Official Summary Text
AB 2516, as amended, Petrie-Norris.
California Grid Manufacturing Initiative.
Existing law establishes the Governor’s Office of Business and Economic Development (GO-Biz) within the Governor’s office and requires GO-Biz to serve the Governor as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. Existing law creates within GO-Biz the Energy Unit to accelerate the planning, financing, and execution of critical energy infrastructure projects, as specified.
This bill would require the Energy Unit, in coordination with other specified state entities, to establish the California Grid Manufacturing Initiative. The bill would require the Energy Unit to
serve as the state’s central entity for aggregating demand for critical electricity grid components, to coordinate the procurement of electricity grid components,
identify and procure critical electricity grid components, as defined,
and to incentivize new or existing in-state manufacturing of electricity grid components.
This bill would require the Energy Unit to develop a process for each public utility,
as defined,
on or before January 1,
2028
2028,
and regularly thereafter, to submit a projection of its purchasing needs for critical electricity grid components for which the public utility has not entered into a purchase
agreement.
agreement and for which the public utility affirmatively seeks the assistance of the Energy Unit in coordinating resources and leveraging purchasing power.
The bill would
require the Energy Unit, based on the projections, to determine the statewide aggregate purchasing needs for critical electricity grid components, as specified. The bill would require a public utility that purchases electricity grid components identified pursuant to the bill to purchase those components from the initiative, except as provided. The bill would permit an electrical corporation, and require the Public Utilities Commission, to authorize the recovery of costs incurred by the electrical corporation in implementing the above-described requirements, and would
authorize a local publicly owned electric utility to recover the costs incurred from the implementation of the above-described requirements from its ratepayers.
provide that, if the Energy Unit determines that centralized procurement is warranted for a critical electrical grid component, a participating public utility may, prior to the issuance of a solicitation by the Energy Unit for that component, submit to the Energy Unit the conditions under which the public utility commits to purchase those components from the initiative, as provided. Under the bill, if a procurement by the Energy Unit satisfies the conditions submitted by a public utility, the public utility’s commitment to purchase the component from the initiative would be binding, as provided.
By imposing new duties on local publicly owned electric utilities, the bill would impose a state-mandated local program.
Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of a commission action implementing the bill’s requirement regulating the procurement practices of electrical corporations would be a crime, this bill would impose a state-mandated local program.
This bill would authorize the Energy Unit to issue requests for proposals or other competitive solicitations to procure critical electricity grid components, as
provided. The bill would require the Energy Unit to identify any critical electricity grid components for
which cost, supply constraints, or other limitations inhibit the state’s ability to achieve its energy goals,
provided,
and would authorize the Energy Unit to provide financial assistance to projects that establish or expand manufacturing capacity in California for
those
electrical grid
components, as specified. The bill would also authorize the Energy Unit to enter into production joint ventures with qualified private suppliers, as provided, and to provide bond financing and other assistance.
The bill would authorize the Public Utilities Commission to authorize the recovery of costs
incurred under the initiative only to the extent it determines those costs are just and reasonable, cost-effective, and aligned with state energy policy, as provided. To the extent the procurement results in costs below prevailing market prices for grid components, the bill would require the commission to ensure that the difference is credited to ratepayers, as provided.
Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of a commission action implementing certain requirements of the bill would be a crime, this bill would impose a state-mandated local program.
Existing law, the Bergeson-Peace Infrastructure and Economic Development Bank Act, establishes the
California Infrastructure and Economic Development Bank (I-Bank) within GO-Biz and, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities, as provided.
This bill would create the California Grid Manufacturing Initiative Revolving Fund in the State Treasury, and the Manufacturing Incentive Account and the Procurement Account within the revolving fund, for the purpose of providing financial assistance pursuant to the initiative. The bill would make the moneys in the revolving fund continuously appropriated for expenditure in accordance with the initiative. The bill would authorize the I-Bank, on behalf of the Energy Unit, to issue revenue bonds to finance procurement and manufacturing of electricity grid components, and would require the proceeds of the bonds to be deposited into the respective accounts and used
exclusively for the purposes of the initiative. By establishing a continuously appropriated fund, the bill would make an appropriation.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for specified reasons.