SACRAMENTO, CA – Today, the legislature passed a 3-party deal on the 2025-26 state budget. While this budget includes some necessary investments in clean transportation, it defers decisions on most Proposition 4 and Greenhouse Gas Reduction Fund investments until later in the year.  

As a result, no funding was allocated to critical energy affordability and reliability programs like the Demand Side Grid Support (DSGS) program, which pays for clean emergency power during times of grid stress, and the Distributed Electricity Backup Assets (DEBA) program, which funds new distributed batteries and microgrids. This action leaves crucial clean energy and climate programs in limbo at a time when we’re facing heat waves that strain the grid and a pullback of federal support.  

“We recognize the difficult fiscal environment and uncertainty around federal funding, but California cannot keep deferring on tough decisions,” said Edson Perez, California lead at Advanced Energy United. “Reliability programs like DSGS have delivered real results by keeping the lights on with clean energy and should be strengthened, not scaled back.” 

Although the deal includes a modest $132 million for the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), it falls short of the $1.5 billion in annual clean transportation investment needed to meet California’s clean transportation goals. This lack of investment sends a damaging message to the homegrown clean transportation industry, which supports nearly 60,000 jobs in the state.  

“The zero-emission vehicle industry provides good paying jobs and economic opportunities to tens of thousands of Californians,” emphasized Perez. “Investments in transportation electrification are also essential to reducing air pollution, especially in the most vulnerable communities. Deferring investment decisions on critical ZEV programs sends a chilling signal to businesses, workers, and communities about the future of the industry. If we want to meet our clean transportation goals and keep these jobs in-state, we need to treat these investments as must-haves, not maybes.” 

Advanced Energy United urges state leaders to think wisely in the coming weeks and commit much-needed funding to affordable clean energy and transportation solutions like DSGS, DEBA, HVIP, and the Zero Emission School Bus Initiative (ZESBI).  

Perez adds, “Policymakers must act quickly to reauthorize California’s cap-and-trade program and invest in the Greenhouse Gas Reduction Fund revenues on key priorities to keep the world's fourth-largest economy capable of providing affordable, reliable, clean electricity and zero-emission transportation to its residents.”