As California legislators raced to beat the proverbial “pumpkin” at midnight last Friday, the advanced energy community closed out a remarkable legislative session with a host of significant wins – but left one notable issue to be addressed in the next session. With bills spanning advanced transportation, energy efficiency, energy storage, resource adequacy, wildfire mitigation, direct access to renewable energy, and microgrids, the session seemed to have something for everyone. AEE was at the heart of action in Sacramento, with an active position on over 15 bills this year – and an impressive record of success.
With high hopes and a heavy lift, we kicked off the legislative session with million dollar questions at the tip of our tongues:
- Would California become the world’s largest economy to adopt a 100% clean grid goal?
- Would California would take first steps towards an expanded Western grid?
These were just two of the Items with much at stake for the advanced energy industry. But as the session wore on, one issue threatened to swamp all others associated with the electric power system: recourse for last year’s devastating wildfires at both ends of the state.
“Inverse condemnation” became the unlikely buzzwords of the day, with utility liability for their role, no matter how small, in these conflagrations demanding the lion’s share of policymakers’ (including the Governor’s) bandwidth and attention. As legislators deliberated, various proposals to redefine utility liability came to the fore, while the fate of a 100% clean grid, grid regionalization, and accelerated renewable energy development seemed to hang in the balance. The final measure, negotiated by a legislative conference committee and codified as SB 901, did not herald drastic reform to the state’s strict liability law for investor-owned utilities (IOUs), but approved the use of ratepayer monies to pay for damages – and cleared the way for other energy-related legislation.
This year held the gravitas of being the final session of Gov. Jerry Brown’s tenure. The legislative session ended just a couple weeks before the (Governor’s) Global Climate Summit in San Francisco. While California’s appetite for ground-breaking energy legislation is not new, 2018 set the state apart from anywhere else in the country with multiple landmark clean energy bills considered the final week of the legislative session. This has been a big year for advanced energy in California. And here’s why.
Year of Advanced Transportation
The Governor set the stage for legislative success earlier this year by re-upping the state's zero-emission vehicle (ZEV) goal to 5 million ZEVs by 2050. As a result, in this session a host of transportation electrification bills made it to the finish line, including a bill sponsored by AEE. AB 2127 (Ting) enables more efficient, scalable buildout of EV charging infrastructure (across all vehicle classes) statewide by affirming the California Energy Commission’s authority to do comprehensive planning (building upon its quarterly assessment).
Among other wins, AB 1796 (Muratsuchi), which would expand access to EV charging on rent-controlled properties, flew to the Governor’s desk and was subsequently signed into law Aug. 20. On the medium- and heavy-duty side, gains were also had for trucks and transit with the passage of AB 2145 (Reyes), enabling new investments to modernize the state’s electric vehicle charging infrastructure, and AB 2061 (Frazier), creating a more level playing field for clean fleets. AB 1184 (Ting) – another bill sponsored by AEE in a previous version, which would have promoted an aggressive and sustained EV customer rebate program, modeled on the California Solar Initiative – was re-purposed by the author for another issue, leaving the EV customer rebate program to be addressed for another day.
Coupled with strong spending in a budget trailer bill proposed in April, the scope of transportation-related bills that were introduced and cleared the Legislature this year was notable – and certainly speaks to the desire for California to remain at the forefront on electrification.
The California Legislature expanded advanced energy opportunity by approving a host of bills that, if signed, will lead to further growth of advanced energy jobs and projects in the state. Undoubtedly, the crowning victory of this year’s session for advanced energy was the passage of SB 100 (de León), the 100% clean grid bill, which has been years in the making. This historic bill ratchets up the existing RPS to 60% by 2030 and requires utilities to meet a 100% clean energy standard through diverse advanced energy technologies by 2045. With the blessing of legislative leadership and unrelenting advocacy by AEE and other public and private stakeholders, the bill passed with dramatically close votes in both the Senate and Assembly (notably with bipartisan support in the latter).
Other noteworthy bills made successful comebacks this session, including Senate Bill 700 (Wiener). SB 700 focuses on extending California’s signature incentive program, the Self Generation Incentive Program (SGIP), for another five years to bring to market new distributed energy technologies, including customer-sited energy storage.
Another prominent bill that got a second lease on life was SB 237, Sen. Bob Hertzberg’s bill to reopen the state’s much-in-demand Direct Access program. In its final form, the bill increases the cap and creates a pathway for businesses and critical energy users statewide (including school districts, hospitals, and data centers) to access affordable clean energy, pending a CPUC assessment. A priority of the Advanced Energy Buyers Group, the bill cleared the Legislature on the final day of session with a nail-biting vote in both houses.
Beyond these headlining items, the advanced energy community can count other key legislative wins, including:
- SB 1131 (Hertzberg) – This bill paves the way for energy efficiency investments in two of the state’s largest energy-consuming sectors, agriculture and industry, by improving a project evaluation process that has to date been wrought with inconsistency and delay.
- SB 1339 (Stern) –This bill creates market opportunity for microgrids and boosts necessary grid hardening and resiliency for critical infrastructure in an age of worsening natural disasters.
Encouragingly, advanced energy bills trended up on bipartisan support, as a handful of Republican lawmakers rose in support of expanding advanced energy opportunity, economic development, and competitiveness. Many of these legislators see the benefits of advanced energy in their districts and support further growth and expansion to spur greater economic development. A number of advanced energy bills received bipartisan support, including AEE-sponsored AB 2127 (Ting). Other notable votes include Assemblywoman Catharine Baker’s (AD-16) positive vote on SB 100 and other AEE priorities, and repeat support from Sen. Anthony Cannella (SD-12), Assemblymember Phillip Chen (AD-55), and Assemblymember Jay Obernolte (AD-33), among others, on a number of key bills.
Despite the sizable wins, this year also had its disappointments, especially the failure to embark on the development of a regional grid system to better utilize advanced energy resources throughout the west. AB 813 (Holden) faced a range of challenges, as opposition from labor and other stakeholder groups ramped up this year. Far from writing a blank check for regionalization, as opponents alleged, the bill would have initiated conversation on the best governance model for an expanded California ISO. Despite guardrails such as legislative oversight by way of a 270-day review period (via new amendments), AB 813 stalled in Rules Committee, as leadership refused to move it to the Senate floor for a vote. Re-consideration and deliberation around the prospects of a regional grid system will have to wait until next year – and a new Administration.
Assembly Bill 893 (E. Garcia), which was supported by a host of large-scale renewable developers and companies, also failed to gain traction in the final days. The bill would have driven near-term procurement of renewable energy by the state’s electricity providers in order to take advantage of waning federal tax credits. After amendments, the bill would have also set a significant procurement target for geothermal to diversify the resource mix. While this bill stalled in Rules Committee, SB 100 does provide developers with significant growth opportunity in the near and long term given the ramped up RPS goal and target of 100% zero-carbon energy.
On another front, renewed threats surfaced for the finance program known as Property Assessed Clean Energy (PACE). Despite a newly minted customer protections and accountability framework by way of a PACE bill package unanimously passed last year, two new bills emerged to up the ante. Sailing through the legislative process, AB 2063 (Aguiar Curry) and SB 1087 (Roth) together increase the underwriting burden and create enforcement uncertainty for PACE program administrators, even as last year’s reforms are still being hammered out at the Department of Business Oversight (DBO). While some headway was made with both authors, there is still concern about the unanticipated impacts on PACE as a tool to help Californians make affordable renewable energy and energy efficiency upgrades to their homes. Moving forward, the advanced energy industry will work with the Legislature and the next Administration to ensure this impactful program isn’t crippled in the name of customer protections.
All in all, this year’s advanced energy legislation has set California on a trajectory to go even bigger and bolder on climate and energy as the state continues to capture the attention of its counterparts in other states and countries. The advanced energy community has every right to celebrate a very successful legislative session – but our hard work continues.
Finally, we thank Gov. Brown and his Administration for an impressive legacy, as we look toward the inauguration of new political leadership. Earlier in the year, AEE met with candidates and staff from the major gubernatorial campaigns and offered a policy roadmap for advanced energy growth in California, where advanced energy employment already exceeds jobs in hospitals, and is nearly double employment in supermarkets. AEE will build on this engagement as the incoming Administration charts its course for California’s secure, clean, affordable advanced energy economy.