California legislators agreed to a series of climate and energy legislation in last-minute negotiations with Governor Gavin Newsom. The bills aim to increase oil and gas production, extend the state’s cap-and-trade program, and reduce electricity costs through a regional energy market, establish air pollution monitoring programs in heavily polluted communication, and replenish and revise the state’s wildfire liability fund.
Ease regulations to increase oil production
SB 237 would, among other things, deem a Kern County environmental impact report sufficient for full compliance with the requirements of the California Environmental Quality Act (CEQA). This would streamline approvals for up to 2,000 new wells a year in Kern County through 2036. The bill would also heighten oversight for offshore drilling.
Extend cap and trade
The legislators also agreed to two bills to extend the state’s cap-and-trade program. AB 1207 would extend the program through 2035. It would also change how the California Air Resources Board (CARB) distributes allowances. SB 840 would revise spending from the program’s revenue, including $1 billion for high-speed rail each year, $1 billion for spending through the budget, and $1.7 billion for various safe drinking water, fire prevention, transportation, and clean air programs.
Allow California to join a regional electricity market
AB 825 would allow California to participate in a Western regional electricity market by expanding partnerships with other states. The bill is intended to reduce electricity costs, improve grid reliability, and increase the use of renewable energy.
Establish air pollution monitoring programs
SB 352 would establish air pollution monitoring for at least five years in heavily polluted communities. The California Air Resources Board (CARB) would select the locations, and the program would be in place for at least five years with optional five-year extensions.
State wildfire liability fund
SB 254 would provide $18 billion in new funding for the state’s wildfire liability fund. The bill would, among other things, also deem the financing of projects related to the clean energy projects funded by the Clean Air Bond Act of 2024 to be in the public interest and eligible for financing by the California Infrastructure and Economic Development Bank. The bill would also require electrical utilities to submit a wildfire mitigation plan to the office for review at least once every 4 years.
The California Energy Journal will publish more details and analysis of these bills when they are passed and signed into law.