Senate Standing Committee on Energy, Utilities and Communications

We'll be starting in ten seconds. Alright. Let's call this hearing of the Senate Committee on Energy Utilities communications to order. We're still awaiting a quorum, so we asked members to come, make their way down. But but, Assemblymember Schiavo if you wanna approach the the ..., you're welcome.

We have a couple, nine bills on today's agenda. So, just for a note for folks, agenda item seven, which is AB 2182 by Irwin. It's been pulled by the author. Agenda item six, AB 2175 by Garcia is on consent. So with that, we will we'll start with, Senator Schiavo.

We really appreciate you coming down. AB 1715.

Yes. Thank you. Thank you so much. Sorry, I got my comfy shoes on. I didn't even get to go change my shoes.

No. Your energy chair seems to be here. She's first. But you you you filled in very kindly so.

So I wanna thank you, Chair Allen, and members of the committee for the opportunity to present AB 1715 today. Really appreciate the committee's work on the bill, and we're accepting committee amendments. AB Fifth AB 1715 is broadly focused on transparency and has two parts. First, the bill will require the CPUC to establish a database on its website of utility advice letters, responses, and resolutions going back to 2020.

This will ensure that a searchable and standardized record is readily available to both consumers and ratepayer advocates.

The current database is challenging to navigate, and it is practically impossible to follow the paper trail between an advice letter and its outcome, or CPUC resolution from the outside. Second, AB 1715 sets up a quarterly reporting structure to ensure proper oversight of taxpayer funds, of government loans, or grants to investor owned utilities. Investor owned utilities have increasingly sought non traditional funding, such as government loans.

For example, in, January 2025, PG and E finalized a loan from the Department of Energy for $15,000,000,000 for load growth and reliability projects. And when, utilities are able to get these government loans at lower interest rates, it's important that the CPUC is aware of that, so that it can be incorporated in considerations when there's discussions around rate increases.

Because sometimes, what the utilities had projected as their loan rates then would be lower if they are able to, secure those lower interest government loans. And so we want to make sure that that's reflective, especially when utility prices are, you know, top of mind for consumers who are struggling with keeping up with, the cost of living.

And this is a clear way that we can make sure that consumers also benefit from the from the savings that utilities benefit when there's, you know, public dollars that help them, borrow at lower rates. Alternative financing mechanisms such as these publicly financed loans or grants are key recommendations from the rate payer advocates because they lower utility borrowing costs and shareholder equity returns, offering potential savings to rate payers, as I just mentioned.

This is a welcome new strategy, but proper oversight to ensure funds are spent responsibly and accounting is transparent are essential if rate payers are to receive the savings they are due.

Here with me to testify for AB 1715 is Adria Tennant from the the utility reform network.

Hello. Thank you, chair. Thank you, committee. Doctor Adria Tinnen, director of Race Equity and Legislative Policy at TURN. Here I'm proud to sponsor AB 1715.

As you all know, California is in an affordability crisis. Our skyrocketing energy utility bills have nearly doubled over the last ten years. To improve affordability while still building out the grid to meet future need and doing what's necessary to prevent wildfires, we've seen an uptick in alternative sources of funding. This is a great thing. PG and E received a $15,000,000,000 DOE loan commitment from rely for reliability and clean energy projects.

And just last year, this legislature approved $6,000,000,000 of wildfire mitigation spending to be securitized. These alternative funding streams have the potential to save rate payers billions of dollars. But right now, we have no way to effectively track those savings and ensure rate payers receive the full benefit. AB 1715 provides critical transparency and accountability by directing the CPC to establish a searchable database of utility advice letters which inform the public of rate changes.

For each advice letter, there'll be a link to the associated protest letters and resolutions filed in response.

Currently, you have to be on a specific email listserv to be made aware of these documents despite them being a matter of public record. Added transparency will allow advocates and the general public to better track and understand rate increases. AB 1715 also includes utilities reporting of state, federal grants, loans, and bonds to the CPUC in a few ways. It centralizes utility reporting for all public funding being sought or secured.

It requires utilities to report this information in each application where it is seeking rate payer money funding.

With this information, the CPUC will be able to ensure rate payers receive the savings from alternative financing, and utilities don't double recover. Lastly, the bill requires utilities to quantify potential cost reductions and deliver those savings to ratepayers. I know you are all committed to achieving affordability, but that cannot be achieved without accountability and transparency.

Many of the provisions in this bill likely look familiar to you as it was passed through this committee in AB 1020 last year, and we strongly urge you for another I vote. Thank you.

Thank you. Let me just take a second to read the amendments that have been agreed to because I I know they didn't make anything analysis. So first of all, delete the word promptly from promptly delivered to rate payers in the public utilities code section five nine three d one. Delete the words investor owned when referencing electrical corporations in public utilities code section five nine three a two and delete public utilities code section four five four from the bill.

So those are the I'm just read for the record.

If you wanna see it in writing, they're very welcome. Okay. Let's any other folks who wanna speak on behalf of the bill and you can stick around to take questions from folks if when we have our discussion. Opposition concerns. Mister Wach.

Mister chairman and members, Scott Wetsch on behalf of California Coalition Utility Employees with the proposed committee amendments. I believe that will remove our opposition. I would just like to note the IBW International played a key role with the Biden administration in securing that $15,000,000,000 loan, and it should be applauded because it helps reduce rates. And that type of behavior should be encouraged, not criticized. Thank you.

Nobody's criticizing it. It's great.

Great. Okay. Any other questions, thoughts, concerns brought before the committee? Let's go to Senator riches.

Good morning. I have a couple of questions for the author. I'm missing my binder so I apologize. I don't have the background analysis. Just a couple quick questions.

One, what are the actual penalties that would be imposed? If you could, it says that it authorizes the CPUC to impose penalties for non compliance. So what would those penalties be? Have they been identified?

No. That would be up to the CPUC to determine.

So no, no monetary amount has been identified thus far? No. And it would go through a process that they'd have an opportunity to respond to.

Yeah. It's really just, you know, allowing the CPUC the ability to enforce the rules. Right? A lot of times we have rules that we have no lever to make sure they're enforced. And so we just want to make sure that they have the ability to do that.

Okay. And then my second question is, which leads to the amendment that was, accepted. Requires utilities to promptly pass the financial benefits of federal funding onto rate payers. It has there been a determination of how much that would be? Or are we expecting through this legislation that the entire, money that they would receive would go to rate payers?

Because I could see how that would be difficult if something was provided for example, for a project and it's going towards the project. How would that translate to them providing it directly to the rate payers?

So, I mean we would hope that the rate payers would get the full benefit. Because, you know, sometimes I think the utilities will come with projected, you know, costs of things. Right? And then once they actually go through the process of getting the financing and and pulling that, project together, the numbers may have changed.

And so this is really around transparency to make sure that the CPUC knows about that, that that's considered, and that savings that the companies get should be passed on to the rate payers.

And I don't know if my witness has anything to add on that too.

Yeah. Thank you. So it's really about ensuring that alternative sources of funding are replacing rate payer funding rather than just adding to it. So we're not paying twice through taxes and rates for the same project. An example is the $15,000,000,000 DOE loan that I mentioned, which absolutely should be applauded.

It's fantastic. PG and E purports that it will save rate payers a billion dollars in savings. So what this bill would require is that that is demonstrated how it saves the billion dollars, and then that we mark that to the CPUC in each of the proceedings where money is being requested for that project to make sure that rate payers are indeed receiving the billion dollars in savings. So it wouldn't necessarily be for, in that example, something like a check going back to individual customers.

It's not that.

It's spending avoided. Right. It's the savings. Never taking it in the first place. That makes

Okay. I'm gonna read this real quick as long as, that's the case because I I think it would be, a little complicated and also debatable. You know, if they receive, let's say whatever it is, dollars 5,000,000,000, whatever it is for a particular project. But if those funds haven't been expended, I just think we have to be careful of at least the wording that I have for my staff and I'm going to look to see if it's specifically in the bill.

But the wording that my staff has is requires utilities to promptly and I understand we took out promptly pass the financial benefits of federal funding on to rate payers.

I'm just saying there may be some instances where they're receiving, money for a project but it doesn't necessarily translate to how you would translate that to the actual rate payer. And if it's not clear specifically, I I just think, Mr. Chairman, it probably should be, you know, to state what they're now stating in committee as opposed to, you know, what I understood that it says. But I'll read it right

I think So If I if I may, I I think the amendment actually gets to the the concern that you're raising. So with taking promptly out, it means that the CPUC can find the appropriate timing and process, to make sure that the that any, you know, refunds to to the rate payers, happens in a in a timely way that makes sense for their process and for the economics of of the company as well. I'm sorry. Let me maybe restate what I'm saying.

What I'm saying is because a person let not a

person, an entity receives money, let's say for a project. They then build the project. I don't know that we assume that because now the rate payers didn't pay for it, that the rate payers would get a refund is what I'm saying.

Not a refund. The savings. They're not paying this. So let's say you have for a project, you receive $5,000,000,000 in alternative financing. Maybe it's a public loan.

That is $5,000,000,000 that you now do not need to request from rate payer funding. And so we would want to make sure that in the, proceeding, there may be other rate payer funding that's being requested, but we would wanna be sure that that 5,000,000,000 is not being requested since it's already been received through a different source.

Okay. So I'm reading from the analysis on page three of nine and it says number six. This bill requires the CPUC to require each utility to promptly deliver to the rate payers the financial benefits of tax payer funding received including all value to or savings expected to benefit the rate payers.

So not taking the 5,000,000,000. Not charging.

So it's kind of like not double dipping. Yeah. Okay. Right?

If you have any

chance to remove that word from that.

If you're

And the question that's good enough.

So that they don't they don't have to So if they get some of this funding, they don't have to then go to the rate payers and say, hey, you need to pay for this project. If they already got funding for it. We just want that to be incorporated into the analysis and

transparent. Okay. Well, I'm gonna support the bill but I do want for the record to mention, I think that's a slippery slope there of not clearly defining what we're talking about. Because as I read it, it's saying what I've already described now a couple times and, that clarification, isn't in the bill itself. So I'm going to support it.

You know, I think transparency is good. I think we should be advised of funding that's received. I agree with double dipping. I agree with all that. I just think, the way that this is written, this one particular, comment, I think just, opens it up for confusion where then the c CPUC can come back and say, well, oh, then you need to give the rate payers back $5,000,000,000 of savings when may maybe they hadn't even charged it.

So I just think, it's not as clear as it potentially could. Yeah.

Okay. Yeah. And we'll take another look at it.

Thank you. Thank you. Appreciate it.

Fair enough.

I'll move the bill when it's, ready to do so. Okay.

This is moved. Senator Stern.

Maybe a helpful clarifying point for you guys to keep pulling the thread on here. Promptly is being removed in the by the the the amends from the committee. So the word promptly is now gone. So it's just to to to deliver to rate payers the financial benefits the taxpayer funding received. I guess the question maybe for you all to tease out going forward is what is the financial benefit?

And so is the financial benefit imply the full amount from the Federal Government or is is that some different amount or is that about a rate payer benefit sort of getting to a little more precision on Do you guys have a definition of sort of how you quantify financial benefits if I may through the chair just to sponsors? Like, is there Is that sort of a commonly understood thing or or referenced in the definition or maybe that's the right area to?

That would be of the process. That would be that would be occurring at the CPUC.

At the CPUC, they'll determine what the quote unquote financial benefits are.

Correct. The utilities would demonstrate, you know, this is how much savings we think here's where it's coming from, and they would reflect that in their applications to the commission. We received this money from the DOE. So we have calculated that to mean be this amount of savings that we no longer need from rate payers on this project here.

So it doesn't necessarily the intent isn't to imply that it's it's the identical benefit. It's the identical total amount of federal funding received. It's the

Correct.

That's why so the the $15,000,000,000 loan is a great example. $15,000,000,000 that PG and E has calculated. And that was one of the impetuses for this bill. Okay. Calculated and and announced widely, this should be over a billion dollars in customer savings.

So we don't have any mechanism right now to actually see where the billion dollars is saved, and to pinpoint what proceedings is this money sort of relevant to. So that we can be sure that we're not double dipping.

Yeah. So that's the process that this sets

K.

up for. Yeah. Okay.

Thank you. Senator Grove is left. Anyone else? I don't know. You can use it okay if we she

Appreciate that. Yeah. Exactly.

This is our next author is here. Let's see. Yeah. Can we just move on? I'm sorry.

So I I just wanna follow-up with my good colleague asked those questions. So you said it would be a refund to rate payers but the witness said there's no refund to rate payers.

Well it would be it would be taken out of the total package that of the funding that the utility needs. Right? So in effect, it it's not drawing down from rate payers dollars that needs to fund projects.

So let's just take it. It's 15,000,000,000 for PG and E. Right? That was asked or granted from the Federal Government. So like mister Wedge said, they the employees all participated in that, help secure those dollars, which makes sense because they would have work.

Right? For the for the, utilities and they would have work on bigger projects. That would be an investment for a project that may be a $100,000,000,000 project. So Correct. And when you just separate it out so that none of that money is used, you said none of that money goes where?

Because some of that money, that $15,000,000,000 could go to contracts, could go to securing equipment, could go to, you know, a variety of things that would help set up that project that could be, let's say, a $100,000,000,000

Where the employees would get to work that. We get to build a project and then then a total project would reduce rate payers expense at the end. How do you expect them to identify the $15,000,000,000 if maybe, I mean it could go as low as somebody needing a stapler on their desk and they use that money. I mean I know that's a silly analogy but you're not going to spend $15,000,000,000 in one place.

Right.

It's going to either go to hiring more employees, existing contracts, engineering, sequa, everything else that has to be complied with.

And so how do you say that that doesn't get spent or go back to the rate or or else it has to go back to the rate payers?

So if in your example, if it's a $100,000,000,000 project and you secure $15,000,000,000

k.

Of public financing, then theoretically and this is and it it's it's partially vague because we're allowing for the CPUC to determine some of this process. Right? And have the flexibility that they need. But, but in that example, a $100,000,000,000, $15,000,000,000, then you need $85,000,000,000 worth of funding anymore. So you don't need a $100,000,000,000 from rate payers to pay for that project anymore.

You got 15,000,000,000 from taxpayers. So now you need 85,000,000,000. Right? So that so that's a $15,000,000 savings.

A million. Without the 15,000,000,000, the project would cease to exist.

But they have the 15,000,000,000 because they got it already over here from the Federal Government.

Right.

And so now they just need 85,000,000,000. Right?

Okay. So I I think that, I think we just look at things differently and and, I I won't focus on that piece. Because if there's, like I said, if the project needs a $100,000,000,000 and they secured a $15,000,000,000 loan to advanced infrastructure, do underground, you know, line work or whatever the project is.

It can be for whatever.

It can be for whatever. But

It's just the it's the big dollar amount.

What what I'm saying is is that, if a contractor needs a $100,000,000,000 and a 15,000,000,000 comes from the Federal Government or some other place, that project still cost a $100,000,000,000. Yeah. And in the meantime, they have let's just say it's undergrounding. Right? And we're putting this we're putting lines underground which California is kinda requiring because of fires and things like that.

So they're doing all this undergrounding work. The project still cost a $100,000,000,000. Yeah. We just got a credit from the Federal Government in order to do the project to complete it to comply with California law, which would not necessarily I don't know that it would reduce rates. I think it would mitigate wildfires and maybe there's a cost savings there.

I just don't see how you track the 15,000,000,000. I'm all for transparency and I'm trying to help. I just Yeah. I'm just trying to figure out Maybe my witness can help

if I'm not clear I'm not saying this clearly.

I just don't see your reasoning.

My witness can help.

Yeah. I I guess I'm a little bit perplexed. So, it really is if if the utility has a project again that is a $100,000,000 and they secure 15 of it from the Federal Government, then they no longer need to ask rate payers for a 100. They need to ask rate payers for 85 because they already have 15 in the back.

So it still costs a

100 fifth The project is the same amount as spending a $100.

It's just that because they got taxpayer dollars to cover 15,000,000,000, they don't get to go to rate payers and say, we need this whole 100 bill anymore. We just need 85 because we already funded 15,000,000,000 of that. It still adds up to the 100 that they need.

Right? Right. No. I see what you're saying.

project was a $100,000,000. I just, Yeah.

The

It's Aye, I think the double dipping just to, to, to add to that, is just to make sure that you're not receiving, and I'm gonna use different numbers, let's say. You know, you're not receiving $10,000,000,000 for this undergrounding project, but you also have an open application for rate pay for $10,000,000,000 of rate payer money for the same undergrounding project. Right? We don't wanna get pay risk paying twice for the same thing. So you just need so utilities would need to tell the CPUC, hey.

We already received $10,000,000,000 for that undergrounding project. So that's 10,000,000,000 less that we have to ask for over here from rate payers because we received it over here.

And everything has to be approved by the PUC ultimately.

I know everything has to be approved by the P P CPUC and I understand that. I'm just trying to say that if you have a $100,000,000,000 project and let's and again, sticking to undergrounding. And that's what it costs the utility to do it. If if that's what they cost the utility to do it. The jobs are there.

Everything is there. It's a requirement. So a lot of times, California policy exceeds anything that's done in any other state. And so if they can get help from other places, like the Federal Government, we get help from the Federal Government to pay for medical rates. We get help from the Federal Government.

So basically, you're if you switch this to something else that's not in the energy department, because we get billions of dollars for people that need Medi Cal. You're saying that if the state passes a piece of legislation or or does something that that Medi Cal is a higher rate, that this money can't be credited and has to go back to the the provider or back to the Federal Government who gave us the money in the first place.

I don't know enough about Medi Cal to follow

that one.

But but If

this was if if and you're using your same scenario, the $15,000,000,000 came from medic from the Federal Government for Medi Cal, and then you're saying the doctor provided services and got reimbursed at 50%, you wouldn't be able to give the doctor the 75% that he deserves because we got the money from the Federal Government. So I know it's trying to I I guess I shouldn't have gone down that road. It's too confusing. I'm sorry.

I just am trying to understand how you think that getting $15,000,000,000 from the Federal Government on a $100,000,000,000 project is a cost savings.

It's it's

15,000,000,000 less from rate payers. Okay. Because they received it. Because the utility has received the money from an alternative source. Okay.

Yeah. It's like It's like saying if, if I

don't want to say I'm

buying a car. Yes.

Right? Mister Nilo, if I'm buying a car follow this

car. Exactly.

Mister Nilo, that's okay.

Go ahead.

I would be happy to sell you a car right here.

So use your car example. Okay.

So if you, if you are buying a car and the car costs $40,000 and you get, you have $15,000 right? Then you don't need the $40,000 anymore on a loan.

Agreed.

Right? You need forty minuteus 15. What's the math? 25. Right?

So you need $25,000 as a loan. Right? Do we agree on that?

Yes.

Okay. Good.

So okay. Good. So, so that's the same analogy. Right? If you are a utility and you're saying I need a $100,000,000,000 for this project.

I said agree.

And then you go get a loan for 15 of that.

Loan is the key word that they have to pay back. Right. Go ahead.

Yeah. Yeah. Yeah.

So So they don't actually get to keep that debt. They have to pay it back.

Right. Right. Well it's like a second mortgage. Right? It's kinda like a second mortgage.

But they still have to pay back the loan.

They right. They do. They do. Okay. Well, maybe PG and E wants to come up and talk about how it worked.

Oh, okay.

Maybe PG and E can.

I mean, if you're getting a loan for $15,000,000,000 from the Federal Government, you obviously have to pay it back. But now you're gonna pay back the loan and credit $515,000,000,000 to the rate payer, which I think is great. I just don't think you can do that.

Essentially, the savings here all comes between our current borrowing rate, which is about 6%, and the borrowing rate between Department of Energy, which is probably about 3%. Okay. It's tied to the it's tied to a marker. So that that 3% savings over forty years, whatever the loan is, that's the savings. We credit that back once a year to customers.

Assuming we get the money, we have not actually received any of the money from the Federal Government. We're still negotiating with DOE. So this is a process that already exists to PUC. We're already filing these reports, I believe, at least quarterly, maybe semiannually. So we don't have a position on this bill.

We think it's fine as is.

Okay. So it's just creating the transparency for state

for federal loans as well and grant

And again, I apologize. And just, you know, I just couldn't follow I mean, if you get a loan like I said, if you I couldn't follow the fact that if you get a loan from the Federal Government that you have to pay back and this bill is gonna require you to give that same amount of money back to the rate payer. That that's we call double dipping. That's double dipping on another side that the utility has to take care of.

It's the benefits. It's not the exact dollar for dollar.

Okay.

As you said. Okay. The benefits.

Thank you. Thank you for trying to answer my question. It's all good.

Senator Neal.

I think we might be making this more complicated than it needs to be. Allow me to try to simplify it. Great. If the PUC has approved rates based upon costs that subsequently are reduced, that the rates have to be reduced accordingly. If there's a $15,000,000,000 loan assumed that's gonna pay 6% and subsequently they get 3%, those rates have to be reduced to reflect the difference between the six and the 3%.

If the PUC authorizes rates based upon $10,000,000 that are gonna be paid for, underground undergrounding and the utility gets a grant to pay for that, then those rates have to be recalculated to recognize that reduced cost. I would think that that's already done. Wouldn't it would seem to me completely dishonest on the part of the utility and and a abdication of duty by the PUC to not subsequently alter that. So I'm gonna support the bill but I would because there are reporting requirements here too.

But on that particular point, I would think that would be already taken care of.

But at any rate, again, I think we made this a little more complicated than we might have.

Your explanation was great. Thank you.

It was great. We're gonna go to you first next time. It saved us a lot. It could've saved us a little bit of time. Thank you.

Thank you, Senator. Any final questions, thoughts? No? Okay. Appreciate the the dialogue and Yep.

Give you the opportunity to to close. I know it's been moved by No. Oh, I'm sorry. Right. Yes.

Yes. Okay. Go ahead and close.

Yeah. Okay. Thank you for the conversation. You know, I mean, at the end of the day, we're trying to protect rate payers, trying to make sure that there is transparency and accountability. And we welcome when IOUs can find more cost savings, especially when it can benefit rate rate payers as well.

And so that is, at the end of the day, the goal of this bill and respectfully request an aye vote when you have a quorum.

Thank you.

Thank you.

Thanks

very much. It's been when appropriate by Senator Richardson, we'll we'll we're still win for a quorum. Okay. Thank you very much. Let's go now to a Senate member Petrie Norris.

Sorry, Senator. It's a Senate member award. Who's here to present AB 131.

Thank you, mister chair and good morning members. I am pleased to join you to present AB 131. This is a public utilities and resources code cleanup bill. I'm happy to accept the committee's amendments. Thank you and your team for your work on this measure.

This bill incorporates requests from the CPUC, PAO, CEC, KISO, as well as representatives of electric co ops to remove from statute defunct entities, align reporting deadlines, eliminate duplicative requirements, and clarify existing provisions. Some of the highlights of the bill include, removing references to the power exchange and electricity oversight board, both of which have been defunct since the early two thousands. The bill extends the sunset of the Energy Conservation Assistance Act. It clarifies that electric co ops are not to be considered electrical corporations by default.

In some, AB 131 addresses needed to code cleanup provisions.

Perhaps not the sexiest bill on the docket for this year's Senate Energy Committee, but a important government house heat keeping measure nonetheless. I am joined, I think, we've got, Annabel Hopkins with, the Public Advocates Office to offer, I think, a couple of brief comments and support and then answer any technical questions that may arise.

Good morning. Thank you, mister chair. Annabel Hopkins with the public advocates office. I will just share a few brief words about the components of the bill that pertain to our office. As you know, the public advocates office is the independent consumer advocate at the CPUC.

It is our statutory mission to advocate for affordable, safe, and reliable utility services consistent with the state's climate and clean energy goals. We support this bill, AB 1301, and thank the author for her work on this. This bill, amongst other things that are very important, would change the Public Advocate's Office's annual report submission deadline from January 10 of each year to February 1 of each year. Very flashy, very sexy, very important work here. This is actually really crucial to the functions of our office.

By making this minor change, we'll be better positioned to report on the previous year's efforts and accomplishments. It'll also align the release of our annual report with that of the PUC, the CEC, and Cal ISO. Happy to answer any questions that you have. Thank you.

That was when you went inside. That's what it says. Yeah. Yeah. Okay.

Great. Thank you. Other folks who wanna speak in support?

Mister chair and members, Don Gilbert on behalf of the Golden State Power Cooperatives. We they think it's a very sexy bill and support it.

Thank you. Alright. Other folks who wanna weigh in support? Anyone who wants to express opposition concerns? Alright.

A motion when appropriate by my colleague. Any other questions or thoughts from the committee? Things people want to raise? Alright. We'll give you the opportunity to we'll we'll take up for a vote when Okay.

Thank you, mister chair. Let's go to your We ask for your aye vote at the appropriate time.

Thank you. And now I think you've got AB 2463?

Yes. So thank you, mister chair. I am pleased to join you today to present AB 2463. This is a measure to ensure that when the CPUC authorizes utility profits, the decisions are transparent and accountable. As members of this committee well know, California has some of the highest electricity rates in the nation.

Many of our constituents have seen their bills increase and skyrocket by some 40% for the last three years alone. Together, we have been working to identify every opportunity to drive down rates in both the short and the long term. One thing that has gotten a lot of attention and scrutiny is the return on equity, which is the profit that utilities earn when they make infra when their shareholders make investments in needed infrastructure. What this this bill does is actually really quite simple.

It says that when the CPUC is setting an authorized return on equity, that they show their work, that they disclose the models, the approach, the analytics that help them reach that conclusion in order to help both us as the legislature understand those decisions, to help stakeholders and advocates understand those decisions, and to help the public as a whole understand those decisions.

So currently, it's a little bit of a black box. We wanna bring more transparency and accountability to that process. I think this is more important now than ever. As you know, we are in a moment of really historic investment in California's grid. We need to ensure that we are doing this work as cost effectively as possible.

So I appreciate your partnership in this work and respectfully ask for your aye vote.

Thank you. Thank you, madam chair. Appreciate it. Anyone who wants to voice support for the bill?

I think you've got Oh, yes. I think I'm joined by Michael Colvin from EDF. Thank you for being here.

Good morning, mister chair and members of the committee. My name is Michael Colvin with Environmental Defense Fund. EDF has been participating in the determinations of the authorized return on equity and overall capital structure of the utilities for the last several cycles. And I've personally been involved in these cases for I'm dating myself fifteen, sixteen years now. And I would like to emphasize what Assemblymember or Petri Norris indicated that this is a little bit of a black box.

And having some of this transparency is gonna both help us as advocates, but also help the legislature for sort of the next steps of what is going to be needed for making additional changes for the return on equity.

I did wanna call your attention to subsection f of the bill, which has, which directs the, PUC to open a new rule making specifically to think about from '20 from now through 2045, what load growth would look like for the electric utilities and what the changes to the gas system investments would look like over that same time frame. So that way, we are making smart decisions about how we make future investments in our infrastructure that better align with our longer term state goals.

And doing that in sort of that rule making fashion makes sense. That way, you're not arguing out in one particular determination, but you're sort of having a more planned approach for this.

Stepping aside from all of this, I recognize cost of capital and, return on equity is not the the easiest of topics to understand and so having a little bit more of transparency here is gonna be extraordinarily helpful And it's gonna be helpful for both ensuring more affordability for our bills, but also making certain that we are making the right investments into our capital infrastructure that led us to where we need to be in the long term.

And so with that, EDF is very proud to support this bill and we pass for your eye vote.

Alright. Thank you. Yes, sir.

Will Abrams with the Utility Wildfire Survivor Coalition, and we're, taking a support if amended position on the bill. Certainly appreciate, the the motivation behind the bill and the intent of the legislation on transparency. We're just really hoping that this takes a few more steps further to really take action around this. We know that ROE is not aligned with our public interest outcomes. We understand that ROE is up here and our our, how the utilities are performing on wildfire safety, paying their victims, affordability is down here.

And so we just support the author's, intent here with the transparency. We encourage further steps so that ROE is not at odds with our public interest outcomes. Thank you.

Thank you. Okay. Other concerns from the from members of the public. We'll go to the committee. Senator Becker.

Just wanna thank the author for this bill. Appreciate the transparency and I'll

move the bill to appropriate time.

Thank you, Senator.

Senator Wiese. I

Thank you.

remember when I was first elected and was on utilities and energy in the assembly, this was the one thing that just I could not understand how you could get a guarantee of a return on your investment. And I am so glad that now as chair in in assembly of utilities and energy that this is one of one of the the your package to to have this transparency and I really appreciate it. I will be supporting it without a doubt. Thanks.

Thank you, Senator. I appreciate that.

Thank you. Okay. The bill's been moved when we have quorum and we'll give you the chance to close.

Alright. Thank you so much, mister chair. I respectfully ask for your eye vote.

Thank you. Thank you. I appreciate your work on this.

Thank

you. Okay. Alright. Let's go now to Assemblymember Ward. All the way here from San Diego.

And we appreciate your patience.

Not too far from Santa Monica. That's right.

Divided by baseball teams though. Alright. You may have received one right. This is AB 1813.

Thank you, Mr. Chair and Members here to present AB, 1813. I wanna thank, the committee and their staff for their hard work on the bill and state. I will be accepting the committee amendments that are outlined in the analysis. So the backstory is in 2022, the legislature passed AB, 2316, and that directed the PUC to establish a new community solar and storage program if it benefits all rate payers compensating projects based on the full value of distributed energy resources.

In the ensuing proceedings, which I attended by the PUC, they, they adopted the community renewable energy program.

But unfortunately, that decision contains serious flaws that ultimately rendered the program unworkable and will lead to no new projects being built. Specifically, the program does not fairly compensate projects for their full value to the grid and rate payers and relies entirely on external sources of funding, which have largely been cancelled out by the federal administration.

This bill, AB 1813, makes needed changes to the community renewable energy program to ensure that California has robust community renewable programs that expands access to solar to all Californians while providing a valuable tool for

and competitive goals, all while creating high quality and competitive jobs. With me in support, I have Patrick Welch in this, with San Diego Community Power and Matthew Friedman with Utility Reform Network. And at the time is appropriate, I welcome your questions and respectfully, request your aye vote.

achieving the state's ambitious energy efficiency and climate change goals, all while creating high quality

Thank you. Patrick Welch with San Diego Community Power, Community Choice aggregator serving over 969,000 customer accounts throughout San Diego County. Our mission is to deliver on affordable, reliable, a 100%, renewable energy by 2035 or sooner. As part of that, mission, we have established our our board has established a goal of building 300 megawatts of locally cited distributed resources, and we see community solar as a a tool in our toolkit to achieve that goal.

Building locally is generally more complex than it is and more difficult than it is building the larger utility scale systems.

This bill puts forward solutions to the PUC's community solar design. It does it in a way that we think really balances the costs with also the grid benefits. And in particular, we appreciate, the bill's approach to the load modification protocols, in the legislation. Under the legislation, there's a a California Energy Commission, process called load modification, where the projects would essentially be determined to have a grid benefit and lower the demand profile of a load serving entity like San Diego Community Power.

We have experience with this process through our residential solar battery savings program.

It is a verifiable, trustworthy process that determines that these types of assets actually have a grid benefit. This bill takes that existing process and applies it to the community solar program at the Public Utilities Commission, and we think that really helps elevate these projects and makes them more economically viable when paired with the new compensation regime as well.

So in closing, just wanna mention that San Diego Community Power believes that as AB 1813 will support affordability with direct bill savings that customers can see while enabling the deployment of reliable local clean energy resources, and we urge your aye vote today. Thank you.

Thank you, Mr. Chair, members of the committee. Matt Friedman on behalf of the Utility Reform Network. AB 1813 would jump start the deployment of distribute of distribution connected renewable energy projects paired with significant amounts of energy storage. Many customers today cannot benefit from behind the meter solar because they don't own their property or because their property is unsuitable for solar.

Net metering is a policy for homeowners, but 45% of Californians rent are renters, and two thirds of low income customers rent. Community solar would allow these customers to subscribe to shared facilities and receive benefits. In 2022, Tern worked cooperatively with the community solar industry and with assembly member Ward to support the enactment of AB 1813.

The bill directed the PUC to establish a community renewable energy program, and our support was based on the recognition that the long standing voluntary renewable energy programs administered by the utilities were neither successful nor scalable, and by the opportunity to use a community solar program as an alternative compliance option for the new solar home mandate under Title 24, the building code.

And despite the clear directives in that bill, the PUC issued one decision in 2024 and another last week, both of which embrace a completely non viable community energy program that's inconsistent with the plain language of the of the prior bill and is frankly designed to fail.

Due to the extended delays at the PUC in implementing AB 2316, key sources of federal and state funding are now no longer available. And the refusal by the commission to implement this bill and its outright hostility to the net value billing tariff supported by Tern and other stakeholders represents a huge missed opportunity and a failure of state leadership.

AB 1813 would redirect the PUC to make changes to its flawed program that will unlock the development of substantial quantities of new local solar and storage that can place downward pressure on rates. And the use of this program to provide alternative compliance for the new solar home mandate could result in billions of dollars of savings for all customers.

The legislature now has a chance to require the PUC to do the right thing and to create a real viable program that benefits the grid and all customers.

We ask for your Aye vote. Happy to answer any questions. Thank you.

Let's ask anyone else who wants to express your support for the bill. Yeah. Come on. Yeah. Me too.

Good morning. Isabella Obradio with The Nature Conservancy in support. Thank you.

Thank you.

Good morning, Chair, Members. Tyler Traton on behalf of Solar in support. Thank you.

Thank you.

Good morning, Mr. Chair. Mark Fenstermaker for Peninsula Clean Energy in support.

Good morning. McKinley Thompson-Morley with the Solar Energy Industries Association in support.

Jeff Neil, representing the Contra Costa County Board of Supervisors also in support.

Good morning. James McGarry on behalf of the Coalition for Community Solar Access, support.

Hello. Derek Churnow with Californians for Local Affordable Solar Storage. We're the bill sponsor. Thank you for Assemblymember Ward for carrying this once again. Appreciate your support.

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

Sabrina Gleitz with Axiom Advisors on behalf of the California Building Industry Association in support.

Brandon Garcia with Advanced Energy United in support. Thanks.

Allison Hilliard with the Climate Center in support.

Brandon Smith with Dimension Energy in support.

Thank you. Alright. Someone rushing to the mic.

Sabrina Gleitz again with Axiom Advisors on behalf of the California Business Properties Association. Thank you.

Thank you. Okay. Let's hear from opposition.

Thank you, Mr. Chair, Members. My name is Shelly Leiser and I'm a Senior Rates Manager at the Public Advocate's Office, which is respectfully opposed to AB 1813. The public advocate's office is an independent advocate established by the legislature to represent the interest of utility rate payers. Over the last the last three years, our office has been engaged in discussions at CPUC on how to support the development of community solar in a way that avoids raising rates for customers who cannot participate.

The term community solar can be misleading.

These projects are often cited far from the customers they serve, relying on the utilities distribution system and incurring costs that should not fall on nonparticipating customers. Last Thursday, the CPC voted out a decision that we believe will protect nonparticipating customers from increased rates and higher electricity costs. As currently written, AB 1813 unwinds the CPC's decision, a decision which was arrived at after consideration of twenty three months of input from numerous parties, including our office.

Instead, AB 1813 would impose an alternative program that will result in increased electricity rates. AB 1813 would revisit the very issues that CPC has already thoroughly examined and resolved.

We should allow this recently adopted framework to be implemented and evaluated before changing it. AB 1813 would also create a cost shift from one small subset of rate payers to all other rate payers, and this is something the CPUC has spent years trying to avoid. The CPUC's most recent decision was specifically designed to limit cost impacts on nonparticipating customers. This bill puts forward an alternative proposal that will will result in increased rates for those who are unable to participate in community solar programs.

And before I close, I wanna note that our office has proposed bill amendments, which we believe would ensure that this bill does not result in cost increases.

So at a time when Californians are already struggling with some of the highest electricity costs in the nation, our focus should be on actions that reduce electricity costs for all rate payers, not on lowering cost to a subset of customers, which will result in increased cost to all other rate payers. We encourage you to vote no on proposals such as AB 1813. Thank you.

Good morning, Chair Allen and Members. Catherine Borg on behalf of Southern California Edison respectfully in opposition of 1813. At its core, AB 1813 raises significant affordability concerns for California rate payers. The bill allows compensation above avoided cost, weakening long standing safeguards and creating a cost shift to non participating rate payers. Those who ultimately bear the burden of higher electricity bills.

Ensuring that non participating rate payers are protected from these cost shifts has been a foundation principle in California energy policy, and this bill moves away from that standard. The bill does so in part by miss calculating or miss classifying front of the meter utility scale generation as a load modifying resource. These resource types are fundamentally different. Load modifying resources reduce customer demand while the generation contemplated here supplies energy to the grid.

Applying the same framework results in overcompensation relative to the value provided increasing cost system wide.

AB 1813 also undermines the community renewable energy program established under AB 2316, which was specifically designed to expand access to clean energy while maintaining affordability protections. Several members here voted for that protection. This bill weakens those protections and risks shifting costs in a way that is inconsistent with the program's intent. Finally, the bill disrupts the PUC's ongoing proceeding to thoughtfully balance renewable access with affordability that was just voted on last Thursday.

Rather than allowing that process to continue, AB 131813imposes a framework that risks higher cost without corresponding benefits.

We support expanding access to clean energy, but it must be done in a way that is fair, sustainable, and protects all customers. State laws and mandates already add 37% to the average electricity bill for customers of investor and utilities, including Southern California Edison, PG and E, and San Diego Gas and Electric. Don't let AB 1813 add to that average. For these reasons, Southern California Edison respectfully urges a no vote. I've had passed out here a copy of the local reliability area.

This would be your new definition of community solar. So I would say that the, Big Creek to Santa Barbara would be a five and a half hour drive, and that's would be your new definition of community. Thank you.

Thank you, Mr. Chair and Members. Israel Salas with, San Diego Gas and Electric also in opposition and based on the map that was provided, the entire SDG and E service territory would be one community. Thank you.

Good morning. Brandon Ebeck on behalf of Pacific Gasimetric in very strong opposition. Thank you.

Okay. Are there folks who wanna raise concerns? Alright. We'll bring it to the committee. You know, I well, I want to just appreciate some of the comments that were just made.

You know, I think we all want to make sure that, you know, I mean, I've this committee has certainly been very supportive of a lot of the the clean energy work that is at the heart of the coalition that's come behind this. And we also certainly want to make sure that, you know, renters are able to participate as well.

And, you know, I think that the idea is that it got really strong community solar program can support the avoided cost of new transmission and distribution while also at the same time reducing load on the electric grid during peak times. You know, I think Lois Wolk did SB 43 a while over, you know, I don't know. Was it twelve years ago or something?

And that was all about creating this community solar program within the IOU service territory. And but we've seen additional efforts stymied at the PC as folks have tried to develop various community solar programs. So obviously, I understand that the agency just adopted this decision. I think it was on Thursday. I know that there's been a lot of frustrations and many awaiting a decision that ensures these projects can actually come to fruition.

I certainly appreciate some of the concerns that have been raised by the opposition. I'm also heartened to see such diverse support for the bill. Ratepayer groups, organized labor, building industry, environmental organizations. So, but I I do I so I support the bill. I'm I'm I'm I'm I think it's really important to support these clean energy efforts, and and make sure that we can roll them out around the state.

I do wanna just encourage the author to, and the sponsors as well, to remain open to some of the adjustments that might help to alleviate some of the concerns that have been raised by the opposition. I love your response to that. Selling member. I think in particular as the bill moves forward assuming it's gonna pass today.

It would be helpful to consider locating projects as close as possible to the customers actually subscribing to the programs to make sure that these these clean energy projects are actually delivering on the avoided cost.

And I just wanted to get your thoughts on that that issue and several of the others that were raised by the opposition.

Thank you, Mr. Chair. I'm happy to respond to that. But I think I may just want to take a step back to that 30,000 foot level and everything and be much more transparent about what happened and didn't happen over the last four years.

So we had agreed this would be a wonderful addition to, the the solar opportunity that we wanna be able to see, especially as rooftop solar is not only starting to, to a degree saturate, but also is being stymied by certain decisions that were there that were making those opportunities a little bit economically unworkable, but also recognizing that the green tariff program was failing and that we weren't having an opportunity for more than half of Californians to be able to participate, in, the the purchase and and the, the benefits from, new solar systems as well.

And so, the idea of community solar and storage program is nothing new, nothing that California is specifically inventing because we are seeing these proliferate in other states across the country.

Working on AB 2316, we operated in great faith that we were gonna be flexible and consistent with how we often provide this framework and the guidance to the PUC to be able to develop a new program with specific, you know, flexibility around those guardrails. And let them do their thing that they need to do during the rate making process.

But with the suspicion in mind that, you know, things may not go well there, that certain voices, certain, guidance, would lead a program and certain decision making to be essentially not, not, not math out. Right? Not workable economically.

And ultimately lead these systems, to or lead the program to fail, leave no systems to be created, no new opportunities, no new jobs to be created. And honestly and frankly, in the last four years, that's what's happened. Right? Probably not the only person in this room that gets royally frustrated by a state agency or a state entity that is overly bureaucratic and is overly missing the mark, on its responsibilities to be able to deliver on.

What the legislature is asking you to do, which is actually to have something workable.

And so, when you look back, and we actually did a deep dive through an oversight hearing this year in the assembly, with all respect to the Senate, we actually looked at what happened over those last couple of years through many of those proceedings. And what we found was that the PUC did not even go through its normal course of process and its normal course of analysis when deciding the decision around this very important new program.

And so, central to that, of course, is using the avoidable cost calculator. Other things that we were asking for the community networks that you were talking about, environmental organizations, obviously, green energy advocates, the, labor advocates, the array of of of of interests that were there saying this is the way that you should be framing up the math of how you're gonna be able to get this program to actually implement. And of course, they didn't go with that idea.

They went with this other idea. And what you're looking at right now is the proverbial train that is literally heading to the bridge that is no longer there. This is going off of the tracks and is absolutely going to crash. So our job here through AB 13 is to really come back in and say, we gave you a chance, PUC. We gave you that flexibility.

We need to narrow and better define these parameters because this is what's gonna make that program work. You know, for my fellow California elected officials, four excuse me, 12 other states in the last four years have adopted and gone through their regulatory process to make community solar storage programs work. So this is another very big example of how California is not actually making things work that we largely agree need to actually move forward.

Not just because we wanna be able to meet our green energy goals, this would go a long way to be able to do that, but because these would produce a lot of really good jobs. And we are seeing growing interest actually since the enactment of EB twenty three three, twenty three sixteen from our Central Valley communities that are looking for new job opportunities, new ways to be able to use their land a little bit more effectively.

There are multiple wins here if we can get this right. And AB 1813 is really trained to be headed in that direction. I will say that we just received the public advocates, office, recommendations, for proposed amendments under consideration just last week. Of course, I'm open to a lot of these, recommendations. Their voice is very critical in trying to make these programs work.

So we'll continue to be able to look at those as if and as this bill is able to move forward, mister chair.

Thank you. Thank you. Alright. Let me just take the opportunity to establish a quorum. Secretary, please call the roll.

[Roll Call]

Thank you. We got a quorum. Thank you Members. Let's go to Senator Becker. He know you.

Thank you. I know it's incredibly frustrating for you and certainly, you know, for me as well. Four years after your first bill, we have a negligible community solar here in this state. Community solar is valuable for the reasons we've heard, particularly for people who are renters or cannot put solar

in their own homes to be able to buy into community solar and have that serve their community. That's what other states have figured it out. In Florida, they built 3.8 gigawatts of community solar. In New York, 2.4 gigawatts of community solar. Minnesota, nine thirty two megawatts of community solar.

Maine, in fact, has more community solar than California has. And I think it's just a real shame we've not been able to, figure this out. And I think it's very interesting that we're being asked to, trust the PUC on this one. I was chair of our budget sub two, on resources and energy. And when we were asked to implement your bill and PUC came before us and Turner and others argued that their methodology was not the right approach and would not lead to any community solar.

They're treating community solar as if it was coming the same, you know, the electrons as if they were coming from, you know, thousands of miles away. And anywhere across our state, let's just say. And it we argued that we can would would kind of negate the intent of the community solar program and and certainly that's been the case. Right? We have very negligible community solar here today.

So, I'm gonna trust you and I know that you've been working on this issue. I really appreciate that and, urge us to support this bill, moving forward today so we can have a real community solar program here in California. Thank you for your work.

Thank you. Senator Reyes.

I wanna echo my colleague's comments. I wanna trust you on this. I do trust you on this because in '22 in the assembly, we voted to, for the community solar that you were proposing and it was well put together, well well thought out. It's unfortunate that we get a decision from the PUC at the eleventh hour and having to deal with how that might affect and that might not affect. But the comments from the public advocate, of course, are extremely important.

And I do appreciate that they did offer, some amendments and, their comment was that those amendments would probably, remove their, their opposition. And I think, I know how thought for you you are on your bills and trying to reach the right balance. So I know that that's something that you will be working on just as you have mentioned here. The when we earlier, there were comments about the cost savings for some and not for all.

And I think you've always been clear, in '22 as you are here that you want cost savings for all of the rate payers and try to find that balance.

I know that as the initial author and now as the author of this follow-up bill, you are the right person to do that. So I absolutely will be supporting.

Thank you, Senator. Thank you.

I apologize. I just arrived. I was in another committee. Curious. It's my understanding and correct me if I'm wrong that that on June 11, the CPUC adopted a decision establishing a process to implement the customer community renewable energy tariff that was established in '20 in a 2024 decision.

What are your thoughts about this bill? Or how would this bill interfere with that implementation of that recently adopted decision?

So they, of course, always are subservient to what the legislature is putting in statute as far as where we wanna see a program ultimately designed. I will say that that timeline has absolutely been moved. In fact, at one point, we weren't ever sure when they were gonna get around to having decision.

How convenient that they decided to go ahead and expedite that and get that a week before this committee hearing that is gonna be able to potentially, like, you know, be injected into the conversation that we're having here. It doesn't unengate, the deep concern that Aye, advocates, and others that wanna see this program actually workable, that the underlying underpinnings of, some of that decision, are still rendering this program to be economically viable.

If it's okay with you, and the chair, I'd like to actually ask mister Freeman to be able to come up to talk about the very specific math, that is at the heart of what we're talking here because we still have a time to be able to get this train back on the correct track and make sure that the end end goal are products that are gonna be able to produce the energy that we are directing them to do, produce the jobs that we want to be able to see, and really make a workable program.

If the chair would allow, I would love to hear, you know, how this bill, interacts with the with the decision. So, the chair, he would mind.

Thank you, Senator. The decision that the PUC adopted last week, really, what they adopted is a sham program that is not going to work. Everybody knows in the proceeding that the pro that the program is not gonna work. And in fact, the PUC's own decision acknowledges that the program itself cannot move forward unless this legislature, appropriates a significant sum of money either from the general fund or through the greenhouse gas reduction fund to pay, the savings that customers would realize who subscribe to these projects.

So understand the program cannot move forward without a supplemental appropriation.

The PUC's decision even tells the utilities don't spend any time or money implementing this program until the legislature takes action to appropriate new money, knowing full well that that's not going to happen. The PUC's decision links the compensation for the community solar project to the price that is currently paid under what is called the REMAP program, the renewable energy market adjusting tariff for small projects.

This price is essentially non financeable for the type of community solar projects that we're talking about, especially community solar projects that include energy storage, which is extremely valuable to the grid. And in fact, under the existing REMAP program, since 2017, only two solar projects have been successfully built, and they were only built because of the federal investment tax credit that has now gone away. There is no path forward for the viability of projects under this new program.

So with the question is, how does this bill affect the PUC's decision? It does affect the decision. It requires the PUC to do what AB 1813, what the original bill that Assembly member Ward, authored several years ago, told the PUC to do, which was to use the avoided cost calculator to calculate the compensation for community solar projects. That was the understanding of all the people who worked on the original bill.

In fact, the analysis from this committee when it was up four years ago explained that the language would require the PUC to use this methodology.

It was understood by the governor's office and other folks. The PUC simply ignored that understanding to adopt an alternative proposal that was made by Southern California Edison at the very end of the proceeding. The avoided cost calculator is what is used to compensate solar exports under the net metering program for the new net billing tariff. And in fact, when you hear the public advocate's office and the utility say, talk about a cost shift.

We've heard a lot of cost shift conversations around the net energy metering program.

From their perspective and from Tern's perspective, there's no cost shift if we use the avoided cost calculator to measure the value of rooftop solar. So you have one customer with a rooftop solar system that is exporting a kilowatt hour onto the system. They're getting compensated today under the new program, the net billing tariff program, using the avoided cost calculator. The bill that assembly member Ward authored and that was adopted said use the same methodology for these community solar projects.

A kilowatt hour exported from one project to the distribution system should be the same as the value for another one.

The PUC is basically adopted a very different approach that treats those two kilowatt hours completely differently, and therefore significantly disadvantages the community solar project and makes it impossible to move forward. So the current program is designed to fail because the PUC doesn't want such a program to exist. That's how you have to read between the lines and understand why the PUC took this action. They are not interested in a viable program.

This bill would ensure that PUC actually develops a program that's going to work and provide benefits, including the most important benefit is to provide alternative compliance for the state's new solar home building new solar home mandate, which requires rooftop solar for new residential construction, but provides an alternative compliance method for community solar program.

This community solar program, it was estimated in the PUC proceeding, under the avoided cost calculator approach that's in this bill, could provide 7 to $8,000,000,000 of savings for every thousand megawatts of community solar as an alternative to rooftop solar because the community solar program is so much cheaper. No party rebutted that analysis in the PUC proceeding, and the PUC itself completely ignored this argument in its decision. So the PUC process is just quite faulty.

I could go on, but I know I just wanted to give you a flavor for some of the critiques that we've raised and why the PUC's decision is not going to work and requires a correction from this legislature to affirm that it meant what it said when it passed the original bill several years ago.

Mister chair, would you mind if I respond to that?

Very briefly, please.

Thank you. Yeah. It's misleading to equate these types of community solar models with roof top solar that's located on a building. These projects can be hundreds of miles away, so they should not get identical compensation for their exports. We're talking about the ACC or the worded cost calculator.

And, in the original legislation, AB, 2316, was a very important consumer protection that we supported saying that any community solar program should not, force costs onto non participating customers. And that ended up being a lot of the crux of the CPC's decision was that it could not find and that it said it was not that it's not possible to show that these types of facilities avoid distribution and transmission costs, and they do not avoid generation capacity costs.

So compensating them using the avoided cost calculator, which provides these benefits, would be overcompensating them. And our initial analysis has shown that at at the public advocate's office, excuse me, has shown that the avoided cost calculator is about four times more expensive than the wholesale rate. So it would be, a pretty extreme overcompensation scenario.

In terms of the analysis that mister Friedman was referencing, we did, dig into some of the assumptions in that analysis, and it seemed that the authors were assuming optimal siting for the resources to be in the areas that would, decrease cost the most, which I think is very overgenerous and not quite realistic. Thank you.

So I guess my my my final question would probably be your response, your thoughts on the concerns that they have about using the same cost calculator, the avoidance cost calculator which doesn't really reflect the, the long distances that the energy has to travel and be equitable in in comparison to the roof, the rooftop solar.

So I think that, you know, there continues to be a back and forth between what is and is not gonna be able to work in practice right now. And I would candidly say that I think there is some perspective by many commissioners as well about what is or is not actually workable when we're turning or thinking about the the the valuation of a lot of this. We've seen what some horrible decisions have been done to the industry to support rooftop solar right now.

So let's just sort of put that over here. But as an underpinning, you know, it sort of guides, you know, sort of what their overall ethos is towards the decision making with regard to solar opportunities.

What we're missing here, because I think of a lot of that same philosophy and because of the lack of consideration for calculations that they already had been using for other programs historically, but failed to use for the consideration of this program, is a intentional outcome that is going to render a program economically inviable.

so that is the deep concern is that we need to be more specific as a legislature about what our expectations are, about what they should be bro breeding it. And it, Senator, would be consistent with exactly how they've calculated, the rate making for and the and the valuation, for previous programs that the PUC has considered over over the decades. So I think that is something that is gonna be probably an ongoing consideration for, further proceedings that we would actively engage in as well.

And

Like I said, you, probably, walked in just after it had mentioned that, you know, the, public advocate's office had, submitted to us just last week a list of, recommendations that they would like to be able to see. That was last week.

We are looking at those. We wanna be able to incorporate everything that we can to try to be able to meet some of those terms. And so that's my commitment as an author is, this bill, if it asks, this bill moves forward.

Thank you, member Ward. I think what I'm gonna personally, I I think, it's encouraging to see that you are working with the opposition with, regards to some of the concerns and the items that they would like to see. Especially as a public advocate, I think we, I have a little bias towards making sure that you know, I I heed their their counsel. So I'm gonna I'm gonna hold off but I'm gonna wait to see what your bill looks like when it comes before.

I'm assuming it's gonna go where does it go next?

Appropriations.

Appropriations?

Yep.

Okay. And then, and then to the floor. It's just appropriation then to the floor. I'm gonna wait to see how, the final bill looks like before, before we vote on it on the Senate floor and then I'll I'll revisit, what the outcome was and and what the concerns or lack of or what has been addressed by the opposition before I do, support the bill. But I appreciate the work that you've been doing this especially because you have history on on this on this on this front.

And I and I respect the knowledge that you've acquired on that. So I look forward to seeing what what the bill looks like moving forward. And with that, I will be abstaining but look forward to see the the final language when it comes to before me in the Senate floor.

Thank you, Senator. Well, I hope you'll be pleased with the progress that we're gonna make by the time it comes to the floor and everything. I'll give you a glimmer and hope in that I had mentioned earlier that we see a lot of interest coming out of the Central Valley for land holders there that see this as a major opportunity for economic development and for a new purpose for a lot of land that's otherwise been followed.

Another area of the state that's also seeing a lot of potential high opportunity for this kind of model is the High Desert.

I know. I'm excite I I like the principle. I love what you're looking into. I just wanna make sure that the concerns are addressed. But I I am excited to see where you're go.

I mean I Of course, we're I mean I fortunately that's what we're looking for. Absolutely. So I know my district

would definitely benefit. Thank you. Okay. Alright. Let's anything else you want to say to close?

No, mister chair. Okay. Thank you very much. I'm certainly happy to support the bill. I know you have a lot you certainly have some more work to do but important goals.

Let's let's call the roll.

Is there a motion?

Is there a motion?

Moved by senator's turn.

So moved.

Due passes amended to appropriations. Senators Allen.

Aye.

Allen, aye. Achoo Bogue. Not voting. Archuleta, Arreguin, Becker.

Becker, aye. Caballero, Gonzales, Grove, Hurtado, McNerney, Nilo, Reyes.

Aye.

Did you just call my name?

Yes. No. Nilo, no. Reyes, Richardson, Rubio, Stern? Aye.

Stern, aye. Strickland? No. Strickland, no. Wahab.

Okay. We'll leave the roll open for folks to add on. Thank you very much. Let's go to Senator Pappen. Let's I'm sorry.

Senator Pappen. She's been waiting a while. Yeah. Let's go to AB 2111.

How are you? Was it for each tie day or

You may proceed when ready.

Thank You may proceed

when ready.

Thank you

chair and members. I'm delighted to present, AB 2,111. California's transmission planning process relies on a single forecast and when that forecast misses, rate payers pay the price. This bill's premise is if you build it with room, you'll be able to cost effectively accommodate our energy needs. AB 2111 requires the CPUC to plan for multiple demand and resource scenarios instead of just one.

Right now, planning is based on a single set of assumptions about load, growth, electrification and future generation. But demand is already exceeding those assumptions. Driven by things like electric vehicles, data centers and broader electrification across the economy. When planning falls behind reality, the grid becomes very constrained. In the most recent interconnection cycle, over 10 gigawatts of proposed capacity wasn't able to do to move forward.

In part due to transmission limitations and upgrade costs. These bottlenecks limit where projects can be built, reduce competition, increase cost for rate payers and create reliability risk during periods of high demand. By identifying upgrades across a range of plausible futures, AB2111 helps identify transmission needs earlier, reducing bottlenecks and supporting a more competitive and reliable grid with lots of energy generation possibilities. With me today to testify on behalf of this bill is Miles Horton from Sonoma Clean Power. Take it away,

Miles. Thank you, mister chair and members, and thank you to the author for her leadership. I'm Miles Horton with Sonoma Clean Power. We are a community owned power provider serving Sonoma and Mendocino Counties. And we really got into this space because as we were going out to try to buy newer, cheaper, clean resources to serve our customers, we were finding that we couldn't get our hands on them due to lack of transmission.

And this is an issue that's happening all around the state. And so what's happening is these resources that we need to meet our climate goals, to save our customers money, to maintain reliability, just increasingly are not available because the transmission's not in place. And that has a lot of really negative impacts for the whole system.

AB 2111 is a really kinda common sense approach actually that basically says, like the author mentioned, let's look at a range of plausible scenarios and build transmission so that we're ready for whatever can happen. And we can still accomplish our goals in terms of climate, in terms of rate payer affordability, in terms of reliability across that range of scenarios.

We're not gonna be caught flat footed if something happens that we didn't predict and then not have enough transmission to get where we need to go. So we're very supportive of this. We just thank the author for her, for taking this on and, happy to take any questions.

Alright. Others who wanna voice support for the bill?

Thank you, mister chair. Mark Fenstermaker for Peninsula Clean Energy, a proud cosponsor of AB 2111. Wanna thank our assembly member for her leadership on this issue.

Thank you. Wanna voice opposition? Concerns? No? You just Just like to stand there.

Good morning. Kiara Ross on behalf of the cities of Belmont, Redwood City, San Mateo, and the town of Hillsborough all in support of the bill. Thank you.

Good second thoughts, I think. Okay.

Good morning. Melanie Law on behalf of Clean Air Task Force in support.

Okay. Chair member, Gail Dentis on behalf of San Diego Community Power in support.

Good morning. Kate Brandenburg on behalf of Abundance Network in support.