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Governor Newsom Taps Budget Surplus For Clean Energy

Governor Gavin Newsom unveiled his administration’s revised budget today, known colloquially as the May Revise, culminating a weeklong tour to promote a “$100 billion California Comeback Plan.” The budget includes unprecedented funding for essential state needs, such as combatting homelessness, offering utility debt relief for low-income households, expanding access to broadband, transforming public education, and providing direct financial relief to millions of Californians struggling to make ends meet in the wake of COVD-19.
Alex Jackson (Alum)

Governor Gavin Newsom unveiled his administration’s revised budget today, known colloquially as the May Revise, culminating a weeklong tour to promote a “$100 billion California Comeback Plan.” The budget includes unprecedented funding for essential state needs, such as combatting homelessness, offering utility debt relief for low-income households, expanding access to broadband, transforming public education, and providing direct financial relief to millions of Californians struggling to make ends meet in the wake of COVID-19.

But the budget also harkens back to Governor Newsom’s remark last fall, during a tour of the wildfire devastation in Butte County, that “we are in a climate damn emergency” and must “accelerate our efforts across the board.” While more details will emerge over the coming days, the May Revise proposes a dizzying array of funding for vital investments in climate mitigation and resilience that, as the Governor might say, meet this moment.

A Whole of Government Approach

The May Revise proposes billions of dollars for investments in clean energy, climate resilience, zero-emission vehicles and more, all without putting more pressure on electric rates, which will be essential to keep utility bills affordable and to preserve the cost savings from fuel switching to electric cars and appliances. Here's a snapshot from three key categories:

Clean Energy ($912 million), including:

  • $35 million for resource and transmission planning, which California sorely needs to jumpstart the renewable energy build out required to decarbonize the electricity system under SB 100.
  • $350 million for pre-commercial long duration storage projects to keep the grid running on clean energy when wind and solar are unavailable and to enable California to reduce its dependence on fossil gas plants.
  • $375 million for energy efficiency upgrades at industrial plants and food processers to cut both costs and emissions from sectors that are vital to California’s economy.
  • $20 million to spur environmentally responsible development of offshore wind energy, a resource with a load profile that perfectly complements California’s solar energy production and offers tremendous potential to create high-wage jobs if done right (a prospect bolstered by the proposed funding for interagency coordination and additional outreach to marine and coastal stakeholders and tribes).
  • $110 million in green hydrogen production to capitalize on the potential for hydrogen to displace fossil fuels in power plants, vehicles and heavy industry.

Climate Resilience for Vulnerable Communities ($784 million), including:

  • $100 million over two years to subsidize the cost of constructing cool roofs on low-income residential projects as part of the California Energy Commission’s BUILD program.
  • $200 million for urban greening projects to reduce the health risks from extreme heat.
  • $50 million to fund the chronically oversubscribed yet highly successful Low Income Weatherization Program
  • $495 million over three years to fund the Strategic Growth Council’s Transformative Climate Communities Program, which empowers the communities most impacted by pollution to choose their own goals, strategies, and projects to reduce greenhouse gas emissions and local air pollution.
  • $200 million to remediate and protect local communities from abandoned oil wells.
  • $15 million for incentives to reduce super climate-polluting hydrofluorocarbons (HFCs).
  • $5 million to support the Fifth Climate Assessment.

Zero Emission Vehicles ($1.8 billion/$3.2 billion over three years), including:

  • $1.4 billion to put three thousand zero-emission drayage trucks, school buses, and transit buses (with the necessary infrastructure) on California roads to clean the air.
  • $250 million to expand Clean Cars 4 All, which enables low-income Californians to scrap their old car and replace it with a new or used option that is less polluting and more efficient.
  • $400 million for consumer rebates for new ZEV purchases through the Clean Vehicle Rebate Project, with funding set aside to provide increased rebates for lower-income vehicle buyers.

Sprint to June 15

The onus now shifts to the Legislature, which must approve the budget in advance of California’s June 15 constitutional deadline. But with equally ambitious proposals already emerging from the Senate and expected from the Assembly, all signs point to a historic year for investing in clean energy and climate resilience to propel California’s economic comeback.