In the early morning hours of Saturday, September 16, the California legislature’s 2017 session came to a close. It was a jam-packed year, full of debate, negotiations, and deal making. The legislature took on a number of big ticket issues this year, including cap and trade, transportation, and housing. While the cap and trade extension was secured in early summer, a host of other measures important to AEE on energy storage, advanced transportation, and PACE financing cleared the legislature at the tail end of session. They were sent to Gov. Brown’s desk, with the expectation that all would gain his signature. That leaves us with much to wrap up about what got done this year – and what remains to be done next year.
AEE, along with a broad coalition of Property Assessed Clean Energy (PACE) companies, the banking industry, and consumer advocates, worked to pass SB 242 (Skinner) and AB 1284 (Dababneh), and we were successful in the final days of session. If signed by the Governor, as expected, this package of bills will strengthen the existing PACE program by putting strong consumer protection measures in place. AB 1284, which passed in the final hours of session with a unanimous vote in the Assembly, would subject PACE providers and the industry to regulatory scrutiny under the Department of Business Oversight. This package of bills serves as a model for other states as PACE programs expand nationwide.
For months, stakeholders were waiting to see a proposal to spend proceeds from the state’s cap-and-trade auction program, known as the Greenhouse Gas Reduction Fund (GGRF), and one finally came together in the final week of the session. The Governor and Senate President Pro Tem Kevin De León both offered up separate proposals, each focusing one-time dollars on reducing emissions in the transportation sector. The final measure negotiated by leadership approves nearly $1 billion in spending on a variety of existing programs on zero-emission equipment at the ports, clean heavy-duty trucks and buses, and rebates for the purchase of clean passenger vehicles.
This is notable for a few reasons. One, it shows the legislature’s concern and interest in combating the state’s largest source of emissions. Two, it includes significant investment for existing programs, where monies can be distributed quickly. And finally, the deal represents the largest single-year commitment of GGRF dollars to reducing transportation-related GHG emissions.
While representing a huge opportunity for advanced transportation, this deal does include one particularly concerning detail that was added to the budget bills, (AB 109 and AB 134). Proposed by labor unions, this provision purports to hold vehicle manufacturers accountable to certain labor practice standards and criteria, as set by the state’s Labor Secretary and Air Resources Board (ARB), in order for their cars to be eligible for the Clean Vehicle Rebate Program (CVRP). In the Capitol, it was dubbed the “anti-Tesla amendment,” as Tesla has resisted the organizing efforts of the United Auto Workers at its Fremont plant, but it is concerning to all automakers due to language that is ambiguous and subjective. AEE will weigh in during the stakeholder process at the ARB to ensure that this last-minute amendment does not undermine advanced transportation growth in California.
Speaking of advanced transportation, AEE co-sponsored a bill (AB 1184) that would restructure the CVRP program along the lines of the California Solar Initiative to accelerate electric vehicle (EV) sales with incentives initially bigger but declining over time as volume increase and prices come down. Unfortunately, it was not taken up by the Senate in the final weeks of session, so it became a two-year bill. We will be working with the author, Assemblymember Phil Ting, as well as other stakeholders and the Governor’s office to get this important bill to the finish line in 2018.
In addition to GGRF spending, the legislature also passed another AEE-supported transportation bill, AB 739 (Chau), on a bipartisan vote. This bill drives progress toward California’s zero-emission vehicle (ZEV) goals by requiring ZEVs to comprise 15% of the state’s new heavy-duty fleet purchases, beginning in 2025.
Energy storage also got a boost this session. A priority for the California energy storage industry and AEE, AB 546 (Chiu) helps standardize regional and local storage permitting guidelines, reducing delays in project approvals, and increasing opportunities for storage deployment, and it is on its way to the Governor’s desk. Another bill supported by the storage industry, SB 700 (Wiener), which would increase the rebates for customer-sited storage systems, was held earlier this year, becoming a two-year bill.
Despite a last-minute push, two bills to expand the grid territory managed by the California Independent System Operator (CAISO) – AB 813/AB 726; Holden – didn’t have the votes to make it to the end. A bigger regional grid would help California make good use of its excess solar generation during the day while potentially bringing in wind power from neighboring states at night. The Administration slipped CAISO regionalization language into these bills, which also would accelerate procurement of renewable energy by utilities in order to take advantage of federal tax credits now being phased out.
Another bill to be worked on next year is SB 100, the Pro Tem’s bill that would ramp up the existing RPS and require utilities to meet a 100% clean energy standard by 2045. This legislation was moving until the final week, when labor came out in opposition. The International Brotherhood of Electrical Workers (IBEW) was seeking an amendment that would require the legislature to review any additional “non-wires” distributed energy resource (DER) projects in utility plans, potentially freezing out non-utility alternatives offered up by third-party companies, in order to protect utility jobs. A strong coalition, including AEE, opposed this amendment, which the Pro Tem refused to accept. IBEW continued to oppose the bill, kicking it over to next year. Stay tuned on this.
Overall, 2017 marked continued progress for the advanced energy industry in California. The legislature cemented the state’s climate and energy goals by extending the cap and trade program and providing regulatory and market certainty for advanced energy companies. Legislators were more engaged than ever in advanced transportation, storage, energy efficiency, and renewables – and the jobs they represent in their districts. As for those matters kicked over to 2018: Just a few more months and AEE will be back at it in Sacramento.
