Senate Standing Committee on Energy, Utilities and Communications

Alright. Let's call this hearing of the Senate Committee on Energy Utilities and communications to order. I wanna ask our colleagues to please come down to Room 1200 so we can establish our quorum. We have 13 well, I'm sorry, 12 bills on the city's agenda. Two on consent.

We're going the so SB 1282 by Senator Becker has Been pulled by the author. More to come on that. Let's start with Senator Perez who's gonna be presenting two bills this this afternoon. She's gonna start with SB 952, that's Senator Laird's bill and she's kindly offered to present that bill in Senator Laird's absence. So let's start with item one in your agenda packets members.

That's SB 952 by Senator Laird. Thank you. Senator Perez, you may proceed when ready.

Thank you. Chair and committee members, today I'm presenting SB 952 on behalf of Senator Laird. The bill is sponsored by the state water contractors. It provides the Department of Water Resources with operational flexibility to achieve 100% clean energy procurement for the state water project by 2035, while managing costs for public water agencies and SWP rate payers.

In 2022, SB 1020 by Senator Laird established several clean energy goals for the state, including a requirement that 100% of energy procured by state agencies be provided by renewable and zero carbon resources by 2035.

Unlike traditional utilities, the state water project energy use is highly variable due to the hydrologic conditions that change year by year. Given the variability in energy usage, the current statutory guidelines for procuring 100% clean energy by 2035 are expected to increase state water project costs beyond the existing operational costs that average about $1,300,000,000 annually.

SB 952 ensures these costs can be managed by recognizing the complex hydrology of the state water project and allowing excess renewable energy procurement to apply towards clean energy targets in future years. The bill also allows DWR to further balance cost and revenues by directing them to consider additional factors. When building a compliant energy portfolio, including resource type, location, portfolio diversity, and hours of typical peak operation.

By keeping costs lower for the public water agencies that contract with DWR, SB 952 ultimately reduces the costs that get passed down to state water project rate payers while also ensuring the state does not compromise its clean energy goals. This bill has no registered opposition. Here today to help answer questions is Jonathan Young with the State Water Contractors.

Yes, sir. Good afternoon. Jonathan Young with the State Water Contractors. In the interest of your time, we are the sponsor of this legislation. We just, respectfully request an aye vote and I'm happy to to answer any questions.

Thank you very much. Thank you. Anyone else wanna voice support for the bill? Come on up to the mic and identify yourself in affiliation.

Good afternoon, chair and members. Derek Dolfie on behalf of California Municipal Utilities Association in support. Thank you.

Great. Thank you. Anyone else? Okay. Let's go to opposition.

Anyone who wants to raise concerns? I know there's no opposition on file. Alright. Seeing none, we'll bring it to the committee for questions, thoughts, comments. Senator Becker.

Just a quick question. Just a quick question on if you're for for witness. The part about considering portfolio diversity, what's the goal of that and you know, could that be used to procure less solar somehow because it's more available outside of peak or what's what's the goal of that part?

Yeah. I think the the thought process on that was just to give DWR more clarity when they're evaluating the different types of resources, whether it be wind, solar, geothermal, biomass, or things like that. I'm really looking at the time and the place and the location of the resource, because essentially the way DWR operates the project is they'll be purchasing solar and wind and things on the ISO system, and then they'll be selling some resources, sometimes simultaneously.

So it's really just helping them when they're doing the calculations of, the most effective cost portfolio. They're just looking at different resources, where they are, what the pricing is, and whatnot.

Is that helpful?

Yeah. That's okay. Thank you.

Okay. Other questions, thoughts? Alright. Yes, Senator Hurtado.

I'm sorry. I know you just explained right now more or less the reason for, you know, having a portfolio diversity. But I mean, is there like a current issue or challenge or it's something that you're kind of more specifically trying to change or that we need to improve on or

Yeah.

No. That's a great question. I just think the one thing, that the department's working through is with a lot of the emerging emerging green technologies and the potential for other resources. They they just wanna keep their options open. There's, you know

So it's currently working as it is, but with is that

Yeah. And as new technologies come online, it's a it's a way DWR can establish kind of a baseline of assessing new and emerging resources versus existing ones that may be available to contract with it currently.

But that currently it's fine as well. Yes.

Yes. Okay.

Alright. We will let you close and we'll entertain the motion when we have a quorum.

Yeah. Respectfully ask for your aye vote on SB 952.

Great. Okay. Excellent. Close. Let's now go to item two.

That's your bill. Senator Perez, that's, SB 1417. And this one does have some opposition, so we'll we'll have some more fun on this one. You may proceed when ready.

Thank you, mister chair and members. I'm here to present SB 1417, the Mutual Water Company Rate and Disclosure Notice Act. I begin by accepting the committee amendments outlined on page five of the analysis. I appreciate the work and effort of the committee staff to work through the language. California is served by thousands of public and private water service providers, including mutual water companies.

These companies operate as small private nonprofit corporations that deliver water to shareholders within a designated area. Unlike public water providers, mutual water companies are not automatically subject to standard transparency requirements, leaving their constituents with limited rights to know about the operations of their water service provider. In addition to that, there is almost no government oversight of the finances or operations of mutual water companies. That is why legislation was necessary to extend Brown Act style, open meeting, public record, audit, and budget requirements to these companies.

Apart from the Brown Act, public water providers are also subject to requirements from proposition two eighteen to provide advanced notification and a public forum meeting before adopting a proposed rate increase.

These requirements do not apply to mutual water companies, leaving shareholders of a mutual water company without an advance notice or a clear forum to provide feedback to a mutual water company's board on potential rate increases before they are adopted. In Altadena, approximately 25,000 residents receive water primarily from one of three companies. Lincoln Avenue Water Company, Rubio Canyon Canyon Land And Water Association, and Los Flores Water Company.

As these companies have sought rate increases to recover financially from the Eaton fire, they have done so without sufficient standards and timelines of advanced outreach or stakeholder engagement. Las Flores, for example, is considering a $3,000 wildfire recovery fee to standing homes and to be applied once destroyed homes are rebuilt.

Rubio Canyon Land and Water Association have a proposed 11% rate increase and fire recovery free of up to $30 a month. Lincoln Avenue Water Company is approaching with a $15 rate increase in addition to a 10% increase to all tiers. Apart from these fire related fees, reports from constituents and others have also depicted concerning issues. Residents are still receiving water service charges from the time of the Eaton Fire, although their property was destroyed.

A single entity is pursuing receiving mandatory $12,000 metering charges for constructing ADUs in the midst of the rebuilding process as residents are being urged to build ADU units to expedite rehousing.

According to neighborhood sources, mutual water companies are contemplating providing CEO pay raises while this is happening. There are also accounts of shareholders being targeted with tactics to make them feel unwelcome in shareholder meetings, including requiring a driver's license to identify themselves in order to attend a public meeting. SB 1417 addresses this gap in issues by extending rights and benefits of advanced transparency and accountability regarding rate increases to Californians serviced by mutual water companies.

Specifically, SB 1417 will provide a written outline of the proposed rate increase, reasoning, and which Board members voted for the proposal. It will convene a public meeting to discuss the proposed rate change in a location that can accommodate at least 100 people and is within five miles of the company's service area or a county government building and also require that they send the written proposal and notice of the public meeting in advance of to shareholders and local media outlets.

In addition, SB 1417 also requires a mutual water company to make available to qualified individuals upon request certain company information and any written rate increase proposal, and it clarifies existing law that mutual water companies are not allowed to sell water to tenants of shareholders except in mutually agreed upon situations.

By guaranteeing this advanced notification and the ability to engage with company Board Members on company Board Members on proposed and adopted rate increases, this bill ensures that mutual water companies are accountable and transparent to shareholders when they consider rate changes. With me here to testify in support is Zaire Calvin, an Altadena resident and community leader for Eaton Fire Recovery. I'm also joined by Alf Brandt, a water lawyer and policy expert, testimony on the existing law and help answer technical questions. At the appropriate time, I respectfully ask for your aye vote.

Thank you, Senator.

Thank you. Thank you for having me today. Zaire Calvin. I'm a resident. I've been over the the recovery of all all everything that's been happening in Altadena.

My sister was one of not one of the first death in the Altadena fire. So this fight has been a lot. Everybody has probably gotten past all of this, but the community has not we literally only have, like, 25 houses rebuilt. So this is so important because we keep getting hit with new fees and new realities that keep coming out of nowhere. Like, you're already fighting against insurance because you're underinsured.

You're already fighting against you're paying rent. You're paying mortgage. You're paying for a dirt lot. You're paying for all these different things. And then the water companies are coming in saying, well, hey.

You know, to make our business survive, will you pay for our recovery? And that part is absolutely insane. I've been in meetings where they've actually I've been in all the meetings actually. So when I speak, I'm not just speaking for myself. I'm speaking for thousands in the community.

Again, they literally would try to keep me out of a meeting by asking for ID to say, "hey. If you're not from here, from this specific thing, you can't be in this meeting." They have the meetings in small places where they couldn't even, have a quorum to be able to vote on anything. So all of this stuff has been done, it seems like, in in lieu of what the community really needs and what's been going on with the community.

And it's been a painful time for the community. It's it's absolutely ridiculous. People can't pay and don't know when their ALE is gonna run out. And all of this is going on while these rate hikes keep happening. And then you have conflicts of interest seemingly with some of the people who are running, some of these water situations also.

When you're talking about certain people who are part of the Metropolitan versus the the smaller groups, they're they have double roles in a lot of these positionings, and the community knows that also and feel like that's unfair also with all of these things that are happening when it comes to that's why this bill is so important for protection to make sure that we're able to come back.

It... it's bad. It's really bad.

Thank you. Thank you, sir. I appreciate you being up here. Yes. Thank you.

Good afternoon. My name is Alf Brandt. I've been a water lawyer for many years and done mutual water companies, which is a unique to California special thing. I started in early in my career as doing a water company case before the Public Utilities Commission. I served, John Perez in dealing with Maywood Mutual Water Companies in Southeast Los Angeles.

I served, Jose Salorio dealing with a water mutual water company in Santa Ana. I dealt with Assemblymember Rendon dealing, again, Maywood Mutual Water Companies, and I helped, served Mike Gibson when he closed down, Sativa Mutual Water Company in Compton. So I've been working on these issues for many years. This bill, SB1417, takes the next step in holding mutual water companies, which are private companies, shareholders only, having them have some public responsibility.

If they're gonna operate a public water system, they have some responsibility to the public to be open about that, and it it is it is mutual water companies, only shareholders get water.

Now, there can be ways. There are exceptions for state agencies, and there are exceptions if the shareholder passes or leases the shares to somebody else. But generally, it's only shareholders. In 2013, we opened up a little bit and said, if you drink their water or you're an agency, elected person who represents the people who drink that water, you can go into the meetings. You can get five documents.

You can do certain things because in Maywood, the city council, all the constituents were holding them responsible, and they had nothing to do. They couldn't do anything with the company. They couldn't even talk to them often. And so this is just another step responding to what's happening to about rebuilding a system and imposing that on the shareholders as well as on those who may be leasing the shares or, you know, homeowners because as I understand it, Altadena has a significant number of renters.

And that's the issue is sometimes the shareholders aren't around, aren't involved, and we don't even know who they are.

So that's what we're that's what, Senator Perez is doing, and I'm here to answer any questions, about mutual water company.

Thanks, Sal. Thank you so much. Thank you very much. Alright. Other folks who wanna come to the mic and express their support for the bill?

Okay. Opposition. Opposition. Come on up.

Chair Allen and members of the committee, my name is Karina Cervantez and I'm here on behalf of the California Association of Mutual Water Companies. I did wanna start off by saying that most of our comments have to do with the statewide impacts, from this legislation. I do wanna end with a note about the local community as well. But we do wanna thank the Senator's office.

Our, first and primary concern had to do with, had to do with, the conflicts that we saw with the inability to be able to bill tenants for water service.

We did feel that that conflicted directly with SB 998 and SB 3, which does expressly allow for a, tenant to become the direct water customer of a community water system including mutual water companies. We do have some other outstanding concerns that remain. There is an issue regarding providing customer, shareholder information upon request. And we believe that there should be ongoing safeguards present to prevent against the misuse of personal information, about both the tenant and about the shareholder.

Third, we do feel that the bill is overly prescriptive, requiring to call out board of directors that vote to propose a water rate increase.

This information is already available through the minutes of a board meeting, also highly visible for those of you that are in attendance in the Board Meetings. And we just feel that calling it out again is equivalent to an announcement. That does discourage board participation, in service of their community. Lastly, we're also concerned with some of the facility requirements in this bill. We do feel that in smaller rural communities, and also disaster impacted communities, that inappropriate facility may be really, really challenging to obtain.

The bill does require a 100 person seat capacity for some of these public meetings. I think overall we do just want to urge some caution in pursuing policies that may unintentionally obstruct necessary rate adjustments. Even under the best of circumstances, water systems are voting to raise rates, to maintain reserves, invest in critical infrastructure, and comply with regulatory requirements to ensure safe and reliable service. We, of course, recognize that it's not the best of times. It's among the worst of times in the community of Altadena.

I know that we've watched your leadership, Senator and also, of course, of your various community members, how they've risen up and tried to work through the healing and also the recovery of the community. But there are some additional details that I wish to highlight about the local water providers that are being discussed today. That didn't quite make it into, today's bill, bill analysis. Throughout 2025, the Altadena Mutual Water Companies have tapped into their reserves to avoid raising rates on communities who have already suffered so much.

They continue to moderate dramatic and further increases by continuing to do the same to support the community through the recovery.

They've waived fees having to do with will serve letters and also, noting fire flow requirements to expedite recovery. Since January 2025, so a full year and a half ago, Rubio Canyon, Lincoln Avenue, Las Flores Water Company, They've been meeting with State agencies, local representatives and their short shareholders to discuss their operational and infrastructure needs following the EM fire. They've estimated those costs to be upwards towards a $100,000,000.

They've circled the block here up in Sacramento meeting with the State Water Board, with the Department of Financial Assistance, trying to access external fundings because they've tried to do their best to avoid any type of water rate increase. It wasn't until this year that the board of directors of each of the various water companies made the difficult decision to begin to increase water rates.

These moderate increases help to ensure clean drinking water is available when residents rebuild and return, while also spending, while also spreading recovery costs so existing shareholders and community members are not left to shoulder the burden alone.

For these reasons, we are respectfully asking for a no vote on this bill. Thank you.

Thank you.

Appreciate it. Thank you. Okay. Other folks who wanna raise their concerns about the bill? No?

Okay. Let's bring it back to the committee. Senator, can you give us a sense of the conversations you've been having with opposition? I mean, there's a couple of issues that were raised including the voting question that I think needs a little deserves a little consideration in workshopping. What what's what's been the dialogue like so far?

Yeah. I mean, my office has had many conversations with the mutual water companies including, you know before we even introduce this bill around their request and how we're going to go through this recovery process. I mean, I'm I'm going to continue to stand firm that we need stronger transparency law here. I mean, you just heard from one of my constituents. And frankly, I didn't know this up until a couple of weeks ago because I I'm still in disbelief that this happened.

Zaire Calvin lost his sister in the Eaton fire. He's a fire survivor who also suffered losing a loved one and was asked for his driver's license three times in a public water meeting in order to attend and be present. I can't emphasize enough to each and every single one of you how utterly unacceptable that is. And that makes me so incredibly angry that somebody in my community would be treated that way.

And I hope everybody here, Democrats and Republicans, can see why I would be so upset hearing that from one of my residents and a black resident at that.

It is utterly unacceptable. So what we were asking for here is the same basic sunshine laws that we have that apply to all of these agencies. But when I hear stories like that, when our office is trying to work in good faith, it makes me deeply concerned.

Well, I totally understand that. I I get so you but you there's a robust dialogue happening?

Yes.

There has been.

Okay.

Alright. Questions from the members. Senator Hurtado.

Well,I'm so glad that that you're taking action on this. I know and I'm so sorry, first and foremost, like, for your loss, for what you're going through. It's completely unacceptable what's is occurring. I'll say that as a State Senator that represents, the Central Valley, the Bakersfield area and above, I was really angry when I read the story about what was going on.

And you know, these issues of fees are occurring even outside of areas that haven't had a a disaster.

But it's especially like, disturbing that it's happening in an area that is still trying to recover. It's inhumane. I there's just no words really, to really describe how wrong it is for that to be, occurring. I apologize for that. I have a question for the author.

I mean, for and I also want to be added as a co author and support you on this effort. Do you know what is the the legal authority for the increase in fees?

Well, these my understanding, and Alf, if you wanna go ahead and speak to this a little bit, these companies are operating as as private companies. Right? And so each of the folks that are paying these fees, they act as shareholders to this company. So the challenge becomes is even though the shareholders have a right to provide feedback and participate, if they don't receive adequate notice that those increases are happening, then they don't know to be present at a meeting.

In addition to that, because they are not subject to the same sunshine laws that we have for other, let's say, City Council School Board meetings, they don't have to do meeting postings online.

So my residents have had to physically drive out to locations, check buildings to see if those meetings are even happening. And so it's this lack of transparency and access to information which prevents the shareholders who are the ones that are supposed to have the ability to have oversight over these agencies from being able to do so. And Alf, if you wanna add in, I'm sure I missed something.

Sure. The private companies do not need any of they can raise rates, whatever they do. It's up to the shareholders. So they don't have any they don't have any of the limits like Prop 219 or 96. They don't have anything.

They're not a public agent. They are a private company that can decide to do whatever it wants and charge what it wants. It they don't have any limits. There are limits because they operate a public water system on when they can shut off and do those kinds of things because that applies to all public water system.

Whether it's a private company, a public utility, which is a private company, or a mutual or a public agency. The public agency and public utilities have some limits because the state law and the constitution even imposes that. But these private companies do not. They're responsible only to their shareholders. And they're not allowed to have customers.

I mean, that is one thing. They're allowed to serve their shareholders, their shareholders only. And maybe their shareholders, as part of their lease, gives the rights to the to the tenant.

But the assessment's being done through the property taxes. Right? Is Am I understanding that?

No. These are corporate assessments, corporate capital assessments under the corporation's code. So they need capital.

Go on a-

No. They're just

They just lead to the property itself.

They go to the to the shares and to the shareholder. And then because the share is a pertinent to the land, it goes on the property. It can go on the property as well.

Because I know I part of the reason why I'm very supportive and found that the issue that was happening in the senator's district is that very similar issues are happening in my district, but it's mostly around. I think just you know, loops, gaps in Prop 218 and a need to modernize. But it sounds from what I'm hearing, this 218 is this is another way of

None of that applies.

Yeah. None of that applies.

218, you know, 296. None of that applies to Mutual Water Company.

And was there a study that was done that kind of to justify the need to do this to to add make this assessment?

They're not required to do anything like that. I mean, that's what one of this bill is requiring them to do a report. So if they're not required, they can just decide with without I mean, they're only subject to their shareholders. But if they wanna impose anything on their shareholders, they're free to do it. They don't have to do a report.

They don't have to do a study. They don't cost of service, by the way, that you know, that you saw on the mutual water companies. That is a term of art for public agencies, not for mutual water companies. They don't have to worry about cost of service. They can charge whatever they want regardless of what the costs are.

Okay. Thank you.

And can I also add, there are three different companies also, So they're fragmented? So the costs aren't even the same. So literally, one can say we're charging for this. Another one can say we're charging for another thing. And they've been doing that.

And that's been, like, the basis of why everything is crazy. One water, company is charging for this when another one isn't. Another one is charging for these rates when another one isn't. So it's so fragmented and messed up that that's what's causing all of the problems is the fact that they can do whatever they want whenever they want. And when they talked about they care about the people, Rubio specifically said-

Hey, we have this disaster fund that we and I was in the meeting, so this isn't hearsay. We have a disaster fund that's supposed to be for the disaster, but we don't wanna tap into it just in case there's another disaster. So why don't we hold on to that and you guys pay for it? They literally said that. And we literally are supposed to take on the cost to pay for it.

Yeah. That's also happening in my Senate district too. Or it could be like blocks away or, you know, very nearby and they're paying completely I mean, just different standards, different charges and it just doesn't make any sense at all.

And these these agencies, they are sorry. Never mind. I forgot.

Senator?

I'll move the bill when appropriate.

Well, thank you, Senator for bringing this forward. When all this happened soon after the fires, I was able to go to Altadena and Pasadena and later we went to your District, Senator. And so we have been there and I was there when the ashes were still hot and so on. And I thought, my God, are we ever going to rebuild Altadena.

But as I'm hearing, my question is as people are able to rebuild, I think we have to stop for a second and acknowledge those who lost their lives, lost their property, lost everything.

And my condolences to those who have friends and relatives that are no longer with us. And my question, I guess, is when they're trying to rebuild, are there being charged? I heard something like $12,000 to reconnect these new houses that are being built. That's one. And then the other is that there are these vacant lots where people could not and have not been able to build, but they're still being built?

And is that what's going on?

Yeah. So a couple of things and I'll try to break this down because as was mentioned before, there's three water districts that cover Altadena. And each has a different fee structure that they've placed for those that are rebuilding. So for Las Flores, Las Flores is considering providing a $3,000 fee that you'd have to pay to reconnect to the water system as you're going through the rebuilding process.

Rubio Canyon is proposing an 11% rate increase and a fire recovery free of up to $30 a month on top of that 11% rate increase.

And Lincoln Avenue Water Company is approaching with a $15 rate increase in addition to a 10% rate increase across all tiers. So that's within those three water companies covering just 25,000 residents. In addition to that, we have two different water agencies that are now proposing metering costs. So if you decide that you want to build an additional ADU, many of our families are doing that as they're thinking about trying to add to housing stock. And also, they have many family members that lost a home.

So putting an ADU in the back is beneficial for their family member that's also lost the home. We have many multi generational families in Altadena that are both black and Latino. They're proposing a $12,000 metering charge just to build the ADU. So when you think about that total, that's $15,000 potentially in some parts of Altadena just to connect to your water system.

That's not even getting into, and I know you all have heard me talk about this before, the $20,000 charge that's being proposed to folks to connect to the new electrical underground system.

We've not even gotten to you rebuilding your home. So I think you can begin to see how these charges add up very quickly for residents. And when residents feel like they have no opportunity to provide feedback or to offer questions about where these charges are coming from, that's a cause for concern.

And of course, the other thing when we hear public forum, public meeting, public information, well I think everyone's a member of the public.

So if you need a driver's license, and that's for the purpose to say that you're a resident in that area and that you have a say, why would anybody need to identify themselves if it's open to the public? I think we need to take a good hard look at that one.

Yeah. I completely agree with you, Senator Archuleta. And you know, this is the reason why I was so alarmed to learn this a few weeks ago. It honestly really broke my heart. And just to hear that this has happened now with two different districts, I think is really concerning.

These are public meetings. We do not ID anybody when they are stepping into this room. There's a reason why these discussions need to be public. And if we're requiring an ID just so somebody can show up and listen and participate in a discussion, I think that's incredibly troubling.

Well, I thank you for your support and your input. And once again condolences to these families. Thank you, Mister chair.

Thank you. Let's establish a quorum and then we'll hear from Senator Rubio. Secretary, please call her over.

Here

Allen?

Allen here. Ochoa Bogh, Archuleta?

Hi.

Archuleta here. Arreguin? Becker?

Here.

Becker here. Caballero? Dahle? Gonzales? Grove? Hurtado?

Hurtado here. Reyes? Richardson?

Hi.

Richardson here. McNerney?

Here.

Here.

McNerney here. Rubio?

Present.

Rubio present. Stern?

Here.

Stern here. Strickland?

Here.

Strickland here. We'll hop.

Alright. Thank you, Ma'am. We have a quorum. Let's go to Senator Rubio, for questions.

Thank you, Chair. First of all, I just wanna say, I think, Mr. Calvin, we've had a conversation before. Thank you for being here. This circumstance is just unimaginable.

So I know because I've also had time to tour the area at the time it happened. And there's just so much tragedy all around from the excessive charges to not understanding the system to rebuilding 25 homes from what what you just shared. I mean, the problems go on and on. I mean, the reality is that, you know, there's gonna be so much to rebuild and take care of, and this is just an added burden.

But first of all, I wanna say thank you to the Senator for bringing this forward.

And I do believe, though, there's still conversations, you know, that we can have about certain things. I do know that, you know, because I I'm mindful, as an elected and a formal former, local elected that sometimes, you know, certain things, pose a challenge. So I wholeheartedly agree with everything that you just proposed.

But, you know, I can understand that, 100% seek capacity in certain areas where they don't have the ability to, just to find space, you know, could be a conversation that you can continue to have and see there's opportunity for, you know, provision that says, you know, in an area that potentially has it versus just mandating when there's no way to to get there to comply. But anyways, just wanna say that, it's important to to document everything that keeps adding on.

I mean, I when I hear some of the charges that you're just expressing from the reconnection fee to the charges, But I do think just generally it's something that I've expressed just locally. You know, in Southern California, we have so many companies. It's just incredible how we got here, you know, to have three water agencies in such a small community. Now we know why we're here and that's another conversation for another day, but maybe there's something that we need to explore there.

And, you know, and I know because I'm from Southern California.

In fact, I'm neighbors to Altadena. And there's always a lot of issues because even sometimes, clients or customers don't know who their water agency is because they're so fragmented and everyone has different rules. And so again, at some point, we're gonna have to discuss how do we fix that because that will be a problem not just now but moving into the future. But my condolences to not just Calvin, Mr. Calvin who was here, but all those that lost their lives.

But we definitely have a really big problem that we have to solve and I think this bill, is a really good step forward but I hope that the conversations continue and and see if we can get to a better place as well. But thank you.

Thank you, Senator Rubio. I I really appreciate your comments. I know that you've spent time visiting with residents from Altadena and you representing the San Gabriel Valley as well understand how personal this issue is, for me and for yourself as well. So I certainly hear you on figuring out some of the details here, especially with the room numbers. I know from the region we're from, we know that sometimes like capacity just in terms of finding a space of a certain size can be a challenge. So those are certainly conversations that we're up for having.

Okay. I'll entertain a motion. If anyone wants to

Senator.

Offered a motion. Okay. Would you like to close, Senator?

I respectfully request your aye vote. Thank you.

Thank you. Alright. Secretary, please call the roll.

And this is do pass as amended. She did accept the MSCF.

Senator Allen?

Aye.

Allen, aye. Ochoa Bogh? Archuleta?

Archuleta, aye. Arreguin? Becker?

Aye.

Becker, aye. Caballero? Dahle? Gonzalez? Grove? Hurtado?

Here. Aye.

Aye.

Hurtado, aye. McNerney?

Aye.

McNerney, aye. Reyes. Richardson.

Aye.

Richardson, aye. Rubio.

Aye.

Rubio, aye. Stern?

Aye.

Stern, aye. Strickland?

No.

Strickland, no. Wahab.

Okay. Thank you, Senator. And that bill is on its way that we will leave the roll up and certainly, for, for future vote. Let's, let's quickly entertain a, a motion for the consent calendar while we ask Senator Hurtado to take to move make her way to the dais. Secretary, please call the roll on the consent calendar. This is items—there are two items.

Agenda item nine, SB 1008, 1008, by Ochoa-Bogh, and item 11, SB 1245 by Stern. We have a motion for this consent calendar by Senator Stern. Secretary, please call roll.

Hi.

[Roll Call]

Okay. Alright. Thank you. Let's now go with Senator Hurtado who is presenting SB 924.

Thank you, Mr. Chair. I want to start by thanking the committee staff for their work on this Bill, and I accept the amendments outlined in the committee analysis. You know, in a time when we're dealing with added fees, high cost in energy, high cost in water, SB 924 modernizes California's low energy assistance programs to ensure that the, that there's actually lower utility bills, and then it proves in home safety, and it delivers real relief for families who need it most.

But more importantly, it, it refocuses the program on lowering bills, improving why—I said that already, apologize.

Ultimately, SB 924 is about making sure that the current energy programs that we have in place work as intended, not just on paper, that, that families, really feel the benefits of those investments that are made, and I, you know, they're more direct benefits as well. So, with me today, I have Hortencia Lopez, Executive Director for the Energy Transition Collective, and Jose Antonio Ramirez, City Manager for the city of Livingston.

Alright. Let me come to the dais. Come on up. Please.

Blessed afternoon, everyone. I was just touched by the previous presentation and it really touches to the core. Oh, I'm sorry.

I think it's on but you just need to speak into them.

Just be closer to that. Yeah. Thank you.

Now can you hear me?

Yep.

Okay. Thank you. Sorry. I've been told I have a low voice. Anyway, I just wanted to, first of all, I think Senator Hurtado did a great job with outlining our bill and what we propose to do with it.

Energy Transition Collective is the sponsor of this. And so, I just wanna start with the reality that many Californians are living with right now in communities shared, shaped by decades of disinvestment including formerly redlined neighborhoods. Families are still living in homes that leak air, trap heat, and drive-up monthly bills. These are homes where turning on the air conditioner in a heat wave or heater in the winter isn't just uncomfortable, it's unaffordable.

And those same homes are the least prepared to benefit from the clean energy transition that we're investing millions into.

There is a problem. This is the problem SB 924 is trying to solve. At its core, the bill says something very simple. If we are going to spend ratepayer dollars on low-income energy programs, we should be able to measure whether those programs actually improve households' affordability. Right now, we cannot consistently do that.

The bill directly addresses gaps by requiring measurable affordability outcomes including bill impacts that are tracked across housing types and tenancy status. SB 924 also modernizes how we think about weatherization. It recognizes that lowering bills today often requires a whole home approach—one that includes not just basic measures, but the systems and conditions that actually allow households to realize savings over time. And importantly, it acknowledges renters.

Without explicit attention to tenant level benefits, we risk investing public dollars into buildings without improving affordability for the people who live in them. I also want to clearly say we support the committee's recommendation—recommended amendments—clarifying that core weatherization services remain eligible is important. Maintaining the standard of the program deliver energy savings as a whole and do not create undue rate payer burden is appropriate.

Aligning diversity provisions with GO 156 makes sense and refining how non-energy benefits are considered can help ensure program remain administratively workable.

There are constructive improvements but I would respectfully urge the committee to preserve what is most important here. The focus on measurable affordability, the flexibility to deliver whole home solutions, and the recognition that health safety and housing conditions are inseparable from outcomes for low-income households. Because if we don't fix the homes, we don't fix the bills. And if we don't fix the bills, the energy—clean energy transition—will not reach the communities who need it the most.

For me, I'd like to close saying energy justice is about more than choice.

It's, it's about dignity, economic security, and resilience. We must ensure that the transition to clean energy works for everyone, not just those that can afford it. SB 924 moves in that direction and I thank you for your time.

Thank you. Thank you very much. Alright.

Yes. I, as, as stated, my name is Jose Ramirez. I'm here under the capacity as the City Manager. And I would like to just share that I work with communities that have historically been underserved by energy programs, including renters, new multifamily households, and the area where I'm at is, there's—it's a rural area. Current equity programs do not fully reach or benefit all housing types, especially renters and multifamily residents.

SB 924 ensures that programs work across diverse housing types, conditions, and tenancy structures. The bill explicitly supports tenant level benefits, which is critical to ensuring renters are not left behind. It requires meaningful public and stakeholder input, including from community-based organizations, and we're very fortunate that we have the Energy Transition Collective that's taking the lead role of this, and we appreciate the Senator for putting this bill forward.

Community-based organizations play a key role in building trust, increasing participation, and ensuring programs are culturally relevant. Without intentional design, programs risk reinforcing existing inequities.

And finally, I'll, I'll close by saying that many households face language, access, and trust barriers that prevent participation in these existing programs. This bill creates a framework for more responsive and community-informed program design. Equity is not just about access; it's about making sure that everybody's at the table. So, thank you again for the opportunity.

Thank you. Alright. Anyone else who wants to voice support for the bill? Come to the mic please, quickly, and give your name and affiliation.

Committee chair and members, Rafael Aguilera with the Greenlining Institute in strong support.

Thank you.

Wilfredo Cruz Jr., Executive Director, CEO of Community Resource Project who operates these kinds of programs in several counties in California. Also, a voice of strong support. Thank you.

Thank you. Alright. Let's go to opposition. Anyone has concerns about the bill? Okay.

I don't think there's any registered. Let's go to the committee for questions, thoughts, comments. Senator Archuleta.

Again, thank you for fighting for your constituents, Senator. You're amazing. My, my question is, if the homeowner is able to do some of this weatherization, do they get a tax write off or do they—is there an agencies that come in and provide these things? How can they be the recipient of this good fortune?

We'll have my witness come back up and answer your question. I I can impart answer it, but I'll allow her to go ahead and answer it for you.

Have different eligibility requirements. So there there are those programs that do have incentives where they can have it done, but they have to be able to afford it. The low income programs communities we work are are required to qualify under the 250% federal poverty level, which for a family of two is about $42,000 a year. So

Yeah. The reason I asked ma'am is because it could be expensive even just the to insulate the attic or or to air condition as you mentioned.

And and I know that we're talking low income, they wouldn't have the resources to do that. So my concern is having various agencies or entities that come in and do that and provide that without charging the tenant, I'm sorry, or the the land the the landlord or whoever it might be because of the fact that they just can't afford it. And so what we're trying to do is take care of the people that are in such dire need.

Uh-huh.

Right.

But if it's a burden, that's what I'm concerned about. No one is going to come back and hand you a bill of any kind.

No. No. If you're eligible then it's in no cost to you. Okay. But you have to be an eligible client customer.

Good. That makes me feel much better.

Okay.

Thank you. Thank you, Mr. Chair.

Okay. Great. We will entertain a motion for anyone. Yep. Okay.

So Senator Becker. Senator, you may close.

I respectfully ask for an aye vote.

Thank you. Let's, call the roll on SB 924.

Due passes amended to appropriations. Senators Allen?

Aye.

Allen, Aye. H. O. Bogue, Archuleta?

Aye.

Archuleta, Aye. Aragine, Becker?

Aye.

Becker, Aye. Caballero, Dally? Aye. Dally, aye. Gonzales Grove, Hurtado.

Aye.

Hurtado, aye. McNerney, aye. Reyes Richardson. Aye. Richardson, aye.

Rubio. Stern. Aye. Stern, aye. Strickland?

No.

Strickland, no. Wahab. Melanie?

We'll we'll ask McGurney to go to the dais, but we'll we'll call the roll one more time. Well Alright. Jerry makes his way to the guys, please call the roll one more time.

Ochoa-Bogue, Aragine, Caballero? Aye. Caballero, aye. Gonzales, Grove, Reyes, Rubio?

Aye.

Rubio, aye. Okay.

We'll keep the roll open for other members to join. Let's now go to item four. This is s p nine twenty five. Senator McNerney has a number of bills. He's gonna be up there for a while.

So

Okay. Thank you. Thank you so much. We'll now go to Senator McNerney's next bill, which is SB 1011.

Thank you, Chair Allen. I'm presenting SB 1011, the Utility Infrastructure AI Safety Oversight and Workforce Protection Act. I wanna start by saying that I am accepting the committee amendments and thank the staff for their work on this. Artificial intelligence has tremendous potential but also creates substantial risks.

One of the primary risks is that AI sometimes hallucinates, makes errors that in certain situations could lead to dangerous, incorrect advice or actions. The electrical and gas infrastructure of the state is vital, the public safety, economic stability, and environmental sustainability, and when it comes to AI being used by utilities, it is imperative that these models complement, not replace, human judgment. SB 1011 directs the CPUC to adopt standards--one of my favorite words there, standards--for human review and approval when utilities deploy an AI model.

It requires the CPUC to ensure that sufficient staff is retained to conduct effective review and approval of AI operations and requires consultation with effective labor representatives as a part of the development of any plan a utility must file regarding the use of AI in utility operations. Californians can't afford to outsource the safety of our grid to unproven, unmonitored algorithms.

SB 1011 is a common-sense solution that ensures AI use supports human decision-making, rather than replacing it. In testimony with me today, I have Joe Steinberg, an engineer at PG&E, and Ivan Fernandez, on behalf of the California Federation of Laborers. Also, Matt Broad to answer any technical questions.

Great. Come on up.

Mr. Chair and members, my name is Joe Steinberg. I'm an associate distribution engineer with PG&E and a member of the Engineers and Scientists of California Local 20. I'm here to testify in support of SB 1011, a bill we are proud to co-sponsor.

Last December, the City of San Francisco suffered a major blackout that affected over 130,000 customers. Some residents were out of power for days. During this time, PG&E provided customers with estimated restoration times that were unrealistically optimistic. The reason for those inaccurate restoration estimates, according to PG&E, was that they were provided by an AI tool that had been trained on data that only consisted of smaller outages.

For many of us, an extended power outage is an inconvenience, but for some, like those who depend on temperature-controlled medications, for those suffering from food insecurity, the effects of being unable to plan for an extended outage can be much more serious. Public safety depends on a utility's ability to respond effectively to events without precedent. In my own lifetime, I've witnessed the 1989 Loma Prieta earthquake, the 2000 to 2001 rolling blackouts, the 2010 San Bruno pipeline explosion, and the 2018 Camp Fire. When these events happened, there was no training data.

In my own role as an associate distribution engineer at PG&E, I'm responsible for training and mentoring a team of engineering estimators. I assign them work to design improvements to PG&E's gas distribution facilities. I'm responsible for reviewing their work for safety, compliance with internal standards and procedures, CPUC general orders, and federal code. After my review is completed, the work is then reviewed by our regional senior distribution engineer. Before being released to construction, all work receives a final review by an engineering supervisor. This means there are numerous sets of eyes on our work before it is rolled out to the public.

Safe and reliable operation of our grid depends on it. As AI tools are implemented by utilities, particularly Generative AI, public safety depends on the outputs of those AI tools receiving no less scrutiny than the decisions made by trained, experienced engineers. This is what SB 1011 does. It gives the CPUC the discretion to preserve human oversight of AI deployment at utilities, which is absolutely necessary for public safety. For these reasons, I urge urge your aye vote. Thank you.

Thank you. Yes, sir.

Hello, Mr. Chair and members. Ivan Fernandez with the California Federation of Labor Unions, proud co-sponsor of SB 1011. This year, the Labor Federation is sponsoring a package of bills where we're establishing worker technology rights as the new labor standards for the 21st century. SB 1011 encapsulates the principles of meaningful human oversight and review, and of course, the need to protect jobs. As described by the previous witness and by the senator, AI deployment by utilities is a practice that is likely to grow.

As utility-specific AI tools proliferate, there is a growing need to establish guardrails on how these systems impact the scope of work of thousands of employees and to ensure that utilities are ultimately managed by highly trained professionals capable of understanding the nuances of greater management. The need for human oversight and control is essential in all workplaces, and this is further compounded when it comes to the reliability and safety of utilities that millions of Californians rely on.

Without human review of these systems, we are leaving decisions relating to blackouts, wildfires, and gas leaks up to a tool without clear accountability standards. And AI is ultimately a tool. And depending on how guardrails are established, it can be useful to support workers, but without guardrails, we are leaving the proper use of these tools up to chance and leaving workers behind during one of the most consequential moments of our generation.

Our goal is not to prevent the use of AI tools, but rather to protect the role a worker has when executing their job and to be certain that these tools are safely deployed. SB 1011 strikes the necessary balance of ensuring that utilities have the ability to continue using systems designed to rapidly and safely address any grid-related issues, while also being thoughtful on the need to create a regulatory structure to address the looming deployment of tools that may be marketed as being capable of replacing the professional judgment of an experienced engineer. And for these purposes and for these reasons, I respectfully urge your aye vote at the appropriate time. Thank you.

Thank you. All right. Other folks who wanna come and express support, come give your name and affiliation.

Mr. Chair and members, Matt Broad, here on behalf of the Engineers and Scientists of California and Utility Workers Union of America, both proud to co-sponsor this bill. Thank you.

Thank you, Matt, and thanks for your work on the bill. All right. Other folks? Okay, let's go to opposition. People wanna raise concerns about the bill? Come on up.

Good afternoon, Chair Allen and members. Jon Kendrick from Cal Chamber. We oppose SB 1011 as a cost driver. We appreciate that the author and committee are attempting to address concerns with what appears to be a significant rewrite. Still need an opportunity to review that in detail.

That said, we remain concerned that the approach does not resolve the bill's core problems. Rather, it shifts those issues to a regulatory body that does not have expertise in AI technologies. This is not a comment specific to the CPUC; it's merely a statement on the complexity of AI issues. These are issues that Cal Chamber has consistently stated should be debated and decided within the Legislature.

While the amendments rely on agency rule-making, the statutory direction remains quite broad. The bill provides that standards adopted by the commission shall achieve at least the following, which creates a floor, not a ceiling, and appears to grant wide discretion to develop expansive regulatory requirements. On first read, we're concerned that the resulting regulations may encounter many of the same issues that we identified in our letter, particularly with respect to operational constraints, cost pressures, and implementation complexity.

We're also concerned about how this fits within the broader regulatory landscape, particularly as it intersects with workforce and labor policy. This is an already active and evolving area with numerous proposals this year in addition to existing law addressing the interconnection between technology and the workforce.

As a result, the utilities may be required to navigate multiple overlapping requirements governing the same technologies without a clear mechanism to reconcile them. The commission does not have the authority to harmonize these requirements, creating a real risk of duplication, conflict, and legal uncertainty. Again, we appreciate that the amendments appear intended to address concerns and we'll review them more closely with that in mind to provide more detailed feedback to the author and committees as the bill moves forward, but we wanted to provide a quick readout on these pretty significant changes. Thank you.

Thank you. Yes, sir.

Good afternoon, Chair and members. Derek Dolfie, on behalf of the California Municipal Utilities Association. Just wanna say that we appreciate that the amendments are being taken. We need to review them and we certainly think that there may still be some complications that we have to work out, but we look forward to continuing the conversation. So thank you to the work of the committee on this bill.

Hello. Claire Sullivan, on behalf of the City of Burbank, also currently in an opposed position, but looking forward to review the committee's amendments, and we're very grateful to the author for working with us. Thank you.

Good afternoon. Alfredo Medina, here on behalf of the Imperial Irrigation District, and while we're currently in opposition to the bill, we'd like to align our comments with those of CMUA. Thank you.

Margie Lie, Samson Advisors, here on behalf of the Southern California Public Power Authority, aligning our comments to CMUA.

Thank you. Good afternoon, Mr. Chair. Israel Salas with Southern California Gas Company and San Diego Gas and Electric Company, opposed to the bill in print. Thank you.

Thank you. All right. Okay. Other folks? Concerns? Issues? All right. We'll bring it to the committee. We'll go to Senator Strickland.

Move the bill.

I know we have a long agenda. I'll be very brief. But, Senator, it's not just on this bill, but I've now seen a plethora of these bills. They all say the same thing: AI, safety, safety, safety.

You know, we need human review. Don't humans make mistakes as well? Like, I mean, I would like to see some data. A lot of these are saying, hey, we need human review, human review because AI is making all these mistakes, but, you know, I like to see apples to apples in data and I'm not just talking about your bill but, you know, it seems like this Legislature is going overboard in terms--in my perspective--overboard in terms of, you know, shutting down a technology that is just emerging.

And I understand some of the reasons why some of the members come up, but, you know, I would like to see before we start passing a whole bunch of regulation against emerging technology that we actually have data before us because when someone says human review, human review, humans make mistakes too, on top of AI, and I just want this body to understand that we might be stifling a brand new technology moving forward by overregulation, and that should be a concern to everybody in this Legislature as well. So I know it's not just this bill, but this is, like, I think, the fifth or sixth bill I've seen kinda targeting AI just early in the session. So those are my comments.

Senator Wahab, followed by Senator Stern.

Thank you. I appreciate you bringing this bill forward. I also understand the concerns of my colleague here. AI is still very much in its infancy and, largely, I will just highlight my district. My district is the largest manufacturing-- advanced manufacturing district in the State of California with the most premier companies in our district.

I did bring in a couple of our colleagues in the fall to just educate them on AI technology, as well as semiconductors and advanced manufacturing as a whole. The reality, though, is that artificial intelligence will be the industrial revolution of the 21st century, not just in one industry, but literally every single thing that we touch in every single industry. And the difference-- and I agree with you. Human beings make mistakes all the time.

However, things are being implemented to be utilizing this type of technology with very little testing, with very little oversight, and the expectation is that it's perfect from the start. It's not, but we are expected as policymakers to ensure that there are safeguards in place, and the reason for that is because we would like to see reviews. We would like to see data. We would like to see metrics.

We would like to see all of these things that are gonna educate us on this particular tool industry per industry. And the reality is we are piecemealing a lot of, you know, industries here in this building, whether it's data centers, whether it's AI, whether it's utility companies or housing. It's not done in a holistic way, and I wish that we had a team of scientists that were not paid by lobbyists supporting a specific business interest, but largely, what is the big overall picture 10 years down the road, 15 years down the road?

However, that is not the case in how policy is made. So I do appreciate the bills that actually do care about human beings and ensuring, especially when we're talking about these larger industries, that we are prioritizing the lives and the, you know, property and you name it across the board, and it's just the right thing to do. So with that, I'm more than happy to move the bill, but I will also say I also agree with your comments because they are valid as well. It's just, you know, the way that we're moving forward, I'd rather be cautious than have an incident if we could prevent it.

Yeah. Bill's moved by Archuleta. Let's go to Senator Stern.

Thank you, Mr. Chair. Briefly, in the spirit of what Senator Wahab-- her comments and perhaps Senator Strickland to some extent, one thought maybe for you to consider going forward, I think the-- I like the amendments. I think the committee's done a good job of sort of rounding out a more rigorous and open CPUC process. Hopefully, it would be expert-driven.

The concern I have right now with the committee amendments is just that they talk about-- they specify, for example, that the PUC may prohibit the use of an AI model if they find that it would negatively impact the provision of safe, reliable, and affordable electric or gas service.

I'm sort of-- I'm really interested in the PUC in this process analyzing the flip side, which is what AI can actually do to accelerate our climate goals, what AI can do to say enhance the flexibility of the grid, if we're talking about real-time pricing, getting to the kind of trading models that we think will actually get more out of the existing grid and require us to use less fossil fuels, for example.

So I don't know if it's possible to sort of expand on, not so much what the CPUC may prohibit, but more so that the-- an analysis, I suppose, of what AI might enable, and specifically in that sort of climate context, because I'd be remiss to sort of leave the upside of grid optimization, say, on the table.

I get that there's a lot of downsides to data centers, you know, using our grid without paying their fair share, that kind of stuff, but I also think about the demand flexibility work that Senator Becker and I have been working on, or even the fusion work that you're working on. Can AI actually help enable some of that? My understanding is that it does a good job in some of those ways.

So maybe-- it's just something for you to consider going forward, building that into your PUC analysis of sort of analyzing what the upside of appropriately and safely administered AI might be, so thoughts for you to consider going forward.

Thank you.

Yeah.

Okay. Seeing no other comments or thoughts, let's-- it's been moved by Senator Archuleta. Secretary-- why don't you close?

Thank you. First of all, I wanna thank Joe and Ivan for your support-- words on this. As you heard from the opposition, we are willing to work with ideas and comments and concerns, and we will continue to do that. And I appreciate Senator Strickland's comments that humans make mistakes. I think all of us know that.

But the thing is, one of the things the bill does is make sure that there's enough humans left in the corporation that they can provide some amount of oversight because we don't wanna just let AI loose on things. We wanna have enough human capability, enough human expertise on the site, on the job so that we can balance whatever decisions are being made. I think the-- and now, in this moment in time, we are seeing how-- we are trying to decide how we can put guardrails.

We don't want AI to go roughshod on jobs. We don't want it to go make mistakes that cause millions or billions of dollars of infrastructure damage or human lives when having a human being in the loop to oversee what the AI is doing might make a huge difference. So basically, this is common sense. It starts to set us up for how do we manage AI in the future. We don't want to just let it loose. With that, I will ask for an aye vote.

Please call.

Do pass to be amended in the Privacy, Digital Technology and Consumer Protection Committee. [Roll call].

Okay. We'll leave that open for other folks to add on. Let's now go to Senator McNerney's SB 1168, Item Six, on data centers.

K. Moving forward, this is SB 1168. Thank you, Chairman Allen. This bill has been substantially amended over the weekend, and I think we're moving into a a realm where this is, gonna be a very, a very positive bill. And as I said, I've been accepting proposed amendments outlined in the analysis.

California does pay some of the highest utility rates in the country, and rates are expected to climb even higher with the rapid development of data centers due to their massive energy usage and the need for infrastructure upgrades for them to actually get that power. Harvard and MIT poll released earlier this month showed that two thirds of respondents are worried about electrical pricing, rises doing to, due to the they did due to data centers.

And with the committee amendments, SB 1168 directs the CPUC to, assess methods to ensure data centers pay their fair share. Ensure data centers, pay their share for the load increases and, help alleviate rate pressures on residential consumers. I don't really have any supporting witnesses.

Basically, this is now a steady bill and I will ask for an aye vote.

Alright. Folks, you wanna come to the mic to voice support?

Will Breager from State Strategies here for Climate Action California in support.

Thank you. Alright. Opposition, folks who wanna raise concerns about the bill?

Hi. Good afternoon. My name is Khara Boender, Director of State Policy at the Data Center Coalition. The Data Center Coalition is a National Industry Voice for the Data Center Industry and our companies are represent leading data center owners and operators and companies that lease large amounts of data center capacity. We are opposed to the bill as it is in print, but thank you for the committee and staff and the author for the amendments.

We look forward to reviewing those with cross our membership, and we'll reevaluate our position as necessary. Thank you.

Good morning or good afternoon, Mister chair. Amanda Gualderama with CALP Broadband. We have a oppose unless amended to the bill in print, but look forward to reviewing the amendments. I wanna thank the committee and author, for those discussions.

Good afternoon. Jon Kendrick again from the California Chamber of Commerce, opposed to the bill in print. Really think the committee staff did a phenomenal job in analyzing this bill. Appreciate the author taking the amendments. Looking forward to see what those look like. So thank you.

Good afternoon chair and members. Martin Vindual on behalf of the California State Association of Electrical Workers and the California State Pipe Trades Council. We were previously opposed to the bill in print, but due to the committee amendments, we will be removing our opposition and going neutral on the bill. Looking forward to working with the author. Thank you.

Good afternoon, mister chair members. Brady Van Engelen here on behalf of Southern California Edison. I posted the bill in print, currently reviewing the amendments and I look forward to working with the author. Thanks.

Great. Thank you. Okay. Questions, thoughts from the committee? Folks wanna bring move by Senator Caballero.

We'll give you the opportunity to close. Thank you, Senator.

I will ask for an aye vote.

Thank you. Alright. Secretary, please call a roll on SB 1168.

Do pass to be amended in the Revenue and Taxation committee. Senators, Allen?

Allen, aye. Ochoa Bogh? Archuleta?

Aye.

Aye.

Archuleta, aye. Arreguin? Becker?

Aye.

Becker, aye. Caballero?

Aye.

Caballero, aye. Dahle?

Dahle, no. Gonzales? Grove? Hurtado?

No.

Aye.

Hurtado, aye. McNerney?

Aye.

McNerney, aye. Reyes? Richardson?

Aye.

Richardson, aye. Rubio?

Aye.

Rubio, Aye. Stern.

Aye.

Stern, Aye. Strickland?

No.

Strickland, no. Will hop.

Okay. Alright. Thank you, Senator. Alright. We are now going to do a SB 1196 which is item seven in your packets members.

Proceed, chair and, Allen and members of the committee. I thank you for your patience this afternoon. My bill, is SB 1196 , which will accelerate utility hookups of ADUs and junior ADUs. Let me start by saying I have accepted the committee's amendments outlined on page five of the analysis. I wanna thank the committee staff who with working with my staff over the weekend on this bill.

As you know, California faces a housing shortage, and to help, deal with this crisis, the ledger legislature has passed numerous laws to streamline the construction of low cost ADUs known as backyard cottages. ADUs are now the hottest sector of California housing market, but California homeowners and ADU builders are increasingly frustrated by the long delays in obtaining service connections. Some have been forced up to wait a year for utility hookup.

ADU builders also say IOUs delay projects by not allowing homeowners to apply for a service connection until a property owner has received a building permit further delaying the hookup. Some IOUs also cancel ADU applications without the homeowners consent facing forcing property owners to resubmit their applications, prompting even more delays by having to start over.

SB 1196 streamlines ADU construction by allowing applicants, and this is important, to request for utility hookup at the same time that they request the billing permit. That will delay months. That will, shorten months of delay. And it bar and it bars utilities from canceling a service connection, without the applicant's consent. The bills also directs the CPUC to create clear timelines for utility service connections, establish penalties for IOUs that failed to provide timely hookups.

I respectfully ask for an aye vote. With me today, I have Sylvia Aguilar of the Scacetic Coalition. Sylvia?

Good afternoon, chair and members. I'm Sylvia Aguilar. I'm the programs and operations manager for the Cacita Coalition. We're a nonprofit dedicated to advancing middle housing solutions, including ADUs and JADUs. Our founders co wrote the 2017 law that legalized ADUs statewide and unlocked the California ADU revolution.

Since 2018, the number of new ADUs permitted in the state has skyrocketed from 800 a year to about 30,000 today. ADUs now comprise about one third of new homes in California, and many homeowners are adding ADUs to rent or lease to residents in need of lower cost housing. But as Senator McNerney noted, homeowners and ADU builders are increasingly facing a significant barrier and that's these long service connection delays by utilities.

PG and E, for example, estimates on its own website that utility energization for a home addition can take up to a hundred and eighty two days. Such long delays not only place an undue financial burden on property owners but also worsens California's housing shortage.

Although ADUs are more affordable to construct than other types of housing, they still cost homeowners 200,000 or more to build depending on the side of the unit. So many homeowners who have added an ADU can't afford these long delays for a service connection as they need to rent or lease the unit in order to begin to recoup their investment.

As Senator McNerney noted, IOUs also add delays when they prohibit homeowners from applying for a service connection until the property owner has received a building permit from their local government. This problem alone can cause months and months of delay. It's our understanding that SDG and E is the only IOU that allows applications for an ADU service connection to happen at the same time a homeowner applies for a building permit.

This policy allows the ADU permitting and the service connection application to happen simultaneously, preventing weeks or months of delay. Some IOUs, as he stated, cancel ADU applications without the homeowner's consent creating even more delays. And according to members of our coalition, IDU IOUs cancel these applications because they don't want it to look like they've taken too long to connect an ADU to their service.

It's also important to mention that SB 1196 only applies to ADU projects that don't require a major upgrade by the utility. So this bill is about smaller jobs where the homeowner might only need to add a second panel or a meter.

And so we believe SB 1196 is common sense legislation that will ensure that we can get low cost housing online for all Californians in a timely manner. And for this, I respectfully ask for your aye vote. Thank you.

Anyone else wants to voice support for the bill? SB 1196. Come under the mic and for inflation.

Chair and members, Alicia Priego on behalf of the Housing Action Coalition in support.

Thank you.

Chair, members of the committee, Jordan Panana Carbajah on behalf of California YIMBY in support.

Thank you.

Thank you so much.

Thank you. Okay. Opposition to the bill. Concerns? Do you wanna raise?

Okay. We'll bring it to the committee for thoughts. Aisha Wahab.

Thank you. One, I I just wanna say I'm a proud co author of this bill. I think that we need to kind of go into, you know, further and further and be able to develop more. But I also wanna say just folks that are kind of moving into these types of homes, they also want options. And they don't get enough options when we're talking about, energy.

And oftentimes, it's specifically just the homeowner that gets the options. And so we need to actually go further, into the folks that are actually building these ADUs, being able to have the ADU, resident be able to have options, renters to have options, and, lower income individuals to have options.

That this is the only way that we can actually, in my hopes, create a more sustainable grid, make it a little bit more environmentally friendly, far more affordable, and more consistent with the entire holistic community rather than just, property owners alone. So this is a step in the right direction and I'll move the bill.

K. Okay. Bill has been moved. We'll go to you, Senator, for a close.

No other comments? Thank you. I will ask for an aye vote.

Thank you. Alright. Secretary, please call the roll.

Due passed to be amended in the committee on local government. Senators Allen.

Aye.

Allen, aye. Acho Bogue. Archuleta.

Aye.

Archuleta, aye. Arreguin Becker. Aye. Becker, aye. Caballero?

Aye. Caballero, aye. Dally? No. Dally, no.

Gonzales? Grove? Hurtado? Yeah. McNerney?

Aye

McNerney, aye. Reyes? Richardson?

Richardson, aye. Rubio?

Aye.

Rubio, aye. Stern? Aye. Stern, aye. Strickland?

Aye.

No.

Strickland, no. Wahab? Wahab, aye.

Alright.

Thank you for your vote, Senator Stern. Alright. We'll next go to the final, final item from Senator McNerney, SB 1350.

Well, thank you, chair and members. Again, our last bill this morning, this afternoon, whatever the heck time it is. First of all, I wanna say I'm accepting the committee amendments as usual.

I thank the chair and the committee staff for working over the weekend. Again, California is committed to reaching 100% clean energy by 2045, but the development of clean energy industries in California is under threat. The Federal Government has canceled tax credits for solar and wind projects, canceled 1,200,000,000 in funding for California's proposed hydrogen hub, meanwhile, clean hydrogen made from renewable energy sources is a clean and safe fuel source that can help us meet our clean energy targets.

Clean hydrogen can be used to transition as distant power infrastructure into clean energy infrastructure.

SB 1350 will help California utilize clean hydrogen to get—decarbonize the power system. SB 1350 stimulates investment in clean hydrogen projects by allowing power plants, and this is the crux of the bill, to get renewable portfolio standard credits when they use green hydrogen to power turbines. By incentivizing in-state clean hydrogen projects, we're also creating thousands of jobs. One hydrogen production project alone in Lancaster, its name is Element, is creating 1,200 construction jobs, union jobs.

With us today, we have Janice Lin from the Green Hydrogen Coalition and Erin Leon from the State Billing and Construction Trades Councils.

Chair Allen and members. Thank you, Senator McNerney. My name is Janice Lin and I'm the Founder of the Green Hydrogen Coalition, an educational nonprofit focused on the thoughtful advancement of renewable hydrogen in order to achieve economy-wide decarbonization. I'd like to start by thanking the chair and committee staff for working with the author's office and the GHC late last week on amendments.

Members, renewable hydrogen is a scalable, carbon-free fuel that can be used to ensure reliability in our power sector and many other sectors, especially those hard to abate ones. Today, we are facing unprecedented volatility in energy prices and there has never been a more important time to ensure diversification.

Renewable hydrogen can help with those emergency reserves when the choice is an outage or burning diesel. And it's already informally defined in the guide book and eligible when used in linear generators and fuel cells. Senate Bill 1350 is a logical extension that puts renewable hydrogen on the same footing as other renewables in the guidebook. To be clear, nothing in this bill mandates nor requires its utilization. Instead, it provides another opportunity, another tool in the toolkit, for load serving entities to meet their carbon goals.

And as the Senator mentioned, to repurpose existing infrastructure and achieve those goals in a cost-effective manner. Any use of renewable hydrogen in turbines will still be held to those same stringent standards that restrict emissions from all power plants today. Our air quality management districts would not permit any power plant that did not meet its world class emission standards.

And to wrap up, I'll just say that Senate Bill 1350 is so essential right now because the power sector is one of those very few near term sectors that can scale demand for renewable hydrogen. When we have larger demand for renewable hydrogen, we will have larger production facilities driving down cost.

So, greater visibility into that assured demand and lower cost renewable hydrogen will help us accelerate demand in other sectors, wisely diversifying our energy supply and enhancing our energy security, and as Senator McNerney said, creating a lot of valuable jobs. This is good for our economy, good for the environment, and good for public health. Thank you for your aye vote.

Thank you. The folks who wanna voice support for the bill. Yeah.

Thank you. Good afternoon, Chair Allen, members of the Senate Energy Committee. Erin Lehane, on behalf of the hardworking skilled and trained members of the California State Building Trades in support of SB 1350. I thank the Senator for championing this issue.

This bill is a technical fix to include hydrogen, like biomethane, to count towards the, the RPS Credit. This fix will allow California to get moving on hydrogen. This one technical fix could have an enormous positive impact in California by allowing our members to build the element resources hydrogen project in Lancaster, creating a new clean fuel for Scattergood Power Plant and beyond. And in doing so, create thousands of hours for our skilled and trained construction workers and apprentices. And this is only the beginning.

This technical fix lies the groundwork for our future hydrogen infrastructure. We have a chance to lead in hydrogen by embracing policy like SB 1350 or we will lag behind and end up being dependent to import from other jurisdictions that do our—do not share our high road environmental and labor standards. At the State Building Trades, I think you guys all know, we are very excited about hydrogen and its potential for our members and all Californians.

As such, we would appreciate your support of this very important bill. Thank you.

Thank you.

Good afternoon, Chair Allen and members. Alfredo Medina here on behalf of LME Resources. We'd like to thank the author, committee staff, and everyone—all stakeholders who took part in helping this bill move forward. We'd like to support this bill but also highlight that we look forward to continued our work with this committee and Senate leadership in ensuring that this project is able to benefit from the pending federal tax credits that are soon expiring. Thank you.

Good afternoon, Chair Allen and members. Sarah Boot on behalf of the Northern California Power Agency, in strong support. Grateful to Senator McNerney for championing this issue and grateful to the committee. Thank you.

Good afternoon, committee and chair. My name is Claire Sullivan, on behalf of the City of Vernon, in strong support of the bill. Thank you for your leadership.

Good afternoon, chair and members. Cesar Diaz with Capital Advocacy, on behalf the California Hydrogen Business Council, in support. Thank you.

Good afternoon, chair and members. Derek Dolfie on behalf of the California Municipal Utilities Association, in support of the bill. Thank you.

Good afternoon, chair and members. Megan Murray with the Weideman Group on behalf of Air Products in support. Thank you.

Marjorie Leu, Samson Advisors, here on behalf of the Southern California Public Power Authority, in strong support.

Good afternoon. Declan Madden, on behalf of Yosemite Clean Energy. We are a biomass through hydrogen company. We thank you for listening to industry feedback, and we are in strong support of the bill. Thank you.

John Winger on behalf of RNG Coalition, in support.

Israel Salas with SDG&E and SoCalGas in support. Thank you.

Mr. Chair and members, Andrew Antwih with Shaw Yonder, Antwih, Schmelzer, and Lange. We thank the author for the bill. We make note of the amendments suggested in the committee analysis. And, on behalf of the Western Propane Gas Association, we did support the bill in its current form and we'll take a second look after the amendments. Thank you.

Okay. Thank you. Folks want to raise concerns?

Thank you, mister chairman, members of the committee. My name is Matt Friedman. I represent the Utility Reform Network. TURN unfortunately opposes this bill unless amended, and the committee amendments just don't address the significant concerns we raised in our letter. We've worked with the author's office, but we have not yet, been able to achieve any type of accommodation with respect to our concerns.

Two first, thoughts. First of all, this bill is not a technical fix as some supporters have suggested. It has major implications for the integrity of the state's clean energy policy. And secondly, the amendments that we have proposed would not, undermine or infringe upon the ability of the element project that's been mentioned to be developed in Lancaster. In recent years, the legislature has devoted significant effort into determining what is an appropriate definition for renewable hydrogen and establishing best practices.

The assembly put together a special select committee. This committee has heard several bills on this topic, but SB 1350 really just ignores all of the prior efforts and would would allow a potentially massive expansion of hydrogen use under the state's renewable portfolio standard program without including any protections against greenwashing, resource shuffling, sham transactions, and increased greenhouse gas emissions across the West. The version in print relies on the definitions established by the California Energy Commission.

And unfortunately, the committee amendments do very little to improve upon that. It just codifies the existing definition.

And this definition is inadequate because it fails to address the critical issues relating to additionality of supplies of renewable energy, hourly matching, preventing, prohibiting reliance on tradable attributes, previously debated vigorously in the legislature. So to ensure that renewable hydrogen produces incremental environmental benefits, doesn't cause more air pollution or additional greenhouse gas emissions, There are three key requirements that have to be included in the definition.

First, renewable electricity, renewable hydrogen produced via electrolysis should be required to rely on newly developed incremental renewable generating resources to prevent resource shuffling. Second, renewable energy that is used to create renewable hydrogen should include both the electricity and the associated environmental attributes and be delivered into the state. And third, any renewable power used to produce renewable hydrogen should be generated in the same hour it is consumed.

These are called the three pillars. They have been a major topic of discussion in the environmental community for the last several years. They are entirely missing from this bill, and the Energy Commission is not going to apply them unless the legislature tells them to do so. So we support integrating renewable hydrogen into state policy, but this effort requires meaningful standards that guarantee superior environmental outcomes, and the failure of this bill to include any of these guardrails could jeopardize the success of this effort.

We're happy to work with the author.

We don't believe that anything we're asking for would slow down the element project. In fact, that appears to represent a gold standard project, but this bill would unlock potential eligibility from a wide range of production facilities across the entire region, and that's why the legislature needs to take a very careful look before moving forward. Thank you.

Thank you. Yes, sir.

I'm Steve Uhler thats UHLER. I'm the individual in opposition. My large concerns is the ability of the tracking system as it exists now to be able to prevent double counting, counterfeiting, and various items. If you had a chance to look at my, position letters, and I I put in two now, a second. But the first position letter points to situations that appear to be show lack of control.

I thought this bill was about biogas, so I presented information for one thing. We don't know what happened in between 2020 and 2024 as far as RPS. It shouldn't take this long to know where we stand. We should know we should be apprised, a lot faster than that. Another thing is there is a bit on biogas.

It says there's supposed to be a tracking system that's the equivalent of PUC three ninety nine twenty five c, but the energy commission says that all they do is look at contracts and decide that, oh, yeah, you used you used the the biogas. This needs to be cleared up.

I would ask that you watch the video from your utility that supplies this place that may be providing the solar shares to you to understand that it appears that they they feel it's fine to have the ratepayers pay for the renewables and then tell somebody else that they could pay a little bit more and then claim those renewables. So my my main point here is it appears that we've outgrown the RPS system in tracking.

We need to, change it such that RPS means resource resource planning system.

We need to have this hydrogen in here. I I support the situation. That's the second bit that I put in there. I throw up an option that will allow will allow no double counting by using an aspect in Regis. It's not the best way to do it.

But you should see that those are enforced and the energy commission does these things that I mentioned that they're not doing per statute right now. Thank you.

Thank you. Alright. Anyone else who wants to force opposition? Okay. We'll bring this now to the committee.

Senator Archuleta followed by Senator Caballero.

Well, thank you, Senator, for bringing this, important bill to us. Well overdue when we're talking about hydrogen and the future of California and energy by allowing power plants to receive the renewable portfolio standard credit, which is very very important to us all. When using green hydrogen to fuel their turbines just as they do with biogas and as fuel cells as we know work so well with hydrogen and that's what our buses and and so many things are moving in that direction.

So Senate bill thirteen fifty will help California advance its clean energy goals while supporting innovation and the transition to reliable zero emission power. So I'm happy to support the bill and I'd be honored to be a co author.

And I think did someone move the bill? If not, I'll move the bill. Alright.

Well, looks at that one appropriate. Let's go to Senator Caballero.

Thank you, mister chair. Let me just say that, I really appreciate this bill. I'd also like to be added as a co author. What we know is that CARB has stated very clearly we're not going to meet our 2030 goals without hydrogen. And what we've been trying to do is to put it on a path.

I understand the three pillars. We've had discussions about this for a long time. And the bottom line is is that, those three pillars slow down the opportunity for us to be able to, create a hydrogen that meets our needs to to decarbonize a hard to decarbonize industries and that's aviation, maritime, and heavy trucking. And your your bill will will allow us to protect the environment at the same time that we're we're producing hydrogen locally.

And I this is really important because we lost federal funds that would have allowed us to make some of the the partnership in the hydrogen space and this will start us back up looking at maybe making the investments ourselves as a state so that we can get this moving again.

I mean, I just heard on the news in Southern California that they are having to sideline the hydrogen vehicles because we can't get, product. And this has happened before when there's been a, dearth of of of product and I think part of it is because the Federal Government is disinvesting in hydrogen. So thank you very much for this bill and I'll be supporting today.

Okay. So the bill is making its way over to environmental quality and I do I mean, the the challenge I think we all had through the course of in analyzing this was ensuring at the end of the day, this is about giving RPS credits. Right? The RPS is a really important tool in our in our transition to cleaner energy future and we wanna make sure that we're not eviscerating the RPS. We we wanna make sure that it's still strong.

It's still something that it's something that actually means something. And that was, you know, a lot of what we're trying to get out with the with the amendments. I'm certainly hopeful that the environmental quality will take a long hard look as well to make sure that we're we're really maintaining the integrity. You know what is stopping this work from happening. The question is whether it it ought to meet RPS standards and RPS standards are supposed to really

be strong and real with regards to this clean energy transition. So with that spirit, I'm I'm certainly happy to support the bill as amended and would like to give you the opportunity to close.

Well, I was expecting some interesting questions. Well, for that, I will ask for an aye vote.

Thank you, thank you, Senator.

Alright. Secretary, please call the roll.

I wanna I wanna thank the the woman and Janice for your support.

Do pass to be amended in the environmental quality committee. Senators Allen?

Aye.

Allen, aye. Acho Bogh. Archuleta.

Aye.

Archuleta, aye. Aragine Becker. Caballero. Aye. Caballero, aye.

Dally. Aye. Dahle, aye. Gonzales Grove. Aye.

Grove, aye. Hurtado. McNerney.

Aye.

McNerney, aye. Reyes. Richardson. Aye. Richardson, aye.

Rubio. Stern.

Aye.

Stern, aye. Strickland.

Aye.

Strickland, aye. Wahab. Aye. Wahab, aye.

All right. Thank you, Senator McNerney. The McNerney show has just come to a close. We're gonna go to Item 10. On top-- for all those aye votes, Senator Stern is now going to present a couple bills himself. Thankfully, one of them was put on consent. So he's got SB 1158 and SB 1370. So we'll start with SB 1158, which is Item 10 in your packets, members.

Thank you, members. I'd like to present this important measure here to improve the reporting that the California Energy Commission and CPUC are currently doing in their quarterly reporting around the Joint Reliability Planning Assessment, which stemmed out of issues we've had around grid reliability. It's been a really successful reporting process to get both agencies analyzing future reliability challenges.

This bill would merely update that process to ensure that permits, approvals, expected completion dates, and statuses of transmission upgrades and grid infrastructure capacity was included in what we call the SCPPA. So I think it's a good, common sense measure, and respectfully ask for your aye vote. Look to my lead witness for a nice brief but meaningful bit of support here, Mr. Will Brieger from Climate Action California.

Thank you. I'll try and keep it brief. Yeah. The bill is a simple bill in that the head-spinningly complicated world of energy planning, it just amends one section of the Public Resources Code to up our game on reliability planning.

I gotta say we're lucky to have CEC and CPUC doing what they do all under an emissions allotment cap from CARB. Meanwhile, the demand side's changing. We're getting data centers, electric vehicles, building and industrial electrification, a warming climate, and the supply side's always changing. We're getting a lot of batteries lately.

So I'd ask you to picture three marching bands come onto the field at the same time and a thunderstorm of new loads opens up, and at the same time, the whole field, the muddy field is tilted by a heat wave--climate change. That's what we're hoping, that CEC and the PUC and Cal ISO and CARB can pull off. The bill steers that reliability planning process. So it takes into account all the new things that are happening: transmission upgrades, permit queues, and DWR's Strategic Reliability Reserve.

I just-- as a climate group, I just wanna emphasize that last thing because, right now, our backup plan, if we really get into a crisis like we saw in 2022, our plan is to turn on DWR's fleet of fossil-fueled plants. So we need a better plan and this bill takes us there. Thank you.

Thank you. All right. Other folks wanna raise their support for this? Objections? Concerns? Okay. We'll bring it to the committee for thoughts and comments, questions. Moved by Senator Strickland. Other questions? All right. We'll let you close, Senator.

I would like it if the marching band to play through the mud, I think was the analogy. We should be able to play through all circumstances. We got a difficult future ahead of us, and I think this will help us get there. So respectfully ask for your aye vote.

Wonderfully evocative metaphor. Secretary, please call the roll.

Wasn't mine, so.

Do pass to Appropriations. [Roll call].

Okay. Let's now go to Senator Stern's final bill. That's SB 1370.

Yeah. Thank-- may I, Mr. Chair? Yeah?

Yes, sir.

Thank you, Members. This is an important report was just released last week pursuant to SB 254 regarding our resiliency to natural catastrophes and the impact that it's having on rate payers both in insurance and in utilities. We just want that report to be brought clearly before the legislature. And it is a multi jurisdictional issue that will involve both judiciary, insurance, emergency management, energy, and natural resource and water.

We could obviate the need for this bill by having that joint hearing, anytime in the next few weeks.

So if we wanna save some time and energy, we could have a joint committee hearing and I think bicameral process might actually make sense. I know everyone's still digesting this important report, but I don't think this is an issue we can afford to let sit on the shelf and let this study gather dust. This is challenging us. It's challenging the solvency of our utilities.

It's burdening households in their insurance rates, and it is hurting victims and their ability to recover damages after these disasters.

So, this bill hopefully gets that process kick started to enhance the legislature's oversight role in, bringing this report, from just a report into action. And with that, I respect the answer aye vote.

Thank you. We're certainly happy to work with the committee on doing hearing something subsequently similar. So, let's hear questions, thoughts from the members.

Move it

Moved by Senator Archuleta, question from Senator Grove.

Thank you.

Sorry. I had

Sorry, Sir, through the chair.

I think there's

I'm so sorry. Witness' support.