centers. But I'm talking about like real generation capacity locally, not just paper and renewables.

I appreciate that you're the biggest green energy provider in the country, but that green energy means much less to us when it's on paper and when it's not like in our backyard. And so I just want some assurance that if supporting this bill that I'm not going to do anything to diminish your motivation to go further and to do more locally.

No. Not at all. We do have significant batteries in LA County and generation capacity. You know, if we can squeeze every dollar out of new capacity by trading it, that only incentivizes to us to, you know, deal with that excess can eventually lower our costs.

So you're saying it actually might help?

You know, every project is different. It's certainly not going to diminish it.

Okay. Well, with that understanding, I'll support the bill today, but I'll definitely be keeping an eye on this issue. Thank you for letting me do that diligence here, Senator Padilla. Appreciate it. Yield back.

Of course. Okay. I think we've been able to ask a lot of questions. Thank you so much, Senator, for your for bringing this bill forward. We'll entertain a motion when we have a quorum, but we'd love to give you opportunity to close.

Thank you, Mr. Chairman and Members. Thank you for the great questions. Just reinforcing again, this promotes cost savings and efficiency. It better aligns with where our current RA framework is at. We need to do everything we can to achieve savings for our rate payers. At the appropriate time when you have a quorum, respectfully ask for an aye vote. Thank you.

Thank you. Thank you so much. Thank you. Thank you. Okay.

Let's now go to Senator Becker who's gonna present SB 913.

Morning, Mister Chair, Members. This morning, I'm presenting SB 913, the Clean Local Power Act. This bill seeks to create an improved pathway for our customer cited resources to compete fairly to offer low cost reserves, we say capacity, for the reliability of our electric grid. For the past few decades, electricity demand has remained fairly stable. However, the CEC projects that trend is set to change dramatically, increasing between 42-61% over the next two decades.

You often hear me talk about how the grid only reaches its maximum capacity a few hours a few hours on the hottest days of the year and comparing it to the our grid to the superstore parking lot. They have to build that parking lot big enough to handle the crowds on the Saturday before Christmas, which means it's less than half full most of the rest of the year. Same with our grid.

As demand on the grid grows overall, it also tends to make the higher peaks highest. When that happens, we have two choices.

We build more power lines and power plants and transmission lines just to handle those few hours a year when we need to meet higher demand, or we could use devices already installed in our homes and businesses to shift demand away from those peaks and save a lot of money. The CPUC reports we already have about three gigawatts of customer sighted batteries already installed across the street. These are customer sighted just batteries alone, and a 100 megawatts of new customer side of batteries are installed every month.

So that's enough new capacity every month to replace effectively replace a peaker plant. The problem is that most of these customer sided resources are currently on the sidelines.

That's because of the rules currently in place. The rules for entry and participation in the RA program, which you heard a little about, the Resource Adequacy Program, and CAISO energy markets have not evolved with the development of these new technologies. This bill asks the CPUC to update these rules to align more closely to those that have enabled the CEC's highly successful DSGS or Demand Side Grid Support Program to sign up more than a thousand megawatts, one gigawatt of these customer sided resources.

The bill levels the playing field by ensuring rules will allow customers to enroll multiple devices, allow performance to be measured at the device level and allow customers to export energy back to the grid, and it ensures that rules won't create barriers to customer enrollment. The bill also directs the CPUC to work with CAISO to ensure the new rules are aligned with the existing CAISO market mechanisms.

The bill is not mandating more use of these devices or subsidizing them in any way. It's just allowing these devices to compete fairly with new utility scale generation to see which resources can meet the grids needs at the lowest cost. Not letting customer decide devices compete would be a wasted opportunity to save ratepayers money. Again, these devices already exist behind the meter today. I'm happy to accept the committee's amendments today, which clarify that procurement requirements reflect the attributes needed to serve the electrical system.

We know that demand for electricity is growing. We're also grappling with the impact that wildfire mitigations had on our rates. It's becoming more and more clear that we have to use our grid more efficiently. This is a way to do that. With that, today, I have Dan Jacobson, the senior policy adviser from Environment California, and Erik Lyon, energy regulatory manager for Renew Home as my primary witnesses in support.

Fantastic. Please come to the microphone.

Good afternoon, Chair Allen and committee members. My name is Caleb Weis. Standing in for Dan Jacobson, who you all know, I'm sure. And I'm the Clean Energy Associate at Environment California. I'm here today to thank the Senator for authoring this Bill and also voice express our strong support for SB 913, the Clean Local Power Act.

According to a report by Environment California Research and Policy Center, California is leading the nation in the adoption of clean distributed energy capacity resources like home batteries, smart thermostats, heat pumps, and electric vehicles. For example, we have over a quarter of a million batteries or home batteries in our state and over 2,000,000 electric vehicles. Furthermore, according to the California Public Utilities Commission, California's are installing over 2,000 additional home batteries per week.

And none of these statistics include the commercial and public sector customers which have also installed and are continuing to install these technologies at scale. The existence of these resources presents an incredible opportunity to improve energy affordability in California and to accelerate California's transition to 100% clean energy.

If we take decisive steps now to harness these abundant clean energy resources, so that they not only provide energy for their owners, but also for their communities. We now have the technology to aggregate these resources in our homes and throughout our state so that they can provide clean, local energy to our communities during times of high energy demand. However, right now these aggregated distributed capacity resources are restricted from fully participating in California's energy market.

This bill will allow those resources to more fully participate in California's energy market and provide energy to California communities, including your constituents when they're, the most affordable energy resource and therefore reducing energy cost for all and not only for those who already have these technologies in their home or business. The more that we use this clean local energy, the less that the utilities need to pay for expensive, often dirtier energy to serve Californians at times of high energy demand.

For that reason, we are strongly in support of this bill and respectfully request your aye vote.

Thank you. Anyone else who wants to weigh in support?

Thank you.

Good morning, Chair, Committee Members. Special thanks to Senator Becker. Thank you for the opportunity to provide testimony today. My name is Erik Lyon, Energy Regulatory Manager for California and The Western US with Renew Home. Renew Home is an aggregator of residential distributed energy resources with active participation in California's energy markets and utility programs.

California has spent decades investing in customer located solar, storage, smart thermostats, and other flexible appliances and devices, but has not been able to fully unlock the value of these resources. When these distributed capacity resources are aggregated, they can offset traditional power plants, and hundreds of thousands of these resources have already been deployed at homes and businesses. At a time when the state desperately needs affordable, clean, and reliable energy solutions, legislators should be looking to innovative solutions that support reliability while driving down costs and emissions.

SB 913 is a bill that can do both. This bill would help address energy affordability by allowing cost competitive and dependable aggregated distributed capacity resources to compete in the resource adequacy market.

Allowing these resources to compete will allow the state to harness hundreds of megawatts of existing capacity without the need to build out expensive infrastructure. It's worth noting that nothing in this bill supposes- presupposes any outcome. It simply directs the CPUC to make changes that will create a more fair market pathway. Our industry is confident that we can compete in the market with traditional generation, and this bill simply gives us a fair shot to do so.

Aggregators like us would still be required to ensure that our capacity can deliver, that it is cost effective, and that it is clean.

If our resources are chosen in this competitive market, all rate payers will benefit from the cost savings, which in turns- which in turn helps drive down total energy costs. For the reasons I discussed, Renew Home is in strong support of SB 913. Thank you for your time, and I am open to any questions you might have.

Thank you. Alright. Other folks who wanna voice their support for the bill, come to the mic and give us your name and affiliation.

Hello. John Hart with the California Solar and Storage Association. On behalf of over 600 member companies, we strongly support the bill. Thank you.

Good morning, Chair and Members of the Committee. Brandon Garcia on behalf of Advanced Energy United in strong support. Thanks to the author.

Will Brieger for Climate Action California in support. Thank you.

Emily Pappas on behalf of the California Efficiency and Demand Management Council in support.

Good morning, Chair and Committee Members. My name is Allison Hilliard with The Climate Center in support on behalf of NextGen California, Climate Action Campaign, Derapi, USGBC California, ev.energy, and Friends Committee on Legislation of California. Thank you so much.

Good morning, Chair and Members. McKinley Thompson-Morley on behalf of the Solar Energy Industries Association in support.

Good morning, Members. My name is Pooja Agarwal with The Climate Center, one of the co-sponsors of this bill, in strong support, along with Environmental Working Group, CALPIRG, 350 Humboldt, and the Center for Environmental Health. Thank you.

Good morning. Claire Sullivan on behalf of the City of Mountain View in strong support. Thank you.

Good morning, Chair and Members. Marissa Hagerman with TrattenPrice Consulting registering support on behalf of Vote Solar. Thank you.

Kim Craig with Arc Strategies in support on behalf of Qcells. Thank you.

Good morning, Mr. Chair and Members. Adam Hatefi here on behalf of Generac Power Systems and Ecobee Smart Thermostats in strong support.

Good morning, Mr. Chairman and Members. Scott Cox on behalf of Ceres here in strong support.

Thank you. Alright. Let's go to opposition, folks who wanna raise concerns about the bill. No? Okay. Seeing no one. No. Anyone come to mic? Alright. Let's go to the, let's bring bring it back to the committee. We'll go to Senator Stern.

Yeah. Thank you for the back to back RA discussion here. It's actually, I'm excited about this bill and I think we can actually unlock a lot of the local capacity that I was actually just talking about if we opened up the market this way and allowed DERs to aggregate more.

So I'm excited about the measure. I think it makes a lot of sense. I'd love to be added as a co whenever opportunity presents itself. Maybe it sounds like you're making one amendment, so perhaps even now.

But, yeah, I think this is actually going to reduce our demand for local fossil fuel generation as a resource and instead empower people in their homes to provide that power. So thank you. I'll move the bill at the whenever we get a quorum.

Great. We'll go to Senator Ochoa Bogh.

Good morning, Senator Becker. So I have a couple of questions for you. The first one has to do with the types of in home distributed energy resources. Are they reliable enough to include in the RA capacity?

And number two, what happens if the DER, such as a Tesla battery wall, isn't fully charged when the LSC... I sound, I'm gonna go back to my definitions here. The load serving entities need to call on that resource.

Well, there are a lot of acronyms in this space. So I...

And I'm trying to, like, go back and forth because I don't know them all by heart. So I'm trying to look at my notes.

I have my own little glossary here. So.

For the purpose of the public, I think it's important to note all of the acronyms in place.

Yeah. So I think that's really the point of this bill is to say that this these distributed resources are now critical infrastructure. And we've seen this not just in our state, but we've seen now in other states that are recognizing this. Virginia just passed a law. Maryland's passing one right now.

To to recognize that and say that this moment is here. Right? The technology has evolved enough that we can count on these resources as a critical infrastructure. So I think that's your first part of your question. Here's the second part of the question.

I mean, you don't get paid if you don't have the resource, but I'll ask if my one of my experts maybe to weigh in. But if the, you know, if your battery is not charged at all, then you don't get paid. But you have a, is there a more sophisticated answer to that question?

I'm Jon Hart with the California Solar and Storage Association. So to your question, what happens if a battery is not fully charged for the event. So couple things. One is, one of the huge benefits of aggregations is you're not relying on one home.

It's not gonna make or break the grid. You're relying on, in aggregations, tens of thousands. So that's one. If one site is not fully ready, you plan for this in advance. Contingency that other sites can make up the difference. So that's one scenario.

Also, it goes a lot into our member companies that are doing this invest a lot into the software and preparation that you're forecasting in advance what the weather is going to be, what the home patterns will be, and that allows you to prepare. You know typically in advance at least 24 hours if you're gonna be called in an event the way that you participate in the market.

So you have that time to prepare. There's gonna be an event tomorrow at 4pm, and we prepare and charge for that. So you have the ability to prepare. And again, if one home is not completely ready, you have the rest of the aggregation that can really make up the difference for that.

So there's a way and... I'm sorry. Through the Chair. So there's a way to exclude the homes that are not fully prepared. Is this... So is there a responsibility by the homeowner to be informed and be prepared to ensure that they're charging their batteries in order to be ready for the time that they are needed to be addressed? This is going to take initiative on the homeowner.

Great question. So the first one, you would not necessarily exclude a home. Let's say if a battery was not charged completely to where it was expected, you could still call on that battery but maybe just not as much and you would call on another one more to make up the difference.

So you don't need to just completely exclude a home. On the second part, homeowners and businesses, it's very hands off for them. They agree, you can use the technologies I have here. And then the companies that, typically the aggregator, is able to operate and send signals.

And even that is not a manual process with software, and again across tens of thousands of sites, it's able to optimize the best way to meet that across all the loads. So for the homeowner itself or for the business owner, they are very hands off after they agree to use these resources in these aggregations.

So is this an opt in program for people who have these type of batteries installed in their homes?

They would sign to agree to this. Yes. It's not happening without their permission.

Okay. So it is. And then...

I do have there are a couple of our colleagues who were participating in the in the DSGS program before we... Well, I guess it's still going, but unfortunately, we've didn't allocate really sufficient funds in in last year's budget. But I could put you in touch with some folks who have who have who have been participating.

Who have opted into this program? So it is an opt in... I mean, the vision is to have an opt in program.

Yes. Yes. Yes. And the rules as they're set up, and these are rules we're not proposing to change, requires that every site sign agreeing to what they're doing. So the either the homeowner, business, they are aware that they are being enrolled in this program, that their resources are being used in this way. They signed to them.

Okay. And then for security purposes, I mean, I'm assuming you folks don't, quote, unquote, suck the life out of the battery per se. Right? You only have, like, a certain percentage that you utilize for each battery?

Yes. And it will, it's different across sites. Typically, how it works is the customer can select an amount that they want reserved at all times. You could say never go past this point, and that's respected across the aggregation.

Okay. And then my last question. So the homeowners or the businesses have paid for the installation, the maintenance, and the use and use of these behind the meter technologies devices to reduce their consumption and hopefully reduce their electric bills. Are they then compensated?

Yes. If you're participating in this program, there's compensation from you mentioned the load serving entity, which that compensation goes to the aggregator.

And then the aggregator would have a deal with the individual customers that they're compensated. And what that looks like will differ amongst aggregators, but the individual homeowner or business, they receive compensation for participating.

Okay. So they do, they're compensated for their cost.

Yes. Absolutely.

Construction and so forth. Okay. I think that is all for me. Thank you very much.

Yes. Thank you.

Okay. Go to Senator McNerney.

I thank Senator Becker for bringing this forward. It's very futuristic. It's something we've been thinking about for a long time. My caution is that there's gonna be kinks when this is deployed. And I'm following up on Senator Ochoa Bogh's, Vice Chair Ochoa Bogh's comments.

Suppose I've got an EV. I'm planning to go from the Bay Area to Santa Barbara tomorrow morning. I hop in the car and it's only half charged. You know, I can only get halfway. I'm gonna be late for my meetings.

I mean, there's gonna be kinks and unintended consequences. It's just a caution. I can see that's gonna happen. We need to move forward with this kind of thinking and get those kinks out, but it's gonna take a while.

Yeah. I will say, so this is where these are customer side of batteries. These are batteries in the home right now. Actually, we do look forward to a day when we'll be able to tap into the those car batteries as well with bidirectional charging. But I will say this builds on the success.

I mean, one of the reasons you'll hear many of us talk about DSGS, DSGS, and here over in the Assembly as well is because it was working very successfully. We finally actually have the infrastructure. And you will hear a push in the legislature to make sure we have that continued funding for this DSGS program that referred to this to the demand side grid support program, which was successful. But we see that as a bridge.

That program really is a bridge to something like this, where you really have more of a market based where all these customer side batteries are again considered critical infrastructure and can bid into the market. So again, it's been working and it's been working in other state.

You know, it's a when you hear about VPPs, virtual power plants, I mean, that's the same thing here. Right? We're just tapping into these resources already in folks' homes. But I, you know, I understand that mean, we will have to certainly watch things as we move along too.

Okay. Thank you. I yield back.

Thank you. Okay. Well, I'm very supportive of your bill. And we still don't have a quorum. But, you know, we gotta reduce the number of people on this committee I think. But I'd love to hear you close and and we'll certainly...

Yeah. I think it was already a good discussion. Respectfully ask for an aye vote.

Okay. Great. Thank you. Thank you, Senator. Let's now go to Senator Richardson. We're gonna go a little out of order. Senator, our Vice Chair graciously agreed to let Senator Richardson present her next two bills because she's got to go present somewhere else. This is SB 11... Sorry, 1265, which is item six in your packets, Members. You may proceed when ready.

Well, thank you, Mister Chairman and colleagues. Good morning. The California Alternative Energy and Advanced Transportation Financing Authority or otherwise known as the Go Green program partners with public and private entities to provide financing that helps California industries reduce greenhouse gas emissions. Go Green supports the development of renewable energy, energy efficiency, and advanced transportation and manufacturing technologies, while simultaneously reducing air pollution, conserving energy, and creating jobs.

Funding the Go Green program comes from investor owned utility rate payers to provide financing and partnerships within the IOU service areas.

Over the last fifteen years, the Go Green program carried out was carried out through the treasurer's office and has expanded rapidly to become a one stop entry point for Californians seeking financing for clean energy projects. Currently, according to the treasurer's office, the Go Green program is oversubscribed. And due to the immense popularity and support that its services provides, the need for this legislation has come forward.

However, despite the immense success that the program has achieved, it is not protected in statute to continue past the current treasurer's tenure. SB 1265 simply codifies this program into law and allows for future state treasurers to use and expand the program.

Here with me today to speak in support of the bill is the deputy treasurer, Morton, on behalf of Fiona Ma, our treasurer, California state treasurer, alongside, Christina Sarone, here to provide some technical support.

Deputy Treasurer Morton.

Thank you, mister chair. Dep as said, deputy treasurer, Kenny Morton, on behalf of state treasurer Fiona Ma, the sponsor of SB 1265 in her capacity as Chair of the California Alternative Energy and Advanced Transportation Financing Authority known as CAEATFA. Go Green Financing is one of those initiatives as Senator Richardson mentioned, increasing accessibility for financing for home and business energy saving improvements by using its state funded loss reserve to reimburse lenders through minimizing lender risk.

It provides below market interest rates, extended payback terms and broader loan approval for borrowers. Go Green currently relies on IOU ratepayer funds and public purchase program surcharges.

While helpful, as the Senator noted, these funding sources limit where the program can operate because IOU funds are restricted to specific service areas. The program can then only serve customers within those regions. This limits expansion and reduces access for Californians outside those areas and weakens the overall statewide impact. Without broader funding, Go Green cannot grow, reach more people or maximize greenhouse gas reductions. This change is necessary to allow the program to continue to prioritize the state's environmental goals and support as many businesses as possible.

SB 1265 creates the alternative energy and advanced transportation expansion fund giving that authority to CAEATFA to receive the ongoing funding and codifying the program within statute. This would help go green financing programs under CAEATFA to secure new funding and partnerships well beyond, as was mentioned, the current treasurer's term to continue to serve Californians. Addressing this structural limitation would improve equity and allow the program to better align with state wide greenhouse gas reduction goals and expanding access beyond IOU boundaries and continue this program.

Go Green is an important economic development tool for the state and has proven to effectively marry the state's economic and environmental goals. The treasurer is proud to sponsor SB 1265 and respectfully request your aye vote.

And additionally, as was mentioned with me, we have Christina Saron who is Executive Director of CAEATFA to help with any technical questions. Thank you.

Great. Thank you. So just note that that she's available. Let's anyone who wants to weigh in support of the bill? I see you.

Chair, senators, Dean Grafilo with Capital Advocacy here on behalf of the California Life Sciences in support of SB 1265. Thank you.

Thank you so much. Alright. Opposition? Concerns? I know there's no register opposition. Just wanna make you have accepted the amendments?

Yes. That's right. Okay. Okay. Great.

Yes.

Questions, thoughts, I will go to Senator Archuleta.

Thank you, Senator, for bringing the bill. My question is the fund and creating the fund. Does that mean our state treasurer has sole authority? And who would benefit with this flexibility and to be able to expedite the funding.

Can you give me an example of some of the recipients?

Sure. I'll have the staff actually answer the question, but I will summarize. Essentially, we've had really frankly an excellent treasurer who this is my second year now that I brought forward a bill where she has had a program and has worked to maximize the outreach. And so, hence, these programs, they're utilizing the money and people are very excited about them. So to my understanding, the treasurer has been, for the most part, I believe, under her direction of the program.

But I'll let the staff clarify further.

Good morning. My name is Christina Sarron. I'm the executive director for CAEATFA. And what what we're seeking is to create the fund is the ability to seek funding from outside sources. Currently, we receive funding from all of the, IOUs and that money is through a contract and we're able to get that and we use it specific to the contract but it can only go to the IOU territory.

We want to be able to seek partnerships with areas in rural communities and areas like that. And in order to be able to take those funds in, we have to have a fund that we have. And be able to get that money into our and use it for those communities.

Okay. But to clarify the question, the question was, who actually determines and administers and it's my understanding that's out of the treasurer's office.

Yeah. It is out of the I think that it is out of the treasurer's office. But also, CAEATFA has a board on it which contains members from the PUC Energy Commission, the Department of Finance's governor's representative, as well as the the treasurer's office. So staff brings forward suggestions, the board approves those, but it always is done, you know, trying to maintain the intent that the legislature authorizes with with the program.

Yeah. And could you define CAEATFA? Just for-

The California Alternative Energy and Advanced Transportation Financing Authority?

Thank you.

And the reason I asked, Senator, is because I know Fiona Ma and her desire to help the community. And I've seen her do this, and she's asking, how can I help? How can I help? Because her her office and her department has resources and can actually help communities across the state. And I'm so excited that this is coming forward because it'll give her the the flexibility she needs. And but I just wanted to double check that it was going to the communities that need it the most and that she has the ability to expedite the funding when they request it.

Correct. Thank you for that, sir. It is really about making sure that we are expanding access to reach more communities through this program.

Very good. Thank you, Senator.

And the other significant if I might through the Chair. The other significant point is that by codifying this, it gives future treasures the ability to continue to build upon the program. And that's really what their hope is today. Thank you. With that, I respectfully ask for an aye vote on SB 1265.

Thank you. Thank you to our friends from the treasurer's office as well. Let's let you now go ahead. So obviously, we'll entertain the motion likely from Senator Archuleta given his enthusiasm when the moment is appropriate. So let's now go to SB 1337.

Yes. Thank you, mister chairman and again members. Let me begin by painting a picture. I grew up in Los Angeles. And over the last thirty years, I remember as a little girl going to school, my mom dropping me off at the bus stop.

And, you would look across the city and you could not see the skity city skyline.

Yeah.

It was very covered with smog and, this would go on from the morning till the end of the day. But fortunately, over the last thirty years, California has really pioneered in climate and air quality policies that have been critical to us protecting our community's health and our environment. Policies like the introduction of the cleanest gasoline in the world started in 1996, has led to countless air quality, health, and life improvements.

Californian's climate and air quality policies have supported, more recently the adoption of highly fuel efficient conventional vehicles and zero emissions vehicles. Due to the petroleum markets evolving quickly amongst the state, and dare I say right now, the world, this the volatility and the understanding of transitioning between some of the newer technologies and our existing technologies leads us to the importance of having groups work together that are making these future policies.

With that in mind, currently, the analysis indicates that in light of several refineries that have closed, even the CEC has noted that the current, pace and what is occurring is difficult and could prove to be problematic to Californians. With that being said, successfully managing the introduction and use of new technologies while simultaneously maintaining fuel production, that coordination, the actions, the strategic alignment between state, regional, and local jurisdictions is desperately needed. You might wonder where this idea came from, the need from the legislation.

It actually comes directly from the letter that mister Gunda with the CEC had noted that we really needed to approach these policies in more in a more holistic matter. So this legislation was brought forward to address his recommendation.

What we are working on, to have this working group that would be established of stakeholders that were brought together largely, out of the work that we did last year in SB 237. The key objectives would be to develop a priority policies and programs informed by the fuel transition plan. It would strengthen coordination and establish clear lines of communication to prioritize critical energy regarding policies and regulations.

And finally, the bill informing this working group, would propose opportunities for partnerships between the governor's office, state agencies, boards, commissions, offices, independent consumer fuel advisory committees, and other industries as necessary, and the legislature to advance solutions to strategically align regulations and permitting processes across all levels of government that could best support the achievement of state policy goals.

That was a little bit of a run on sentence, but just to summarize, essentially, what the group is intended to do is to pull all the levels of government together to make sure that they're discussing future policies and to make sure they're consistent with the overall objectives that we're trying to achieve, that we have successfully achieved in the past, and we hope to achieve going forward.

With that in mind, here to speak in support of the bill, we have mister Paul, De Roe from, WISPA Western States Petroleum Association.

Alright, Paul. Give me a second. Let's establish a quorum. Secretary, please call the roll.

Allen here. Ochoa Bogh?

Here.

Allen?

Here.

Archuleta here. Arreguin? Becker? Caballero?

Here.

Ochoa Bogh here. Archuleta?

Dahle? Gonzalez?

Gonzales here. Grove? Hurtado?

Here.

Reyes?

Here.

Reyes here. Richardson?

Here.

Richardson here. McNerney?

McNerney here. Rubio? Stern?

Here.

Stern here. Strickland?

Here.

Here.

Strickland here.

We have a quorum. You will have the great honor of being the first bill to be voted on this morning in this committee. Paul, you may proceed.

Mr. Chairman and members, Paul Deiro representing the Western States Petroleum Association. Your committee analysis as well as the, author's opening remarks took all of my talking points. So, as a reminder, with the passage of SB 237, it sort of was the beginning of trying to address a gasoline supply shortage or problem. And and the effort was to stabilize that and and take a longer look at that.

SB 237 requires the Energy Commission to do an assessment, which was due at the March, so that's pending. And there will be many more recommendations coming from the Energy Commission and the Administration. We believe this coordinated approach is the is moving in the right direction, looking at all levels of government, state, local, and regional.

Thank you. We support.

Thank you. Thanks, Paul. Other folks on the way in support or in opposition or raise concerns?

And you are clarifying- you're accepting amendments?

Yes.

Yes. Right.

Good. Mr. Chair, members Mike Monagan on behalf of State Building and Construction Trades in strong support.

Thanks Mike. Thank you. Any other anyone else wanna come? Either pro or support or opposition. Okay.

Seeing none, we'll bring it to the committee for questions, thoughts, comments. Senator McNerney, followed by Senator Reyes, followed by Senator Ochoa Bogh.

Well, I think, Senator, we're we're in the midst of a transition and it's gonna have some bumps as we've seen. This is an important effort in that to smooth those out and make sure the transition is is good. I'm looking forward to the SB 237 report that's coming up. I think it's in July. And that ought to be that'll clarify some of these some of these issues that we're looking at.

So thank you for bringing this forward. I'll move the bill when it's appropriate.

Thank you. Thank you.

Alright. We'll go to so we'll go to Senator Reyes.

Thank you. I I think having an inter agency, commissioner or group is extremely important. My concern is going back to SB 237 and also SB X12 by then Senator Skinner who called for an independent consumer fuels advisory committee. Trying to coordinate with all of those so there isn't duplicative work being done. So we don't have competing groups putting together reports and we then have to review everything to determine which one is providing the information we actually need.

You are right. We need to figure out the volatility of petroleum of the petroleum market here nationally and internationally. It's extremely important, But I am concerned about this coordination on because it has become such a big issue, not just now, but it had become a big issue. And so these commissions, these groups had been formed. How how will you figure out how to coordinate with the others?

Permission through the chair? Thank you, Senator Reyes for that question and that's a very important question and one we've gotten couple times. So I'm glad that you asked me to clarify. Essentially, the difference is this as the witness presented, this one is specifically more to the fuel supply. You know, some of the other groups are into the different overall policies and, you know, whether we're using more zero emissions or how can we transition and all of that.

This one is, very directly related to the refineries, what they're producing, how are they transitioning. For example, two have closed in my district. One is now providing SAF, which is actually sustainable fuel for airplanes. So it's really more directed, very specific to the fuel aspect, which is what 237 was about. The other part is we have actually, when I originally brought this legislation forward, I brought it before we introduced it to the CEC.

And so as we work through the bill in the process, if we need to more, clearly delineate the difference between this group or how this group can work with the other groups, we're more than happy to do so. But it was our understanding that through 237, that was a unique way that the enviro groups, the refining groups, all these different groups actually really came together specifically talking about the fuel supply.

And we wanted to keep that group going, keep it going together, and wanted to make sure more importantly, which is what I was gonna add on to Mister McNerney's comment, that today, right now, local air quality districts are making decisions based upon what's impacting having related to fuel. And those conversations are not always happening with the CEC.

So you have the CEC that's meeting and doing their policies. We're meeting, talking about policies, local districts, and so no one is really pulling specifically regarding our fuel, fuel transitioning, and all of that, having that specific discussion. So that's what the working group is intended to do. However, through the process, I commit to working with all the bodies to make sure that it is not duplicative, that it is working with all the other appropriate groups.

So we can get, you know, one report, one answer, and really more importantly, one direction that is right for California.

Thank you.

Yes, ma'am.

Senator Ochoa Bogh

Good morning.

And thank you. Question, I guess, you've kind of answered it though. So I'm just gonna might just be a little redundant and I apologize for that but, I appreciated the angle that you said why. So I think you're I would be backing on Senator Reyes' question with regards to we have all of these groups coordinating, but I think it's specific.

Good morning, senator.

But the question is, is the CEC not already coordinating communicating with other boards and agencies to strategize on effective policies? And I think you address it by saying this will be specific to the, oil industries, to the refineries.

Correct. And this the individuals, identified not individuals, organizations identified in the bill were specifically those that were formed during the review of SB 237. So it's really intended to build upon that group that not everyone walked away, you know, perfectly happy, but that's the sign actually of a good compromise. And so it's really trying to keep that group together that was formed during SB 237. But, again, I do commit to working with the CEC as this bill progresses.

If, there are any duplicates or ways that this group should, form with another and, you know, give a more clear direction, we'll be happy to incorporate that. And I commit to coming back to the committee and, I'm sharing with you if we make any of those changes.

Thank you. I'd be happy to support the bill.

Thank you.

Thank you. Okay.

Seeing no other questions, it's been moved by Senator McNerney. You may close.

As a good Senator should say, I respectfully ask for your aye vote on SB 1337.

Alright. Secretary, please call the roll.

SB 1337 Richardson, do passes amended to appropriations. Allen? Allen, aye. Ochoa Bogh?

Ochoa Bogh, aye. Archuleta? Archuleta, aye. Arreguin? Becker? Caballero? Dahle? Gonzales? Gonzales, aye. Grove? Hurtado? McNerney? McNerney, aye. Reyes? Reyes, aye. Richardson? Richardson, aye. Rubio? Stern? Strickland? Strickland, aye. Wahab? Wahab, aye.

Thank you. We'll keep the roll open for members to add on. Let's go to you as Senator Ochoa Bogh who is now here to present item five. That's a SB 1191. Let's do this first.

Or or or do you wanna

I have to go to elections.

Yeah. I do too. So we just do you wanna just okay. We can we can let let let's let's let well, let let we can vote if if that's if that's yeah. Just to just to make sure that

For all of those

Of course, you're gonna have to come back for this one too, though.

Alright. Let's just go ahead and present, and we can we can

Okay.

We'll lift the call there. Yeah. You may proceed, Senator.

Alright. Thank you, and good morning, mister chair, members of the committee. Grateful to be here. Senate bill 1191 extends the sunset date for California high cost fund A and B programs by five years to 01/01/2033. These two universal programs are essential in ensuring that residents in rural and high cost areas of the state have access to affordable basic telephone services through reliable networks.

These networks provide a critical connection between residents and emergency responders during natural disasters and other emergencies as well as connectivity that's important to daily life. Due to the high cost of serving areas with sparse populations, tough terrain, and extreme weather, the high cost fund programs continue to be necessary for rural communities.

California has a long standing commitment to affordable universal service, and these programs have be a key part of the efforts since they were first established in statute in 1987 and reauthorized multiple times by the legislature. Joining me today is Eric Votaw and Varcom and Yolanda Benson with US Telecom. And I apologize if I butchered your last name, sir.

No. You you you did fine. Thank you. And I appreciate your your your help today. Good morning, chair and members of the committee.

My name is Eric Votaw. I'm the CEO and principal owner of Varcom and DuCor Telephone Company, a California high cost fund a recipient and a member of Calcom. We are in strong support of SB 1191 by Senator Ochoa Bock. At its core, this bill is about one thing, making sure that every California, no matter where they live, can access essential telecommunications services. DuCor Telephone Company serves rural communities in Tulare and Tehama Counties where geography and economics make telecommunication service a challenge to provide.

100% of the children in my DuCor exchange are receiving free lunch. The average median income in DuCor is $73,635 in comparison to the statewide median household income of $99,000. DuCor Telephone Company serves the working poor, those unforgotten who put food on everyone's table. In my Kennedy Meadows Exchange, which is at 7,000 feet in the Sierra Nevada Mountains, there is no commercial power. We are the only lifeline to the community to make sure emergency calls go out and the community is able to reach the world.

The California High Cost Fund A makes it possible for us to provide access to access to telecommunication services at rates that are affordable and in comparable to what urban customers pay. This program ensures that our customers have access to something fundamental, the ability to dial 911. SB 1191 extends its critical program through 01/01/2033, giving carriers like Ducor Telephone Company the regulatory certainty that we need to maintain and invest in the infrastructure that our communities depend upon.

No Californian should be unreachable in crisis because of where they live. We urge you a strong Aye vote on SB 1191, and thank you very much.

Thank you. Yes, ma'am.

Good morning, Chair and members. Yolanda Benson here on behalf of US Telecom, the Broadband Association. I represent some of the largest as well as some of the smallest telecommunications companies here in in California. I wanna thank the author for carrying this bill. It's very, very, very important.

Building on the previous testimony, I I can't emphasize enough the lack of economies of scale in rural California. Within two miles of network in Downtown LA, that can serve tens to 10 to 10s to 10,000 people. However, in the high desert of the Eastern San Bernardino County and Senator Ochoa Bogh's district, two miles of network might serve one or two customers. To cover the cost of providing service in such remote areas, customers would have to pay a 100 or even $200 just for basic service.

And for this kind of service, the California High Cost Fund a and b help to significantly significantly defray the cost for rural Californians so that they have affordable telephone service.

While the high cost fund programs are focused on helping rural residents, they truly benefit the entire state by assure ensuring that all Californians, both rural and urban alike, are connected. We urge your aye vote.

Thank you.

Pam Loomis, on behalf of California's independent telephone companies, in support.

Good morning. Tracy Ryan with rural counties in support.

Good morning. David Nelson on behalf of California Communications Association in strong support.

Thank you. Alright. Folks who wanna raise concerns opposition about the bill? Seeing none, we'll bring it back to the committee for questions. We'll go to.

Move the bill.

Senator Strickland like to move the bill when appropriate. We see Senator Reyes.

I think it's important that everybody have access. This is a subsidized program by the state. What is the cost to the state?

I'll let my experts answer the question.

Thank you. Yolanda Benson, US Telecom, the Broadband Association. The way that it's paid is through a surcharge. If you look at your telephone bill, it says California High Cost Fund A and B. On mine, it's about 2¢ as a surcharge.

However, the fund itself has not really grown. It's actually gotten smaller. So the the the fund is not growing because these companies are very, very good at ensuring that they're doing exactly what they say they're going to do with that subsidy from that that is administered by the PUC.

It isn't something that comes out of the general fund to subsidize them.

Actually, I don't know I don't believe so. No. Because it is the surcharge on your on your telephone bill. It is not a general fund issue.

Thank you very much.

Okay. Did I see Senator Archuletta had a question? No. Okay. Issue's been clarified.

Bill's been moved by Senator Strickland. Let's let you close, Senator.

Thank you. SB 1191 extends or states long standing policy of supporting the availability of affordable, basic telephone service to California's rural communities. I respectfully ask for an aye vote.

Thank you. Alright. Secretary let's call the roll.

Do pass to appropriations. Allen?

Aye.

Allen, Aye. Ochoa Bogh?

Ochoa Bogh, Aye. Archuleta?

Aye.

Aye.

Archuleta, Aye. Arreguin? Becker?

Aye.

Becker, Aye. Caviaro? Dahle? Gonzalez?

Aye.

Gonzalez, Aye. Grove. Hurtado. McNerney.

Aye.

Reyes, Aye. Richardson.

McNerney, Aye. Reyes.

Aye.

Rubio. Stern. Strickland?

Strickland, Aye. Wahab.

Wahab, aye.

Aye.

Aye.

Great. Alright. Let's go to let let's start lifting calls. Well, let's sorry.

We should have to take some motions. Let's start with SB 929. That's item one. Senator Jones.

[Roll Call]

Okay. We're gonna call a recess. I'm gonna go over to elections. Our vice chair has agreed to stay. Thank you, thankfully. And we'll we'll give opportunity for members to come back and and vote as they come.

Good morning. This is the Committee on Energy Utilities and Communications coming back from recess. We're gonna take the vote for file item number three, SB 1197, Senator Nielo. Secretary, please call the roll.

[Roll Call]

This is the Committee on Energy Utilities and Communications. We're gonna be lifting calls on bills. We'll start with file item number one, SB 929 by Senator Jones. Madam secretary, please call the roll.

[Roll Call]

And that bill is out with fifteen zero. We will now adjourn this committee hearing.