CA’s Energy Trailer Bill – What just happened? (Part 2)

More timely and impactful energy policy emerged from the California legislature this week in the form of a new energy and climate change budget trailer bill (AB 209), which creates important new programs, directs billions in state funding, advances access to climate-friendly refrigerants, and shines a light on extreme heat protection for renters. A “trailer bill” is a package of policy details that follow the main budget bill, which allocates the state’s dollars. We need to lay the foundation now to meet California’s goal of getting to a carbon neutral economy by 2045 affordably and equitably – this bill helps do just that.

This bill is in addition to the energy trailer bill from June, which provided $1.2 billion in debt relief to utility customers and paved the way for more equitable and climate-aligned electricity rates, among other things. This energy trailer bill also complements the package of climate bills that advance our greenhouse gas and clean electricity targets, establish a goal for carbon removal from natural and working lands, set a process and guardrails for the use of carbon capture and storage (CCS), and establish health and safety buffer zones around new oil drilling. All of these policies are now on Governor Newsom’s desk for his signature!

The energy trailer bill, AB 209:

• Creates a slate of new programs at the California Energy Commission (CEC) – including equitable building decarbonization ($922 million*), funding to decarbonize the industrial sector ($100 million) and food sector ($75 million), a hydrogen program that focuses on renewable forms of hydrogen production ($100 million), and direct air capture for carbon removal ($100 million).
• Requires that the California Building Standards Commissions (CBSC) update the building code to enable the use of low global warming potential (GWP) refrigerants, plus $40 million to the California Air Resources Board to accelerate the adoption of ultra-low-GWP refrigerants.
• Requires the Department of Housing and Community Development to develop new policies to ensure that homes can maintain a maximum safe indoor air temperature, which is vital for renters who need and deserve protection from extreme heat.
• Improves the June energy trailer bill, including allowing wider participation in the new CEC Demand Side Grid Support Program ($295 million) and clarifying that fossil generators in the Reliability Reserve can only operate in emergency events.
• Updates the Self Generation Incentive Program (SGIP) program to enable $900 million in funding projected for fiscal year 2023/2024 to support residential solar and storage, with 70 percent of the funding for low-income households.
• Boosts grid transmission projects and planning, including through the Climate Catalyst Revolving Loan Fund Program, and by reducing barriers to information sharing by the California Independent System Operator (CAISO).
• Support for offshore wind, including related infrastructure development.

In addition to what is in the trailer bill, other items of note from this year’s budget and future year budget agreements include $30 million to support community engagement in Public Utilities Commission decision making and a total of $270 million for community resilience centers over two years.

We have so much to celebrate in California! Although there is more work to do to maintain these investments and follow through on implementation, this has been an amazing legislative session with many more policy tools and programs to support climate progress now in place.

*Funding amounts referenced above include fiscal year 2022-2023 allocations from this budget as well as future-year commitments by the Administration, Senate, and Assembly which have been agreed to based on current revenue projections.