ARKANSAS, Oct 16 (Future Headlines)- In a significant move for California’s climate, air quality, and equity goals, Governor Gavin Newsom has signed the Powering Up Californians Act, authored by State Senator Josh Becker (D-13). This legislation addresses key barriers to the state’s ambitions, focusing on the electrification of vehicles and buildings and the imperative to upgrade the electric distribution system.

California’s journey toward a cleaner, more sustainable future has deep historical roots. In 1879, the state witnessed the birth of the nation’s first central power plant, serving a small number of customers in San Francisco. At that time, California had just 860,000 residents. Over the decades, California’s electrical grid expanded rapidly, ensuring universal access to electricity for 39 million people. Today, approximately 60 percent of the state’s electricity is sourced from carbon-free options, positioning California well on its path to meet the requirement of 100 percent renewable and zero-carbon energy by 2045.

Despite this remarkable progress, California is facing challenges related to the growing demand for new services, specifically in the electrification of buildings and the establishment of electric vehicle (EV) charging infrastructure. These delays in green projects are undermining efforts to improve air quality. Affordable housing units in San Francisco remain vacant, and electric heavy-duty vehicles that could replace polluting diesel counterparts sit idle, all due to delays in project energization.

Several factors contribute to these delays. A nationwide shortage of transformers, workforce issues, poor communication between customers and utilities, and inefficient processes are among the culprits. These short-term delays are critical to address, particularly as California rushes to meet regulatory deadlines mandating increased sales of zero-emission vehicles and transit options.

However, the larger challenge lies in the current rules governing utility investments. These rules hinder utilities’ ability to make timely investments in new substations and equipment, which are crucial for expanding the grid’s capacity in line with climate, air quality, and equity goals. Building substations, securing permits, and completing construction are time-consuming processes. The complexity is compounded by the transient nature of vehicles, the high-power demands of fast-charging EV stations, and the disconnection between the time it takes to install charging stations and the years required to build substations and essential grid infrastructure.

The Powering Up Californians Act, or Senate Bill 410 (SB-410), introduces a comprehensive set of measures to tackle these issues head-on:

State Policy for Grid Upgrades: SB-410 establishes a state policy that utilities should upgrade the grid promptly to align with California’s decarbonization goals, as well as federal, state, regional, and local air quality and decarbonization standards, plans, and regulations.

Energization Timelines: The legislation sets a deadline for the California Public Utilities Commission (CPUC) to establish average and maximum target energization timelines. It requires utilities to report on their compliance with these timelines, explain any noncompliances, and detail how they will be resolved. The CPUC is empowered to take any remedial actions necessary to ensure compliance with these deadlines.

Workforce Development: SB-410 mandates utilities to train and hire the workforce required for the electrification of the transportation and building sectors.

Grid Planning Aligned with Goals: The legislation necessitates that utilities’ annual grid planning and investments align with federal, state, regional, and local decarbonization and air quality goals, standards, and regulations.

Cost Recovery: It allows utilities to make essential investments within a timeframe consistent with state laws and regulations, providing for cost recovery between general rate cases. This aspect is still subject to prudence review by the CPUC.

The Powering Up Californians Act gained substantial support from diverse stakeholders. Nearly 90 organizations representing environmental, public health, equity, environmental justice, local government, industry, and labor groups endorsed the legislation. Notable supporters include the Alliance for Automotive Innovation, American Lung Association-California, American Nurses Association-California, California Building Industry Association, California Chamber of Commerce, California & Nevada State Association of Electrical Workers, and many more. SB-410 passed the California State Assembly with a bipartisan vote of 70 to 1.

One pressing question is whether SB-410 will lead to increased electric rates. The legislation is designed to align utilities’ investments with their obligation to serve customers’ needs, as mandated by state law. It does not impose additional costs; rather, it ensures that required investments are made within a timeframe that complies with state and federal laws.

In fact, electrifying vehicles and buildings can lead to lower rates. It can help right-size grid upgrades by constructing upgrades once and ensuring they are efficient. This approach is considerably more cost-effective than making multiple incremental upgrades. Electrification can also enhance grid utilization and divert significant funds that would otherwise flow to multinational oil companies. While certain EV charging stations may necessitate grid upgrades, most of the requirements can be met by utilizing existing spare capacity. This approach generates more revenue than the associated costs, leading to a reduction in the price per kilowatt-hour, benefiting all customers.

A recent analysis by the California Public Advocates Office, the state’s official consumer advocate and utility watchdog, estimated that upgrading the grid to electrify buildings and various vehicle types would cost $26 billion. However, the associated new revenue generated would surpass these costs, exerting downward pressure on rates across major investor-owned service territories.

Historical data shows that from 2012 to 2021, EV customers in these territories contributed $1.7 billion in excess of the cost of serving their EV load and utility programs. These savings have already been returned to all utility customers in the form of lower rates.

Unlike historical drivers of grid upgrades, such as air conditioners and hot tubs, which didn’t initially put downward pressure on rates, electrifying vehicles, buildings, and transit options holds significant promise. This is the opportune moment to invest in grid enhancements, create jobs, improve air quality, and reduce consumer vulnerability to global oil market fluctuations.

The Powering Up Californians Act represents a pivotal step toward a more sustainable and efficient future for the Golden State, aligning its energy grid with the ambitious targets for decarbonization, air quality, and equity.

Reporting by Kevin Wood; Editing by Sarah White