Assembly Standing Committee on Utilities and Energy

Good afternoon. Good afternoon, everyone, and welcome. I want to convene today's hearing of the Assembly Committee on Utilities and Energy. Before we move to the agenda, I have a few housekeeping announcements to make. As noticed in the daily file, we are now meeting in Capitol Room 126.

So if you need to be here, please note the room change. As is customary, I will maintain decorum throughout today's hearing To hear as much as possible from the public within the limits of our time, we will not permit disruptions that impede the orderly conduct of legislative proceedings. Any disruptive individual may be removed from the room. Today, we have two measures on the agenda. Once we adjourn from our bill hearing, we will move on to our informational hearing on electricity reliability.

As we get through the bill hearing, reminder that testimony is limited to two witnesses in support and two witnesses in opposition. Each witness will be given two minutes. And, as a reminder, the primary witnesses in support must be those accompanying the author or who have otherwise registered their support position with the committee. And the primary witnesses in opposition must have their opposition registered with the committee. Other all other support and opposition can be stated at the standing microphone when called upon.

And at that point, please just state your name, affiliation, and position. Alright. We do not have a quorum, but we do have an author. So I think we'll go ahead and begin as a subcommittee. And just as a reminder to members or staff who are monitoring today's hearing, we only have two bills.

So we're gonna buzz through this, I think, pretty quickly. So please join us. With that, we will begin with file item number one, which is SB 1259, Senator Blakespear. Welcome.

Thank you. I'll invite my witnesses to come up too. Come on up, please. Madam Chair and Members of the committee hello? Thank you for the opportunity to present 1259, SB 1259.

To begin, I'd like to thank the Chair for the great thoughtful conversations that we've had about this bill. Thank you for your engagement on this topic. The Chair and I both share a strong belief that California needs to be doing more to effectively govern our way through the transportation fuel transition that is underway. I think we also agree that doing so requires more information and a robust holistic strategy, and there are differences of opinion on the best way to go about that.

So while I am accepting the amendments that are outlined in the committee analysis, I know we commitment to have further conversations as we refine this bill as it moves forward.

I look forward to working with the Chair to get the details of the confidentiality provisions right. The amendments we're taking today represent a significant compromise on all sides, especially for my sponsors. I wanna recognize that. Petroleum refineries have been closing across The US for years, including in California, as an increasingly competitive global market pushes companies to consolidate operations. And the hard truth is that more will eventually close.

I want them to remain open as long as we need fuel for them, as I think everybody in California does. However, when it's time for a refinery to close, we need to be ready, and getting ready takes time and foresight. We know that personally in our own lives to take care of those who rely on us, we need to take care of our own health, and we need to make plans for a future we won't be part of. Refineries are no different.

We all know that we we will eventually die, and we will use a will to plan for the inevitable future.

For refineries, the inevitable future will be that some or that they will close one day, but right now, we don't have the equivalent of a will for refineries. I use the analogy of a will because I used to do a state planning law, and so I thought a lot about planning for the future that you won't be a part of. When a refinery closes, communities are left in the dark, and the state lacks the information needed to plan for land reuse, environmental remediation, and economic transition.

SB 1259 changes that. It does not increase the cost of doing business for refinery operators and owners.

These companies either already have this information or they'll need it eventually. In fact, after conversations a few weeks ago in ESTM, we have made it clear in the bill that existing information, if it if the information is needed, can be used to meet these requirements. This isn't about creating redundant busy work for refiners. It simply creates more transparency sooner. Under SB 1259, the state water board will develop an overview of technologies, costs, and timelines associated with refinery cleanups.

Then refiners will submit a report to estimate the eventual cleanup timelines and costs consistent with that overview. Although this is more important than they are required to this is more information than they are required to disclose today, As the committee analysis notes, it is in line with what is already required for other sectors of the energy industry. So, for example, power plants, oil wells, and wind and solar facilities. And that really is all that the bill does.

It asked refineries to provide the same type of transparency we already expect from other industries in California today.

This bill is an important part of California's holistic fossil fuel transition strategy. In a hearing we held in Senate Environmental Quality Committee this year, which I Chair, we heard from energy commission vice Chair, Siva Gunda, and others repeatedly that communities who have directly experienced refinery closures said they needed more information sooner. Without SB 1259, we'll just keep reactively facing crisis after crisis instead of planning intelligently for our future. I would like to address also some of the misconceptions about this bill.

Opponents say that the bill is so onerous that it would leave the state's remaining refineries no choice but to close, but they also say it's unnecessary and redundant with what they already do.

It obviously can't be both of those things, and it's far from being either of those things. There's also the claim that refineries have an, quote, indefinite useful life, And so it's appropriate that they hide their cleanup costs until further notice. And they say they're so close to leaving that one wrong move will send them packing. So how can they both be here to stay and be eyeing the exit?

I appreciate that the Chair seems to share some of my frustration with these contradictory messages, and I think some of the amendments that she and her committee have proposed will help us get to the bottom of things.

The more I look at the history of California's refineries, the more I worry about their future. I'd like to share a few examples. In the city of Hercules, the Pacific Refining Company closed a refinery in 1995. The city relied on bad information and committed millions in future tax revenues to the developers. Now decades later, the city is on track to pay tens of millions of dollars of public dollars more than they accounted for and was sued by the developers to make sure they paid it all.

Shell closed part of a refinery they had in Carson in 1965. Housing was built on land that was not at all remediated to safe levels, and forty years and many, many cases of cancer later, the state and the city needed to take the company and the developers to court for hundreds of millions of dollars in damages. A refinery in Ventura owned by USA Petrochem operated for less than decade in the seventies and eighties and then sat for nearly thirty years without getting properly cleaned up.

Then the EPA finally got involved and found leaking pipelines and tanks spilling onto the shoreline and threatened them with fines. Tens of thousands of dollars per day to clean it up.

Given the scale of the problems we've already seen at smaller closed refineries, we should all be alarmed that the seven refineries that are left are big. They are old, and they need to get their affairs in order sooner rather than later. Otherwise, just like in a state without a will, we're likely to find ourselves fighting in court for years about what the decedent wanted to do with their assets.

Unfortunately, the reporting required by SB 1259 won't guarantee the next California community that's hit by a closure will be ready, but it allows us to know what is coming and plan and prepare however possible. The amendments that we've taken in this committee will unfortunately leave the communities with less information than what is in in print today, and I don't take that decision lightly.

But but with the commitments to continue working on this, I think we can make this the best bill possible, and I wanna thank the Chair again for working with me. With me to testify in support, I have Carrie Birds Eye, City Council member from Benicia, and Ranjeet Deshmukh, a professor from the environmental studies department at UC Santa Barbara. And you're both welcome to share for two minutes.

Welcome. Thank you. The floor is yours.

Thank you very much, Chair and committee members. My name is Carrie Birds Eye, and I serve on the Benicia City Council. I very much appreciate the opportunity today to testify in support of SB 1259. As an elected official of a city that's experiencing a refinery closure, now in real time, I'm acutely aware of the problem that this legislation is addressing and eager for the solution that it offers.

The closure of the refinery will hit our local economy hard in the near term, putting an estimated $10,000,000 hole in our local tax revenue.

Our community does not have the luxury of decades to let the site's future play out in slow motion while viable opportunities slip away. But, the planning and coordination we need to be doing right now is extremely difficult in the absence of hard information about the refinery site. We don't have a complete picture of what's needed to dismantle and redevelop the refinery site. So, let me paint you a picture.

We could be drawing real maps right now on what we can build on with with the land is all about and when.

We what level of cleanup are they gonna need to do? Will it be limited to heavy industrial going forward because it's just too hard or too long of a cleanup? Can we put any new housing developments or retails retail outlets or parks there? How much room do we have to do that? The land the refinery sits upon today has bay views, rolling hills, and so much potential.

Limiting the refineries land to reuse opportunities to heavy industrial is like limiting San Rafael's coast to San Quentin. Right now, we have no information and it's been well over a year since the refinery had first announced its departure. We are asking refineries to do the same as almost everyone else in the energy industry, provide a closure plan in advance and a way to pay for it. I respectfully urge your aye vote on SB 1259.

Thank you.

Good afternoon, Chair Petrie-Norris and committee. My name is Ranjeet Deshmukh. I'm an Associate Professor of Energy Studies at the University of California, Santa Barbara. I study energy transitions, including how the transition in the transportation sector will affect refinery retirements, health benefits from reduced pollution, and potential employment losses. Thank you for the opportunity to testify in support of SB 1259.

Demand for fossil fuels in our transportation sector is declining and then will continue to decline as we decarbonize our transportation systems. In response, will we see some of our refineries retire in the next decade or two? It's likely, and it depends on the pace of electrification and the ability of the state's agent refineries to compete with newer out of state and international producers. This bill makes no judgment on whether the state's refinery should close.

All it says is that in case any refinery decides to retire, they need to have a retirement plan for decommissioning and remediation in advance.

And I'm sure we all agree that we do need a plan to clean up refinery sites after they retire. Existing SEC regulations require refineries to publicly disclose their decommissioning and cleanup costs as part of their closure liabilities. However, currently, refiners choose to do so only after they declare their intent to retire. And even at that point, there is no requirement for providing a comprehensive plan that includes costs, timelines, and decommissioning remediation steps.

The limited information is inadequate for both the host communities to plan for the cleanup and redevelopment and for the state to explore repurposing the remaining infrastructure like marine ports and storage tanks.

The question is whether this requirement is onerous and expensive. The answer is no. These are big corporations, and they can certainly take on the cost of making a plan just like other energy industries, including nuclear, coal mining, and wind and solar. Being transparent about cleanup costs will, in fact, help refiners develop better relations with their host communities.

I recognize that this bill will not answer all the questions about decommissioning and remediation, but this will help provide initial estimates and plans, which can then lead to finding solutions together.

So respectfully ask for a Aye vote.

Thank you. Alright. At this time, we will open it up for additional witnesses here in support. If you'd like to speak in support of SB 1259, please approach the microphone, name, position, and affiliation.

Alex Bloomer on behalf of Earthjustice and strong support. Thank you.

Raj Rizvi with Asian Pacific Environmental Network in support and with #MeToo for NRDC as well. Thank you.

Good afternoon. Allison Hilliard with the Climate Center in strong support. Thank you.

Daniel Broad with Union of Concerned Scientists in support.

Good afternoon. Christina Scrinter with the Center for Biological Diversity in support.

Good afternoon, Grishina Mohaveer, California Environmental Voters in support.

Ruth McDonald with Climate Action California in support.

Good afternoon, Chair and author. Diana Vasquez Vaestros with the California Room to Justice Alliance Action in strong support and one of the cosponsors of the bill. Thank you.

Thank you. Alright. Let's move to opposition testimony if our lead opposition witnesses want to come on up.

Thank you, madam Chair and members. Zach Leary on behalf of the Western States Petroleum Association in respectful opposition to SB 1259. I wanted to start by thanking the Chair and her staff for the significant time that has gone into this bill and then dedicated to the analysis and to the committee members as well. I know we've spent a lot of time looking at this thing and talking about it.

We appreciate that the committee analysis acknowledges the significant shortcomings in the bill and print, the fact that it may accelerate refinery closures rather than prevent them.

The public disclosure requirements could create serious market consequences and the planning assumptions that were overly speculative. Our position at Whisper remains that if the legislature is serious about stabilizing the few remain remaining refineries, it has to start with doing no more harm. And, unfortunately, we're in this bill's final policy committee, and you're being asked to vote on a bill that isn't in print. It's a significant rewrite. I think we have serious concerns about the details of the the final proposal.

I'm urging extreme caution. Many of you were here for the special sessions when bad policies were rushed through a bad process, and that ultimately did not help stabilize refineries and created a worse business environment. What you are being asked to vote on here are significant amendments to a complex policy, imposed on a complex industry with very little time to understand the full consequences.

Let's learn from the lessons of the past and reject this bill today and focus on protecting the few remaining refineries that you all know you need. We respectfully request a no vote on SB 1259.

Thank you, madam Chair, members of the committee. Keith Dunn here on behalf of the State Building Construction Trades Council. I'm here today in opposition. I do also wanna recognize the discussions that went into looking at the goals of this legislation. Legislation, which, you know, I I we all are planners.

We all like to plan for the future. Sometimes when we do that, we need to make sure that we're actually asking the right question. The workforce that safely maintains and repairs and operates these facilities looks towards their future, the future careers that they have, the careers of their families depend on.

And, you know, when we have opportunities to plan around these facilities, we need to make sure the questions we ask are the questions that we need answered, which are today, what are we doing to maintain the existing facilities that continue to need to serve the citizens of the state of California. The state building construction trades council are, if not the largest one of the largest supporters of alternative energy, alternative fuels.

We support almost every opportunity to move those projects forward. There may be some that we don't, but in general, we do. But we still rely upon the petroleum industry to provide the fuel that brings groceries to our stores, our children to their schools, and each of us to our homes. We're decades away from that alternative fuel source. I appreciate the history lesson and failures of the past that our authors discussed.

They're terrible. We used to also use leaded fuel. We don't do what we used to do in the seventies. We've learned. We've learned safety standards.

We've learned better practices from the refiners and how to make a cleaner, safer fuel. We are transitioning. We're decades away from that. Again, as Mister Leary pointed out, this legislation is critically important. We've had special sessions that perhaps some of you voted on.

One of you had your name on the bill that was rushed and probably could have used a little more more discussion. We're opposed to this bill today. We're still reviewing the the amendments that were thoughtfully prepared from the committee. But today, we're asking for a no vote on December with respect to the author.

Thank you. Alright. We're gonna open it up for additional witnesses here in opposition. Go ahead and come on up. And, sir, good afternoon.

On behalf of California's business roundtable in opposition.

Good afternoon, Chair Petrie Norris, members. John Kendrick from the California Chamber of Commerce in opposition.

Good afternoon. Dawn Koepke on behalf of the California Council for Environmental and Economic Balance in opposition.

Thank you. Okay. Bringing it back to the committee. Questions or comments? Assembly member Hart.

Yeah. I had a question for, council member Birdseye. You probably are the person that has had the most experience in a really tough situation, And, you've got a long career in the planning commission and the council as well. Microphone. It's on, but I'm probably too far away. Thank you.

And, so what do you think, could have been done with additional information earlier in the process in your community's response to the closure?

We could be looking at real maps right now, planning our future and not waiting on information from state agencies or others. We have asked the city of Benicia has asked the state water board, the California Energy Commission, and others for information about this 900 acre site, and we have no information on what remediation, what cleanup is needed. The refiner, Valero has partnered with a reputable developer who may or may not have that information, but they're not sharing that with us with our community right now.

If this bill had been in, you know, been a law five, ten years ago, we could be looking at real investments in our community at this very moment.

So you're you're stuck in trying to react whereas in the if the bill had been in place, you would have been proactively engaged in thinking about the future and getting community engagement on an economic development plan that works for the community.

Absolutely. We could be talking to investors, retailers, people that wanna build parks in this area, heavy and light industrial investors. So, yeah, I mean, 900 acres is is a lot of potential development that is essentially on ice right now.

Thank you for that. That's really valuable. And then, professor, take that information, extrapolated statewide, and what does that mean for all of us as consumers and the refinery workers, the operators of these refineries, as as we're in this mid transition, you know, depending on how you see that early in that stage or, you know, further advanced. But the the issues are there. We're we're gonna have to deal with it one way or the other.

Yeah. So my research basically looks at how this transition is potentially gonna evolve. Now we're not saying that all the refineries are gonna retire in the state, but there could be more. But that decision to retire is completely up to the refineries and their ability to compete with refineries elsewhere or imported products or whatever that is. Right?

All we're saying in this bill is that just be transparent about what the cost would be. And right now, there's, like as Carrie just mentioned, there's no information about not just the cost, but the steps taken for the remediation and decommissioning and the timelines, which are, like, so important. So all we are doing is, like, okay, can we prepare for that?

And one additional point I wanna make is this information would also be useful for the state, especially the CC, as they think about repurposing some of the infrastructures. For example, if the state chooses to rely more on imports, do we need more storage tanks?

Can we repurpose the existing storage tanks for petroleum products instead of crude oil? Can our marine ports, you know, accept those imported products? Like, do we have that capacity? So that information will also be useful coming through this particular bill.

Thank you very much for those comments.

Assembly member Wallace.

Thank you, madam Chair. You know, I think we do talk a lot about transparency, and I think that's important. We're talking about where we are in our transition to, you know, more renewable future, and I I'm appreciative of that. What I hear about often in my district, though, is is the costs. And so I'm sort of curious about what that's gonna look like with this measure goes forward and maybe the opposition can speak to that.

Is this a bill that's gonna increase cost for consumers and increase fuel prices? Because that's something that is really important to my district. It's a heavily commuter district, and so we'd like to hear more about that.

Keith Dunn, State Building Construction Trades Council through the Chair, if you can respond to that. You know, it it doesn't take a academic or, Environmentalist City Council member to answer the question. Go out on the streets and ask folks if the price of fuel is too high. There's a lot of factors go into that.

But I can tell you the more that we write the obituary for the future six that are remaining here, the more we're gonna have business decisions that drive them out of the state.

Planning is great, but it's only as good as the questions that you ask. And the questions that we ask are preparing for their exit, not to sustain and maintain until we get to that just transition. I can't say that enough. Go talk to your constituencies. We all talk about affordability here.

It's a great little word, but it actually has meaning when you go out and talk to real people who are impacted mostly by the price of fuel. And some of this is driven by world events. But when we're asking questions about planning and all we're asking about is the future demise and the the exit of, we're asking the wrong question. And that will impact every single Californian's pocketbook. Every single one.

And if I may respond on on the bill and the proposed amendments, our one of our major concerns with the bill is it puts us in potential conflict with our federal reporting requirements. As you know, we are heavily regulated at publicly traded companies at the SEC, at the federal, county standards board, and with the gap reporting requirements, the generally accepted accounting principles at the federal level.

What this bill and the proposed amendments from the way we read them would do is put together a potential ten year plan of when we were gonna close that would remain confidential.

But those plans may be in that plan may be inconsistent with the plans that we are telling our investors through the SEC and reporting requirements that we have to do and puts us at conflict if the state is now requiring us to develop something that is misleading or mischaracterizing our plans in the future as companies. These are multibillion dollar assets.

We are continuously trying to get investment to continue to do the turnarounds and the maintenance needed, and this bill potentially sends the wrong signal of closure signals to the markets. And we think that has severe consequences at a time when California needs us more than ever.

Do you do you mind if you answer this?

yeah. I actually was gonna ask the author if you wanted to respond to that point about the potential conflict or if you'd prefer one

Going

of your witnesses to do so.

The witness too if he's

Thank you.

Able to. So, I mean, to be clear, like, I don't want California's refineries to retire before they need to retire. Okay? We need those refineries, and they have supported California's economy for, like, decades. All we are saying exactly.

But all we are saying is that we just need a plan. This bill doesn't say that you you're gonna retire in, like, ten years or twenty years. There's no timeline for an actual retirement. All it is saying, like, if you choose to retire, these might be the cost and this might be the remediation steps that you might take, and that's all there is. Right?

In fact, I totally understand the affordability question. Like, I care about Californians, and we shouldn't be raising those costs. But we should plan for the potential retirement if they happen. Right? Because the decisions depend on the internal finances of those refineries.

This bill doesn't give a signal that any refineries gonna retire. All it is saying is like, okay. We have this plan. This is done for nuclear, you know, power plants, for coal mining, coal ash ponds, wind and solar industry. All of them have these particular plans, but they're not saying that they're gonna retire in, like, ten years or five years.

That's not part of the bill.

Thank you. Alright. Additional questions, Mister Patterson or vice Chair Patterson.

Oh, well, thank you. Sorry. I'm in between things, so I missed the I you said, sir, you didn't want refineries to close. Maybe good legislation would be to prevent refineries from closing. I think we passed a lot of policies out of this place, not necessarily now or whatever, but just over time, I think that have resulted in business decisions and where we've had fractional amount, the number of refineries.

And so, you know, unfortunately, we're faced with the prospects of some closing. And I'm wondering, you know, maybe I don't know. It's a crazy idea, but I wonder if maybe we can come up with some of those ideas to stop them from closing. And so we don't even need a plan in the first place, because actually my goal is that that no more refineries close.

But I think my concerns with this bill is I'm not sure it seems that we're coming up with a hypothetical plan for maybe someday.

It might close, maybe ten years, maybe twenty. That's like just putting that in the air is, you know, if you think about something, it's gonna happen. And I think this Bill Kinda does that psychologically. We're saying we expect you to close and let's let's do the let's let's plan for your demise now. And I don't know if if I'm reading this wrong, but that's kind of my impression of it.

And I know that there's committee amendments.

Yes. And perhaps the author would like to respond, not to make you repeat your testimony, but I thought that, your analogy to estate planning was very useful because I think the assertion that this bill is trying to write the obituary for the state's refining sector is grossly off the mark. In the same way that when I sit down with my estate planning attorney to set up a trust and figure out how I'm gonna take care of my kids, I'm not hoping that I die tomorrow.

I want to ensure that the world is prepared for that eventuality. So sorry.

I I actually stole your analogy, but if you wanna respond to the concerns raised by our vice Chair.

Well, yeah. I mean, that's exactly right. I appreciate what you said, Chair. Because that is that is exactly the way that that this bill is framed and that we should be looking at this. I mean, the reality is that the state of California is transitioning away from fossil fuels, and that that clean energy transition is underway.

And so are we talking about ten years? Are we talking about a hundred years? The reality is that these large oil refineries, seven of them left in the state of California, they are sitting on large amounts of land, and they most of them predate the EPA. So they are actually out of step with other parts of our energy sector, specifically power plants, oil wells, and wind and solar facilities that all provide this kind of information.

So refocusing on you know, it's not what my witness himself wants or what any individual person wants.

We know that the reality is that refineries will stay in business here as long as it makes sense financially because they are a business. They're they are a private business. And so looking at the market forces that are driving the decision making is is what is going to drive what happens in California. Now to Assemblymember Patterson's point, could we be giving large subsidies to them? Yes.

We could be, you know, having shoveling money to refineries or to any industry we wanted to. But the question is, is that in the best interest of California residents? Is that something that we that we want to do? And if we are even considering doing things like that, we need to have more information about what it would look like if a refinery closed. Because we don't know if there is a large lake of oil underneath the refinery that needs to be cleaned up.

And so the the estimated decommissioning and environmental remediation costs and timelines, that's the core of what this bill is asking for. So it's asking those who are closest to this, the refineries themselves, to assess the decommissioning and environmental remediation costs. And so thinking about that ten years out or when it's ten years from now, ten years later and ten years later is not gonna be driving any of the business decisions.

They are having to assess their own liabilities when they're making decisions about whether to stay in business in California. So so I appreciate, coming back to the core of what this is.

This is not gonna drive up cost for consumers. I think there's a the specter of affordability can seem to infuse nearly every single topic or bill we talk about here. But the reality of this is that the companies are already doing this internally. We just want the state to get out of this asymmetrical information situation where we don't know anything and they have all the information and all the cards, and and we'd like to know a little bit more.

But we don't wanna put them at a disadvantage, and we're obviously not trying to put them out of business.

Well well, thanks for that, madam Chair and Senator, for for that analogy. Just wanna clarify something, and I don't think this was your intention. But I'm not suggesting we give subsidies to the refineries, by the way. I I actually just kinda wanna let let them let them operate and not give them subsidies. But is there how is oil consumption I mean, I know California is doing a clean transition and our oil that we refine here goes to other states as well.

How how is is consumption significantly down? Or

No. And the reality is California is using about 13,000,000,000 gallons of gasoline a year. That's down from 15,000,000,000 in 2005, and a large part of that is due to miles per gallon standards that have made cars more fuel efficient. If you look at jet fuel demand, that is actually on the rise. So you are going to you need jet fuel for decades into the future.

On the gasoline side, we're seeing about a 1% decline a year. You just lost 20% of refining capacity this past year, and it's you know, we're not asking for subsidy. We're asking for changes in the state policies that are making us the most competitively disadvantaged refineries in the world.

And layering on top of bills like this that put us in conflict with our federal reporting requirements is another example of the layering effect of all the bills that California has done for the past twenty years that drive decisions that make the companies think, why are we doing business here in California? And, you know, my companies, and I've had these conversations with them, they wanna stay here.

They wanna compete, but it's the policies that have to change, and it starts by doing no more harm with bills like this.

Thank you. Alright. Assemblymember Zipper.

So thank you for for working so hard on this bill. I've missed the first part of your presentation. Could you describe when the obligation kicks in in connection with the ten year period? What what is the standard in which that would trigger the this planning exercise?

Yes. This is what we worked on in committee. And I correct me if I'm wrong, but I believe that it is two years after the bill passes and then ten years from then. So basically, every ten years.

So if a refinery doesn't have a current intention to to close in that twelve year period, what would happen at that point? Would they would would this apply essentially to every refinery that's currently operating in the state?

Yes. Yeah.

I you know, one of the things that I mean, I just think this is a prudent step. I mean, I I I don't think the the exercise of having a planning exercise that gives more transparency to what might happen to allow both the communities they're within and as well as the state agencies to have the tools that they need to plan ahead is just something that's unreasonable. I mean, it's a it's it is a it is a compliance obligation, but there's tons of compliance obligations that lots of folks who do business in

the state in the state of California already, we have hazardous waste facility closure plans that kick into place for certain kinds of facilities on the day they begin operating. So Aye, you know, I think, you know, if everyone says this isn't that this is California wanting to close refineries, I don't want the refineries to close in advance of the time that demand is reduced.

I mean, I think we have to be careful about not doing things that require importing refined fuel from other places because I think that's way, way worse than actually supporting our refineries here because it keeps the jobs here. But I just don't think this I think this is a prudent measure. I don't think you know, I think there's other obligations that require prior planning as again, you know, the hazardous waste facility closure plans kick in the day a facility begins operating for those that do.

So I don't think this is really I think if we characterize it that way, then, of course, that's a narrative that gets out there, but I just don't see that happening. And so, you know, I do think we have to be careful about making sure that we're not doing things that are pushing, you know, that are making it more necessary to import fuel from outside of the state of California because the demand has not reduced.

I mean, we should be focusing much, much more on reducing things that move us to a clean energy economy and supporting the supply side when it's needed. But I just don't think this does this. I just think this is prudent planning, so I'll be supporting the bill today.

Thank you.

Thank you. Assemblymember Davies.

Thank you, madam Chair. This goes to opposition. I know that you, were saying that, you know, these aren't the questions we should be answering right now. What are the questions we should be asking? And then who decides, what happens to the land once you decide to shut down?

Thank you.

Thank you, Assembly member. Great question. I think on the first part, it's really looking at the policies, and we worked closely with the energy commission at the direction of governor Newsom to identify the policies that are causing our refineries to be some of the least competitive refineries in the world. And how do you improve that? Changing the policies.

And so we really need to be focused on what are those policies, happy to provide that list for you, and how do we change them going forward to keep keep us competitive, keep us operating, lower the hard cost of doing business here in the state. And thank you for the second question on what what happens with this land.

And with all due respect to the council member from Benicia, I I find it hard to believe that the the company operating there wasn't communicating challenges it was having in operating in California and operating under a very tough business environment. And I think with the land who's planning what to do with it, at the end of the day, it's private property. So it's it's owned by that refinery.

In some cases, it may be turned into a terminal. And I know from discussions I've had, the state is in desperate need of terminal and capacity and infrastructure to keep fuel moving to your constituents so that they have it when they go to the gas station. And so the decision at what happens with the land at the end of the day is going to be that companies. And there may be a whole host of use for those those properties. A lot of them will have waterfront.

A lot of them have port access. A lot of them have rail. A lot of them have transmission. These are valuable assets that still have useful life.

And and I would love to give you an opportunity to respond, council member. I think that the experience that that you have gone through is incredibly useful and instructive. And I think it's fascinating that I think the opposition's of your objection to the bill was that it was speculative and, you know, baseless exercise. And so as we worked with the author, we tried to ensure that we're solving a real problem. So Venezia is navigating this right now.

So if there's anyone who can speak to what's not working today and anyone who can help us identify the gaps and what exists today, it is it is the author's witness. So thank you for being here, and I would really value your input on that question.

Thank you, Chair. Well, first of all, the city of Benicia has a deepwater port that is now currently being used as a terminal for refined product. And that we're gonna stay that way until the state tells us that we don't need our port anymore. So we are helping out the state by keeping that terminal open and bringing in large ships of refined product.

The four there's 900 acres associated with that port, and we have approximately six a 120 storage tanks, and 60 of those tanks are being used for refined product right now.

So that's stabilizing our petroleum market right now. Benisha is helping out. What Benisha wants to understand is how what can we do with the 400 acres of buffer zone that has maybe experienced episodes and, you know, product dropping on it, but hasn't really been used as as a heavy industrial site. We wanna understand what it takes to clean up the rest of the refinery acreage while the marine terminal serves the state of California.

And we've asked, like I said before, we've asked the water board, we've asked we know that the California Energy Commission has data that they're not sharing with us.

This this bill would ensure that future, communities that have closing refineries would be better prepared and would not be in the dark when the refinery chooses to go. And yes, it's private land, but it's it's our community. And Valero has been a industrial partner to Benicia, and we want to make sure that we can work with them in ensuring that this whatever development happens on this acreage is good for Bolero's bottom line and good for our community.

Thank you. Alright. Before we take any additional questions, we're gonna pause for a moment to establish quorum. So madam secretary, please call the roll.

Petrie Norris? Present. Petrie Norris present. Patterson? Here.

Patterson here. Werner Calderon Calderon here. Chen Davies? Davies here. Gonzales?

Gonzales here. Harabedian? Hart? Hart here. Erwin?

Kalra? Here. Kalra here. Pappan?

Pappan here. Rogers? Here. Rogers here. Shiavo?

Here.

Schultz? Ta Wallace? Wallace present. Sabir? Sabir here.

Schultz is present.

Schultz. Alright.

Schultz here. Alright. Great. We've got

a quorum. Any additional questions or comments on this measure? Alright. So I I wanna thank the author for your work on this bill, you know, for our opportunity to to really engage in a very authentic and open way. I I think the assertion that this was a rushed process is is pretty disingenuous.

This bill has been in print since the beginning of the year. It went through the normal committee process on the Senate side. It went through, the you know, another committee in the Assembly. Our team has been working in collaboration with the author staff, with proponents, with opposition for more than a month. So let the record show that.

And I think as we have done that work and dug into this, you know, I have arrived at the conclusion that this is an important part of a holistic transition strategy. Is it the only thing we should be doing for the rest of time in this sector? Of course not. Absolutely not.

And I think there's many people on this dais who are very open to a conversation about some of the other concerns the opposition has raised, but you can separate that conversation from the bill before us.

So with that, would you like to close, Senator?

Well, I appreciate those comments, Cher, and also the conversation here today. We're we'll we'll continue to be in dialogue with the opposition to see if we can get to any things that make them more comfortable with the bill, and I respectfully ask for your aye vote.

Thank you. Alright. Do we have We need a

We need a motion and a second. One Thank you.

Thank you.

Motion from Assemblymember Kalra, second from Assemblymember Zipper. Madam secretary, please call the roll.

Item one. The motion is to pass as amended to appropriations. Sorry. That was SB 1259. Petri Norris?

Aye. Petri Norris, aye. Patterson? No. Patterson, no.

Burner? Calderon? Calderon not voting. Chen Davies? Davies, no.

Gonzales? Gonzales not voting. Harabedian, Hart? Hart, Aye. Erwin?

Cholera? Aye. Cholera, Aye. Pappen? Aye.

Pappen, Aye, Rogers?

Aye.

Rogers, Aye, Schiavo. Schultz? Aye. Schultz, Aye, Ta Wallace? No.

Wallace, No. Zipur? Zipur, Aye.

Seven three. So that bill's on call, and we'll leave the roll open for absent members to add on. Alright. Thank you, Senator. Thank you.

Thank you. Moving to file item number two, SB 1425 by Senator Cortesi. Welcome.

Just moving down the line.

May I begin?

Alright. Welcome, Senator Cortesi.

You gotta keep it real.

Oh, thank you. Thank you. Good afternoon, Chair, members. I'm pleased to have the opportunity to present 1425. Thank you so much for that.

And before I begin, I wanna thank the chief consultant Chair specifically for working with my office and stakeholders on this bill. I'll be accepting the committee amendments as outlined starting on page eight of the analysis. As we know, California is building the nation's first 220 mile per hour fully electrified high speed rail system, and there will be massive development potential on the 500 mile corridor.

While the state is responsible for managing this land, it lacks legal authority through the high speed rail authority to regulate encroachments that may delay the building operation and maintenance of the project. SB 1425 simply enables the authority to adopt regulations to establish a permit program for encroachments within the project's right of way.

The codified permit process will bridge a gap between local property owners, businesses, and public utilities to bolster the surrounding communities and support expansion along the corridor. With us today to testify is Robert Pearsall, California political director of use US High Speed Rail, and Keith Dunn, who is here representing the building trades. With that, I respectfully ask for your eyeball.

Good afternoon. Madam Chair, members of the committee. My name is Robert Pearsall. I'm the California political director for US High Speed Rail, the very proud sponsor of Senate Bill 1425. A coalition of more than 50 leading unions, public agencies, and companies, US High Speed Rail was co chaired by former US DOT secretaries Ray LaHood and Anthony Fox.

USHSR works with its members and allied environmental and progressive groups to advocate for public support for world class high speed rail projects across The US. Senate bill 1425 will establish a permit program administered by the authority for encroachments on its rights of way. The measure allows for the authority to accommodate utilities that are trying to expand their business in the Central Valley. Right now, they cannot access authority rights of way because there is no permitting process.

While the authority is charged with managing these lands, it lacks the legal authority to regulate encroachments that might interfere with high speed rail construction and operations.

Common encroachments include utility and broadband lines, equalizer pipes, sewage drainage, vegetation management, all of which, of course, are critical in the region where the project is developing. It's vital that the authority be able to protect its infrastructure from encroachments that may interfere with or delay the construction, operation, or maintenance of the high speed project. Without statutory authority, the project will continue to experience encroachments and barriers to land development.

A clear permitting process will help ensure that the authority can protect, the project's land, facilities, and rights of way while, of course, working more effectively with local property owners and businesses while at the same time limiting unnecessary delays. For these reasons, US high speed rail supports SB 1425 and request your aye vote on this particular important measure.

And we're thankful to the Senator for authoring the bill and the committee for working on amendments, and I'm happy to take questions. Thank you very much.

Thank you.

Thank you, madam Chair, members of the committee. Keith Dunn with the State Building Construction Trades Council. I promise you after today, you won't have to see me for a month. I I'm very pleased to be here in support of this measure. I've been involved with high speed rail for almost two decades.

As we continue to learn from mistakes from the past, I remind everyone that the Central Valley, who I often call the train to nowhere, has almost 5,000,000 residents. Linear infrastructure crosses cities, counties, water, irrigation districts, bridges, everything under the sun. We've been working with folks who initially identified some concerns with this bill to try and take amendments, which I appreciate from your staff working to work those out. This project is is necessary. This project is important.

This project is part of the transition that we talked about on the bill before. We're here to support it. It's important. And the more that we can deliver some certainty in process, the more money that we can save, the quicker than we can actually get people on this train and start getting them out of their vehicles. So with that, I'm gonna be quiet, ask for your vote.

Thank you very much.

Thank you. Alright. Additional witnesses in support. Go ahead and come on up.

Good afternoon, madam Chair, members. Matt Cremins on behalf of the California Nevada Conference of Operating Engineers in strong support.

K. Good afternoon, madam Chair. Matt Easley on behalf of the Associated General Contractors of California in support. Thank you.

Ruth McDonald with Climate Action California in support.

Alright. Turning to opposition. Do we have a right. Yes. Primary opposition witnesses for fourteen twenty five.

Come on up.

Good afternoon, madam Chair and members. Brian White on behalf of Los Angeles Department of Water and Power.

First of all, madam Chair, I wanna thank you and the committee, committee consultant, Mor Shaba, for really digging into this this complicated issue. We know it's important and providing some very thorough and thoughtful comments in the analysis on this issue of, encroachments that the authority is seeking to to get authorization for. As the nation's largest municipality, that provides water and power for millions of residents, 4,000,000 residents in the city of Los Angeles.

We wanna make sure that we can provide reliable and affordable water and power to our residents and our businesses and visitors. But we have to make sure that we do this in in a thoughtful way, with respect to encroachment permits.

We have expressed our concerns with the author about this various iterations of the bill, going forward. And primarily, we wanna make sure that this doesn't impose significant relocations or or delays, with our own rights away, our own encroachment permit process that we have to do. We appreciate that the author took some amendments earlier in the process to address existing rights. And now with the committee suggested amendments, we think that these amendments are very helpful.

We think it'll get us into a better place where we eventually will go neutral once we see them in print. Of course, we'll we'll wait for that. But there

is one issue regarding emergencies, and we appreciate the fact that the author and and the sponsors are are willing to address the emergency issue. It's in the bill where the language that it would not be considered an emergency for an encroachment permit as long as we get consent. We don't know exactly what that means. It's consent like picking up the phone and saying, hey. We have an emergency.

We have to deal with this right now. That's what we do with Department of Water Resources. It's simply a phone call. So something like that or something less bureaucratic than what an encroachment permit is required is what we'd like to see going forward. So I'll update work with the author to try to get that fixed.

But for that for those reasons, we have an opposing estimate now, but we think we'll be moving to a neutral once that's in print.

Alright. Thank you. Thank you.

Sorry. Madam Chair, members, Joe Zanzi with the Southern California Gas Company and San Diego Gas Electric. We just wanna align my comments with my colleague from LADWP. Really appreciate the thorough analysis and recommendations. We think the amendments go a long way to, address a lot of our concerns. So review or hope to review them, with our experts and get to a a better place, but happy to answer any questions.

Right. Great. Additional witnesses here in opposition.

And, yes, as a reminder for everybody else, name, position, and affiliation placed at this stage. Thank you.

Hi. Madam Chair, committee, Catherine Bourg with Southern California Edison. We appreciate everything that's been done so far on the on the bill with the analysis and the proposed amendments. I'm looking forward to getting review and

Thank you, madam Chair and members. Jason Icker on behalf of the California Municipal Utilities Association opposed to the bill in print, echo the comments by LA to do EWPA special Name,

position alright. Thank you. Name, position, and affiliation only, please.

Marjolee Stanson, advisors on behalf of the Southern California Public Power Authority opposed to bill in print reviewing. Thank you.

Thank you. Five stars.

Kieran Ross, on behalf of the City of Burbank, I'll say ditto. Thank you.

Thank you.

Grace Martin on behalf of Pacific Gas and Electric Company in opposition to the bill and print.

Thank you.

Yolanda Benson representing US Telecom, the Broadband Association. Appreciate the author and oppose unless amended at this point. Thank you.

We will look forward to it. I'm great.

Thank you so much. Okay. Bringing it back to the committee, Assembly member Zibur.

So first of all, I wanna thank the author. You know, I've been someone who supported high speed rail since I was actually the president of California Environmental Voters, and I wrote op eds in favor because I think it's something we need to do for the people of the state of California, and it's a smart climate investment. So, you know, obviously, a bill that's actually trying to make sure that that is happening in a in, in the right way is something that I strongly support.

It's, for for all the reasons why, why why this is important. The

reason I'm speaking today is that I think the issues that are raised by the utilities are really, really important ones. When I was in a prior life, I

ended up spending five about half of my time for about five years actually doing entitlements for a long line telecommunications line, which ran from San Diego all the way to the California northern border. And, the issues that the utilities are raising are real ones, and they need to you know, I know that, that there's been some good movement over the course of the last couple days. And I wanna thank you, and I wanna thank the committee staff for that.

But they do need opportunities to have their lawyers look at these things. They're really crucial.

I mean, they've got, you know, just knowing from what we dealt with on that telecommunications line, the utilities potential encroachments are significant. They're numerous, and they, in some cases, they affect their ability to provide service. So I'm hoping that once they've thoroughly reviewed that, you're gonna continue working with them to address details which they may not be aware of right now.

And I think this issue with respect to the emergencies is something that I'm hoping that you're committed to doing and working with them over the course of the next couple weeks because I I suspect that they are sending all this stuff to their to their lawyers, and the lawyers are gonna need time. And I I bet you anything that they're gonna come back with some things they're gonna need fixed.

So I think these things should be handled through master agreements with utilities. And so I just want, you know, want to accommodate, I think, the way these things are done. But obviously, you know, the the goals of what you're trying to do are really important.

So Thank you. Through through the Chair. Yeah. Absolutely. We've been going back and forth as, you know, as we both know about each other.

Being attorneys, one of the first things I did when we started dealing with the opposition on this is encourage, especially the utilities, to go back and have their attorneys look at language that we were offering because it is it's important. Even conjunctives are important sometimes and things like that. So that has I I as far as I know, that's been done. We've been receiving feedback from them. Certainly, the committee staff has done a great job handling some of those same issues.

The agreements now, thanks to the amendments that we're taking, are expressly embedded in this bill as, I guess, we call around here sort of a carve out, but they're they're fully respected in the bill as preexisting agreements that, you know, likely govern a lot of the issues that an over the counter kind of an encroachment permit might, you know, might might cover. We think those agreements are probably more much more comprehensive.

Obviously, we can't do agreements for every possible I think your example is a great one in every every possible neighbor, farmer, whomever that's, you know, coming along can have a master agreement, but they can have an orderly encroachment prevent process.

And and, again, as as you know, as certainly as a community staff knows, this is about getting them in and out when they're trying to create an efficiency that needs to cut across light rail right of way to to make it as a streamline process as possible for them to walk away with a permit and go out and and do their work. Yeah.

We will keep I I the crux I did not miss the point of your question. We won't stop here in terms of the dialogue back and forth. And if they pick up something something that flares up for them in legal review, we'll we'll address it.

Thank you. I I know I know you would never do this, but, I mean, sometimes, you know, you've got issues that are raised by opponents and you realize that there's a, you know, a that that's a a wish and a hope and that you, you know, we discount whether or not that's really necessary. And I think that the point I just wanted to emphasize is that this language is gonna be really crucial.

And so I hope that when they come back, if they do, and I suspect that they will, once their lawyers look at this, that you're gonna be working with them to really try to address those.

Short answer is yes.

Thank you. Assembly member Pappan.

Thank you, madam Chair. I don't have too much to say other than I'm gonna vote for the bill with trepidation. As high speed rail comes through my district, very tight quarters along the peninsula, you know, what does operating right away mean? One man's operating right away might be some very valuable land to my community.

And so I will be looking with benevolence to the high speed rail authority as it comes through and how a right of way might be handled through what I consider to be extremely tight quarters.

As you you're out in the valley now. You get in my parts, and we're surrounded by water on both sides. It is narrow to say the least. So there's not a question, but you look like you might wanna add something. And I'd love to hear from you on the record.

I'm with US High Speed Rail. We're based in Washington, DC. Although I'm based here, we are not with the authority. So I certainly do want do not wanna speak on their behalf.

Oh, I would've taken it if you'd like to. I I've been to

the federal rental authority too for for various matters as it relates to the railroad that comes up my my the spine of my community. But that's alright. Welcome.

Alright. Seeing no additional questions oh, sorry. Assembly member Schultz.

Thank you very much, madam Chair. I'll be brief. Senator, thank you for the bill. I will be supporting it. Like, my colleague from West Hollywood, I have long supported the project.

The one thing I would be remiss if I didn't just ask of you is to continue engagement with the city of Burbank, which is another community through which the project will run. And specifically, the Burbank to Los Angeles final EIR does note impacts on the Burbank operable unit, a Superfund site that's gonna be impacted by construction for the project. So just please do continue to engage.

We obviously want the project to be a success, but there are unique environmental concerns as it relates to that particular segment of the project. And we just wanna make sure we get it done the right way.

Thank you, Senator.

Thank you. And and we are aware and have been aware of of of those issues.

Alright. Okay. We've got a motion and a second. I see no additional questions or comments. Senator, would you like to close?

Thank you very much, Chair. The amendments, I think, are really extensive and have covered some of the concerns, and it's understandable. I think as recently as last night, yesterday afternoon, I was doing my final final review of those to make sure I was completely familiar. The scope of right away, which my my friend from the Peninsula right next door to my district who's worked so hard on Caltrain and and the right of way there trying to adopt high speed rail.

We understand that's a, you know, sort of probably a narrower definition of right of way in that particular area for high speed rail when they get there officially.

But I I think the committee staff has given us this really comprehensive now it wasn't in print before, but they've given us this really comprehensive description of what would constitute right of way. If you see anything there even now that, you know, another word, another thing that needs to be added based on your experience on the peninsula, we we would love to hear that. And with the with the committee's consent, we would, you know, add that in. We're not trying to miss anything. That's for sure.

It's so important on a bill like this for all parties to make sure all t's are crossed, all i's are done. And I do wanna just say for the record, because I I also think it's it's fairly recently amended language. On the bottom of page five of the RN, it says the authority shall establish reasonable notification and coordination rules for emergencies related to encroachments. That that does not require consent.

That is a follow on on a sub paragraph on page four, which basically takes emergencies completely out of the bill.

It says qualified work, which is what the bill is covering. Qualified work does not include an emergency response necessary to prevent or mitigate a threat to life, health, property, or essential public services. And then it says in terms of does there need to be a notification process, it says the parties it directs the parties to to sit down. I think it does kinda force some engagement with utilities going, you know, in months and years from now.

They're gonna have to sit down what what constitutes a notification in in the year 02/2040.

I don't know, but they'll come up with it. With that, I'll stop breaking down the bill and just, you know, again, thank you for your help with it and respectfully ask for your aye vote.

Thank you, Senator.

We have a motion and a second.

Madam secretary, please call the roll.

Item number two, SB 1425. The motion is do passed as amended to appropriations. Petrie Norris? Aye. Petrie Norris, aye.

Patterson?

No.

Patterson, no. Berner?

Not voting.

Berner, not voting. Calderon? Aye. Calderon, aye. Chen Davies?

No. Davies, no. Gonzales? Gonzales, aye. Harabedian?

Hart? Hart, Aye. Erwin? Aye. Erwin, Aye.

Kalra? Aye. Kalra, Aye. Pappen?

Aye.

Pappen, Aye. Rogers.

Rogers, Aye. Shultz.

Aye.

Aye.

Schultz, Aye. Ta? No. Ta, no. Wallace?

No. Wallace, not voting. zbur?

Aye.

zbur, aye.

Ten three. So that bill is out, and we'll leave the role open for absent members to add on. Thank you. Okay. So just a quick logistics announcement. We are going to hold this open for five minutes in the event that absent members wanna come add on. We'll do a quick lap.

K. 03:18, we are going to transition to the oversight portion of today's doubleheader and see that out. So let's go ahead and go through let's open the role on file item number one with which is SB1259 vice, Senator Blakespear.

[Roll Call

We will take a brief pause, and then we will regroup at 03:18 for, yes, for the the oversight hearing, we will be staying here in Room 126 and beginning in three minutes. Alright. We're back. I have been notified that no additional members will be joining us, so we're gonna go ahead and close out this portion of our hearing. I think we need to reopen the roles on our bills.

So SB 1259. Ten four, so that bill is out. SB 1425. Eleven three, that bill is out, and that concludes, the bill hearing portion of today's agenda. With that, we are adjourned.

Alright. We're back. Good afternoon. I'm calling to order this hearing of the Assembly Committee on Utilities and Energy. We are here to discuss the state of electricity reliability in California with a special focus on the future of the strategic reliability reserve.

We are having this hearing at a pivotal moment for California's electric grid. Demand is rising pushed by data center growth and electrification and rising faster than California expected even one year ago. Even as some of the resources we've leaned on to get through the worst hours of summer are heading toward retirement. The good news, according to the state's newest assessment, which was released yesterday, California is projected to meet its reliability standard this summer.

That summer reliability, however, is partially dependent on a set of emergency, last resort tools that were never meant to be permanent.

The strategic reliability reserve, the gas generators procured by DWR after the twenty twenty outages, still represent the single largest contingency resource on California's grid. All in all, the demand response tools alongside the fossil resources totals roughly 4.5 gigawatts. This is not a permanent fleet. Several of these assets are aging. Several are operating under expiring environmental permits.

The legislature took action just this week to keep one piece of our reserve, DSGS, funded on a short term basis. But beyond 2026, the state has not settled on what, if anything, replaces this reserve once the OTC plans retire. And this is not just a near term question. The state's latest modeling shows that even with today's planned resource build out, California misses its own reliability target by the mid 2030s under every growth scenario the state tested, including the most optimistic one.

So the central question for this hearing is not whether California is reliable today.

By the by our own metrics, it is. The question is what happens just a few years ahead and in the decade after that as these emergency assets phase out? New supply is tested against real stress, and the build out that the state is counting on runs into federal funding uncertainty and a project pipeline where more than half of tracked resources are already running behind schedule.

And I think I outlined some of these challenges because I want today's panelists to not only address the summer outlook, but directly address what is the state's contingency plan once the reliability reserve winds down, is new resource build out sufficient to substitute for these retiring reserves, and to meet the reliability gap that the state's own midterm modeling shows by the twenty thirties rather than simply to meet the growth and demand.

Should any part of California's existing nonretiring natural gas fleet be deliberately retained as a bridge resource during this transition?

And if so, how and when do we decide that? And lastly, what lessons can we apply to future emergency situations should they arise to ensure that California is not scrambling at the last minute? So with that, kind of tease up today's conversation. Really happy to welcome all of our energy principles today.

We are joined by Sivagunda, vice Chair of the California Energy Commission, Luwam Tespai, the executive director of the California Public Utilities Commission, Mark Rothleader, the chief operating officer of the California Independent System Operator, and Delphine Hu, the deputy director for Statewide Energy at the California Department of Water Resources.

So welcome. Thank you so much for joining us, and I think we are gonna go ahead and jump right in. Over to you, vice Chair.

Thank you, Chair and members of the committee. Thanks for the opportunity to be here and be a part of this conversation. I'm Siva Gunda for the record. I'm vice Chair of the California Energy Commission. And with me are colleagues from California Public Utilities Commission, DWR, and California ISO.

Collectively, we have

Vice Chair, these mics are, like, not very sensitive. So maybe scoot that thing a little closer so all the folks watching at home can hear. Okay. Thank you.

Collectively, we have a presentation to walk through the conditions this summer, some of the work we have been able to do over the last five years, really kind of lifting up to the need of reliability and how best to plan for the future and set up the conversation and dialogue for the future of reliability planning. With that, I'll pass it to Luam Tesfai from CPUC to provide a context of the different roles of the agencies.

Good afternoon, Chair Petri Norris, vice Chair, and members of the committee. I'm pleased to be here today with my colleagues, vice Chair Gunda at the California Energy Commission, Mark Rothleader from the California Independent System Operator, and Delphine Ho from the Department of Water Resources. I wanted to start with a very brief orientation of the various agencies and organizations involved in the electric sector regulation and market operations in California, and then we'll continue on with the joint presentation.

So looking at this first slide, as you see, there are five primary entities. Those represented on the panel today as well as our colleagues at the California Air Resources Board.

We have listed some of the main functions on the slide in the overall energy supply planning that we all do jointly. As I mentioned earlier, the California Air Resources Board have the role of setting the requirements for that economy wide greenhouse gas reduction, including the targets for the electricity sector and the scoping plan.

We have the California Energy Commission doing the load forecasting so that we're ready for any variations in load and overseeing the renewable portfolio standard with the California Public Utilities Commission, who conducts electric supply planning and reliability planning so that we're ready for the future conditions. And so we cost effectively supply California with clean energy. The California Public Utilities Commission also has that role with renewable portfolio standard oversight for our load serving entities.

We have the California independent system operator doing our transmission operation as well as running that wholesale electricity market and conducting transmission planning based on the integrated resource plan. And then we have our colleagues at the Department of Water Resources who manages the electricity supply backstop responsibilities included in the electric strategic reliability reserve that you mentioned earlier and managing the Diablo Canyon extension fund. So with that, I'm happy to pass on the mic back to vice Chair Gunda.

Thank you. So I'm gonna just set the stage on some of the work that have that we have done collectively, some core aspects of our work, and how we see things moving forward. And we'll connect, the specific elements of this slide into future slides in a one by one.

So at the top, just noting that following the 2020 rolling outages, there has been a significant amount of coordination and work among the agencies to look at the recommendations and the root cause analysis and ensure that we move forward with those recommendations.

One of the core parts of that is to improve our planning processes, including the forecasting process to ensure that it's not retroactive, in its assumptions, but looking forward, looking at climate change impacts and other, electrification impacts and scenarios to really make the forecasting a robust, planning regime so we can think through planning and procurement beyond that using that forecast.

So that has been a significant change in the way we all work. There is a whole range of forecast that are developed for different purposes.

And second, looking at just the development of the procurement and the supply side and demand side resources, I want to just thank the CPUC for the extraordinary amount of procurement that has been done since 2020, that included significant amount of, midterm, procurement that has been coming online, which you will see, the benefits and impacts of and also future, procurement that is currently, in planning.

So as we move forward from the procurement, the other concern we had is can we build the amount of procurement we're actually, you know, putting out there? So the important part of that was ensuring that the permitting is streamlined.

And thanks to the legislature on the 02/2005, there has been significant work in ensuring the overall permitting regime has smoothened and more collaborative and done in a way that we can move the projects more quickly. And similarly, we have also had significant progress in the processes at both CPUC as well as, Kaiso in terms of interconnection and anodization and so on. So something that you'll hear over the next few slides.

And finally, we have dedicated significant amount of work to ensure that we are well prepared for extreme events coming into 2020. We were most of us were in the middle of that.

We had to really scramble the August 15, and then sixteenth was okay. Seventeenth, eighteenth, 1920 are those four days. Really had to scramble, but we also learned a lot. And much of our work since then has been to really standardize all the work that we have done into a planning document. Kaiso currently runs the overarching plan of action for the summer supported by all the agencies.

So we have done significant work in that. Thanks to the legislature, you have given us some important tools, moving from 2020 to where we are, where we were structurally deficient when we looked at 2022. We were structurally in a deficit, and today, we are looking much, much better, and we'll talk about that as well.

So along with that, we have programs such as DSGS, ELRP, and some of the non rate payer programs that CAISO does through just sheer coordination with the balancing areas and more efficiently, using the market for reliability. So with that, I'll pass it to, Luam to walk through the CPUC slides.

Thank you. And on this slide, you know, one just the part that I wanted to add that's new for this year is the transmission permitting pilot program. So last year, at this hearing, we, announced the updates that we had done to our transmission permitting general order, general order 131E. That was the first time in over twenty years we had done those updates.

But then in addition to that, in May of this year, we did launch a transmission permitting pilot program as well as well as a visual visualization dashboard to really make some of those improvements visible to the public as well as to track some additional metrics to continually improve transmission permitting for the state.

So on this slide, you know, as vice Chair Gupta mentioned, the CEC's Integrated Energy Policy Report or the IPER forecast feeds directly into the California Public Utility Commission's reliability needs assessment and overall generation procurement and transmission planning that occurs in the integrated resources plan.

The integrated energy policy report from the CEC forecast directly informs both the longer termed integrated resources planning proceeding, which guides the load serving entities towards meeting those reliability and greenhouse gas reduction goals with the state, and our shorter term resource adequacy program that requires resources to be under contract and to show up to provide energy to the California independent system operator region. Over the past six years, the California Public Utilities Commission has issued several procurement orders, and that's what you see here on this slide.

Within our planning proceeding to increase the amount of capacity available in that Kaiso service territory. And that's totaling 24.8 gigawatts of new capacity to be delivered through cost competitive solicitations, making sure that we get the best bang for our buck for our rate payers.

Those procurement orders are shown on this slide. The first was in 2019. The second followed the 2020 heat wave that Vice Dragunda detailed, and then a third was in 2023, and then the most recent one came just this year in February. I want to highlight that most recent procurement order for 6,000 megawatts of what we call perfect capacity following an analysis of system need in that time frame.

So we're always the the main theme here is we are always reassessing things to promote future electric system reliability in light of changing circumstances, then we're ordering procurement to be done to make sure we're always ready for the changing dynamics of our grid and the growth of our state.

One important thing to note is that these procurement orders largely flowed from analysis that assumed that the Diablo Canyon power plant would be retiring when their operating licenses were set to originally expire in 2024 and 2025. That was the explicit direction of the legislature when they passed SB 846. And so we have been planning for our load serving and our load serving entities have been procuring for a system where Diablo Canyon does not exist.

As we know, Diablo still exists and so that builds in that extra reliability. The responsibility to sign those contracts for the 24.8 gigawatts, it's really split up among the roughly 40 different load serving entities under the California Public Utilities Commission jurisdiction.

So we have our utilities like PG and E or Southern California Edison, but then we also have a host of CCAs, community choice aggregators, and ESPs that are doing very large amounts of procurement. These load serving entities represent about 75 of all of the electricity load in California. And then, of course, we have our publicly owned utilities like SMUD, LEWP, and others.

So in addition to that, we expect these resources to eventually participate in our resource adequacy program when they come online, which means that they will be under contract to load serving total amount of

electricity capacity that's available on the system, but expand the total amount of electricity capacity that's available on the system to help meet that peak demand during the summer months. And that procurement planning process continues and results from close coordination with the other state energy agencies and with the CAISO. Now as I mentioned, the demand forecasts are based on the CEC's extensive work with the IPR, and that electric sector g g emissions are aligned with that overall carb scoping plan I mentioned earlier, so it's all coordinated.

And these procurement orders are for clean energy and battery storage. So new fossil fuel procurement wasn't even included in these numbers.

So with that, I'm happy to turn the next slide is also me. So I'm happy to turn over to the next slide, and this is a slide that you should remember from from last year. We've used it in a number of years, and so it's very colorful. And and I'm very happy and proud to be able to share the updates for you today. So this slide tracks our remarkable progress towards getting new resources online in that California independent system operator area.

That vertical gray line that you see represents the point of the last data update in early April with new capacity that came online since 2020 to the left of the gray line. And that future new capacity, that's not just new capacity that's hypothetical, it's under contract, is to the CPUC, jurisdictional load serving entities is to the right. And we've really seen a robust April and May for resource development, so we expect these numbers we know these numbers are growing.

Please note that this slide represents cumulative resources, so it's showing how we've done since 2020. The total number of new resources connected to the electric grid has surpassed 30 gigawatts in just six years.

Really something to be proud of, and that's where you can see the gray line intersects with that top purple section. You know, one quick note here is that this slide shows that we what we call nameplate capacity, which is the full installed maximum capacity of the generation resource. The CPUC procurement orders on the previous slide showed what we call net qualifying capacity. So our procurement orders are based on net qualifying capacity to ensure we're accurately accessing the reliability of those contributions.

As we know, solar doesn't shine for all hours of the day, but we're so we're looking really at what they're able to provide and especially paired with battery storage help to really enhance reliability for Californians.

And I also really wanna note on the slide, which I'm sure you can see is that we've really increased and accelerated our pace in the past couple of years. And so we set an all time high procurement record in 2024 with just under seven gigawatts coming online in that year alone, more than any previous year. And in 2025, we almost equaled that amount of new resources built.

On this slide, solar, which is shown in yellow, and battery storage shown in purple represent the majority of that new capacity so far, and we expect that that trend will continue into the future, but we also model for a very diverse set of resources. So we're looking to fill those in with geothermal and other resources to make sure that we round out our reliability.

That slide this slide also shows geothermal, hydropower, biomass, and biogas as well as small amounts of natural gas. It's really important to keep in mind that the load serving entities are continually procuring resources with attributes that help meet the state reliability goals. Meet the state reliability goals. In planning for a system where we are losing Diablo Canyon, our modeling shows that we need clean, firm, dispatchable, and capacity, and that's what you're seeing getting procured. So we're really being able to prove that out.

And so we're also starting to see long duration energy storage contracts that are coming online. I was at a ribbon cutting for that in Kern County just earlier this month, and so we're really seeing some of these resources that we saw as really challenging, really coming to fruition. That's not not just happening. It's from the direction from the legislature and the hard work of our agencies.

So in addition to that, the energy agencies are working with the governor's office of business and development to closely track and support procurement via the tracking energy development task force.

Really being able to look at what are the bottlenecks and having a hands on role of making sure these resources come online. So with that, I'm happy to turn over the microphone to my colleague. I do wanna just finally close that.

You know, this slide is showing a number of new resources coming online, but we're also working on energy efficiency, continuing our work on energy efficiency and real time demand response programs to help shift that landscape and load to better manage for contingencies, and we'll talk about a little bit more about that later.

A number of these programs at the CPUC include air conditioning cycling programs, capacity bidding programs, automate automated programs for electric vehicles, and so we're constantly looking at new opportunities to integrate these resources into our system.

Thank you. Thank you, Luam. So I'm gonna go now into the 2026 summer grid readiness assessment followed following my presentation. We'll have Mark Rothleder speak to, Kaisos assessment, and then we'll close with long run, planning opportunities.

So just before I jump into this particular slide, which is a summary of of what I'm gonna speak in the next few slides, I just wanna note for, the committee that as we move forward from 2025 to 2045, we are looking at about 20 gigs of load coming over the time through electrification, through that's both buildings and transportation.

We have significant chunks from that area, electrification, and another significant chunk from a data center. So those are the two things we are closely monitoring. Happy to answer more questions during the q and a. But as we move into just year ahead assessment, which is 2026, just wanna note for, the committee that 2026, forecast is looking even better compared to 2025.

Again, to, Luam's points, we have made consistent progress as a team collectively in making sure we are doing the forecasting better, planning better, procuring, building, but also having contingency plans ready to deploy if the conditions were to manifest as extraordinary during the summertime.

So some of the core reasons why we are in a better position than the last in 2020 is definitely, but in a significantly over year after year is due to the significant addition of resources, which Luam spoke to, which is about 32,000 megawatts in a variety of diverse resources. Wanted to note here, you will see those numbers, 32, 31, you know, 28. You'll see them because one of the reasons is they're fast moving numbers. They're constantly changing.

So we apologize for different vintages that you might come across.

Another, important statistic is, as you remember, in 2020 when the when we had tough conditions on the grid, it was primarily happening when the overall solar supply was coming down, the demand was still high, and we kinda spoke about the importance of net peak. And we have been able to, provide significant support during net peak through additions of storage. As you see here, the number is right now 16,000 megawatts. We expect to update that number in a few weeks again, which will show further progress.

And finally, through the extraordinary work that Kaiso has done, and the legislative body has done through, many opportunities on the market side, we have been able to better depend on the market, to plan for those emergency, situations.

It's important, though, for us to kind of keep eye on some of the federal changes. Every time the federal statutes change, whether it's tax credits for vehicles, whether it's tax credit options for supply side, you will have significant uncertainty induced in the planning process, both on demand forecasting, but also, you know, making sure the supply comes on either, you know, on time or on cost that we anticipate, which are both, threatened regularly.

Finally, we have done some work on thinking through how best to plan for long lasting extreme events. We have both the analytical capability, but there are several options that we have, which we spoke about in terms of contingencies, strategic reserves, and so on. So if the conditions were to manifest as normal, we are good.

Even under twenty twenty twenty twenty conditions and 2022 conditions, we still have surplus. But I will note, as always, while we are all cautiously optimistic, if an extraordinary coincidental event that has heat, fire, all come together at the same time, we will still have to navigate tough conditions. Next slide.

Just going through this is a table that we try to put in front of the committee as a regular template comparing summer after summer, which gives you a nice way of comparing the last analysis that we provided you with the latest analysis. So I will, point your attention to the last three columns on the, table.

As you see in going into, 2024, our demand was about 46,000 megawatts. It increased slightly or about 200 megawatts coming into 2025. And as you went into 2026, there is a little bit more about, 500 megawatts. So that's the net demand that's growing, but what has been changing the situation is really the resources. As you see, each year, we have been adding significant amount of resources on the system to earlier points by director Luham.

It's really around, you know, the 32,000 megawatts that added since start of twenty twenty. And as you see today, we have 63 66,000 megawatts of installed capacity in California. And you'll saw the backgrounder, and it does point out the importance of noting that these are resources that are installed in California. Not all of them are under a resource adequacy contract, but we do see those resources in California available, to, to go through these situations. So there are three sets of reliability assessments there for you.

One is the traditional planning. So we are in excess, so we have 6,600 megawatts in surplus. If we have so sorry. Yeah. 6,600 megawatts in surplus for 2026 if we had a, you know, normal event, normal summer.

Under 2020 conditions, those surpluses reduced to 4,500, but still significant. And finally, under a 2022 condition, it's close to 3,000 megawatts available. We do note up in red and text that this does not include a coincidental fire risk, which is very, very unlikely, but we do like to put that in that if if all things go wrong at the same time that we could still find ourselves in some deficit that we have to manage.

The next slide then kinda goes into while we have surplus and and an extraordinary condition where you could have a thousand megawatts of deficit, you know, we still do plan for contingency resources. These are incremental to the resources that are already in the ground, shown in the previous slide.

So what you're seeing here, is different sets of contingency resources that we could lean on if the conditions were to warrant. So as noted earlier, and director Ho will talk about this, we have about 3,000 megawatts in the strategic reserve, the OTC power plants. Under DSGS, we expect about 360 megawatts going into this summer. We have ELRP programs. And then what you see at the very end is a non non programmatic.

This is the balancing area transfers. This is done through, Kaisos coordination with LADWP, our bank, and other, balancing areas. And also we have the ability to request, two zero two c waivers to the Federal Government, which we have done in the past, to be able to operate our thermal power plants beyond their normal limits. So when you take all of that into account, you have roughly, you know, 4,300 megawatts of contingencies that we could lean on under extraordinary situations.

So with that, I'll pass it to Mark Roth later.

Thank you, Vice Chair Gunda. So so before I get into my material, I just wanna give a little bit of context. I'm Mark Rothleader. I'm the chief operating officer at the California Independent System Operator. And in our role, as mentioned before, we support the development of the new resources the addition of the new resources.

We do that through our transmission planning and interconnection process. And, that helps ensure that those resources that are brought onto the system are actually able to deliver the energy to serve the load, and they are usable and and useful.

In our operational role, we have the responsibility of as balancing area operator to ensure reliability, which entails constantly, balancing supply and demand, ensuring we're not overloading any lines, effectively operating the system securely, and then also ensuring that we're operating with sufficient operating reserve on a daily and hourly basis to ensure that we can sustain any loss of at least single largest contingency loss of the largest resource at any given time. Also, as part of our operational role on an annual basis, we do a summer assessment.

And that summer assessment allows us to evaluate what you what you just heard about all the resources that are coming on the system as well as the ability to meet the forecasted demand as forecasted by the California Energy Commission with a certain distribution around that forecast the probabilistic forecast around that.

So it doesn't mean that we we haven't we evaluate not just the one and two load, which is that 46,000 plus megawatt forecast, but we we also look at the tails and the distribution of that, which take you well above fifty, fifty two thousand megawatts at the tails. So long story short, we we've been performing this assessment.

And if we think back four years ago, our summer assessment indicated that we were about 1,700 megawatt short of meeting what we call a one and ten year ten year event performance standard. Obviously, that that that notion is a little bit kind of what does that mean? Well, no one wants any outage or any insufficiency any year, but that is kind of the industry balance between how much you invest in resources with the amount of reliability and ensure insurance.

You have sufficient resources to meet all conditions over the years. So that's that's what that is doing. So long story short is that the four years ago, we saw that as 1,700 megawatt shortfall. We're very happy to see the latest assessment. Thanks to all the resources that have been added to the system, we're seeing over 2,500 megawatt surplus above and beyond what is necessary to meet that one in ten year performance.

Now that doesn't mean that if we have extreme events as vice Chair Gunda indicated with coincident events of fires, extreme heat across the West, and in California along the coast that we couldn't deplete that, that that surplus. And that's why the at least in in the current, the feeling that the strategic reserve is at least still necessary for this year events. But we are optimistic cautiously optimistic and vigilant that we can get through this summer based on the amount of resources that we expect to have.

We also do a form a a stack analysis similar to what Vice Chair Gunda described, and that also indicates that we also have sufficient resources. So everything is looking good for the summer.

I will say that as an operational, we, operator, we coordinate with, the other state agencies, on a playbook, and that allows us to deploy, when we do need to have contingency events and need to deploy some of those strategic reserves. We do it in a most effective way following the playbook based on conditions that we've looked ahead seven as far as seven days out so that we are ready for those conditions.

So while the conditions are overall good and we have a surplus, we should talk about a little bit about some of the, things that are different this year. And this is not new, but it it's it's more severe in parts of the West with regards to the dry conditions that we're seeing. And the dry conditions, especially in the Colorado River Basin, are pretty extreme in terms of dry conditions.

In California, we're actually in a in a a better spot but not great. And that's in part because of the March heat. A lot of the early snowpack basically was melted off. So from a storage perspective, we are probably good. But from a from a snowpack, it's gonna be depleted very early if not already depleted.

Similarly, in the Northwest, they also experienced the March heat and they also lost a lot of their early snowpack early on. So overall, the West in terms of the hydro conditions, it could be tight, but there seems to be enough energy in storage water in storage for those peak days as long as we don't have long duration heat events, high load events.

So in terms of the weather conditions, we are forecasting what looks like for the balance of the summer effectively, the indications are that the, the probability of having higher temperatures, does exist in the West. Probably more pronounced and more likely in Northern California and in the Northwest than in more in the than in the South. Now these are all probabilities.

So we all we have to recognize that, even within these probabilities, we could have a very strong heat wave just as what they're experiencing in the East Coast, today or in Europe last week. And so with all these models, you still have to be prepared for those extreme events. And our exposure is if we have an extreme west white heat event, it will deplete not just our resources, but any resources we have available from outside the area at that given time.

The other thing that we're seeing, is a pattern. You may have heard about the, soup Super El Nino or the transition to the silk Super El Nino conditions.

And this is or as a result of, sea surface temperatures being, at higher levels than has ever been seen before. And there the concern is that with those conditions, do are we more likely or potentially more likely to experience a coastal heat event, which if we have a coastal event, obviously, that's where the load centers are, and that's where we get to those extreme high peak conditions. And and that's what happened in 2023 when we had 52,000 just over 52,000 megawatts seen as our peak.

So so I think the long the the the forecast is somewhat encouraging, but also cautious with regards to the fact that we could still see extreme conditions. And if we have those west white heat conditions, they they could tap out our supply.

The other thing is is that the dry conditions itself are indications that we could have a very strong fire event. And the combination of heat and fire potentially taking out transmission lines and availability supply, we still have to be prepared for those conditions.

The other thing is is that the dry conditions itself are indications that we could have a very strong fire event. And the combination of heat and fire potentially taking out transmission lines and availability supply, we still have to be prepared for those conditions.

Let's see. And this is the right slide. Yes.

It is. Sorry. Different color. So just to give you a little perspective, it's been three years straight that we have not had to call a flex alert. So all the things we've been doing over these years has really been paying off.

It doesn't mean that we haven't had extreme events, and we've been able to ride through those. And it doesn't mean that we may still not we may still need flex alerts, and we may still need to go into emergency conditions. But we are prepared to do so, and we are carefully monitoring the conditions that would lead to that. And as I said earlier, we are have a very good coordinated playbook that if we got into the conditions, it will not be a surprise. We are coordinated.

We will be able to deploy the resources that are available to us, and we will do it effectively to mitigate any ultimate impacts on customers. With that, I think I'll pass it on to Delphi. Oh, handing you back. Sorry.

Thank you so much, Mark. So going into the last section of just setting up the slides for the discussion on the long term reliability planning, we thought it would be helpful to just take a quick look at how we were thinking about the need for strategic reserve coming out of 2022. So wanted to this is a illustrative stacked example of all the things that could compound in in requiring a strategic reserve.

So the first piece of that, and I think I'll just Kinda qualitatively talk this through, is are we planning to ensure what both Mark and director testified mentioned? Are we actually planning to make sure the procurement can meet one intent planning standards?

Again, to the points made earlier, when we say one intent, it's probabilistic in nature. All we are talking about is if I have x amount of events in a given ten year period, we will not be short more than one e one one event over those ten years. That is the planning standard. So if we look at what happened in 2020 and look look kind of when was the previous event, it was over twenty years.

So we recognize that even though it has met our planning standards, that was a one in 10 event.

We had two events in twenty years. It is not palatable because it has significant impacts for consumers downstream. And so I think it was important for us to first make sure our planning that the forecasting, the supply modeling that we are doing is actually resulting in a one in 10 procurement strategy. So what we've recognized coming out of 2022 is that we haven't both in 2020 and coming out of 2022 is we were structurally short in making sure we are procuring that level.

And I think that what we see today with all the results that we have shown you is we are structurally long.

We have been able to get beyond the issue that we put in front of you. Second, we talked about, okay, even if we procure, can we build it? So let's say we need to procure and make sure 6,000 megawatts are coming consistently online year after year. Can you actually build it? Again, what you've seen in the in the information we've provided you is that we have demonstrated as a state that we can bring in six, seven thousand megawatts of new resources onto the grid.

So those two compounding events have been what I would consider collectively, addressed. And we are kind of continually improving our planning process and making sure the procurement is happening and we're building to that level. That leaves us two more pieces on the top of thing on top of that. If you procured if you planned and procured, if you built it to that, what have you planned enough to get through an extreme event like we've seen in 2020 and 2022?

The meaning here is is the one in 10 planning standard that we have as a general practice for the industry, does that cover an event like 2022, Or is it beyond that one in 10?

And so that's something that we've started incorporating into our analysis, and that was one of the additional aspect we've said. And finally, given that, you know, if you had a heat event and then you had a transmission like that the bootleg fire happened in 2021 happen, could you ride through that event?

So the idea here by stacking all this is not that it's likely that all of them are gonna show up at the same time, but but it was important for us to recognize that there is a worst case scenario that we have a line of sight on. So what we see here from the stack today is the top that the bottom three bars, we feel very comfortable in making sure that we are planning for it.

What you've seen in the analysis that we've shown you is both in 2020 event, 2022 event, and the normal planning standards, we are largely good, and we have surplus.

And that's what it means that we have largely addressed the three buckets that you're seeing there. The question is what extraordinary range can can be thrown into the process. There is still, you know, under an extreme, you know, unlikely probability of having a significant fire and a significant heat event happening at the same time. We still have some contingencies that we can play with.

But we wanted to start with this slide on why we asked for strategic reserve and recognizing that we were structurally short in 2022 when we were having a discussion.

What the next slide shows is that study comparison of the progress. What you're seeing there is four columns in in each year, and it'll it's kinda helpful for us to walk through and set the stage for it. The four columns are how much surplus or deficit do you have under a planning standard in meeting our planning standard? Are we able to meet a 2020 event? Are we able to meet a 2022 event?

And can we, on the top of that, deal with the coincidental fire? And and just recognizing that in the analysis, each one of them are going more and more extreme. And as you've seen there, year after year, those bars have flipped from negative to positive. And the only bar that you see that is negative today is an extremely unlikely event of heat and fire happening at the same time, and we are still exposed in that event.

So this analysis and the planning and procurement paradigm has been pretty much, culturized and inculcated into our planning processes.

And this is something that will continue to procure in a timely fashion and continue to build. So that brings into, just a few points for our long term discussion. Again, just recognizing that we have flipped from a structurally short to a structurally long position, and that has come from two core elements, improving the forecast and improving the procurement processes. Second, ongoing interagency coordination and tracking. There is a couple of, pieces that we're tracking actively, and we expect them to show up different events to show up.

One is large loads, as we have new data centers and other loads energized to the system. Are we adequately capturing that capturing them in our forecast, and are we doing a good job making sure we are planning for that? Second is around, uncertainties around federal policies. That could be both positive in terms of reduced demand or it could be negative in terms of reduced supply. So we are kind of watching both of those things.

And finally, in terms of, the tools in our toolbox, we continue to have with or without the strategic reserve in the long run, we will continue to have a stack of contingencies that have existed prior to the strategic reserve that includes, some, potential trade pay programs, but non non, emergency programs such as the, balancing area coordination. Historically, what you don't see on the table today, but historically, DWR has been able to coordinate the pumping load and see if we could help the grid.

So there are certain things we can still do, but I think, you know, it's important for us to continue the conversation on what is that amount that would be good to have in a cushion beyond the marketplace and continue to work through with the legislature. I wanted to give both thanks to Kaiser, but also thanks to the legislature on the opportunities with the extended day end market.

I think that gives us a huge opportunity to plan as a West for events like this and be more coordinated in the West.

So with that, I will close our presentations and look forward to the questions. Thank you.

Well, thank you very much for your presentation. I just because it's one of the last things you mentioned, you were talking about large loads. Could you talk a little bit about how a date or data center could possibly play into some of the some of these scenarios?

Yeah. Absolutely. So thank you for that question. As a member, the the main piece here is, do we have access to the data? So when we started on the data centers a few years ago, we didn't really know how best to forecast that.

Thanks to CPOC, we are having LSC by LSC application level data today. So what we have is a line of sight around 25,000 megawatts of new applications. The question then is what part of those 25,000 will actually show up as a load and we should plan for as a load? So what the, technical teams collectively have kinda come together is looking at a few different, kind of, characteristics.

When you put an application, what percentage of those applications actually become, you know, move beyond an inquiry to an actual assessment application.

Right? So we have a percentage of that. Second, understanding even if you moved forward with building a 200 megawatt data center, what is the ramp rate? Meaning, you don't bring on a 200 megawatt load on day one. It usually ramps up over over five years.

So what is the ramping rate on that? So looking at a few characteristics like that, the overall consensus amongst the technical teams is to to bake in about 5,000 megawatts of data center load through through twenty forty five for system wide. For local reliability, it's almost 8,000 megawatts, and we'll continue to observe and update it every year.

So those are broad statistics that we've observed from two particular LSCs, both the Silicon Valley power as well as PG and E who had a lot of data centers and looked at historical data and how they're showing up.

But also and, Behar, please go ahead.

Sure. I can add more information for what we're doing at the Public Utilities Commission, and there are also things that are going on at the CAISO as well as FERC. So I wanna give Mark a chance to talk about that. I can talk about the FERC one as well, but the the order to show cost went to you. So you might not wanna be the one that shares a little bit of information.

So but more on that. So at the Public Utilities Commission, there are a couple of different initiatives going on related to data centers. And so, one that is new that I I wanted to share was our new advanced, rate design rule making. This is actually one that, Assemblymember Rogers alluded to at our hearing in January, and I said it's coming. It has opened.

So I I'm happy to report that. And so that advanced rate design rulemaking will look at a couple of different opportunities. One, of course, we're concerned about impacts to rate payers. And so, you know, looking at those issues and as well as the implementation of Senate bill 57, which ordered the public utilities commission to study the potential impacts of data's large loads, like data centers on customers and ways to mitigate that.

But the advanced rate design rule making is also looking at opportunities to shift the way that large loads and other customers use electricity in order to support efforts like reliability, of course, also to support efforts like affordability for customers.

And so that's one of the main new items that we have. We also have what we call the rule 30 application in the Pacific Gas and Electric territory. It's more focused, I think, I would say, on affordability for customers and making sure that large loads are able to connect to the system in a prompt fashion through opportunities for them to front load those costs rather than shifting them onto other rate payers.

Because what there is a big opportunity for us for these large loads to use electricity, spread out fixed costs, and help reduce rates for all customers, and that's what we're trying to harness here. So a number of different efforts that are going on, at the CPUC as well, and I wanna turn the mic over to Mark to talk about their efforts.

Yeah. Thank you. Yeah. Recently, the Federal Energy Regulatory Commission did issue a show cause order, and this is not unexpected. We we maybe the show cause order was unexpected, but the process of FERC evaluating how how large loads were being considered in the in the planning process, interconnection process, so that they could be, one, timely considered and what net transmission upgrades would be necessary to support.

But also, to support the idea that any transmission upgrade that would be necessary to support those data centers, the cost allocation of those were being appropriately allocated to those data centers and not general consumers. So the show cause order for us and really, our participating transmission owners is, basically our responsibility to show how our current tariff, our current roles and processes are supportive of that.

And if they are not, identify what things we could do to make them supportive of the timely interconnection of those large loads and also the proper cost allocation for any transmission upgrades. We have a responsibility to to respond to that within thirty first report is thirty days and another report in sixty days.

So we are in the middle of that process as we speak and we look forward to the opportunity to have that dialogue with FERC and collaborate with our participating transmission owners and their regulators in doing so.

Because this is also a jurisdictional question about where is the how does cost allocation of transmission occur. So we do need some coordination. And I think FERC was appropriately respectful recognizing those jurisdictional boundaries.

That that is really helpful. I but just digging a little deeper into the load shifting particularly when you have an extreme weather event. So what what what ability do the data centers have if you have a no. I don't know how long an extreme weather event might you might have twelve hours. How how how helpful could they potentially be with that?

So data centers, what we've observed have had a have different types of operating that they are doing for each of their particular needs. So we have seen some that have a backup generation that's diesel that they could possibly ship some of their used to. A number of them are looking into natural gas backup opportunities for them to be able to shift their loads.

And then through the advanced rate design rulemaking, we're looking at, you know, how can we set in advance of an emergency set up rate design structures that encourage them to shift their use in a way that is predictable for the system operator, for example, that is in alignment with the resources that we have on the grid, you know, when solar is available, things of that nature.

And so that's what that rule making is going to be looking at, both for large loads and other customers as well so that we can better align the new data centers coming on the grid in California with our grid.

Can I just add that that what Nuam just described is both important for, speed to interconnect because it would help, allow them to interconnect sooner before the maybe transmission upgrades for kind of continuous firm service would be able to be supported?

But it also could help defray some of the transmission costs if we know that for a few hours under certain events, they could flex and shift their load off the system either by starting a backup power or shifting some of their computing to other data centers.

Yeah. Thank you, Sunimba, on that question. Just purely reducing demand, at a data center, staff are still evaluating for the technical potential, but there seems to be, based on some analysis, that data center showed a potentially five to 10% reduction just through using the compute differently. So I think, again, how do we capture that demand flexibility? Is it through the rates?

Is that the best way to do it? Is it some sort of an incentive to reduce it under extraordinary conditions? Those are, you know, additional questions we need to think through. And finally, all the way going towards, do we want them to go offline onto their backup generation for a significant reduction on extraordinary situations? As we've noted in these hearings previously, the rough number today that we have with backup generators at data centers could be as high as 17,000 megawatts in the state.

So those, you know, exist and, you know, under extraordinary events, we do not wanna go there because it does have local impacts, and that's something that we heard from the legislature, but that's another tool in the toolbox.

Alright. Thank you. Assemblymember Hart.

Well, my takeaway from your report and the work you're doing is just an extraordinary success. This is really impressive. You know, you should be congratulated. And, all the citizens of California are grateful for what you've done to put us in this position where the reliability of our energy supply is significantly improved over the past three years, and that's an incredible accomplishment. Looking at the things that you were just talking about about data center demand increasing and how this is all relatively new.

So you're learning real time what those risks are and also the ability for them to mitigate those risks and working closely with them. The other side of the equation is some of the emergency supplies we have, like the natural gas, power plant contracts. How do you see that, developing over the next couple of years? Those are extremely expensive and they're there just on an emergency basis.

We're trying to plan ahead to eliminate the need for those, I assume, and just like to know where we are in that process.

Yeah. Thank you, Assemblymember. Just kind of, going back to, the slide we've noted on the construct for the strategic reserve, I think, you know, again, noting that we were in a structurally short, situation. So the tools that you've given us are, one, about for three years, recognizing that we have to address the bucket one and two of the stack, that we've shown you the the kind of cushion of the OTC power plants. Right?

So I think as we move towards, you know, the future years and as of today, we are structurally long and just recognizing that the the legislature has given us tools in in in tranches. So the OTCs work for three years, the emergency demand side programs, you know, up to five years or so, and then being an extra cushion of Diablo through 2030.

And what I think was expected for us to do is, like, you know, address much of these buckets and come back to you with, like, what is the, you know, small amount of number we might need beyond that 2030 or so. But I think what the way I would approach the OTC power plants is based on where we were in 2022 and where we are today. I think they've served their purpose through this year.

And as we move forward, we have additional resources and buckets we've given us and will continue to kind of come back to us. I'll come back to you if if the condition significantly changed, but I'll pass it to director Ho if she wants to add anything else.

Thanks. So then that's the question is whether or not we feel comfortable enough with the reserves to not renew those contracts and take that cost and help repairs on the utility bills by eliminating that cost. Yeah. But

So, you know, another detail that I wanted to make sure is clear there, you know, those contracts over the last three years, you know, we removed the ones through cooling facilities, you know, those ones on the coast from the resource adequacy program three years ago. And so we have been planning for those facilities already to be closed. We kept them on for three years through the funding supported at the legislature, and managed by the Department of Water Resources.

And so, you know, we've we haven't had to have any flex alerts in the last three years, and so that's really proved out. You know, we had them in case of an emergency.

We haven't needed to use them, but we have done the planning. And, you know, looking back at slide number five, you know, you can really see that huge growth in resources coming online, and that did come to fruition. So we had those resources available over the last three years in case, but, we were able to really scale up those resources, bring them online, and we have that pipeline of new resources as well that you can see further to the right of the slide.

So we don't have any recommendations to extend those facilities.

And that's great news. It's really important. Yeah. Should have been a slide on

the Yeah. I think if someone ever heard, I think the the pieces the SACWIS is a interagency body that staff work and recommend extension to of these resources to the water board, and staff have kind of their recommendation is to stay on course.

Great. Thank you. And then you mentioned that Diablo is currently in your planning, plan to be closed in 2030. And so that's consistent with this extension. And, you're able to meet all of these benchmarks with that planning in mind.

What does that mean post 2030? And some of that is obviously speculative. We don't know what the data center demand's gonna be doing going to be like in that point in time. But you are looking at those things ahead, and so tell us more about that.

That's right. So in the CPUC's integrated resource planning process, and this was pursuant to the legislature in SB 846, we actually continued our resource planning with the expectation that Diablo the the units there would go offline in 2024 and 2025. And so that's why we've been able to have this very large increase in resources is because we continue to plan as if it would close and to make sure that we were getting these new resources built out.

And so, you know, the future of Diablo is, you know, I think in the hands of the legislature, but, pursuant to August, we have been doing the planning as if it is closing. And so, for reliability reasons, we've been able to bring those new resources online.

Now there are other things that could be studied in relation to Diablo, whether, you know, related to affordability or other things like that. But for planning for reliability, we we planned as if it were closed. We're closing in '24 and '25.

And how does the demand side grid support program and its potential expansion fit into these discussions?

Yeah. Thank you, Assembly member. I think the, you know, basic notion of this is as we go through different stacks of the strategic reserve, you know, first looking at the OTCs as a significant part, we know that the OTCs are not gonna extend beyond this year. I think it's important for us to recognize that there'll be some level of usefulness to have demand side programs as the governor's budget put in.

There is a recognition inherent to the budget that there is having support for demand side programs would be helpful.

So I know that that is an active discussion with the legislature, and and I will I will not comment on how it's done, but I think it's important to have that.

Good. That's nice to underline that as well. And then can you speculate about the benefits of the extended day ahead market? How it that obviously is wrapped up with, you know, the weather in the Western Region and the the extreme events that you're talking about with fire, coincidental to a large heat wave that obviously connects with the ability to get power moved around the West. But it does diversify us in a way that's different than what we had before.

Absolutely. And thank you for asking about that. So May 1, we started the extended day ahead market, with Pacific Core. So now we are I will optimize, see across, effectively six states and those resources that are in those that that that extended area. I think it's a very powerful capability to deal with situation awareness and move resources around from where they may be available because maybe we're not all peaking at the same time.

Maybe the weather condition is, not across the entire West or moderating over the day. And so we do believe and it's still early because it hasn't been tested through the summer, so I wanna be a little cautious. But we do expect it to be an additional tool being able to enhance the reliability and move energy around where from where it is available to where it's needed across a wider footprint.

In terms of economic benefits and and and affordable events, we we do also we have not quantified this yet, but we are starting to do our benefits and assessment, and we expect that we'll be able to quantify the benefits similar to the way we have done with the extended real time energy balance market, which has delivered over $8,600,000,000 of benefits since its inception in, to 2014. So, I expect the extended day head market to be similar.

As the footprint grows, the benefits will grow because you have access to a larger set of resources, a larger diverse footprint of load, and a wider more transmission that you are able to optimize over that footprint. So ask me again in a few months. I'll have more quantified answers, but we are we it's it's off to a very good start, and we look forward to testing it through the summer.

So it's not quite ready for the playbook to be an element in that or

you're getting to I would say it's an embedded element in the playbook. In other words, to the extent that we are forecasting and able to now better forecast what is available and how much energy we can get from outside inside the area. It already is effectively part of the playbook, but it's not a new element in terms of a box that says we'll we'll use the extended day ahead market. It's embedded with our within our operations and our market optimization already.

Gives you more confidence in your predictability. Absolutely. Absolutely. Great. Well, this is all really helpful and super encouraging, and just appreciate your expertise and diligence.

I know we wanna have public comment from members of the audience. We got a lot of people here too. Is there anything else that you wanted to add to the conclusion? I saw you grabbing the microphone.

Oh, and and I was just gonna I I I just, I wanna say thanks, you know, Sunil Murrah. I think it's been, a a very, productive five, six years of work, as you noted. It has been some extraordinary moments over the last five years, but I think the collective work that's represented here and the staff that we represent, the thousands of staff that work in the agencies that don't always show to this hearings, but we stand on on their hard work.

So I think thanks to the legislature, the administration, and, sometimes the unsung heroes of stakeholders, who we call in a pinch moment and ask for support, and and they do. So I think it's been a collective statewide effort and and really glad that we are making significant progress.

Thank you. Thank you for those concluding remarks. It's a great way to end the the hearing. And the the fact that colleagues are not here is not any indication of lack of interest. This is an extraordinary day at the end of the session.

People are dealing with crises. I am mentally doing that as well, but I'm physically here. Let's have, folks who'd like to make comments come on up. Please limit your comment to, you know, if you could, a minute or so. We hate that very much.

Thank you. My name is Dan Jacobson with the Environment California. Nora. I just wanna make some really quick comments. First, it's the twenty fourth anniversary of the passage of the first RPS here in California.

So next year will be the twenty fifth anniversary. It was ten years ago that we passed yesterday 100 that set us on a goal for a 100% clean energy. So the numbers and the statistics that I think you're seeing are incredible. When we passed the first RPS, I think we had something like 4% of our clean energy on the grid. And today, I'm almost positive we hit a 100%.

I just looked at the ISO. We were at 92% with plenty of extra room on the grid. So great job for the legislature to do it and great job for the staff to be able to implement that kind of work. I think there's maybe two key things that I would say going forward. One is that we have to look at the grid itself.

Grid utilization, there's a bill that we have, a couple that have been introduced this year. But things like thank you. Right now, SB 905 and SB 913 are really looking at this issue and saying, how do we use some of the resources that we have even better?

And then the second thing that I'd say is, the grid enhancing technologies and the advanced conductors, we didn't talk about that here, but those are sort of superheroes, sort of unknown superheroes that we have. And we should really come back to that next year in 2027 and figure out how we can do even more.

But I'd also wanna thank you, their Assembly member. The points that you hit on, I think, in your questions were exactly the right ones, and appreciate your comments. Thank you.

Thank you very much for the marking the anniversary of success.

Oh, there's lots of anniversaries there. Jan Smutny-Jones from DDP and Energy Producers. And I those were all very important events, but I wanna point out that California has been on a road to cleaner, more efficient resources for almost fifty years now. So there's a it's been a long road, but we're but we're getting very quickly.

Putting some the the Chair started the meeting today, she indicated that we look like we're good for this year and you you heard a great presentation by some very dedicated public servants.

But she also was started talking about years out, five or ten years. And I will note that over that course of history of last fifty years, we've ended up short a number of times. We had expectations of things that were going to happen that didn't. And so we did end up extending Diablo Canyon. We prematurely, stopped the modernization of the OTC units.

All those things resulted in the problems we had at 2020 and 2022. So we have a really good mixed portfolio of resources right now, and I use the word portfolio for a reason. We have a gas fleet that's relatively new that's operating less than it did, but it shows up in those hot days. There's 26,000 megawatts that pop up. Obviously, we have a lot more solar and storage that we put into place.

That's all been put into place by by the people that I represent, both on the gas side, the renewable side, and the storage side. So it's very important that we keep an eye on all this and keep the system reliable because that's the number one thing we need to be mindful of. Thank you.

Thank you for that historical reminder. It's appropriate.

Good afternoon. Adam Hanafiwith California Advocates here on behalf of the California Coalition of Large Energy Users or CLUE. We account for a good chunk of the state's commercial load, and our members include mostly health care providers, but also research institutions, education, and technology providers for the state's critical infrastructure like 911 cent 911 call centers. We are actually extremely concerned with the reliability of the grid. As you might expect, all our members have a serious interest in having electricity be reliable.

And the analysis that you heard today, we have some issues with. And I wanna read a section of the CAISO's reliability analysis that was the underlying, basis for a lot of what what you heard today. And what the Kaiser said in their full report was that the twenty twenty six summer assessment model portfolio includes all existing resources. And the resulting portfolio represents the full set of ARIA eligible capacity and energy only co located resources.

This includes resources that may not be contracted by load serving entities within the CAISO balancing authority area.

Examples include resources contracted by entities without RA requirements, resources serving load outside the CAISO, or resources that remain Un contracted. And then they say that this may be overestimating the reliability of our grid. We have that concern that this analysis may be overestimating the reliability of the grid. And we hope that in the coming days and in the coming months, there is some remedy for that. Thank you.

Thank you. Totally understand the consequences to your stakeholders. So thank you.

Good afternoon. Michael Colvin with Environmental Defense Fund. I wanted to make three really quick points. First, I just wanted to thank the legislature for renewing the DSGS program. I think it's gonna be really critical, not just for the summer reliability, but for going forward, being able to have that level of flexibility.

It was a really smart budget play. The second observation is something that was mentioned during the presentation, but I think it's really worth underscoring the role that energy markets are gonna be playing to help us out with summer reliability. California is not an island, and we should not be treating it as such. The more interconnected, the more we can think of our grid as a larger expansion of resources, the better off we're going to be.

And so we need to be thinking through how can we more heavily rely on the use of cleaner resources in the market to help us displace some of the summer reliability reserve that we have excuse me, the strategic reliability reserve that we have.

Third, in observation, you've heard a couple of other people say this already, but when you look at the amount of fossil use that we have this summer versus where we were even a few years ago, we're down about 60%. That's an incredible achievement. And now we need to be thinking about how do we target that even more specifically and really looking at taking advantage of the runway that we have to use more proactive planning to really drive down the amount of false usage with more intentionality.

With that, thank you so much for your time.

Thank you for those great points.

Good afternoon, Mister Hart. Jacob Evans with Sierra California. Really appreciate the comments you raised about DSGS and about OTC plants. And I have a comment about one OTC plant in particular, to urge the retirement of Ormond Beach Generation Station. It's currently being paid to remain available as an emergency, break the glass, reliability resource.

This had little use. Past payers have paid approximately $13,000,000 per month to keep the plant available. It's why the plant not being turned on since 2024. As you likely know, once we're cooling plants like Ormond Beach pulling millions of gallons of water, ocean ocean water, killing enormous quantities of fish, larvae, and plankton damaging local marine habitats by turning heat or water to coastal environments. And we also spew large quantities of air pollutants and harm local neighboring communities. So we really appreciate the dialogue here that connects California's increasing good good reliability to a need to retire those plants, specifically, Arman Beach.

We urge the state to retire on this hopefully.

Thank you.

To your point, we heard really good news today, and we shoulda had it in a slide because then we could share it with others. But

Hi. Good afternoon. So thank you for staying. Definitely Diana Vasquez Ballesteros representing California Farm Environmental Justice Alliance. And we're here to really just echo some of the things that we have heard earlier.

I'm really grateful for the panel. This is something that's really critical given that we're gonna go into the summer season, knowing that's gonna be a hot summer, knowing that we're gonna have some events that we probably are gonna be dealing with either this summer and hopefully, you know, we're prepared for. But also is we also heard about the OTCs. Right?

That's something that at least our alliance, and you're gonna hear from our member in a in a few minutes, of really is why are we not retiring these OTCs sooner, and we're still keeping them online.

And I think one of the things is that we have heard that demands, response support programs are critical. They're not funded at the same rate that we're keeping these OTCs. So it's really critical of how we're shifting the cost and are really spending the monies that we currently have, which are really limited in the retirement of the OTCs and really thinking about how are these plants gonna be replaced with renewable infrastructure.

And that's something that we have been actively with, you know, obviously, pursuing with the CPUC, with couple proceedings, IRP, RA, obviously, with the advanced, you know, clean, rate design. Sorry.

And really thinking about how are these proceedings literally thinking about it in a cumulative matter. These proceedings are being seen individually. They're not really talking to each other, and that's something we have heard in other oversight hearings. So really thinking about how the proceeding is gonna really dictate the market. But more than anything, how are we gonna actually think about the communities who have been dealing with these OTCs for years?

So that's something that we're gonna be looking at and really hoping that in the next couple of months or even the next year, we can actually have a clear plan, so the communities can actually plan for a better future. So just thank you.

Thank you very much for those comments.

Good afternoon, Marie Liu. Reading a statement on behalf of the Central Coast Alliance for the United for Sustainable Economy known as CAWS. They represent the Central Coast communities, including South Oxnard South Oxnard and the Port Of Hueneme. They are one of the three coastal communities that have been impacted by the ongoing operations of a of one of the o three OTC plants. It's a predominantly Latino neighborhood who is who has quite a high EnviroScreen score.

So we were really happy to hear the discussion today, confirming the planning has been working on no longer needing these OTC plans. Really looking for for the the deadline for these facilities to actually be real this time. Simply, it hasn't been worth the $13,000,000 a month that rate payers have been paying to keep these facilities open, and and the the benefits just hasn't justified the cost. So looking forward to, hopefully, the next era of clean energy in California. Thank you.

I'm very familiar with the work of cause, and that's my district. And so thank you for making those comments, and please share the good news from today's hearing with everybody.

Good afternoon. Assembly members, thank you so much for the hearing today, and thanks to staff for their really great presentation on the reliability concerns facing the state. My name is Julian Lake. I'm representing the Bay Area Council, a leading member for the Diablo Canyon twenty forty five coalition, coalition seeking to keep the Diablo Canyon Nuclear Power Plant, California's only remaining nuclear power plant open till 2045.

We feel that California faces two significant challenges, keeping the lights on reliably and sustainably and also ensuring that that cost of energy is affordable and equitable for as many Californians as possible.

Unfortunately, reliability isn't free as the procurement decisions outlined in our presentation have described, And we feel that, despite the fact that many of these, procurement decisions have been made, sans the the continuation of Diablo Canyon Power Plant, existing, we feel that it would be more prudent and affordable for California to keep the power plant going until 2045. A recent MIT study found that keeping Diablo Canyon open till 2045 would save over $1,300,000,000 a year or over $20,000,000,000 over the course of that extension.

That's savings that can can help affect ratepayers, keep costs low, and and keep the lights on in a clean affordable way. As I'm sure you know, Diablo Canyon provides about 9% of California's power, about 17% of our clean power, and is just an incredible asset that we should be considering going forward in terms of meeting these critical needs facing California. And so I urge folks to consider keeping the plant open, and we would be happy to work and answer questions around what that might entail.

Thank you.

Thanks so much for your testimony.

Good afternoon. Tiffany Phan on behalf of the California Efficiency and Demand Management Council or SEDMEC. Just wanted to say thanks for including the discussion around DSGS in the background document. Appreciate the legislature administration finding funding for that program to get us through the summer and appreciate the recognition that there is a funding cliff at the end of the summer. So hoping that we can find some additional dollars to extend that program, and allow that successful program to continue.

Thank you.

Thank you. That's a really important point. Well, appreciate everybody being here. Appreciate, the staff's great work and the Chair organizing this really informative committee hearing, and we are adjourned.