Morro Bay City Council
September 24, 2024

CITY OF MORRO BAY
City Council Regular Meeting Agenda

Tuesday, September 24, 2024, 5:30 p.m.

Veterans Memorial Hall, 209 Surf St., Morro Bay, CA
Public Participation
Public participation is offered in the following ways:
• Community members may attend the meeting in person at the Morro Bay Veterans Hall.

Alternatively, members of the public may watch the meeting and speak during general Public Comment or on a specific agenda item by logging into the Zoom webinar using the information provided below. Please use the "raise hand" feature to indicate your desire to provide public comment.
•
Zoom webinar link:
https://us02web.zoom.us/j/82722747698?pwd=aWZpTzcwTHlRTk9xaTlmWVNWRWFU QT09
•
• Password: 135692
Or Telephone Attendee: 1 (408) 638-0968 or 1 (669) 900-6833 or 1 (346) 248-7799; Webinar ID: 827 2274 7698; Password: 135692: Press *9 to raise hand for public comment.
•
• Meetings are also broadcast on cable Channel 20 and streamed on the City's website.

Community Members are encouraged to submit agenda correspondence via email to the City Council at [email protected] prior to the meeting. Agenda correspondence received by 10:00 a.m. on the meeting day will be posted on the City website. •
Pages

1. ESTABLISH QUORUM AND CALL TO ORDER

2. MOMENT OF SILENCE

3. PLEDGE OF ALLEGIANCE

4. REPORTS

4.a Closed Session Report

4.b Mayor and Councilmembers' Reports, Announcements and Presentations

4.c City Manager Reports, Announcements and Presentations

4.d Subcommittee Reports - Verbal Update of Current Subcommittee Activities

1. Water Reclamation Facility & Morro Bay / Cayucos Sanitary District JPA

2. Morro Bay Power Plant (Vistra)

3. Offshore Wind Energy

4. Downtown Design District

5. RECOGNITION AND PRESENTATIONS

5.a Bird Festival Presentation

6. PUBLIC COMMENT
Members of the audience wishing to address the Council on City business matters not on the agenda may do so at this time. For those desiring to speak on items on the agenda, but unable to stay for the item, may also address the Council at this time.

Public comment is an opportunity for members of the public to provide input to the governing body. To increase the effectiveness of the Public Comment Period, the City respectfully requests the following guidelines and expectations be followed:
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Those desiring to speak are asked to complete a speaker slip, which are located at the entrance, and submit it to the City Clerk. However, speaker slips are not required to provide public comment. •
When recognized by the Mayor, please come forward to the podium to speak. Though not required, it is helpful if you state your name, city of residence and whether you represent a business or group. Unless otherwise established by the Mayor, comments are to be limited to three minutes.
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All remarks should be addressed to Council, as a whole, and not to any individual member thereof.
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The Council respectfully requests that you refrain from making slanderous, profane or personal remarks against any elected official, commission and/or staff.
•
Please refrain from public displays or outbursts such as unsolicited applause, comments or cheering.
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Any disruptive activities that substantially interfere with the ability of the City Council to carry out its meeting will not be permitted and offenders will be requested to leave the meeting.
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Your participation in City Council meetings is welcome and your courtesy will be appreciated.
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The Council in turn agrees to abide by its best practices of civility and civil discourse according to Resolution No. 07-19.
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7. CONSENT AGENDA

Unless an item is pulled for separate action by the City Council, the following actions are approved without discussion. The public will also be provided an opportunity to comment on consent agenda items.

Recommended Action
Approve Items 7.a. through 7.d. as submitted.

7.a Approval of Minutes
(City Clerk)
Recommended Action
Approve as submitted.

1. September 10, 2024 - Regular Council Meeting 5

2. September 10, 2024 - Special Closed Session Meeting 13

7.b Approval of Proclamations
Recommended Action
Receive and file.

1. Proclamation declaring September 22 - September 28, 2024 as the 20th Annual Sea Otter Awareness Week
16 7.c FY 2024-25 Budget Amendments for Fire and Police Measures Q & E Allocations
17 (Finance Department)
Recommended Action
Adopt Resolution No. 64-24 authorizing amendments to the adopted Fiscal Year (FY) 2024-25 Operating & Capital Budget.

7.d Resolution No. 65-24 Approving the Revised Local Agency Investment Fund (LAIF) Transaction Officers
21 (Finance Department)
Recommended Action
Adopt Resolution No. 65-24 approving the revised Local Agency investment Fund (LAIF) Transaction Officers.

8. PUBLIC HEARING ITEMS
None

9. BUSINESS ITEMS

9.a Vistra Battery Energy Storage Systems (BESS) Project - Status Update 23 (Community Development/Fire Department/City Attorney)
Recommended Action
Receive and file an update on the proposed Vistra BESS Project, including:

1. Status and estimated timeline for the processing of the Vistra

BESS project application,

2. Offsite Consequence Analysis, and

3. Assembly Bill (AB) 205

9.b Approval of Offshore Wind (OSW) sub-recipient agreement with San Luis Obispo County
91 (City Manager)
Recommended Action
Approval of the agreement and authorize the City Manager to execute the funding sub-recipient agreement with the County of San Luis Obispo. The fund supports staffing costs associated with development of the joint Operations and Maintenance Waterfront Infrastructure Facility Siting Study and Site Readiness Plans.

10. COUNCIL DECLARATION OF FUTURE AGENDA ITEMS

11. ADJOURNMENT
The next Regular Meeting will be held on October 8, 2024.

This agenda is subject to amendment up to 72 hours prior to the date and time set for the meeting. Please refer to the agenda posted at City Hall, 595 Harbor Street, Morro Bay, CA 93442 for any revisions or call the Clerk's office at (805) 772-6205 for further information.

Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available for public inspection upon request by calling the City Clerk's office at (805) 772-6205.

In compliance with the Americans Disability Act, if you need special assistance to participate in a City meeting, please contact the Clerk's office 24 hours prior to the meeting to insure reasonable arrangements can be made to provide accessibility to the meeting.

1 MINUTES - MORRO BAY CITY COUNCIL

REGULAR MEETING
September 10, 2024, 5:30 p.m.

Veterans Memorial Hall, 209 Surf St., Morro Bay, CA
Members Present: Mayor Carla Wixom
Council Member Zara Landrum
Council Member Laurel Barton
Council Member Cyndee Edwards
Council Member Jennifer Ford
Staff Present: City Manager Yvonne Kimball
City Attorney Chris Neumeyer
City Clerk Dana Swanson
Finance Director Emily Conrad
Public Works Director Greg Kwolek
Police Chief Amy Watkins
Fire Chief Dan McCrain
Management Analyst Janeen Burlingame
HumanResources/Risk Manager Rachael Hendricks
_____________________________________________________________________

1. ESTABLISH QUORUM AND CALL TO ORDER
Mayor Wixom established a quorum and called the meeting to order at 5:36 p.m.

2. MOMENT OF SILENCE

3. PLEDGE OF ALLEGIANCE

4. REPORTS

4.a Closed Session Report
https://youtu.be/d3LBaLajf_o?si=ErceJ8Ee11TMT2Mn&t=41
City Attorney Neumeyer announced no statutorily required reportable action was taken in closed session.

At Council's direction, he clarified closed session listings included the phrase "various potentially interested parties" to acknowledge that if the City was to do an RFP for the property, which was under consideration, there would be potentially interested parties, who would be prospectively identified by name if active negotiations occur, and that anyone the City is in active negotiations with now were listed on the agenda.

2 4.b Mayor and Councilmembers' Reports, Announcements and Presentations
https://youtu.be/d3LBaLajf_o?si=FzXSceRN4J-x3lIi&t=94

4.c City Manager Reports, Announcements and Presentations https://youtu.be/d3LBaLajf_o?si=noiaJkWr8WAqXCPG&t=759

4.d Subcommittee Reports - Verbal Update of Current Subcommittee Activities
https://youtu.be/d3LBaLajf_o?si=0LQEZ9MShjd0LoSg&t=853
a. Water Reclamation Facility & Morro Bay / Cayucos Sanitary District JPA
b. Morro Bay Power Plant (Vistra)
c. Offshore Wind Energy
d. Downtown Design District

5. RECOGNITION AND PRESENTATIONS

6. PUBLIC COMMENT
https://youtu.be/d3LBaLajf_o?si=-XGemeDoQG96LC6s&t=1142  Garry Johnson, Morro Bay, announced he would be on the Rock radio station, 97.3 Saturday morning to talk about the BESS project and battery technology.
 Linda Winters, Morro Bay, enjoyed and appreciated the events celebrating Morro Bay's 60th anniversary.
 Jon Nowaczyk and Natalie Teichmann, Let's Get Tuned, spoke to the closed session item regarding 781 Market Avenue, shared the benefits their business offers Morro Bay, and asked that Council extend their lease.
 Rachel Wilson, Cayucos, commented on the proposed BESS project and urged the Council to prioritize the safety of local residents.  Betty Winholtz, Morro Bay, thanked those who helped with and attended Morro Bay's 60th anniversary parade, invited residents to attend Recreation & Parks Commission meetings the 3rd Thursday of the month, inquired about potential County funding for efforts related to offshore wind, and expressed safety concerns at the intersection of Beach and Main Streets.
 An unnamed person offered comments.

3  Michelle Leicester-Cadaret, Morro Bay, requested the City take action to remedy health and safety concerns related to the burned house on Trinidad.

End of public comment.

7. CONSENT AGENDA
Unless an item is pulled for separate action by the City Council, the following actions are approved without discussion. The public will also be provided an opportunity to comment on consent agenda items.

Mayor Wixom opened public comment for items on the Consent Agenda. https://youtu.be/d3LBaLajf_o?si=YmujUM_8Gh-TeC6f&t=2522  Betty Winholtz, Morro Bay, raised questions regarding Item 7.d.  An unnamed person offered comments.

Mayor Wixom sought Council concurrence to allow an announcement that had been missed during general public comment.
 Mary Ann Gustafson, San Luis Obispo Bicycle Club, announced the 53rd Annual Lighthouse Century Bicycling Event to be held Saturday, September 28th.

End of public comment.

Motion by Council Member Edwards
Seconded by Council Member Ford
Approve consent agenda items 7.a through 7.d
Ayes (5): Mayor Wixom, Council Member Landrum, Council Member Barton, Council Member Edwards, and Council Member Ford
CARRIED (5 to 0)

7.a Approval of Minutes
Approve as submitted.
a. August 27, 2024 - Regular Council Meeting

7.b Approval of Proclamations
a. Proclamation recognizing September 15-October 15, 2024 as "National Hispanic Heritage Month"
Approve as submitted.

7.c Designation of Voting Delegate and Alternate at League of California Cities 2024 Annual Conference Business Meeting

4 1. Select City Manager Kimball, as the voting delegate for the upcoming annual business meeting to be held at the League of California Cities Annual Conference; and

2. Authorize the City Clerk to complete the League of California Cities’ online submission form attesting that council action was taken and affirming the selection of the voting delegate.

7.d National Opioid Settlement Agreements with Kroger Co.

1. Approve Settlement Agreements and Participation Forms for the City’s participation in the National Opioid Settlement Agreements with Kroger Co.

2. Approve the California State-Subdivision Agreements Regarding Distribution and Use of Settlement Funds relating to the National Opioid Settlement Agreements with Kroger Co.

3. Adopt Resolution No. 60-24 approving and authorizing the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements with Kroger Co., including signing necessary documents and transmittal thereof as necessary.

4. Approve disbursement of initial partial settlement funds to County (default option) while reserving option for direct distribution of further settlement funds to City later in time.

8. PUBLIC HEARING ITEMS
None

9. BUSINESS ITEMS

9.a Advisory Board Interviews and Appointments
https://youtu.be/d3LBaLajf_o?si=gJajvGLLhLUwSPmU&t=3029 Mayor Wixom invited CFAC applicant Sarah Love to the podium to introduce herself and share the reason for her interest in serving on the Citizens Oversight/Finance Advisory Committee.

The Council interviewed Jennifer Madrid and Christopher DeMoville for consideration of appointment to CTAC and voted by written ballot. Clerk Swanson read the results into the record. Christopher DeMoville received three votes (Council Members Barton, Edwards and Ford) and was appointed as the City's representative to SLOCOG's Citizens Transportation Advisory Committee.

Motion by Mayor Wixom
Seconded by Council Member Edwards

5 Appointed Sarah Love to fill an unscheduled vacancy on the Citizens Oversight/Finance Advisory Committee for a term ending January 31, 2026.

Ayes (5): Mayor Wixom, Council Member Landrum, Council Member Barton, Council Member Edwards, and Council Member Ford CARRIED (5 to 0)
The Council voted by written ballot to appoint Christopher DeMoville as the City's representative to SLOCOG's Citizens Transportation Advisory Committee for a 4-year term ending October 31, 2028.

Ayes (3): Council Member Barton, Council Member Edwards, and Council Member Ford
Noes (2): Mayor Wixom, and Council Member Landrum
CARRIED (3 to 2)

9.b Consolidation of Morro Bay Transit Administration, Operations, and Maintenance into the San Luis Obispo Regional Transit Authority https://youtu.be/d3LBaLajf_o?si=RSzsRzzRLsFgDO3z&t=4462 Public Works Director Kwolek and Management Analyst Burlingame presented the report and, along with RTA Executive Director Geoff Straw, responded to Council inquiries.

Mayor Wixom opened public comment for Item 9.b.
https://youtu.be/d3LBaLajf_o?si=APmLm9sI8GT2w03q&t=8607  Betty Winholtz, Morro Bay, opposed any form of outsourcing and urged the City to continue in-house management of transit services.
 Mary Witkowski, Morro Bay, expressed concern about transferring services to RTA and believed there was a lack of awareness about available services.
 Michelle Leicester-Cadaret, Morro Bay, was concerned transferring services to RTA would limit use of the trolley for local events, suggested driving transit vehicles back and forth to San Luis Obispo would increase pollutants, and agreed with the need to advertise and promote available services.

End of public comment.

Ms. Burlingame, Mr. Kwolek and Mr. Straw responded to additional questions.

6 Motion by Council Member Barton
Seconded by Council Member Ford

1. Authorize consolidation of Morro Bay Transit (MBT) administration, operations, and maintenance into the San Luis Obispo Regional Transit Authority (RTA) and direct staff to return to Council with an agreement for provision of MBT services by the RTA for
authorization to execute, such agreement pending and conditional upon any required meet and confer or applicable union
negotiations; and

2. Direct staff to prepare an amendment with MV Transportation (a third-party vendor providing driver and dispatch services) to extend the current agreement to align with RTA consolidation and return to Council for authorization to execute.

Ayes (4): Mayor Wixom, Council Member Barton, Council Member Edwards, and Council Member Ford
Noes (1): Council Member Landrum
CARRIED (4 to 1)

9.c Approval of Updated Harbor Vitality Director Classification and Job Description Revised Pay Schedules, and Amendment to
Compensation and Benefits Resolution for City Department Heads to Reflect Updates
The Council took a brief recess at 8:28 p.m. and reconvened at 8:35 p.m. with all members present.
https://youtu.be/d3LBaLajf_o?si=AH7A8Q9_OI32pYZx&t=10710 Human Resources/Risk Manager Hendricks presented the report and, along with City Manager Kimball and Fire Chief McCrain, responded to Council inquiries.

Mayor Wixom opened public comment for Item 9.c.
https://youtu.be/d3LBaLajf_o?si=XW4_ue9iF73KcPOO&t=12040  Bill Luffee, Morro Bay, stated the job description seemed too broad, mentioned nothing about boating or safety, and questioned whether the Director would handle only lease site negotiations or all City real estate.
 Cal Myers, Morro Bay resident and Harbor Advisory Board ("HAB") Chair, noted some HAB members reviewed and provided individual feedback on the proposed job description within Brown Act confines. He opined the position had three big hats: economic development, lease management and harbor patrol, with

7 maintenance as a 4th piece. He expressed concern about the job title and hoped the City was successful in its search.
 Betty Winholtz, Morro Bay, echoed comments by previous speakers, understood the economic development piece but had difficulties seeing how harbor patrol fits in. She expressed concern this person would experience conflict balancing the various duties.  Mary Witkowski, Morro Bay, disagreed with the revised title, job description and salary reduction, noting the Director's focus should be on public safety, maintenance of harbor infrastructure and maximizing waterfront assets, seeking grant opportunities for launch ramp and revetment improvements.
 Jeff Eckles, Morro Bay, expressed concern about the proposed job title and felt we may be asking too much out of the position, perhaps at the expense of performing traditional duties of a Harbor Master or Harbor Director.

End of public comment.

Staff responded to additional Council questions.

Mayor Wixom sought Council consensus to go past 9:30 p.m. to finish this item.

Motion by Mayor Wixom
Seconded by Council Member Barton

1. Adopt Resolution No. 61-24 updating the Harbor Director Job Description to Harbor Vitality Director; and

2. Adopt Resolution No. 62-24 revising Fiscal Years 24-25, 25-26, and 26-27 pay schedules, decreasing the salary for the Harbor Vitality Director to align with other Morro Bay non-sworn director positions; and

3. Adopt Resolution No. 63-24 amending the previously adopted maximum compensation and benefits for certain City department head positions.

Ayes (5): Mayor Wixom, Council Member Landrum, Council Member Barton, Council Member Edwards, and Council Member Ford CARRIED (5 to 0)

10. COUNCIL DECLARATION OF FUTURE AGENDA ITEMS
None.

11. ADJOURNMENT

8 The meeting adjourned at 9:48 p.m.
/s/ Dana Swanson, City Clerk

1 MINUTES - MORRO BAY CITY COUNCIL

CLOSED SESSION MEETING
September 10, 2024, 3:00 p.m.

City Hall Conference Room
595 Harbor Street, Morro Bay, CA 93442
Members Present: Mayor Carla Wixom
Council Member Zara Landrum
Council Member Laurel Barton
Council Member Cyndee Edwards
Council Member Jennifer Ford
Staff Present: City Manager Yvonne Kimball
City Attorney Chris Neumeyer
Community Development Director Airlin Singewald
_____________________________________________________________________

1. ESTABLISH QUORUM AND CALL TO ORDER
Mayor Wixom established a quorum and called the meeting to order at 3:00 p.m.

2. SUMMARY OF CLOSED SESSION ITEMS

3. CLOSED SESSION PUBLIC COMMENT
 Natalie Teichmann, Let's Get Tuned, expressed a desire to be part of communications regarding 781 Market Ave.; implored Council to respect and support community members who use their services; asked for transparency, integrity and honesty with regard to negotiations; and suggested what constitutes the highest and best use is debatable.  Jon Nowaczyk, Let's Get Tuned, hoped to receive a response to their proposal to extend the lease agreement and believed theirs could be a successful venture.
 Ron Reisner, Morro Bay, stated 781 Market Ave. and the adjacent properties were underutilized, providing only marginal revenue for the city.

He suggested redevelopment would benefit the waterfront and downtown areas and urged Council to make decisions in the best interest of the city, maximizing both short and long term revenues.
 Bob Fowler, on behalf of Embarcadero Master Leaseholders group, spoke in support of full redevelopment of the Market Avenue properties and the importance of this catalyst site for both waterfront and downtown

2 businesses. He suggested parking concerns could be resolved and encouraged the Council to move a project forward.
 Homer Alexander, Morro Bay, urged the City to aggressively pursue redevelopment of the three City-owned parcels, including the parking lot on Market & Pacific, suggesting a full service hotel could bring revenues of $800,000 per year, and conference center would generate revenue during slow tourism months.
 John Solu, Morro Bay, shared his experience as a hotelier and suggested a full service 100-room hotel could bring $700,000-$800,000 in revenue per year.
 Judy Setting, Morro Bay, expressed concern there had not been sufficient outreach to bring forward the best offer and price for redevelopment of Market Plaza and requested a copy of the updated appraisal. She urged the Council to protect the City's assets and that any redevelopment should include an elevator and better connect downtown with the Embarcadero.

4. THE COUNCIL WILL CONVENE IN CLOSED SESSION

4.a CONFERENCE WITH REAL PROPERTY NEGOTIATOR -
GOVERNMENT CODE SECTION 54956.8
Property: 714 Embarcadero, 781 Market Street and parking lot; APNs 066-321-028, 066-321-027, 066-321-026, 066-321-025, 066-112-007, 066-321-008.

Property Negotiator: Hemant Patel; Various Potentially Interested Parties Agency Negotiators: Yvonne Kimball, City Manager; Airlin Singewald, Community Development Director; and Chris Neumeyer, City Attorney Negotiation: Price and Terms of Payment

4.b CONFERENCE WITH REAL PROPERTY NEGOTIATOR -
GOVERNMENT CODE SECTION 54956.8
Properties: 231 Atascadero Road; 595 Harbor Street; 695 Harbor Street; 955 Shasta Avenue; Portion of Lot 1 of Lot Line Adjustment 01-97 ("Triangle Parking Lot"); and 160 and 180 Atascadero Road, 1700 Embarcadero (APNs 066-331-032, -033, and -034)
Property Negotiator(s): Various Potentially Interested Parties Agency Negotiators: Yvonne Kimball, City Manager; Ailin Singewald, Community Development Director; and Chris Neumeyer, City Attorney Negotiations: Price and Terms of Payment

4.c CONFERENCE WITH REAL PROPERTY NEGOTIATOR -
GOVERNMENT CODE SECTION 54956.8

3 Property: APNs 066-280-045 and 066-044-011, 1130 Napa Ave., Morro Elementary School
Property Negotiators: San Luis Coastal Unified School District Agency Negotiators: Yvonne Kimball, City Manager; Airlin Singewald, Community Development Director; and Chris Neumeyer, City Attorney Negotiation: Price and Terms of Payment

5. RECONVENE IN OPEN SESSION
The City Council reconvened in Open Session. City Attorney Neumeyer announced no statutorily required reportable action was taken in closed session.

At Council's direction, he clarified closed session listings included the phrase "various potentially interested parties" to acknowledge that if the City was to do an RFP for the property, which was under consideration, there would be potentially interested parties, who would be prospectively identified by name if active negotiations occur, and that anyone the City is in active negotiations with now were listed on the agenda.

6. ADJOURNMENT
The meeting adjourned at 5:22 p.m.

Respectfully submitted,
/s/ Dana Swanson, City Clerk

AGENDA NO: 7.b
MEETING DATE: September 24, 2024

A PROCLAMATION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA,
DECLARING SEPTEMBER 22 – SEPTEMBER 28, 2024 AS
THE 20TH ANNUAL SEA OTTER AWARENESS WEEK

CITY COUNCIL
City of Morro Bay, California
WHEREAS, the southern sea otter, a keystone species, plays a critical role in maintaining the health and resilience of nearshore marine ecosystems, including vital kelp forests and seagrass beds, both of which are essential for supporting marine biodiversity and combating climate change; and
WHEREAS, sea otters have been historically hunted to the brink of extinction, with their population once reduced to approximately 50 individuals in the early 1900s, but due to the protections afforded by the federal Endangered Species Act, the Marine Mammal Protection Act, and California state law, their population has begun to recover and now numbers are around 3,200 individuals; and
WHEREAS, the southern sea otter continues to face numerous threats, including high levels of mortality from great white shark bites and the impacts of climate change, which are constraining their range to a small fraction of their historical habitat, thereby limiting their ability to expand and fully recover; and
WHEREAS, the ecological benefits of sea otters extend beyond marine ecosystems, as their presence near shorelines can help humans monitor the health of coastal waters by detecting pollutants and pathogens that threaten both marine and human communities; and WHEREAS, the protection and recovery of southern sea otters contribute not only to the biodiversity of the Pacific Coast but also to the broader fight against climate change by supporting carbon-sequestering habitats that remove harmful carbon dioxide from the atmosphere; and WHEREAS, we proclaim our steadfast commitment to the continued protection, expansion, and recovery of the southern sea otter population, recognizing their indispensable role in sustaining vibrant and resilient coastal ecosystems. We encourage all efforts to mitigate the threats they face and to foster the restoration of their historical range, ensuring a healthier, more sustainable future for both wildlife and people along our cherished coastlines.

NOW, THEREFORE, BE IT RESOLVED, that the Morro Bay City Council does hereby proclaim September 22 – September 28, 2024, to be the 20th Annual “Sea Otter Awareness Week.”

IN WITNESS WHEREOF I have
hereunto set my hand and caused the
seal of the City of Morro Bay to be
affixed this 24th day of September 2024
_____________________________
Carla Wixom, Mayor
City of Morro Bay, California

01181.0004/769398.2
AGENDA NO: 7.c
MEETING DATE: September 24, 2024
Prepared By: EC/MAG Dept Review:

City Manager Review: __YK_____ City Attorney Review: LNL__ Staff Report
TO: Honorable Mayor and City Council DATE: September 17, 2024 FROM: Emily Conrad, Finance Director
Melissa Green, Administrative Programs Manager
SUBJECT: FY 2024-25 Budget Amendments for Fire and Police Measures Q & E Allocations

RECOMMENDED ACTION
Adopt Resolution No. 64-24 authorizing amendments to the adopted Fiscal Year (FY) 2024-25 Operating & Capital Budget.

ALTERNATIVE(S)
The Council may choose to modify the recommended budget amendments to include alternative funding sources, such as the General Fund Vehicle Replacement Fund (050) for the Fire Department request and the General Fund (001) for the Police Department request.

FISCAL IMPACT
Adoption of Resolution No. 64-24 would increase FY 2024-25 expenditures in Measure E fund by $112,118. Based on the adopted budget, the projected Measure E fund balance at year-end was $935,601. This budget amendment would result in a projected ending fund balance of $823,483.

Special Safety Grants Fund (282) expenditures would decrease by $64,381. Based on the adopted budget, the projected Special Safety Grants Fund balance at year-end was $171,057.

The budget amendment would result in a projected ending fund balance of $235,438.

BACKGROUND/DISCUSSION
The Fire Chief and Police Chief have requested amendments to the adopted FY 2024-25 Operating Budget for their respective departments. Because both requests address public safety concerns aligning with the legislative intent of Measures Q & E, Finance staff recommended they go before the Citizens’ Finance Advisory Committee (CFAC) for funding consideration. Both requests were presented to CFAC on August 20, 2024. The Committee voted unanimously to recommend approval of both requests; however, CFAC’s recommendation included a request that Council consider whether more appropriate funding sources were available for the Police personnel request.

The Police Chief’s request concerns the permanent, part-time (0.75 FTE) Property Evidence Clerk position. This position has been funded through the Special Safety Grants Fund (282) since FY 2018-19. The Special Safety Grants Fund receives an annual grant from the Supplemental Law Enforcement Services Fund (SLESF) under Government Code Section 30061-30065.

SLESF program funds must supplement, not supplant, existing funding for front-line law

enforcement services. The Property Evidence Clerk is not a front-line position and would normally be budgeted from general governmental funds, such as the General Fund or Measure E. As such, the Police Chief desires to reallocate funding for this position away from the Special Safety Grants Fund. The FY 2024-25 cost for the permanent, part-time Property Evidence Clerk is approximately $62,000. This position is within the Service Employees International Union (SEIU) employee group and will benefit from negotiated salary increases of 5% in FY 2025-26 and FY 2026-27.

The Fire Chief’s request concerns the repair of the Department’s ladder truck. The ladder truck has suffered a failure of the mounting plate that connects the waterway and ladder to the truck, rendering the ladder unsafe to operate. Morro Bay Fire Department has the only ladder truck in the North Coast area, meaning emergency response for incidents requiring a ladder truck will be delayed due to travel time from Atascadero or the City of San Luis Obispo. The truck has approximately 11 years of life cycle duty remaining and a replacement cost of $1.75 - $2 million.

Additional detail about this request is included in the agenda packet for the August 20, 2024 CFAC meeting (Attachment 1). The one-time cost of the ladder truck repair is approximately $50,000.

CONCLUSION
Due to legitimate concerns related to the appropriate use of SLESF grant funding, staff recommends the approval of the Police Chief’s budget amendment request. Likewise, to repair critical equipment used by the Morro Bay Fire Department for essential public safety services, staff recommends approval of the Fire Chief’s budget amendment request. Both requests are incorporated in Resolution No. 64-24, authorizing amendments to the adopted FY 2024-25 Operating & Capital Budget.

ATTACHMENTS

1. Link to August 20, 2024 CFAC Agenda Packet

2. Resolution No. 64-24 Authorizing Amendments to the FY 2024-25 Operating & Capital Budget

RESOLUTION NO. 64-24

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA,
AUTHORIZING AMENDMENT TO THE CITY’S FISCAL YEAR
2024-25 OPERATING AND CAPITAL BUDGET

T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the City of Morro Bay is required to appropriate and expend public funds to conduct its day-to-day business activities; and
WHEREAS, the City Council adopted the Fiscal Year (FY) 2024-25 Operating and Capital Budget on June 25, 2024, by Resolution No. 47-24; and
WHEREAS, the Morro Bay Fire Department’s emergency response fleet includes a 2015 Pierce ladder truck used to provide an elevated water stream for difficult-to-access structures; and WHEREAS, the ladder truck has suffered a failure of the mounting plate that connects the waterway and ladder to the truck, rendering the ladder unsafe for operation; and WHEREAS, the cost of the repair exceeds available funds in the Fire Department’s adopted FY 2024-25 operating budget; and
WHEREAS, the Morro Bay Police Department receives an annual grant from the Supplemental Law Enforcement Services Fund (SLESF) pursuant to California Government Code Section 30061-30065 (Code); and
WHEREAS, in accordance with said Code, SLESF funds are to be used exclusively to fund frontline municipal police services and must not supplant other funding for Public Safety Services; and
WHEREAS, the City tracks all SLESF revenues and expenditures in a dedicated Special Safety Grants Fund (Fund 282); and
WHEREAS, the City’s FY 2024-25 Operating & Capital Budget includes a part-time permanent Property Evidence Clerk funded from Fund 282; and WHEREAS, City staff recommend removing this position from Fund 282 to fully comply with the intent of the Code; and
WHEREAS, the City Council deems it necessary to amend said budget.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro Bay, California, a budget adjustment is authorized to allow for $50,000 in expenditures for the repair of the Fire Department’s ladder truck and to reallocate funding for the part-time permanent Property Evidence Clerk position, as outlined in Table 1.

2 | P a g e
Table 1. Budget Amendment Detail
Type Account Description Increase
(Decrease)
Expense 003-4210-6604 Outside Vehicle
Repair/Maint
$50,000
Expense 282-4190-4110 Regular Pay ($45,925.67)
Expense 282-4190-4599 Other Pay ($2,263.00)
Expense 282-4190-4910 Employer Paid
Benefits
($755.22)
Expense 282-4190-4911 Pension Normal
Cost
($3,614.35)
Expense 282-4190-4912 PERS Unfunded
Accrued Liability
($9,797.05)
Expense 282-4190-4914 Workers’
Compensation
($2,026.00)
Expense 003-4190-4110 Regular Pay $45,925.67
Expense 003-4190-4910 Employer Paid
Benefits
$755.22
Expense 003-4190-4911 Pension Normal
Cost
$3,614.35
Expense 003-4190-4912 PERS Unfunded
Accrued Liability
$9,797.05
Expense 003-4190-4914 Workers’
Compensation
$2,026.00
PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof held on the 24th day of September 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
______________________________
CARLA WIXOM, Mayor
ATTEST:
_____________________________
DANA SWANSON, City Clerk

AGENDA NO: 7.d
MEETING DATE: September 24, 2024
Staff Report
TO: Honorable Mayor and City Council DATE: September 10, 2024 FROM: Emily Conrad, Finance Director
SUBJECT: Resolution No. 65-24 Approving the Revised Local Agency Investment Fund (LAIF) Transaction Officers

RECOMMENDED ACTION
Adopt Resolution No. 65-24 approving the revised Local Agency investment Fund (LAIF) Transaction Officers.

FISCAL IMPACT
The City earns a significant portion of its interest income from LAIF.

SUMMARY
This Resolution reauthorizes the City’s ability to invest with LAIF which is managed by the California Treasurer's Office, and updates the authorized signers with LAIF.

BACKGROUND/DISCUSSION
The City’s Investment Policy under “Suitable and Authorized Investments” lists the California LAIF investment pool as a suitable investment instrument. Further, the City Council must adopt a Resolution to authorize changes to the City’s authorized individuals with LAIF in accordance with State law.

Resolution No. 49-21, adopted June 22nd, 2021, is the current Resolution on file with the State Treasurer’s Office, and revisions to the list of authorized individuals are necessary due to changes in City position titles.

The proposed resolution, based on an updated format prescribed by LAIF, accomplishes the following objectives:
• authorizes the deposit and withdrawal of City monies in LAIF • revises the list of authorized positions

CONCLUSION
Staff recommends the City Council adopt Resolution No. 51-17 to reaffirm its desire to invest with LAIF and update the list of individuals authorized to transact with LAIF on behalf of the City.

ATTACHMENT

1. Proposed Resolution No. 65-24 authorizing investment of monies in the Local Agency Investment Fund and updates the authorized signers.

Prepared By: ___EC__ Dept Review:__ EC _
City Manager Review: _YK_ City Attorney Review: _LNL_

RESOLUTION NO. 65-24

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF MORRO BAY, CALIFORNIA
TO RESCIND RESOLUTION NO. 49-21,

REAFFIRM INVESTMENT OF MONIES IN THE

LOCAL AGENCY INVESTMENT FUND, DESIGNATE

TRANSACTION OFFICERS AND APPROVE POLICY

REQUIRING APPROVAL PRIOR TO ANY LAIF TRANSACTION

THE CITY COUNCIL
City of Morro Bay, California
WHEREAS, Resolution No. 49-21, dated June 22, 2021, authorized the City of Morro Bay to continue investing funds with the State of California’s Local Agency Investment Fund (LAIF); and WHEREAS, the officers, then authorized to order deposit and withdrawal of monies, and affect changes to the account, have changed.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro Bay, California as follows:

1. Resolution 49-21 related to investing funds through LAIF is rescinded and replaced in its entirety with the passage of this Resolution; and

2. The City will continue investing with LAIF, and designates the following officers to deposit and withdraw funds, and affect changes to the account:

City Manager
Finance Director/Treasurer
Accounting Manager
Fiscal Analyst

3. For the purposes of internal controls, the City will require written approval of one of these authorized representatives prior to initiation a deposit, withdrawal of funds, or any other change in the account by another one of the designated representatives.

PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular meeting thereof, held on the 24th day of September 2024 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSE:
______________________________
CARLA WIXOM, Mayor
ATTEST:
________________________________
DANA SWANSON, City Clerk

Prepared By: _AS/CFN/DM___ Dept Review: _______AS_______ City Manager Review: _YK_ City Attorney Review: __CFN_______ Staff Report
TO: Honorable Mayor and City Council DATE: September 17, 2024 FROM: Airlin Singewald, Community Development Director
Dan McCrain, Fire Chief
Chris F. Neumeyer, City Attorney
SUBJECT: Vistra Battery Energy Storage System (BESS) Project – Status Update

RECOMMENDED ACTION
Receive and file an update on the proposed Vistra BESS Project, including:

1. Status and estimated timeline for the processing of the Vistra BESS project application,

2. Offsite Consequence Analysis, and

3. Assembly Bill (AB) 205

ALTERNATIVES
No alternatives.

FISCAL IMPACT
The processing of the Vistra BESS project has no impact on the City’s General Fund. The City’s time and materials cost to process the BESS project is reimbursed by Vistra, in accordance with a reimbursement agreement between the City and Vistra.

BACKGROUND/DISCUSSION

1. BESS Project Application Status and Anticipated Timeline The purpose of this item is to update the Council on the status and estimated timeline for the continued processing of Vistra’s application to develop a BESS project at the former power plant property. This item is informational only. The Council should refrain from expressing their opposition or support of the project, since this is not a noticed public hearing to deliberate on the merits of the project.

In 2020, Vistra applied to the City for a coastal development permit (CDP) and other City approvals to allow for the development of a 600 MW BESS facility on a 24-acre site at the former power plant property. As required by Plan Morro Bay, Vistra also proposed a master plan to allow for redevelopment of the site, including changing the existing Visitor-Serving Commercial (VSC) zoning to Industrial, which would make the BESS an allowable use on the site, subject to CDP approval.

The master plan and land use change will require an amendment to the City’s Local Coastal Program (LCP).

AGENDA NO: 9.a
MEETING DATE: September 24, 2024

As required by the California Environmental Quality Act (CEQA), the City is also preparing an Environmental Impact Report (EIR) for the proposed project. In 2021, the City contracted with Rincon Consultants to prepare the EIR, at Vistra’s expense. The City published its notice of availability of the Draft EIR for the BESS project on March 11, 2024. This started a public comment period that ended on May 28, 2024. Rincon Consultants is currently reviewing the public and agency comments and preparing written responses for inclusion in the Final EIR.

The purpose of an EIR is to promote informed decision-making and transparency by studying and disclosing a project’s environmental impacts. The City would be required to certify the EIR before approving the project. By certifying the EIR, the City would recognize the EIR was prepared in accordance with the applicable requirements of CEQA. Certifying an EIR (on its own) does not approve a project. In fact, in some cases a lead agency will certify an EIR without approving the underlying project. This allows a lead agency to potentially rely on the EIR when considering other future development projects within the same project area.

While the EIR and project approvals are separate, they are closely related. For example, the City may use information in the EIR, most commonly the alternatives chapter, to consider a modified version of the project. The EIR will also provide critical information to substantiate the required findings (e.g., that the project would not be contrary to public health or safety) for the City to approve or disapprove the project.

Phased Approach
As described above, the proposed project requires a CDP and an LCP amendment. The LCP amendment is to satisfy the master plan requirement and to change the zoning to make the BESS an allowable use on the power plant property, subject to CDP approval. The CDP is to authorize development of the BESS in the Coastal Zone. The LCP amendment requires final approval by the California Coastal Commission (CCC). The City’s decision on the CDP is appealable to the Coastal Commission.

Approval Purpose Final Approval Body Standard of Review LCP
Amendment
To approve master plan and
land use change to make BESS
approvable, subject to a CDP.

Coastal Commission LCP and Coastal
Act
CDP Authorizes development of the
BESS project, consistent with
the master plan.

Coastal Commission
(on appeal).

CDP could be
approved by
Planning
Commission and is
appealable to
Council and CCC.

LCP, including
Power Plant Master
Plan
To date, staff has concurrently processed the LCP amendment and CDP application. This means staff planned to bring the LCP amendment and CDP application to the Planning Commission and City Council for consideration together at the same time. If approved by the City Council, staff would have sent both the LCP amendment and CDP application to the CCC for final consideration and action. The City’s approval of the CDP would have been contingent on the CCC approving the LCP amendment.

In a letter dated 8/2/2024, CCC staff directed the City to process the LCP amendment first and then the CDP application. This is because the CDP for the BESS project is not approvable until CCC certifies the LCP amendment. Since the CCC is the final approval authority for the LCP amendment, City staff has notified Vistra of our intent to segment the CDP and LCP amendment applications per CCC staff direction.

As shown in the estimated timeline below, the City would process the project in two phases, per CCC staff direction. The first phase would be the LCP amendment, with final approval required by the CCC. If the CCC approves the LCP amendment, the City would then proceed with processing the CDP application (Phase 2). Assuming that the critical planning issues associated with the BESS are addressed at the master plan level, the City should be able to find the CDP application consistent with the master plan and EIR. Staff estimates this “segmented” process will add at least 3 months to the timeline to account for separate CDP hearings before the Planning Commission, City Council (on appeal), and Coastal Commission (on appeal).

The segmented process is not expected to change the trajectory of the Final EIR. This is because the EIR is required to evaluate the impacts of the proposed master plan and foreseeable development. Since the BESS project is a foreseeable result of the master plan it needs to be analyzed in the EIR at the same time as the master plan. This is the case whether or not the process is segmented.

Timeline
The following is an estimated timeline for the continued processing of the BESS project, given the CCC’s recommended two-phase approach.

Phase 1 – LCP Amendment
Agency Consultation and Final
LCP Amendment (Power Plant
Master Plan)
The current draft of the Master
Plan may need to be updated
based on public and agency
comments.

October 2024
Prepare Final EIR. The Final EIR would evaluate the
LCP amendment and BESS
project (as foreseeable
development).

December 2024
Prepare Planning Commission
staff report packet for LCP
amendment.

This would include a detailed staff
report, with recommended
findings and conditions.

February 2025
Planning Commission hearing(s). The Planning Commission’s role is a recommendation to City
Council.

March/April 2025
City Council hearing to consider
LCP amendment.

If LCP amendment is approved by
City Council, it will be forwarded to
the CCC for consideration.

May 2025
CCC hearing(s) to consider LCP
amendment.

The CCC would be the final
approval authority on the LCP
amendment.

August 2025
At this point, if the LCP amendment was approved, the City could now process the CDP application

Phase 2 – CDP Application
Review CDP for consistency
with LCP amendment and
prepare findings and conditions.

The City would review the CDP for
consistency with the Power Plant
Master Plan and Final EIR.

September 2025
Planning Commission
hearing(s).

The Planning Commission would
be the review authority on the
CDP, with appealability to the City
Council.

October 2025
City Council hearing(s) [on
appeal].

The City Council would hear an
appeal of the Planning
Commission’s action on the CDP
November 2025
CCC hearings(s) [on appeal]. The City’s approval of the CDP would be appealable to the CCC.

The CCC would first hold a
“substantial issue” hearing to
determine if the appeal raises a
coastal resource issue.

January 2026
At this point, the BESS project could potentially be approved, and if so, then developer could proceed with construction permits.

Project Status / Next Steps
City staff is currently working on two parallel efforts to process the BESS project. First, the City is working with Rincon to review and prepare written responses to the 214 public and agency comment letters on the Draft EIR. The City’s responses to comments will be included in the Final EIR that will be released to the public prior to the first Planning Commission hearing.

At the same time, City staff is deciding on a recommendation to the Planning Commission. A major factor in this decision is staff’s analysis of the project’s consistency with the City’s LCP. Since the CCC would play a significant role in the permitting of the project, including final approval authority of the LCP amendment and appeal jurisdiction of the CDP, City staff will look to CCC staff for guidance on questions of LCP and Coastal Act consistency. CCC staff’s 8/2/2024 letter (see attachment 4) concluded that the project faces “development constraints” that “…at the current time appear to preclude such a use/development altogether under the Coastal Act and the LCP.” City staff will be meeting with CCC staff, including CCC’s attorneys, and the BESS project applicant to discuss how these development constraints may affect the project.

In deciding a recommendation, staff would have the following options:

1. Recommend denial of the project.

2. Recommend approval of the project as proposed. To pursue this path, City staff would need to show that the project, as currently proposed, is consistent with the LCP.

3. Recommend approval of one of the EIR alternatives. City staff would need to show that the selected alternative is consistent with the LCP.

4. Recommend approval of a modified project (not an EIR alternative). Under this option, Vistra would need to modify its proposal as necessary to be consistent with the City’s LCP.

The modified project would need to be analyzed in the Final EIR.

Depending on City staff’s analysis and how discussion go with CCC staff, Vistra would always have the option to withdraw their application at any time.

2. Offsite Consequence Analysis
See PowerPoint Presentation provided as Attachment 1

3. Assembly Bill 205
Assembly Bill 205 (“AB 205”) was approved by the Governor on June 30, 2022. (See Attachment 2 and https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB205). AB 205 made multiple statutory changes to implement energy related items of the 2022 Budget Act.

Chapter 6.2 (“Certification of Nonfossil-Fueled Powerplants, Energy Storage Facilities, and Related Facilities”) was added to Division 15 of the Public Resources Code. These new State laws are in Public Resources Code sections 25545-25545.15 comprising eight pages of new laws.

According to the Legislative Counsel’s Digest1for AB 205, the bill establishes “a new certification process for… an energy storage system capable of storing 200 megawatt hours or more of electricity… The bill would authorize a person proposing to construct those facilities, no later than June 30, 2029, to file an application for certification with the [California] Energy Commission.” A summary from the California Energy Commission of the so-called “Opt-in Certification Program” is provided as Attachment 3 and is also available at https://www.energy.ca.gov/programs-andtopics/topics/power-plants/opt-certification-program.

A. BESS Permitting Authority
AB 205 authorizes qualifying battery energy storage system (“BESS”) developers the option to seek all necessary permits for BESS development (including otherwise necessary permits from a local government) directly from the California Energy Commission (“CEC”) and, as applicable, a few other State agencies such as the California Coastal Commission (“CCC”). The current application being processed by City staff from Vistra for development of a BESS in Morro Bay qualifies for the AB 205 permitting process and is subject to the CCC’s jurisdiction.

Public Resources Code section 25545.1(a)2 provides “[u]pon receipt of the application, the [CEC] shall have the exclusive power to certify the site and related facility…” Section 25545.1(b)(1) further provides “the issuance of a certificate by the [CEC] for a site and related facility pursuant to this chapter shall be in lieu of any permit, certificate, or similar document required by any… local… agency… for the use of the site and related facilities, and shall supersede any applicable statute, ordinance, or regulation of any… local… agency…” Section 25545.1(b)(2) provides, however, that this permitting authority of the CEC “does not supersede the authority of the State Lands Commission to require leases and receive lease revenues, if applicable, or the authority of the California Coastal Commission, the San Francisco Bay Conservation and Development Commission, the State Water Resources Control Board, or the applicable regional water quality control boards.” Refer to below Section B(iv) for more details concerning the CCC.

1 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB205 2 Hereinafter the Public Resources Code sections will simply be referred to as “Sections.”

B. Permitting Requirements
AB 205 provides authority for any proposed developer of a BESS project in Morro Bay to bypass the normally applicable permitting authority of the City and go directly to the CEC and CCC for certification. However, there remain relevant requirements for a developer to use the AB 205 process to secure permits from the CEC and CCC (rather than the City). Below are some requirements. i. Net Positive Economic Benefit to Local Government
Section 25545.9 provides that for the CEC to certify a new BESS the CEC must make findings “that the construction or operation of the facility will have an overall net positive economic benefit to the local government that would have had permitting authority over the site and related facility. For purposes of this section, economic benefits may include, but are not limited to, any of the following:
(a) Employment growth. (b) Housing development. (c) Infrastructure and environmental improvements. (d) Assistance to public schools and education. (e) Assistance to public safety agencies and departments. (f) Property taxes and sales and use tax revenues.” ii. Benefits Agreement with One or More Community-Based Organization(s) Section 25545.10 provides that for the CEC to certify a new BESS the CEC must find “that the applicant has entered into one or more legally binding and enforceable agreements with, or that benefit, a coalition of one or more community-based organizations, such as workforce development and training organizations, labor unions, social justice advocates, local governmental entities, California Native American tribes, or other organizations that represent community interests, where there is mutual benefit to the parties to the agreement.” The contents of such an agreement may “include, but are not limited to, any of the following: (1) Terms of employment, such as wages and benefits, employment status, workplace health and safety, scheduling, and career advancement opportunities. (2) Worker recruitment, screening, and hiring strategies and practices, targeted hiring planning and execution, investment in workforce training and education, and worker voice and representation in decision making affecting employment and training. (3) Establishing a high road training partnership, as defined in Section 14005 of the Unemployment Insurance.” (Section 25545.10(a).)
Furthermore, the agreement “may also include, but not be limited to, funding for or providing specific community improvements or amenities such as park and playground equipment, urban greening, enhanced safety crossings, paving roads and bike paths, and annual contributions to a nonprofit or community-based organization that awards grants to organizations delivering community-based services and amenities.” (Section 25545.10(b).)
iii. Finding of Public Convenience and Necessity if Preempt Local Laws “If a project is approved, CEC’s certificate is in lieu of any local permit or local law or ordinance.

However, to grant a certificate to a project, the CEC must make findings that the project will comply with all applicable laws, ordinances, regulations, and standards, or make findings that despite the non-conformance, the project is required for public convenience and necessity, and that there are not more prudent and feasible means of achieving public convenience and necessity.” California Energy Commission, Opt-in Certification Program, September 9, 2024, https://www.energy.ca.gov/programsand-topics/topics/power-plants/opt-certification-program.

iv. Local Coastal Program and California Coastal Commission The allowable land uses for the site in Morro Bay where Vistra has proposed to site a BESS are contained within the City’s Local Coastal Program (“LCP”). The City’s LCP currently does not allow for a BESS use in the proposed site and would need to be amended to allow for such use and issuance by the City of a Coastal Development Permit (“CDP”). If the applicant were to use AB 205, then “the California Coastal Commission shall assume coastal development review authority, using the certified local coastal program as guidance.” (Section 25545.5(d)(1).) Of note is the statute does not require that the CCC follow the LCP, rather consistency with the Coastal Act is the standard of review, with the LCP to be used as non-binding “guidance.” In a letter dated August 2, 2024 the CCC addressed a number of questions and issues regarding the proposed BESS including those concerning the CCC’s role related to potential LCP changes and CDPs. (See Attachment 4.) C. Further AB 205 Details
i. Initial Local Agency Consultation
“The CEC is required to invite the local government to attend a mandatory pre-filing meeting with an applicant.” (California Energy Commission, Opt-in Certification Program, September 9, 2024, https://www.energy.ca.gov/programs-and-topics/topics/power-plants/opt-certification-program.) ii. Public Meetings
“The CEC will announce the receipt of an opt-in application through its email subscription service, and by advertising in a newspaper of general circulation in the project area. Within 30 days of an application being deemed complete and prior to publication of the Draft EIR, the CEC is required to hold a public information and scoping meeting as close as practicable to the proposed project site.

There will be a comment period on the Draft EIR, and the CEC will hold at least one public workshop in the project area to take public comment. All public meetings will be announced at least 10 days in advance.” (California Energy Commission, Opt-in Certification Program, September 9, 2024, https://www.energy.ca.gov/programs-and-topics/topics/power-plants/opt-certification-program.) iii. Labor Requirements
Sections 25545.3.3, 25545.3.5 provide for certain labor requirements. These include mandates to pay prevailing wages and use of a skilled and trained workforce and/or to enter into a project labor agreement.
iv. Expedited Timelines
Upon submission of a BESS application, the CEC shall either determine the application is complete within 30 days, or request further information from the applicant within 30 days necessary to deem the application complete. (Section 25545.4.)
“[N]o later than 270 days after [a BESS] application is deemed complete, or as soon as practicable thereafter, the [CEC] shall determine whether to certify the environmental impact report and to issue a certificate for the site and related facilities pursuant to” AB 205, absent limited circumstances such as substantial changes are proposed in the project that may involve new significant environmental effects. (Section 25545.5)(e)(1).)

Other agencies that retain jurisdiction under the AB 205 process, such as the CCC, “shall take final action on the eligible facility within 90 days after the certification by the [CEC] of the environmental impact report for the site and related facilities, if the applicant has filed a complete, final application for a permit or waste discharge requirement, as applicable, with those agencies before the certification of the environmental impact report.”
v. CEQA
Use of the AB 205 process by a BESS developer renders the CEC the lead agency for purposes of CEQA compliance. “The CEC must make findings under CEQA for any project that would have a significant effect on the environment. For each significant effect, the CEC must find that project changes have been required to avoid or substantially lessen the significant effect, or that mitigation or alternatives to avoid or substantially lessen the significant effect are infeasible. To approve a project that is found to have a significant and unavoidable impact on the environment, the CEC will need to adopt a statement of overriding considerations that identifies how the project’s benefits will outweigh any unavoidable impact.” (California Energy Commission, Opt-in Certification Program, September 9, 2024, https://www.energy.ca.gov/programs-and-topics/topics/power-plants/optcertification-program

CONCLUSION
This report provides for receive-and-file by the Council of an estimated project timeline, an on offsite consequences analysis and a review of AB 205 as it relates to the project. The project is currently at a critical point in the process where staff will consider all the information in the record (EIR analysis, technical study results, public and agency comment letters, etc.) to decide on a recommendation to the Planning Commission. This is an iterative process requiring input from the applicant and various agencies, which could in-turn result in project modifications and further analysis. Ultimately, unless Vistra withdraws its application or does not remain consistent with its cost reimbursement obligations, staff is required under law to continue processing the application.

Staff will follow CCC staff direction to segment the CDP and LCP amendment, by first processing the LCP amendment and then the CDP once/if CCC approves the LCP amendment.

ATTACHMENT(S)

1. Offsite Consequence Analysis Presentation

2. AB 205 Bill Text

3. CEC Summary – Opt-in Certification Program

4. August 2, 2024 CCC letter re proposed BESS Project

9/19/2024
1 OFFSITE CONSEQUENCE ANALYSIS

VISTRA MORRO BAY BATTERY ENERGY STORAGE SYSTEM
(BESS) PROJECT
What is
proposed?
Vistra Energy proposed a 600MW, 2,400MWh
Battery Energy Storage Facility.

Utilizes 24 acres of a 107 acre property for this
project.

Property is old oil tank site on power plant
property.

Proposal is designed with 3 buildings to house
batteries.

Alternative model utilizing 174 cargo style
enclosures.
1 2

9/19/2024
2 Proposed project • Each building contains 2,400
battery racks. • 60,000 battery modules per
building. • 2-story buildings each 91,000
sqft. • Building size 350 ft x 260 ft, 30
ft.

Enclosure alternative
• 174 cargo container style enclosures. • Each enclosure holds 46 battery racks, 736 battery modules. • Groups of 8 enclosures spaced 10 ft apart. • Each group of 8 spaced 25 ft from the
next group.
3 4

9/19/2024
3 What is an Offsite Consequence Analysis
EVALUATE POTENTIAL RISKS TO THE PUBLIC IN EVENT OF A FIRE. PROVIDES ADDITIONAL INFORMATION TO AREA HAVING JURISDICTION (CITY OF MORRO BAY) FOR SITING CONSIDERATIONS. ESTIMATE SAFE DISTANCES BASED ON KNOWN HAZARDS. ANALYZE POTENTIAL AIRBORNE EMISSIONS TO EVALUATE IMPACTS TO SURROUNDING COMMUNITY.

Components of an Offsite Consequences Analysis
Evaluates potential risks to public in event of a fire.

Assumes a maximum credible fire event.

Assumes all active protection features fail.

Utilizes atmospheric conditions that would produce the highest concentration levels.

Assumes fire is closest to nearest residence and occupant is outside for duration of event.

Identifies the furthest distance where serious injuries from short-term exposures would no longer occur. 5 6

9/19/2024
4 What is not evaluated
ACTIVE FIRE SUPPRESSION ACTIVITIES. FLOOD, EARTHQUAKE, OR OTHER SYSTEM FAILURES. GROUND BASED CONTAMINATION, EX. WATER RUN OFF FROM FIREFIGHTING ACTIVITIES.IMPACTS TO ANIMALS, MARINE LIFE, ENVIRONMENT.

Methodology
and
Assumptions
Evaluates gasses known to be in smoke plumes
from various Lithium-Ion batteries used in
energy storage.

Exposure guidelines utilized are Acute Exposure
Guideline Levels (AEGLs) and Emergency
Response planning Guidelines (ERPG’s).

Atmospheric conditions that would produce the
highest concentrations of pollutants at ground
level.

Assumes no evacuations and sensitive
receptors are outside for highest exposure
concentration levels.
7 8

9/19/2024
5 Air pollutants evaluated
Hydrogen
Fluoride (HF)
Hydrogen
Chloride
(HCl)
Hydrogen
Cyanide
(HCN)
Carbon
Monoxide
(CO)
Definitions of Acute Exposure Guideline
Levels (AEGLs)
AEGL-1 is the airborne concentration (expressed as parts per million (ppm) or mg/m3) of a substance above which it is predicted that the general population, including susceptible individuals, could experience notable discomfort, irritation, or certain asymptomatic nonsensory effects. However, the effects are not disabling and are transient and reversible upon cessation of exposure.

AEGL-2 is the airborne concentration (expressed as ppm or mg/m3) of a substance above which it is predicted that the general population, including susceptible individuals, could experience irreversible or other serious, long-lasting adverse health effects or an impaired ability to escape.

AEGL-3 is the airborne concentration, expressed as ppm or milligrams per cubic meter (mg/m3), of a substance above which it is predicted that the general population, including susceptible individuals, could experience life-threatening health effects or death. 9 10

9/19/2024
6 Definitions of Emergency Response
Planning Guidelines (ERPGs)
ERPGs identify the concentration levels at which people will begin to experience health effects if exposed to a hazardous chemical for 1 hour ERPG-1 is the maximum airborne concentration below which nearly all individuals could be exposed for up to 1 hour without experiencing more than mild, transient adverse health effects or without perceiving a clearly defined objectionable odor.

ERPG-2 is the maximum airborne concentration below which nearly all individuals could be exposed for up to 1 hour without experiencing or developing irreversible or other serious health effects or symptoms which could impair an individual's ability to take protective action. ERPG-3 is the maximum airborne concentration below which nearly all individuals could be exposed for up to 1 hour without experiencing or developing life-threatening health effects.

Exposure limits evaluated
• AEGL-2 or the ERPG-2 were chosen as the exposure limits. • Duration of exposure was evaluated at 10- minutes, 30- minutes, 60- minutes, 8- hours based on exposure guideline levels.
• AIRSCREEN dispersion model was chosen for this evaluation. • AERSCREEN produces estimates of “worst-case” 1-hour concentrations for a single source, without the need for hourly meteorological data, and also includes conversion factors to estimate “worst-case” 3-hour, 8- hour, and 24-hour concentrations.
• Assumes receptor is exposed for the entire duration.
11 12

9/19/2024
7 Distances to sensitive receptors
(Proposed Project)
Distances to sensitive receptors
(Enclosure Alternative)
13 14

9/19/2024
8 Concentrations at closest residence
Findings
1 The proposed building project and enclosure alternative do not exceed AEGL-2 or ERPG-2 thresholds at the closest residence if involved in a fire. 2The concentrations of airborne pollutants are reduced by half or more in the enclosure alternative over the proposed building version. 3 A distance of 131 meters is the maximum distance CO would exceed ERPG-2 or AEGL-2 levels for the proposed building project or 70 meters for the enclosure alternative in an 8-hour duration. 4Hydrogen Fluoride (HF) and Carbon Monoxide (CO) are the
only 2 chemicals to exceed 50%
of the health protective thresholds at 8 hours at the closest residence in the proposed building project. The enclosure alternative does not exceed 50%. 15 16

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9/19/2024
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SHARE THIS: Date Published: 07/01/2022 02:00 PM
AB-205 Energy. (2021-2022)
Assembly Bill No. 205
CHAPTER 61
An act to add Article 13 (commencing with Section 16429.8) to Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code, to amend Sections 25403.2 and 25806 of, to add Chapter 6.2 (commencing with Section 25545), Chapter 7.4 (commencing with Section 25640), and Chapter 8.9 (commencing with Section 25790) to Division 15 of, and to add and repeal Section 25216.8 of, the Public Resources Code, to amend Sections 381, 739.1, 739.9, and 2827.1 of the Public Utilities Code, to add and repeal Section 17131.20 of the Revenue and Taxation Code, and to add Division 29 (commencing with Section 80700) to the Water Code, relating to energy, and making an appropriation therefor, to take effect immediately, bill related to the budget.
[ Approved by Governor June 30, 2022. Filed with Secretary of State June 30, 2022. ]

LEGISLATIVE COUNSEL'S DIGEST
AB 205, Committee on Budget. Energy.
(1) Existing law, until January 1, 2026, establishes the California Arrearage Payment Program (CAPP) within the Department of Community Services and Development. Existing law requires the department to survey utility applicants to obtain data pertaining to the total number of residential and commercial customer accounts in arrears to determine the total statewide energy utility arrearage and to develop an allocation formula for determining an individual utility applicant’s share of CAPP funds. Existing law authorizes specified utilities to apply for CAPP funds on behalf of their customers, and requires the utility to use any funds received to offset customer arrearages that were incurred during the COVID-19 pandemic bill relief period, as specified. Existing law prohibits service from being discontinued due to nonpayment for those customers included in a utility’s CAPP application while the department reviews and approves all pending CAPP applications, and requires the utility applicant to waive any associated late fees and accrued interest for customers who are awarded CAPP benefits.

Existing law requires the department to report specified data to the Legislature and on its public-facing internet website relating to distribution of CAPP benefits.

This bill would, upon appropriation, establish the 2022 California Arrearage Payment Program (2022 CAPP) within the Department of Community Services and Development. The bill would require the department to release program notices and post program notices related to 2022 CAPP administration on its public-facing internet website. The bill would require the department to make available an online application for utility applicants to Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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request 2022 CAPP funding for residential customers. The bill would require the department to develop an allocation formula for determining an individual utility applicant’s share of 2022 CAPP funds based on the proportional share of the total statewide energy utility arrearages. The bill would require the department to approve utility applicant’s 2022 CAPP applications, set statewide allocations, and disburse funds within 7 months of the appropriation for the CAPP.

This bill would require a utility applicant to issue 2022 CAPP benefits to residential customers within 60 days of receiving 2022 CAPP funds. The bill would require a utility applicant to submit all reporting required by the department detailed in a program notice within 6 months of the utility applicant’s receipt of its 2022 CAPP allocation. The bill would require the department to report specified data to the Legislature and on its publicfacing internet website relating to distribution of 2022 CAPP benefits within 60 days of receiving reporting from utility applicants.

This bill would require that any payment authorized by the 2022 CAPP be treated in the same manner as the federal earned income refund for purposes of determining the individual’s eligibility to receive benefits under specified public social services laws. The bill would also prohibit the payment from being taken into account as resources for a period of 12 months from receipt, for purposes of determining the eligibility of the individual, or any other individual, for benefits or assistance for any other state or local program, as provided. (2) Existing law requires the State Energy Resources Conservation and Development Commission (Energy Commission) to undertake various actions in furtherance of meeting the state’s clean energy and pollution reduction objectives.

This bill would require the Energy Commission to establish and implement the Long-Duration Energy Storage Program to provide financial incentives for projects that have power ratings of at least one megawatt and are capable of reaching a target of at least 8 hours of continuous discharge of electricity in order to deploy innovative energy storage systems to the electrical grid for purposes of providing critical capacity and grid services. The bill would authorize the Energy Commission to adopt guidelines or other standards for, use financial incentives to provide moneys to participants in, and provide technical assistance for, that program. The bill would authorize the Energy Commission to noncompetitively award moneys for that program under specified circumstances.

Existing law vests the Energy Commission with the exclusive jurisdiction to certify the construction of a stationary or floating electrical generating facility using a source of thermal energy with a generating capacity of 50 megawatts or more. Existing law prohibits a person from constructing such a facility unless that person obtains a certificate from the commission, as provided.

The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if the lead agency finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment.

The Jobs and Economic Improvement Through Environmental Leadership Act of 2021 authorizes the Governor, until January 1, 2024, to certify a leadership project, as defined, that meets specified requirements for streamlining benefits related to CEQA, as provided. The act authorizes a person proposing to construct a leadership project to apply to the Governor for certification that the leadership project is eligible for streamlining pursuant to the act.

This bill would establish a new certification process for a solar photovoltaic, terrestrial wind electrical generation powerplant, or thermal powerplant that does not use fossil or nuclear fuels, with a generating capacity of 50 megawatts or more, an energy storage system capable of storing 200 megawatthours or more of electricity, an electric transmission line from those generating or storage facilities to a point of junction with an interconnected electrical transmission system, or a facility for the manufacture, production, or assembly of energy storage systems or their components, wind systems or their components, solar photovoltaic systems or their components, or specialized products, components, or systems that are integral to renewable energy or energy 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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storage technologies with a capital investment of at least $250,000,000 over a period of 5 years. The bill would authorize a person proposing to construct those facilities, no later than June 30, 2029, to file an application for certification with the Energy Commission. The bill would require the Energy Commission to review the application, as provided, and to determine whether to issue the certification within a specified time period. The bill would require the Energy Commission to forward the application to a local government having land use and related jurisdiction in the areas of the proposed site and related facility and would require the local agencies to review the application and submit comments on the application, as provided, thereby imposing a state-mandated local program. The bill would authorize local agencies to request a fee from the Energy Commission to reimburse the local agency for the actual and added costs of the review by the local agency. The bill would prohibit the Energy Commission from issuing the certificate unless the Energy Commission makes certain findings. The bill would, except as provided, specify that the issuance of the certification is in lieu of any permit, certificate, or similar document required by a state, local, or regional agency, or federal agency, to the extent permitted by federal law, for those facilities. The bill would designate the Energy Commission as the lead agency for purposes of CEQA in regards to the certification decision. The bill would specify procedures by which the Energy Commission is to conduct the environmental review for its certification decision. The bill would provide that a facility certified under these provision is a certified leadership project under the Jobs and Economic Improvement Through Environmental Leadership Act of 2021, without the need for any action from the applicant or the Governor, if the commission makes certain findings and takes certain actions. The bill would require the Judicial Council to adopt a rule of court to establish procedures that require actions or proceedings related to the certification of an environmental impact report or the issuance of the certification for any site and related facility to be resolved within 270 days, and, if the Jobs and Economic Improvement Through Environmental Leadership Act of 2021 is inoperative or repealed, would require those procedures to become operative. (3) This bill would require the Energy Commission to implement and administer the Distributed Electricity Backup Assets Program to incentivize the construction of cleaner and more efficient distributed energy assets that would serve as on-call emergency supply or load reduction for the state’s electrical grid during extreme events, as provided. The bill would require the Energy Commission to implement and administer the Demand Side Grid Support Program to incentivize dispatchable customer load reduction and backup generation operation as on-call emergency supply and load reduction for the state’s electrical grid during extreme events, as provided. The bill would create the Strategic Reliability Reserve Fund, and the Distributed Electricity Backup Assets Account and the Demand Side Grid Support Account in the fund. The bill would continuously appropriate to the Energy Commission moneys in the fund for purposes of adding resources to the electrical grid to ensure electrical grid reliability and support the clean energy transition, thereby making an appropriation. The bill would continuously appropriate moneys into the accounts to the Energy Commission for the implementation of the above-described programs, respectively, thereby making an appropriation.

This bill would require the Department of Water Resources, in consultation with the Energy Commission, to implement those projects, purchases, and contracts to carry out the above-described purposes. The bill would provide that CEQA does not apply to contracts entered into, or approval granted by, the department to implement those projects, purchases, and contracts. The bill would establish the Department of Water Resources Electricity Supply Reliability Reserve Fund and would continuously appropriate moneys in the fund to the Department of Water Resources to cover the costs incurred by the department in the implementation of the bill, thereby making an appropriation.

This bill would, until July 1, 2027, vest the Energy Commission with the exclusive jurisdiction to certify sites on which facilities for actions described above that are undertaken by the department are proposed to be located.

The bill would require the department to submit an application for certification for those sites, as provided. The bill would require the Energy Commission to establish a process to expedite the review of an application, as provided, and to determine whether to issue the certification within a specified time period. The bill would prohibit the certification of a site under certain circumstances. The bill would exempt from CEQA the certification of a site and related facilities by the Energy Commission. (4) Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations. Existing law requires the PUC to require each electrical corporation to identify a separate rate component to collect revenues used to fund certain programs. Existing law requires the rate component to be a nonbypassable element of local distribution service and collected on the basis of usage. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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This bill would repeal the requirement that the nonbypassable element be collected on the basis of usage.

Existing law requires the PUC to continue the California Alternative Rates for Energy (CARE) program to provide assistance to low-income electric and gas customers with annual household incomes that are no greater than 200% of the federal poverty guideline levels. For electrical corporations with 100,000 or more customer accounts, existing law requires the PUC to ensure, among other things, that the average effective CARE discount is not less than 30% or more than 35% of the revenues that would have been produced for the same billed usage by non-CARE customers and that the average effective discount, as determined by the PUC, reflects any charges not paid by CARE customers.

This bill would instead require that the average effective discount, as determined by the PUC, not reflect any charges for which CARE customers are exempted, discounts to fixed charges or other rates paid by non-CARE customers, or bill savings resulting from participation in other programs.

Existing law authorizes the PUC to adopt new, or expand existing, fixed charges, as defined, for the purpose of collecting a reasonable portion of the fixed costs of providing electric service to residential customers. Existing law requires the PUC to require each electrical corporation to offer default rates to residential customers with at least two usage tiers, as provided. Existing law requires the PUC to ensure that the approved charges do not, among other things, unreasonably impair incentives for conservation and energy efficiency. Existing law authorizes the PUC to authorize fixed charges that do not exceed certain amounts per residential customer account per month, as provided.

This bill would delete the requirement that each electrical corporation offer default rates to residential customers with at least two usage tiers. The bill would additionally require the PUC to ensure that the approved fixed charges do not unreasonably impair incentives for beneficial electrification and greenhouse gas reduction. The bill would instead authorize the PUC to authorize fixed charges for any rate schedule applicable to residential customer accounts. The bill would eliminate the cap on the amount of the fixed charge that the PUC may authorize. The bill would require the fixed charge to be established on an income-graduated basis, as provided, with no fewer than 3 income thresholds so that low-income ratepayers in each baseline territory would realize a lower average monthly bill without making any changes in usage. The bill would require the PUC, no later than July 1, 2024, to authorize a fixed charge for default residential rates. The bill would prohibit the PUC from applying the composite tier method to the treatment of any revenues resulting from any fixed charge adopted pursuant to these provisions.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the PUC is a crime.

Because the provisions of this bill are within the act and require action by the PUC to implement their requirements, a violation of these provisions would impose a state-mandated local program. (5) The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally define “gross income” as income from whatever source derived, and provide various exclusions from gross income.

This bill, for taxable years beginning on or after January 1, 2022, and before January 1, 2027, would exclude from gross income any amount of bill credits received by a customer from a utility applicant pursuant to those acts. The bill would repeal these provisions on December 1, 2027. (6) Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill, for specified provisions, would provide findings to comply with the additional information requirement for any bill authorizing a new tax expenditure.
(7) The bill would include findings that certain changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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(8) 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. (9) This bill would appropriate $200,000,000 from the General Fund to the Energy Commission for the 2021–22 fiscal year to be used for a program to provide incentives for demand side grid support and associated mitigation costs, as specified.
(10) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Vote: majority Appropriation: yes Fiscal Committee: yes Local Program: yes THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Article 13 (commencing with Section 16429.8) is added to Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code, to read:

Article 13. 2022 California Arrearage Payment Program
16429.8. The Legislature finds and declares all of the following:
(a) On March 4, 2020, Governor Newsom proclaimed that a state of emergency exists in California as a result of the rise of COVID-19.
(b) A nationwide emergency in response to COVID-19 was declared on March 13, 2020, pursuant to the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.). A federal major disaster declaration for California was approved on March 20, 2020, and is still in effect. (c) Under Section 139 of the Internal Revenue Code, certain payments made by the state to individuals in connection with the COVID-19 pandemic qualify as disaster relief payments that are excluded from the recipient’s gross income.
(d) As a federal declared disaster, the COVID-19 pandemic is considered a qualified disaster for purposes of Section 139 of the Internal Revenue Code. Those payments made in the 2021–22 state fiscal year towards utility bills under the California Arrearage Payment Program (Article 12 (commencing with Section 16429.5)), which was established in the 2021 State Budget, were considered qualified disaster relief payments by the Internal Revenue Service and excluded from an individual’s gross income. (e) Californians continue to struggle to afford the cost of energy due to the economic impacts of the ongoing COVID-19 pandemic.
(f) Benefits issued under this chapter are for past due energy utility bills accrued during the COVID-19 pandemic and the Legislature intends for them to be treated as qualified disaster relief payments that are to be excluded from individual taxable gross income pursuant to Section 139 of the Internal Revenue Code. 16429.9. For purposes of this article, the following definitions apply:
(a) “2022 CAPP” means the 2022 California Arrearage Payment Program established in Section 16429.10. (b) “COVID-19 pandemic bill relief period” means the period starting March 4, 2020, and ending December 31, 2021, inclusive of both start and end dates.
(c) “Department” means the Department of Community Services and Development. (d) “Electrical cooperative” has the same meaning as defined in Section 2776 of the Public Utilities Code. (e) “Electrical corporation” has the same meaning as defined in Section 218 of the Public Utilities Code. (f) “Gas corporation” has the same meaning as defined in Section 222 of the Public Utilities Code. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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(g) “Load-serving entity” has the same meaning as defined in Section 380 of the Public Utilities Code. (h) “Local publicly owned electric utility” has the same meaning as defined in Section 224.3 of the Public Utilities Code.
(i) “Past due bills” means active residential customer accounts with a past due balance incurred during the COVID-19 pandemic bill relief period and includes 2022 CAPP-eligible residential customer accounts that have payment plans or payment arrangements.
(j) “Program notice” means official guidance issued by the department regarding 2022 CAPP implementation and administration.
(k) “Utility applicant” means any of the following:
(1) A local publicly owned electric utility.
(2) An electrical corporation.
(3) A gas corporation.
(4) An electrical cooperative.
16429.10. (a) Upon appropriation, the 2022 California Arrearage Payment Program is established in the Department of Community Services and Development.
(b) The department shall release program notices and post program notices related to 2022 CAPP administration on its public-facing internet website.
(c) All active residential utility customers with past due bills incurred during the COVID-19 pandemic bill relief period are considered eligible for 2022 CAPP assistance and shall be included in a utility applicant’s request for 2022 CAPP funding.
(1) The department and utility applicants shall prioritize the issuance of 2022 CAPP assistance in the following order:
(A) Active residential customers with past due bills and who, absent the 2022 CAPP assistance or any other protection or assistance provided by the utility applicant, might be subject to service disconnection, consistent with current law, due to nonpayment of balances incurred during the COVID-19 pandemic bill relief period.
(B) Active residential customers with past due bills incurred during the COVID-19 pandemic bill relief period. (2) The department, in its application approval and allocation notice to utility applicants, shall direct utility applicants on how 2022 CAPP assistance will be applied to each of the priority groups. A utility applicant shall be responsible for correcting any misapplication of 2022 CAPP assistance when that failure was due to a utility applicant not properly applying 2022 CAPP assistance to residential customer accounts in accordance with program notices, 2022 CAPP application terms and conditions, and guidance issued by the department. (d) Within 90 days of receiving funds, upon appropriation, the department shall make available an online application for utility applicants to request 2022 CAPP funding for residential customers. (1) To receive 2022 CAPP funding, a utility applicant shall complete a 2022 CAPP application, submit all necessary data and information to support the utility applicant’s 2022 CAPP application, execute the 2022 CAPP terms and conditions document, and comply with all department-issued program notices. (2) All utility applicant 2022 CAPP applications shall include the total number of eligible residential accounts, the total amount of eligible residential account arrearages incurred during the COVID-19 pandemic bill relief period, and identify for each eligible residential account the corresponding account number and past due bill balance accumulated during the COVID-19 pandemic bill relief period. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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(3) The general manager, utility director, or a designee shall certify that the 2022 CAPP application is true and accurate and execute the 2022 CAPP terms and conditions. (4) (A) Customer information shall be subject to Section 6254.16. This subparagraph shall become inoperative on January 1, 2023.
(B) Customer information shall be subject to Section 7927.410. This subparagraph shall become operative on January 1, 2023.
(e) There shall be a 30-day application timeframe in which utility applicants may apply to the department for 2022 CAPP funds. The department shall contact a utility applicant that does not respond during the initial application period to inquire as to the status of the utility applicant’s 2022 CAPP application. (f) The department shall review utility applicant 2022 CAPP applications for completeness and confirm that utility applicants’ submissions support the total amount of financial assistance requested on behalf of residential customers. Incomplete 2022 CAPP applications shall be returned to the utility applicant for corrections or amendments consistent with department notes or directives. (g) One billion one hundred ninety-seven million dollars ($1,197,000,000) appropriated in Item 4700-101-3398 of the Budget Act of 2022 shall be used for the 2022 CAPP program. The allocation may be adjusted for the purposes of administrative costs. Upon appropriation, the following specified amounts shall be allocated for each utility category. Funding allocation to one of the categories that is not necessary for assistance for that category maybe reallocated to another category.
(1) Two hundred thirty-nine million four hundred thousand dollars ($239,400,000) shall be allocated for financial assistance to customers of local publicly owned electric utilities and electrical cooperatives. (2) Nine hundred fifty-seven million six hundred thousand dollars ($957,600,000) shall be allocated for financial assistance to customers of electrical corporations and gas corporations, including customers served by a community choice aggregator.
(h) To establish statewide 2022 CAPP allocations, the department shall develop an allocation formula for determining an individual utility applicant’s share of 2022 CAPP funds based on the proportional share of the total statewide energy utility arrearages.
(1) When determining statewide 2022 CAPP allocations, the department shall ensure utility applicant allocations do not exceed the total amount of eligible arrearages reported in the utility applicant’s 2022 CAPP application. If there are remaining 2022 CAPP funds after the initial allocation determination, the department shall redistribute the remaining 2022 CAPP funds to utility applicants according to their proportional share of the total statewide energy utility arrearages within each utility category. (2) Upon approving a utility applicant’s 2022 CAPP application, the department shall submit to the utility applicant an application approval and allocation notice that identifies the utility applicant’s allocation along with directions on how to apply 2022 CAPP funds to customer accounts by priority group. The department shall make all application approval and allocation notices available on its public-facing internet website. (3) Utility applicants shall provide benefits to residential customers in accordance with program notices, the 2022 CAPP application terms and conditions document, and guidance issued by the department. (4) The department shall approve utility applicant’s 2022 CAPP applications, set statewide allocations, and disburse funds within seven months of the appropriation for the 2022 CAPP. (i) Within 60 days of receiving 2022 CAPP funds, a utility applicant shall issue 2022 CAPP benefits to its residential customers as bill credits to help address the past due bills and shall include a statement that the credits are a result of 2022 CAPP funding or other statement as approved by a department-issued program notice.
(1) Between the time when a utility applicant submits its 2022 CAPP application and the department completes the disbursement of CAPP allocations to all utility applicants, a utility applicant shall not discontinue service 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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due to nonpayment by those residential customers with arrearages accrued during the COVID-19 pandemic bill relief period.
(2) A utility applicant shall not disconnect a residential customer’s utility service, regardless of balance owed after applying a 2022 CAPP benefit, for 90 days after a 2022 CAPP benefit is applied. (3) If a residential customer has a remaining balance after a 2022 CAPP benefit is applied, the utility applicant shall notify the residential customer of the option to enter into an extended payment plan with late fees and penalties waived. The utility applicant shall not discontinue service to the residential customer while the residential customer remains current on the repayment plan. (4) Utility applicants shall waive any associated late fees and accrued interest for residential customers that are awarded 2022 CAPP benefits.
(5) An electrical corporation shall use existing proportional payment processes adopted by the Public Utilities Commission in response to the COVID-19 pandemic to allocate any partial payments made by residential customers to the utility applicant and other load serving entities in proportion to their respective shares of the outstanding customer charges.
(j) An electrical corporation shall issue 2022 CAPP benefits to residential customer for past due bills owed to the utility applicant and other load-serving entities serving the residential customer in proportion to their respective shares of customer arrearages.
(k) Within six months of a utility applicant’s receipt of its 2022 CAPP allocation, the utility applicant shall submit all reporting required by the department detailed in a program notice. The utility applicant shall remit payment of any unapplied 2022 CAPP benefits to the department as part of its reporting to the department. (l) Within 60 days of receiving reporting from utility applicants pursuant to subdivision (k), the department shall provide to the Legislature, and make available on its public-facing internet website, a report. The report shall be submitted in conformance with Section 9795 and shall include all of the following:
(1) Total arrearage amount applied for statewide.
(2) Total active residential customers in arrears applied for statewide. (3) Total 2022 CAPP funds applied for by utility applicants. (4) Total 2022 CAPP funds approved by the department and disbursed to utility applicants statewide. (5) Total 2022 CAPP funds distributed by utility applicants. (6) Total 2022 CAPP funds not expended and returned to the department by utility applicants. (7) Total active residential customers, statewide, included in 2022 CAPP applications received by the department.
(8) Total active residential customers, by utility applicant, included in 2022 CAPP applications received by the department.
(9) Total active residential customers, statewide, that received a 2022 CAPP benefit. (10) Average 2022 CAPP benefit, statewide, received by active residential customers. (11) Total active residential customers, by utility applicant, that received a 2022 CAPP benefit. (12) Average 2022 CAPP benefit, by utility applicant, received by active residential customers. (13) Total expenditures by the department for the administration of 2022 CAPP. (m) Utility applicants shall provide all documents and data necessary for the department, or its designee, to complete a review and audit of 2022 CAPP benefits applied to eligible residential accounts. The department shall provide 30 days’ notice to utility applicants of any document requests to support departmental review and audit. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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(n) Notwithstanding any other law, the payment authorized pursuant to this section shall be treated in the same manner as the federal earned income refund for the purpose of determining eligibility to receive benefits under Division 9 (commencing with Section 10000) of the Welfare and Institutions Code, excluding benefits under Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code, or amounts of those benefits.
(o) Notwithstanding any other law, the payment authorized pursuant to this section shall not be considered as income and shall not be taken into account as resources for a period of 12 months from receipt, for purposes of determining the eligibility of the individual, or any other individual, for benefits or assistance or the amount or extent of benefits or assistance under any state or local program not covered in subdivision (n). With respect to a state or local program, this subdivision shall only be implemented to the extent that it does not conflict with federal law relating to that program, and that any required federal approval or waiver is first obtained for that program.

SEC. 2. Section 25216.8 is added to the Public Resources Code, to read:
25216.8. (a) On or before January 31, 2023, the commission, in consultation with the Public Utilities Commission, the Department of Water Resources, and California balancing authorities, including, but not limited to, the Independent System Operator, shall issue a written report to the Joint Legislative Budget Committee addressing all of the following:
(1) An evaluation of how the state, load-serving entities, as defined in Section 380 of the Public Utilities Code, local publicly owned electric utilities, as defined in Section 224.3 of the Public Utilities Code, and California balancing authorities managed summer reliability during 2022. (2) The magnitude of projected reliability problems in 2023 to 2026, inclusive. (3) Potential solutions to addressing reliability concerns. In doing so, the commission shall evaluate options that rely on state budget actions, statutory changes, and using existing resource adequacy, integrated resource planning, and other reliability processes at the Public Utilities Commission and the Independent System Operator to ensure reliability.
(b) (1) A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
(2) Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2027.

SEC. 3. Section 25403.2 of the Public Resources Code is amended to read:
25403.2. (a) Using the moneys appropriated pursuant to Items 3360-105-0001 and 3360-005-0001 of Section

2.00 of the Budget Act of 2021, the commission shall implement and administer a statewide program to incentivize the construction of new multifamily and single-family market-rate residential buildings as all-electric buildings or with energy storage systems. The commission shall provide a combined incentive if a building is both all electric and has an energy storage system.
(b) The program implemented and administered pursuant to this section shall be known as the Building Initiative for Low-Emissions Development Program Phase 2.
(c) In implementing and administering the Building Initiative for Low-Emissions Development Program Phase 2, the commission shall do all of the following:
(1) Before June 30, 2022, develop and approve program guidelines in a public process. The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to the development and approval of the guidelines. (2) Make program applications available within 30 days of the commission approving the guidelines pursuant to paragraph (1).
(3) Ensure, to the extent reasonable, that the program incentivizes the construction of buildings as all electric or with energy storage systems that would not have otherwise been constructed as all electric or with energy 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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storage systems but for the Building Initiative for Low-Emissions Development Program Phase 2. (4) Ensure, to the extent reasonable, that the program incentivizes the installation of technologies not otherwise required pursuant to the applicable local and state building codes. (d) A goal of the Building Initiative for Low-Emissions Development Program Phase 2 is to spur significant market adoption of all-electric buildings and energy storage systems. (e) The commission may pay an incentive upfront if not doing so would inhibit participation in the Building Initiative for Low-Emissions Development Program Phase 2.

SEC. 4. Chapter 6.2 (commencing with Section 25545) is added to Division 15 of the Public Resources Code, to read:

CHAPTER 6.2. Certification of Nonfossil-Fueled Powerplants, Energy Storage Facilities, and Related Facilities 25545. For purposes of this chapter, the following definitions apply:
(a) “California Native American tribe” has the same meaning as set forth in Section 21073. (b) “Facility” means any of the following:
(1) A solar photovoltaic or terrestrial wind electrical generating powerplant with a generating capacity of 50 megawatts or more and any facilities appurtenant thereto. (2) An energy storage system as defined in Section 2835 of the Public Utilities Code that is capable of storing 200 megawatthours or more of electrical energy.
(3) A stationary electrical generating powerplant using any source of thermal energy, with a generating capacity of 50 megawatts or more, excluding any powerplant that burns, uses, or relies on fossil or nuclear fuels.
(4) A discretionary project as described in Section 21080 for which the applicant has certified that a capital investment of at least two hundred fifty million dollars ($250,000,000) will be made over a period of five years and the discretionary project is for (A) the manufacture, production, or assembly of an energy storage system or component manufacturing, wind system or component manufacturing, and solar photovoltaic energy system or component manufacturing, or (B) the manufacture, production, or assembly of specialized products, components, or systems that are integral to renewable energy or energy storage technologies. (5) An electric transmission line carrying electric power from a facility described in paragraph (1), (2), or (3) that is located in the state to a point of junction with any interconnected electrical transmission system. (c) “Site” means any location on which an eligible facility is constructed or is proposed to be constructed. 25545.1. (a) A person proposing an eligible facility may file an application no later than June 30, 2029, for certification with the commission to certify a site and related facility in accordance with this chapter, including a person who has an application for certification or small powerplant exemption filed with the commission pursuant to Chapter 6 (commencing with Section 25500) pending as of the effective date of this section. Upon receipt of the application, the commission shall have the exclusive power to certify the site and related facility, whether the application proposes a new site and related facility or a change or addition to an existing facility. This section does not modify the Public Utilities Commission’s jurisdiction, including the issuance of a certificate of public convenience and necessity under Chapter 5 (commencing with Section 1001) of Part 1 of Division 1 of the Public Utilities Code for a facility that is proposed by a utility regulated by the Public Utilities Commission. (b) (1) Except as provided in paragraph (2), the issuance of a certificate by the commission for a site and related facility pursuant to this chapter shall be in lieu of any permit, certificate, or similar document required by any state, local, or regional agency, or federal agency to the extent permitted by federal law, for the use of the site and related facilities, and shall supersede any applicable statute, ordinance, or regulation of any state, local, or regional agency, or federal agency to the extent permitted by federal law. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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(2) Paragraph (1) does not supersede the authority of the State Lands Commission to require leases and receive lease revenues, if applicable, or the authority of the California Coastal Commission, the San Francisco Bay Conservation and Development Commission, the State Water Resources Control Board, or the applicable regional water quality control boards.
(3) For facilities described in paragraph (4) of subdivision (b) of Section 25545, this subdivision does not supersede the authority of local air quality management districts or the Department of Toxic Substances Control.
(c) The Legislature finds and declares that this section addresses a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities. 25545.2. An application for a site and related facility submitted pursuant to this chapter shall be in a form prescribed by the commission and shall contain all of the information required by Section 25520 and be further supported by other information as the commission may require to support the preparation of an environmental impact report and issuance of a certification.
25545.3. For purposes of sections 25545.3.3 and 25545.3.5, the following definitions apply:
(a) “Construction” includes any new construction work and subsequent construction work following initial completion that is contracted out to a contractor in the construction industry. (b) “Covered project” or “project” means a site and related facility subject to an application submitted under this chapter.
(c) “Project labor agreement” has the same meaning as set forth in Section 2500 of the Public Contract Code. (d) “Skilled and trained workforce” has the same meaning as provided in Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. 25545.3.3. An application for a covered project submitted under this chapter shall include the applicant’s certification that it will meet the requirements of a covered project and the commission shall make the requirements a condition of certification. The application shall also include the applicant’s certification that either of the following is true:
(a) The entirety of the construction of the covered project is a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code. (b) The construction of the covered project is not in its entirety a public work for which prevailing wages must be paid under Article 1 (commencing with Section 1720) of Chapter 1 of Part 7 of Division 2 of the Labor Code, but all construction workers employed on the project will be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.

If the project is subject to this subdivision, for those portions of the project that are not a public work, all of the following shall apply:
(1) The applicant shall ensure that the prevailing wage requirement is included in all contracts for the performance of all construction work.
(2) All contractors and subcontractors shall pay to all construction workers employed in the construction of the project at least the general prevailing rate of per diem wages, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.
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(4) Except as provided in paragraph (6), all contractors and subcontractors performing construction work shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code, make those records available for inspection and copying as provided therein, and furnish those payroll records to the Labor Commissioner pursuant to Section 1771.4 of the Labor Code.
(5) Except as provided in paragraph (6), the obligation of the contractors and subcontractors to pay prevailing wages and employ apprentices may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the project, or by an underpaid worker through an administrative complaint or civil action, or by a joint labor-management committee though a civil action under Section 1771.2 of the Labor Code. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code. (6) Paragraphs (4) and (5) do not apply if all contractors and subcontractors performing construction work on the project are subject to a project labor agreement. The project labor agreement shall also include, but not be limited to, all of the following:
(A) Provisions requiring payment of prevailing wages to all construction workers employed in the construction of the project and for enforcement of that obligation through an arbitration procedure. (B) Targeted hiring provisions, including a targeted hiring plan, on a craft-by-craft basis to address job access for local, disadvantaged, or underrepresented workers, as defined by a relevant local agency. (C) Apprenticeship utilization provisions that commit all parties to increasing the share of work performed by state-registered apprentices above the state-mandated minimum ratio required in Section 1777.5 of the Labor Code.
(D) Apprenticeship utilization provisions that commit all parties to hiring and retaining a certain percentage of state-registered apprentices that have completed the Multi-Craft Core preapprenticeship training curriculum referenced in subdivision (t) of Section 14005 of the Unemployment Insurance Code. 25545.3.5. An application for a covered project submitted under this chapter shall include the applicant’s certification that a skilled and trained workforce will be used to perform all construction work on the project and all of the following apply:
(a) The applicant shall require in all contracts for the performance of work that every contractor and subcontractor at every tier will individually use a skilled and trained workforce to construct the project. (b) Every contractor and subcontractor shall use a skilled and trained workforce to construct the project. (c) Except as provided in subdivision (e), contractors and subcontractors that fail to use a skilled and trained workforce shall be subject to the penalties provided in Section 2603 of the Public Contract Code. Penalties for a contractor’s or subcontractor’s failure to comply with the requirement to use a skilled and trained workforce may be assessed by the Labor Commissioner within 18 months of completion of the project using the same procedures for issuance of civil wage and penalty assessments pursuant to Section 2603 of the Public Contract Code. Penalties shall be paid to the State Public Works Enforcement Fund. (d) For purposes of this subdivision, an applicant shall be considered to be an “awarding body” under Chapter

2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. Except as provided in subdivision (e), the applicant shall retain records, including copies of monthly reports, that demonstrate compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code while the project or contract is being performed and for three years after completion of the project or contract.

The applicant shall submit these records immediately upon request of the commission. When submitted to the commission, these records shall be a public record under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and shall be open to public inspection.
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(e) Subdivisions (c) and (d) do not apply if all contractors and subcontractors performing work on the project are subject to a project labor agreement. The project labor agreement shall also include, but not be limited to, all of the following:
(1) Provisions requiring compliance with the skilled and trained workforce requirement and for enforcement of that obligation through an arbitration procedure.
(2) Targeted hiring provisions, including a targeted hiring plan, on a craft-by-craft basis to address job access for local, disadvantaged, or underrepresented workers, as defined by a local agency. (3) Apprenticeship utilization provisions that commit all parties to increasing the share of work performed by state-registered apprentices above the state-mandated minimum ratio required in Section 1777.5 of the Labor Code.
(4) Apprenticeship utilization provisions that commit all parties to hiring and retaining a certain percentage of state-registered apprentices that have completed the Multi-Craft Core preapprenticeship training curriculum referenced in subdivision (t) of Section 14005 of the Unemployment Insurance Code. 25545.4. (a) Within 30 days of the submission of the application, the commission shall review the application and make a determination of completeness.
(b) The executive director may require the applicant to submit additional information, documents, or data determined to be reasonably necessary to prepare the environmental impact report for the application and to make a decision on the application. The executive director shall also require the applicant to submit additional information requested by trustee agencies for the purposes of supporting a decision on the application and environmental impact report. The executive director shall transmit the request for additional information within 30 days of the submission of the application.
(c) An application is deemed completed as follows:
(1) Thirty days after the submission of the application, if the executive director does not require the submission of additional information pursuant to subdivision (b). (2) Immediately upon acceptance of the additional information requested by the executive director pursuant to subdivision (b), if the executive director requires the submission of additional information pursuant to subdivision (b).
(d) The executive director may request additional information from the applicant to address comments by public agencies on the scope and content of the information that is required to be included in an environmental impact report for certification. The applicant shall provide to the commission the requested information within 30 days of receiving the request.
(e) (1) Except as provided in paragraph (2), no later than 270 days after the application is deemed complete, or as soon as practicable thereafter, the commission shall determine whether to certify the environmental impact report and to issue a certificate for the site and related facilities pursuant to this chapter. (2) Paragraph (1) does not apply, and the time to certify the environmental impact report or issue a certificate for the site and related facilities pursuant to this chapter may be extended if one or more of the following occurs:
(A) The commission is required to recirculate the environmental impact report pursuant to Section 15088.5 of Title 14 of the California Code of Regulations.
(B) Substantial changes are proposed in the project that may involve new significant environmental effects or a substantial increase in the severity of previously identified significant effects. (C) Substantial changes occur with respect to the circumstances under which the project is undertaken that may involve new significant environmental effects or a substantial increase in the severity of previously identified significant effects.
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(D) New information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence before the commission publishes the notice of availability pursuant to Section 25545.7.6, is submitted that may require additional analysis and consideration. (E) The commission, in consultation with the Department of Fish and Wildlife or the State Water Resources Control Board, if applicable, determines that additional time is necessary to obtain information and conduct surveys, including due to seasonal constraints.
25545.5. (a) Within 90 days of the effective date of this chapter, the commission shall, in coordination with the Department of Fish and Wildlife, develop a plan that ensures timely and effective consultation between the commission and the Department of Fish and Wildlife with respect to any proposed commission findings and actions to authorize the take of endangered, threatened, and candidate species pursuant to the California Endangered Species Act (Chapter 1.5 (commencing with Section 2050) of Division 3 of the Fish and Game Code) or impacts to fish and wildlife resources pursuant to Section 1602 of the Fish and Game Code. The commission shall also consult with the Department of Fish and Wildlife with respect to any proposed commission findings and actions regarding potential impacts to fish, wildlife, and plant resources and the habitats upon which they depend. The plan shall include a process to ensure that all such take and impacts are consistent with Chapter 6 (commencing with Section 1600) of Division 2 of, and Chapter 1.5 (commencing with Section 2050) of Division 3 of, the Fish and Game Code.
(b) Within 90 days of the effective date of this chapter, the commission shall, in coordination with the State Water Resources Control Board, develop a plan that ensures timely and effective consultation between the commission and the State Water Resources Control Board and the applicable regional water quality control board with respect to any proposed commission findings and actions related to discharges of waste that could affect the quality of waters of the state. The plan shall include provisions to ensure that all discharges are consistent with all applicable provisions of Division 7 (commencing with Section 13000) of the Water Code. (c) The commission shall, in coordination with the Department of Toxic Substances Control, develop a plan within 90 days of the effective date of this chapter that ensures timely and effective consultation between the commission and the Department of Toxic Substances Control with respect to any proposed commission findings and actions related to hazardous waste control laws.
(d) (1) For sites and related facilities located in the geographic jurisdiction of the California Coastal Commission or the San Francisco Bay Conservation and Development Commission, the commission shall consult with the applicable agency to coordinate processing and sequencing of the applications to expedite the permitting process of those agencies. In areas of the coastal zone covered by a certified local coastal program, the California Coastal Commission shall assume coastal development review authority, using the certified local coastal program as guidance. In the Suisun Marsh Secondary Management Area and the portions of the Primary Management Area with a local protection program, the San Francisco Bay Conservation and Development Commission shall assume permitting authority for processing and issuing marsh development permits using the local protection programs as guidance.
(2) The California Coastal Commission, the San Francisco Bay Conservation and Development Commission, the State Water Resources Control Board, the applicable regional water quality control boards, the applicable local air quality management districts, or the Department of Toxic Substances Control, as applicable, shall take final action on the eligible facility within 90 days after the certification by the commission of the environmental impact report for the site and related facilities, if the applicant has filed a complete, final application for a permit or waste discharge requirement, as applicable, with those agencies before the certification of the environmental impact report.
25545.6. Notwithstanding any other law, an application submitted pursuant to this chapter shall be reviewed by commission staff. The executive director shall prepare a recommendation for the commission’s consideration at a publicly noticed meeting on whether to certify an environmental impact report and issue a certificate for the site and related facilities pursuant to this chapter.
25545.7. (a) The commission is the lead agency for purposes of the California Environmental Quality Act (Division 13 (commencing with Section 21000)) and, except as provided in this chapter, shall prepare an environmental 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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impact report pursuant to Division 13 (commencing with Section 21000). (b) The regulatory program that implements this chapter is not a certified regulatory program under Section 21080.5.
(c) The commission may prepare an initial study pursuant to Section 15063 of Title 14 of the California Code of Regulations to help identify the significant effects of an action taken pursuant to this chapter. 25454.7.2. The commission shall conduct public outreach to solicit input on an application to identify the range of actions, alternatives, mitigation measures, and significant effects to be analyzed in depth in the environmental impact report as follows:
(a) Within three days after the application is deemed complete pursuant to Section 25545.4, the commission shall issue a notice of preparation pursuant to Section 15082 of Title 14 of the California Code of Regulations. (b) (1) No sooner than 10 days and no later than 30 days after the application is deemed complete pursuant to Section 25545.4, the commission shall conduct a public informational meeting as close as practicable to the proposed site. The commission shall provide notice of the informational meeting at least 10 days before the meeting. The notice shall be sent electronically to all persons who have requested to receive a notice from the commission on action related to certification pursuant to this chapter and to all persons who the commission’s executive director, in consultation with the public advisor of the commission, determines to be concerned with the application. The informational meeting shall provide all of the following:
(A) Information on the proposed site and related facility from the applicant and from commission staff. (B) Information on how to participate in the commission’s review of the application. (C) A reasonable opportunity for the public to comment on the application. (2) No sooner than 10 days after the application is deemed complete pursuant to Section 25545.4 and no later than 60 days after the issuance of the notice of availability pursuant to section 25545.7.6, the commission shall conduct a public workshop in the community nearest to the proposed site. The commission shall provide the notice in the same manner as required for the notice of the informational meeting pursuant to paragraph (1).
(3) Not later than 30 days after the issuance of the notice of preparation, the commission shall conduct a public scoping meeting pursuant to subdivision (c) of Section 15082 of Title 14 of the California Code of Regulations as close as practicable to the proposed site. (c) The commission may conduct the informational meeting at the same time as the scoping meeting. 25545.7.4. (a) For purposes of this section, “traditional ecological knowledge” means knowledge held by indigenous cultures about their immediate environment and the cultural practices that build on that knowledge, including California Native American tribes’ intimate and detailed knowledge of plants, animals, and natural phenomena, the development and use of appropriate technologies for hunting, fishing, trapping, agriculture, and forestry, and a holistic knowledge or worldview that parallels the scientific discipline of ecology. (b) Within five days after the application is deemed complete pursuant to Section 25545.4, the commission shall submit the application to all California Native American tribes that are culturally and traditionally associated with the geographic area of the proposed site and initiate consultation with those tribes pursuant to Sections 21080.3.1, 21080.3.2, and 21082.3.
(c) The commission shall take feasible measures to avoid or minimize adverse impacts to tribal cultural resources.
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(e) Where feasible, the commission shall invite tribal historic preservation officers of, or other cultural monitors designated by, California Native American tribes that are culturally or traditionally associated with the geographic area of the proposed site to observe and monitor activities at the site during the environmental review and certification process.
25545.7.6. (a) No sooner than 30 days and no later than 60 days after the issuance of the notice of availability of the draft environmental impact report, the commission shall hold at least one public meeting on the draft environmental impact report as close as practicable to the proposed site. (b) Notwithstanding subdivision (a) of Section 21091, the public review and comment period for the draft environmental impact report for an application shall be at least 60 days. (c) No sooner than 30 days after the completion of the final environmental impact report, the commission shall consider the certification of the environmental impact report of the application at a public meeting. (d) This chapter does not limit the commission from holding additional public meetings. 25545.8. (a) For the consideration of an application and the issuance of a certification under this chapter, the commission shall comply with the requirements of subdivisions (a), (d), (e), (g), and (h), inclusive, of Section 25523.
(b) Subdivisions (f), (g), (j) and (k) of Section 25519, and Sections 25525, 25527, and 25538 apply to an application submitted pursuant to this chapter.
25545.9. The commission shall not certify a site and related facility under this chapter unless the commission finds that the construction or operation of the facility will have an overall net positive economic benefit to the local government that would have had permitting authority over the site and related facility. For purposes of this section, economic benefits may include, but are not limited to, any of the following:
(a) Employment growth.
(b) Housing development.
(c) Infrastructure and environmental improvements.
(d) Assistance to public schools and education.
(e) Assistance to public safety agencies and departments. (f) Property taxes and sales and use tax revenues.
25545.10. (a) The commission shall not certify a site and related facility under this chapter unless the commission finds that the applicant has entered into one or more legally binding and enforceable agreements with, or that benefit, a coalition of one or more community-based organizations, such as workforce development and training organizations, labor unions, social justice advocates, local governmental entities, California Native American tribes, or other organizations that represent community interests, where there is mutual benefit to the parties to the agreement. The topics and specific terms in the community benefits agreements may vary and may include workforce development, job quality, and job access provisions that include, but are not limited to, any of the following:
(1) Terms of employment, such as wages and benefits, employment status, workplace health and safety, scheduling, and career advancement opportunities.
(2) Worker recruitment, screening, and hiring strategies and practices, targeted hiring planning and execution, investment in workforce training and education, and worker voice and representation in decisionmaking affecting employment and training.
(3) Establishing a high road training partnership, as defined in Section 14005 of the Unemployment Insurance Code.
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(b) The topics and specific terms in the community benefits agreement may also include, but not be limited to, funding for or providing specific community improvements or amenities such as park and playground equipment, urban greening, enhanced safety crossings, paving roads and bike paths, and annual contributions to a nonprofit or community-based organization that awards grants to organizations delivering community-based services and amenities.
25545.11. Sections 25532 to 25534.2, inclusive, apply to a certification issued pursuant to this chapter. 25545.12. (a) Regulations adopted to implement this chapter, or any amendment to those regulations, shall be adopted by the commission in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The adoption of these regulations shall be considered by the Office of Administrative Law as an emergency, and necessary for the immediate preservation of the public peace, health, safety, and general welfare. Notwithstanding any other of law, the emergency regulations adopted to implement this chapter shall remain in effect until amended by the commission. (b) (1) Notwithstanding any other law, until July 1, 2025, an agreement entered into for purposes of this chapter shall not require competitive bidding, or the review, consent, or approval of the Department of General Services or any other state department or agency and is not required to comply with the requirements of the State Contracting Manual, the Public Contract Code, or the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code. (2) If the commission enters into an agreement with a local government pursuant to this subdivision, the commission may advance funds to the local government for purposes of the agreement. 25545.13. (a) A site and related facility certified under this chapter is deemed an environmental leadership development project certified by the Governor under Chapter 6.5 (commencing with Section 21178) of Division 13 and eligible for the procedures established under Section 21185, with no further action by the applicant or the Governor, if the commission verifies that the conditions in Chapter 6.5 (commencing with Section 21178) of Division 13, including Sections 21183 and 21183.6, are met and prepares the record of the proceedings concurrently with its review of the application and certifies the record of proceedings within five days of certification.
(b) On and after January 1, 2026, if Chapter 6.5 (commencing with Section 21178) of Division 13 is inoperative or repealed, the procedures established pursuant to subdivision (c) shall apply to any action or proceeding brought to attack, review, set aside, void, or annul the certification of an environmental impact report or the issuance of the certification for any site and related facility subject to this chapter, if the commission prepares the administrative record of the proceedings concurrently with its review of the application and certifies the administrative record within five days of certification. (c) On or before December 31, 2023, the Judicial Council shall adopt a rule of court to establish procedures that require actions or proceedings brought to attack, review, set aside, void, or annul the certification of an environmental impact report or the issuance of the certification for any site and related facility subject to this chapter, including any potential appeals to the court of appeal or the Supreme Court, to be resolved, to the extent feasible, within 270 days of the filing of the certified administrative record with the court.

SEC. 5. Chapter 7.4 (commencing with Section 25640) is added to Division 15 of the Public Resources Code, to read:

CHAPTER 7.4. Long-Duration Energy Storage Program
25640. For purposes of this chapter, the following definitions apply:
(a) “Energy storage system” has the same meaning as defined in Section 2835 of the Public Utilities Code. (b) “Financial incentive” includes a contract, grant, loan, rebate, block grant, or other appropriate funding mechanism.
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25641. The commission shall establish and implement the Long-Duration Energy Storage Program to provide financial incentives for eligible projects, located at eligible storage facilities, that have power ratings of at least one megawatt and are capable of reaching a target of at least eight hours of continuous discharge of electricity at that power rating in order to deploy innovative energy storage systems to the electrical grid for purposes of providing critical capacity and grid services.
25642. (a) The commission may establish project and storage facility eligibility guidelines for purposes of this chapter.
(b) Any eligibility guidelines established pursuant to subdivision (a) shall be consistent with both of the following requirements:
(1) “Eligible storage facility” shall include, but not be limited to, an energy storage system that is interconnected to the electrical grid in California or to a California balancing authority. (2) (A) “Eligible project” shall include, but not be limited to, an eligible storage facility that includes any of the following:
(i) Compressed air or liquid air technologies.
(ii) Flow batteries, advanced chemistry batteries, or mechanical energy storage. (iii) Thermal storage or aqueous battery systems.
(iv) A hydrogen demonstration project.
(B) “Eligible project” shall not include a pumped storage project or lithium-ion-based storage technology. 25643. In implementing the Long-Duration Energy Storage Program, the commission may do all of the following:
(a) In addition to any other authorized method of providing moneys to participants in the Long-Duration Energy Storage Program, use financial incentives.
(b) Award Long-Duration Energy Storage Program moneys for technical assistance, including, but not limited to, providing outreach to eligible industries, identifying promising technologies, assessing market conditions needed to accelerate commercial traction of the technology, assisting with technical review of proposals and deliverables, identifying opportunities that provide significant benefits to the electrical grid, and performing benefits analysis.

The commission may contract for, or through interagency agreement obtain, technical, scientific, and administrative services and expertise from one or more entities to support the Long-Duration Energy Storage Program.
(c) Adopt guidelines or other standards at a business meeting for the Long-Duration Energy Storage Program.

The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to the adoption of the guidelines or other standards adopted by the commission pursuant to this chapter.
(d) (1) Notwithstanding any other law, noncompetitively award Long-Duration Energy Storage Program moneys through an amendment to, or a new agreement with a party to or recipient of, contracts or grants from California governmental entities or a federal agency if the recipient has received funding for the original project through a competitive bid process from a California governmental entity or federal agency and the awarding of those moneys is consistent with the stated goals and criteria of the Long-Duration Energy Storage Program. (2) Notwithstanding any other law, noncompetitively award Long-Duration Energy Storage Program moneys to a governmental entity, national laboratory, entity contracted by the federal government to operate a national laboratory, or foundation established to serve the University of California or California State University. (3) Notwithstanding any other law, noncompetitively award Long-Duration Energy Storage Program moneys to any entity if the cost to the state is reasonable and the commission makes any of the following determinations:
(A) The expertise, service, or product is unique.
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(B) A competitive solicitation would frustrate the obtainment of necessary information, goods, or services in a timely manner.
(C) The moneys to be awarded would fund the next phase of a multiphased project, the multiphased project was funded through competitively awarded agreement, and the entity satisfactorily performed the competitively awarded agreement.
(D) It is in the best interests of the state to do so.
(E) The entity will use the moneys as matching funds for federally awarded moneys. (e) Notwithstanding any other law, in its discretion, advance up to 25 percent of the Long-Duration Energy Storage Program moneys awarded pursuant to this chapter. 25644. Notwithstanding any other law, a commission agreement entered into for purposes of the Long-Duration Energy Storage Program shall not require the review, consent, or approval of the Department of General Services or any other state department or agency and are not required to comply with the requirements of the State Contracting Manual, the Public Contract Code, or the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code. 25645. In providing financial incentives pursuant to this chapter, the commission shall give preference to an eligible project that does one or more of the following:
(a) Increases the reliability and resiliency of the electrical grid. (b) Adds electrical grid services when the electrical grid is stressed or anticipating pending energy challenges. (c) Increases the use of renewable energy and reduces the impact of climate change on the electrical grid or on connected facilities or communities, including by improving air quality, reducing emissions of greenhouse gases, or providing under-resourced communities with increased reliability and resiliency. (d) Lowers energy costs and provides employment opportunities for residents of under-resourced communities. (e) Interconnects to the electrical grid and is commercially operational by 2028.

SEC. 6. Chapter 8.9 (commencing with Section 25790) is added to Division 15 of the Public Resources Code, to read:

CHAPTER 8.9. Strategic Reliability Reserve
Article 1. General Provisions and Definitions
25790. The Legislature finds and declares all of the following:
(a) California is a leader in driving the affordable and equitable transition to a clean reliable energy system and economy. However, the impacts of climate change are occurring sooner and with more intensity and frequency than previously anticipated.
(b) Extreme events from climate change, including heat waves, wildfires, and drought, combined with other factors, such as supply chain disruptions, are jeopardizing California’s ability to build out the electrical infrastructure needed to maintain affordability and reliability. (c) As California transitions to a clean energy future and contends with climate impacts and other challenges, sufficient capacity of new and existing generation assets will be required to maintain reliability during extreme events.
(d) California must ensure electricity reliability during this period of heightened risk, which includes extraordinary near-term measures and substantive changes to mid-term energy policy, while also ensuring the multifaceted California electrical grid is best positioned to sustainably and equitably achieve California’s clean energy future, climate targets, and air quality requirements.
25790.5. For purposes of this chapter, the following definitions apply:
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(a) “California balancing authority” has the same meaning set forth in Section 399.12 of the Public Utilities Code. (b) “Extreme event” means either of the following:
(1) An event occurring at a time and place in which weather, climate, or environmental conditions, including temperature, precipitation, drought, fire, or flooding, present a level of risk that would constitute or exceed a one-in-ten event, as referred to by the North American Electric Reliability Corporation, including when forecast in advance by a load-serving entity or local publicly owned electric utility. (2) An event where emergency measures are taken by a California balancing authority, including when forecast in advance by the California balancing authority.
(c) “Fund” means the Strategic Reliability Reserve Fund established pursuant to Section 25793. (d) “Load-serving entity” has the same meaning as defined in Section 380 of the Public Utilities Code. (e) “Local publicly owned electric utility” has the same meaning as defined in Section 224.3 of the Public Utilities Code.
(f) “State board” means the State Air Resources Board.

Article 2. Distributed Electricity Backup Assets Program 25791. (a) The Distributed Electricity Backup Assets Program is hereby created. The commission shall implement and administer the program to incentivize the construction of cleaner and more efficient distributed energy assets that would serve as on-call emergency supply or load reduction for the state’s electrical grid during extreme events.
(b) In implementing and administering the program, the commission, in coordination with the state board, shall allocate moneys for either of the following:
(1) Efficiency upgrades, maintenance, and capacity additions to existing power generators, consistent with subdivision (e).
(2) Deployment of new zero- or low-emission technologies, including, but not limited to, fuel cells or energy storage, at existing or new facilities.
(c) The commission shall develop guidelines, in consultation with the state board, to implement the program.

The guidelines shall include a loading order that aims to achieve electricity reliability and prioritizes feasible, cost-effective demand response and efficiency resources, then feasible, cost-effective renewable and zeroemission resources, and then feasible, cost-effective conventional resources. The guidelines shall also consider the anticipated useful life of the resources in relation to the state’s climate and air quality requirements. (d) The state board, in consultation with air pollution control districts and air quality management districts, as appropriate, shall identify the cleanest available technologies and equipment that would qualify for the incentives for backup generators under the guidelines, inclusive of the emissions of greenhouse gases, criteria air pollutants, and toxic emissions associated with obtaining and using feedstock fuels. (e) The commission, in consultation with the state board, may fund new efficiency upgrades, maintenance, and incremental capacity additions to existing power generators. As a condition of the receipt of funds for this purpose, as applicable, generator operators shall comply with regulations adopted pursuant to Part 2 (commencing with Section 38530) of, and Part 5 (commencing with Section 38570) of, the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), including, but not limited to, the mandatory reporting of emissions of greenhouse gasses and market-based compliance mechanism.
(f) All funding recipients under the program shall participate as an on-call emergency resource for the state during extreme events.
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of a state of emergency issued by Governor Gavin Newsom on July 31, 2021.

Article 3. Demand Side Grid Support Program
25792. (a) The Demand Side Grid Support Program is hereby created. The commission shall implement and administer the program to incentivize dispatchable customer load reduction and backup generation operation as on-call emergency supply and load reduction for the state’s electrical grid during extreme events. (b) The commission shall allocate moneys to develop a new statewide program that provides incentives to reduce customer net load during extreme events with upfront capacity commitments and for per-unit reductions in net load. Eligible recipients shall include all energy customers in the state, except those that are eligible to participate in demand response or emergency load reduction programs offered by entities under the jurisdiction of the Public Utilities Commission. Payments shall be made to any of the following:
(1) Participating individual entities.
(2) Participating aggregators of multiple energy customers. (3) Participating local publicly owned electric utilities and load-serving entities. (c) Entities with generation or load reduction assets that are incentivized pursuant to Article 2 (commencing with Section 25791) shall participate in the program under this article. (d) Participants shall provide load reduction or backup generation service, or both, in response to a dispatch by an applicable California balancing authority of a California balancing authority area in which participants are located during extreme events.
(e) The commission, in consultation with California balancing authorities and the state board, shall adopt guidelines to determine when to implement the program, including which resources are dispatched first to minimize local pollution and emissions of greenhouse gases. The dispatch order of resources in the program shall follow a loading order that prioritizes, to the maximum extent feasible to ensure electricity reliability, costeffective demand response and efficiency resources, then feasible, cost-effective renewable and zero-emission resources, and then feasible, cost-effective conventional resources. The guidelines shall also consider the anticipated useful life of the resources in relation to the state’s climate and air quality requirements. (f) The state board, in consultation with the commission, shall develop a plan, including determining the funding amounts allocated after the dispatch of resources participating in the program, to mitigate impacts from these resources.
(g) All energy produced as a result of the program shall be settled at a relevant reference energy price derived either through the Independent System Operator market tariff or similar mechanism established and documented for an applicable California balancing authority area.

Article 4. Strategic Reliability Reserve Fund
25793. (a) The Strategic Reliability Reserve Fund is hereby created in the State Treasury. Notwithstanding Section 13340 of the Government Code, the moneys in the fund and the accounts contained in the fund are hereby continuously appropriated without regard to fiscal year to be expended by the commission for purposes of adding resources to the electrical grid to ensure electrical grid reliability and support the clean energy transition. (b) The Distributed Electricity Backup Assets Account is hereby created in the fund, to be administered by the commission to implement the Distributed Electricity Backup Assets Program in accordance with Article 2 (commencing with Section 25791).
(c) The Demand Side Grid Support Account is hereby created in the fund, to be administered by the commission to implement the Demand Side Grid Support Program in accordance with Article 3 (commencing with Section 25792). Revenue generated by the sale of energy services within the Demand Side Grid Support Program shall be deposited into the Demand Side Grid Support Account. (d) The commission may accept nonstate moneys, including, but not limited to, federal moneys, for purposes of this chapter.
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(e) The commission shall adopt emergency regulations to implement this chapter at a commission business meeting. Notwithstanding Sections 11346.1 and 11349.6 of the Government Code, a finding of emergency or necessity to address an emergency shall not be required. Notwithstanding any other law, these emergency regulations shall be valid for three years, or until replaced by nonemergency regulations, whichever is sooner. (f) The executive director, or a designee, of the commission may approve any contract, grant, or loan entered into for purposes of this chapter until October 31, 2023. After October 31, 2023, any contract, grant, or loan entered into for purposes of this chapter shall be approved in a commission meeting held consistent with Chapter 3 (commencing with Section 25200) of Division 15. For any contract, grant, or loan entered into for purposes of this chapter, no later than 10 days after the commission, executive director, or their designee, approves the contract, grant, or loan, the executive director of the commission shall give written notice to the Joint Legislative Budget Committee of the action.
(g) (1) Notwithstanding any other law, a contract, grant, or loan entered into for purposes of this chapter for an activity that is needed for ensuring electrical grid reliability by October 31, 2023, shall not require competitive bidding, or the review, consent, or approval of the Department of General Services or any other state department or agency and is not required to comply with the requirements of the State Contracting Manual, the Public Contract Code, or the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code. (2) This subdivision does not apply to any contract, grant, or loan entered into for purposes of this chapter that is not needed for ensuring electrical grid reliability by October 31, 2023. (3) This subdivision is inoperative on November 1, 2023. (h) Notwithstanding any other law, the commission may pay an incentive up front if not doing so would inhibit participation in the programs established pursuant to this chapter.

Article 5. Certification of Facilities
25794. For purposes of this article, the following definitions apply:
(a) “Department” means the Department of Water Resources or a person designated by the Department of Water Resources for purposes of this article.
(b) “Facility” means a facility described in Section 80710 of the Water Code. (c) “Site” means a location on which a facility is constructed or is proposed to be constructed. 25794.1. (a) Notwithstanding any other law, from October 31, 2022, to October 31, 2026, inclusive, the department shall submit an application for certification to the commission in accordance with this article for a site on which a facility described in Section 80710 of the Water Code is located. (b) The issuance of a certificate by the commission for a site and related facility pursuant to this article shall be in lieu of any permit, certificate, or similar document required by any state, local or regional agency, or federal agency to the extent permitted by federal law, for the use of the site and related facility, and shall supersede any applicable statutes, including the California Coastal Act of 1976 (Division 20 (commencing with Section 30000) of this code) and Title 7.2 (commencing with Section 66600) of the Government Code, ordinances, regulations, or standards of a state, local, or regional agency, or a federal agency, to the extent permitted by federal law, and shall not be subject to the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000)) and regulations adopted pursuant to that division. (c) The Legislature finds and declares that this section addresses a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities. 25794.2. (a) The commission shall establish a process to expedite review of an application submitted pursuant to this article. The process shall include guidance to the department on determining optimal locations for facilities based on the potential to improve reliability, reduce the occurrence of public safety power shutoffs, decrease the 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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use of high-emission backup power, minimize air pollution, and avoid impacts on disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code. (b) An application submitted pursuant to this article shall be in the form prescribed by the commission and shall contain all of the information required by Section 25520 and be further supported by other information as the commission may require to enable review of the site and related facilities, and issuance of a certification, including, at a minimum, all of the following:
(1) A description of the facility, including a showing that it is capable of delivering energy during net peak hours in response to a dispatch by the Independent System Operator during extreme events, and has access to the infrastructure and resources needed to operate.
(2) A description of the site, including whether the site is disturbed and the site’s zoning designation and the allowable uses within the zoning designation.
(3) A list of all properties and property owners within 1,000 feet of the site. (4) A description of the potential impacts of the project on the environment and on public health and safety, including on the surrounding community, and project design measures proposed to mitigate those potential impacts. The description shall include the applicable local air district’s attainment status under the federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.).
(5) A description of all local, state, regional, and federal laws, ordinances, regulations, and standards that would otherwise apply to the facility in the absence of the commission’s exclusive jurisdiction pursuant to subdivision (b) of Section 25794.1, and an analysis of the project’s compliance with those local, state, regional, and federal laws, ordinances, regulations, and standards. (c) An application submitted pursuant to this section shall be reviewed by commission staff. The executive director shall prepare a recommendation for the commission’s consideration on whether to issue a certificate for a site and facility pursuant to this article.
25794.3. Upon receipt of an application pursuant to this article, commission staff shall establish a docket for the proceeding and publish a notice of receipt and shall mail the notice to all property owners within 1,000 feet of the proposed site. The notice shall also be sent to all local, state, and regional agencies that would have had jurisdiction over the site in the absence of the commission’s exclusive jurisdiction under subdivision (b) of Section 25794.1, federal agencies with jurisdiction over the project, and any California Native American tribe that is traditionally and culturally affiliated with the geographic area of the proposed site. 25794.4. (a) Within 20 days of the submission of the application pursuant to this article, the executive director shall review the application for completeness. The executive director may require the department to submit additional information, documents, or data reasonably necessary to make a decision on the application. The executive director shall transmit the request for additional information within 20 days of the submission of the application.
(b) An application is deemed complete as follows:
(1) Twenty days after the submission of the application, if the executive director does not require the submission of additional information, documents, or data pursuant to subdivision (a). (2) Immediately upon acceptance of the additional information, documents, or data requested by the executive director pursuant to subdivision (a).
(c) No later than 180 days after the application is deemed complete, or at any later time as is mutually agreed to by the commission and the department, the commission shall determine whether to issue a certificate for the site and related facility pursuant to this article.
25794.5. Upon an application being deemed complete, the commission shall do all of the following:
(a) (1) Comply with subdivisions (d) to (g), inclusive, of, and subdivision (k) of, Section 25519. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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(2) Notwithstanding subdivision (f) of Section 25519, local agencies may review an application submitted by the commission under paragraph (1) and may submit comments on, among other things, the design of the facility, architectural and aesthetic features of the facility, access to highways, landscaping and grading, public use of lands in the area of the facility, proximity to sensitive receptors and other incompatible land uses, and other appropriate aspects of the design, construction, or operation of the proposed site and related facility. (b) Provide the application to all California Native American tribes that are culturally and traditionally associated with the geographic area of the site and initiate consultation with those tribes in a manner consistent with Sections 21080.3.1 and 21080.3.2.
(c) (1) If the commission does not receive a California Native American tribe’s request for consultation pursuant to subdivision (b), the commission, within 60 days after the application has been deemed complete, shall complete a preliminary analysis for the facility’s potential impacts to environment and public health and safety and the facility’s compliance with applicable laws, ordinances, regulations, and standards that would have applied in absence of the commission’s exclusive jurisdiction under subdivision (b) of Section 25794.1. (2) If the commission receives a California Native American tribe’s request for consultation pursuant to subdivision (b), the commission shall complete a preliminary analysis within 30 days after the commission concludes the consultation process with the California Native American tribe pursuant to subdivision (b). (d) Consult with local jurisdictions and state agencies in conducting the analysis and attempt to resolve any potential noncompliance with applicable laws, ordinances, regulations, and standards. (e) Propose conditions and verification and monitoring requirements for certification, as appropriate, to mitigate any potential impacts to the extent feasible.
(f) Require the department to fully mitigate all air emissions in the surrounding community. The department may use the Climate Heat Impact Response Program (CHIRP) administered by the state board for compliance with this subdivision.
(g) Publish the preliminary analysis for a minimum of 30 days before a 30-day public and agency comment period.
(h) Prepare a final analysis responding to public and agency comments and making any changes at least 10 days before the commission considers whether to approve certification of the site and related facility. 25794.6. The commission shall not certify a site and related facility if any of the following applies:
(a) The site is a site described in Section 25527 unless the commission finds that the use is not inconsistent with the primary uses of those lands and that there will be no substantial adverse environmental impact. (b) The site has not been previously disturbed.
(c) The site does not have access to the infrastructure and resources with the necessary existing capacity and in the proximity needed to operate the facility, including, but not limited to, a natural gas line and a water line, as applicable.
(d) After July 31, 2023, the facility will use diesel fuel. 25794.7. The commission shall maintain on its internet website a list of all certifications granted pursuant to this article for as long as the certifications are in effect. 25794.8. (a) A certificate issued pursuant to this article shall be valid for a period not to exceed five years from the date of issuance.
(b) If a facility operates longer than the period specified in subdivision (a), all necessary permits, certificates, or similar documents required by state, local, and federal governments shall first be obtained. 25794.9. Sections 25532 to 25537, inclusive, apply to a certificate issued pursuant to this article. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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25794.10. (a) The executive director shall charge and collect a reasonable fee from the department upon the submittal of an application pursuant to this article to cover the estimated actual cost of reviewing an application.

The department shall submit a deposit along with the application that does not exceed 3 percent of the estimated capital cost of the proposed facility.
(b) The commission staff shall separately account for the deposit collected and the charges incurred in the review of the application. The status of the account shall be provided to the department at regular intervals established by mutual agreement. The executive director shall request additional deposits if the initial deposit has been exhausted.
(c) A final accounting shall be rendered by the commission staff after the commission has reached a final decision on the application. If, in the final accounting, the deposits exceed the actual costs incurred by the commission, the excess shall be refunded. If the actual costs exceed the amount of the deposits, the department shall be billed for the difference.
(d) The executive director may adjust or waive deposits for minor projects. For facilities with an estimated capital cost that exceeds one million dollars ($1,000,000), the executive director shall permit payment of the deposit in increments, as determined by the executive director.

Article 6. Miscellaneous
25795. Beginning on January 31, 2023, and on May 1, August 1, and December 1 annually thereafter, the department shall issue a written report to the Joint Legislative Budget Committee detailing the actions undertaken by the department in the period since the previous report pursuant to this chapter through that date, including, but not limited to, all of the following:
(a) Amount of funds expended.
(b) Purpose of funds expended.
(c) Status of actions funded.
(d) For new and expanded resources, the amount by megawatt, resource type, operational date, and expected lifetime of that capacity.
(e) The frequency at which resources funded by the department have been used and the extent to which they complied with the requirements of this chapter.
(f) In consultation with the state board, an estimate or the best available information on the emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants emitted by the resources funded by the department over the period since the previous report.
(g) Summary of contracts, grants, and loans issued pursuant to this chapter. 25795.5. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 7. Section 25806 of the Public Resources Code is amended to read:
25806. (a) A person who submits to the commission an application for certification under Chapter 6 (commencing with Section 25500) or Chapter 6.2 (commencing with Section 25545) shall submit with the application a fee of two hundred fifty thousand dollars ($250,000) plus five hundred dollars ($500) per megawatt of gross generating capacity or per megawatthour of gross energy storage capacity, as applicable, or seventy cents ($0.70) per square foot for a facility described in paragraph (3) of subdivision (b) of Section 25545, of the proposed facility. The total fee accompanying an application shall not exceed seven hundred fifty thousand dollars ($750,000).
(b) A person who receives certification of a site and related facility pursuant to Chapter 6 (commencing with Section 25500) or Chapter 6.2 (commencing with Section 25545) shall pay an annual fee of twenty-five thousand dollars ($25,000). For a facility certified on or after January 1, 2004, the first payment of the annual 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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fee is due on the date the commission adopts the final decision. All subsequent payments are due by July 1 of each year in which the facility retains its certification. The fiscal year for the annual fee is July 1 to June 30, inclusive.
(c) The fees in subdivisions (a), (b), and (e) shall be adjusted annually to reflect the percentage change in the Implicit Price Deflator for State and Local Government Purchases of Goods and Services, as published by the United States Department of Commerce.
(d) The Energy Facility License and Compliance Fund is hereby created in the State Treasury. All fees received by the commission pursuant to this section shall be remitted to the Treasurer for deposit in the fund. The money in the fund shall be expended, upon appropriation by the Legislature, for processing applications for certification and for compliance monitoring.
(e) A person who submits to the commission a petition to amend an existing project that previously received certification shall submit with the petition a fee of five thousand dollars ($5,000). The commission shall conduct a full accounting of the actual cost of processing the petition to amend, for which the project owner shall reimburse the commission if the costs exceed five thousand dollars ($5,000). The total reimbursement and fees owed by a project owner for each petition to amend shall not exceed the amount of the maximum total filing fee for an application for certification as specified in subdivision (a) of seven hundred fifty thousand dollars ($750,000), adjusted annually pursuant to subdivision (c). Any reimbursement and fees received by the commission pursuant to this subdivision shall be deposited in the Energy Facility License and Compliance Fund.

This subdivision does not apply to a change in ownership or operational control of a project.

SEC. 8. Section 381 of the Public Utilities Code is amended to read:
381. (a) To ensure that the funding for the programs described in subdivision (b) and Section 382 are not commingled with other revenues, the commission shall require each electrical corporation to identify a separate rate component to collect the revenues used to fund these programs. The rate component shall be a nonbypassable element of the local distribution service. (b) The commission shall allocate funds collected pursuant to subdivision (a), and any interest earned on collected funds, to programs that enhance system reliability and provide in-state benefits as follows:
(1) Cost-effective energy efficiency and conservation activities. (2) Public interest research and development not adequately provided by competitive and regulated markets. (3) In-state operation and development of existing and new and emerging eligible renewable energy resources, as defined in Section 399.12.
(c) The commission shall order the respective electrical corporations to collect and spend these funds at the levels and for the purposes required in Section 399.8.
(d) Each electrical corporation shall allow customers to make voluntary contributions through their utility bill payments as either a fixed amount or a variable amount to support programs established pursuant to paragraph (3) of subdivision (b). Funds collected by electrical corporations for these purposes shall be forwarded in a timely manner to the appropriate fund as specified by the commission.

SEC. 9. Section 739.1 of the Public Utilities Code is amended to read:
739.1. (a) The commission shall continue a program of assistance to low-income electric and gas customers with annual household incomes that are no greater than 200 percent of the federal poverty guideline levels, the cost of which shall not be borne solely by any single class of customer. For one-person households, program eligibility shall be based on two-person household guideline levels. The program shall be referred to as the California Alternate Rates for Energy or CARE program. The commission shall ensure that the level of discount for lowincome electric and gas customers correctly reflects the level of need. (b) The commission shall establish rates for CARE program participants, subject to both of the following:
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(1) That the commission ensure that low-income ratepayers are not jeopardized or overburdened by monthly energy expenditures, pursuant to subdivision (b) of Section 382. (2) That the level of the discount for low-income electricity and gas ratepayers correctly reflects the level of need as determined by the needs assessment conducted pursuant to subdivision (d) of Section 382. (c) In establishing CARE discounts for an electrical corporation with 100,000 or more customer accounts in California, the commission shall ensure all of the following:
(1) The average effective CARE discount shall not be less than 30 percent or more than 35 percent of the revenues that would have been produced for the same billed usage by non-CARE customers. The average effective discount determined by the commission shall not reflect any charges for which CARE customers are exempted, discounts to fixed charges or other rates paid by non-CARE customers, or bill savings resulting from participation in other programs, including the medical baseline allowance pursuant to subdivision (c) of Section 739. The average effective CARE discount shall be calculated as a weighted average of the CARE discounts provided to individual customers.
(2) If an electrical corporation provides an average effective CARE discount in excess of the maximum percentage specified in paragraph (1), the electrical corporation shall not reduce, on an annual basis, the average effective CARE discount by more than a reasonable percentage decrease below the discount in effect on January 1, 2013, or that the electrical corporation had been authorized to place in effect by that date. (3) The entire discount shall be provided in the form of a reduction in the overall bill for the eligible CARE customer.
(d) The commission shall work with electrical and gas corporations to establish penetration goals. The commission shall authorize recovery of all administrative costs associated with the implementation of the CARE program that the commission determines to be reasonable, through a balancing account mechanism.

Administrative costs shall include, but are not limited to, outreach, marketing, regulatory compliance, certification and verification, billing, measurement and evaluation, and capital improvements and upgrades to communications and processing equipment.
(e) The commission shall examine methods to improve CARE enrollment and participation. This examination shall include, but need not be limited to, comparing information from CARE and the Universal Lifeline Telephone Service (ULTS) to determine the most effective means of using that information to increase CARE enrollment, automatic enrollment of ULTS customers who are eligible for the CARE program, customer privacy issues, and alternative mechanisms for outreach to potential enrollees. The commission shall ensure that a customer consents before enrollment. The commission shall consult with interested parties, including ULTS providers, to develop the best methods of informing ULTS customers about other available low-income programs and the best mechanism for telephone providers to recover reasonable costs incurred pursuant to this section. (f) (1) The commission shall improve the CARE application process by cooperating with other entities and representatives of California government, including the California Health and Human Services Agency and the Secretary of California Health and Human Services, to ensure that all gas and electric customers eligible for public assistance programs in California that reside within the service territory of an electrical corporation or gas corporation, are enrolled in the CARE program. The commission may determine that gas and electric customers are categorically eligible for CARE assistance if they are enrolled in other public assistance programs with substantially the same income eligibility requirements as the CARE program. To the extent practicable, the commission shall develop a CARE application process using the existing ULTS application process as a model. The commission shall work with electrical and gas corporations and the Low-Income Oversight Board established in Section 382.1 to meet the low-income objectives in this section. (2) The commission shall ensure that an electrical corporation or gas corporation with a commission-approved program to provide discounts based upon economic need in addition to the CARE program, including a Family Electric Rate Assistance program, uses a single application form, to enable an applicant to alternatively apply for any assistance program for which the applicant may be eligible. It is the intent of the Legislature to allow applicants under one program, that may not be eligible under that program, but that may be eligible under an 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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alternative assistance program based upon economic need, to complete a single application for any commission-approved assistance program offered by the public utility. (g) It is the intent of the Legislature that the commission ensure CARE program participants receive affordable electrical and gas service that does not impose an unfair economic burden on those participants. (h) The commission’s program of assistance to low-income electric and gas customers shall, as soon as practicable, include nonprofit group living facilities specified by the commission, if the commission finds that the residents in these facilities substantially meet the commission’s low-income eligibility requirements and there is a feasible process for certifying that the assistance shall be used for the direct benefit, such as improved quality of care or improved food service, of the low-income residents in the facilities. The commission shall authorize utilities to offer discounts to eligible facilities licensed or permitted by appropriate state or local agencies, and to facilities, including women’s shelters, hospices, and homeless shelters, that may not have a license or permit but provide other proof satisfactory to the utility that they are eligible to participate in the program. (i) (1) In addition to existing assessments of eligibility, an electrical corporation may require proof of income eligibility for those CARE program participants whose electricity usage, in any monthly or other billing period, exceeds 400 percent of baseline usage. The authority of an electrical corporation to require proof of income eligibility is not limited by the means by which the CARE program participant enrolled in the program, including if the participant was automatically enrolled in the CARE program because of participation in a governmental assistance program. If a CARE program participant’s electricity usage exceeds 400 percent of baseline usage, the electrical corporation may require the CARE program participant to participate in the Energy Savings Assistance Program (ESAP), which includes a residential energy assessment, in order to provide the CARE program participant with information and assistance in reducing the CARE program participant’s energy usage. Continued participation in the CARE program may be conditioned upon the CARE program participant agreeing to participate in ESAP within 45 days of notice being given by the electrical corporation pursuant to this paragraph.

The electrical corporation may require the CARE program participant to notify the utility of whether the residence is rented, and, if so, a means by which to contact the landlord, and the electrical corporation may share any evaluation and recommendation relative to the residential structure that is made as part of an energy assessment, with the landlord of the CARE program participant. Requirements imposed pursuant to this paragraph shall be consistent with procedures adopted by the commission. (2) If a CARE program participant’s electricity usage exceeds 600 percent of baseline usage, the electrical corporation shall require the CARE program participant to participate in ESAP, which includes a residential energy assessment, in order to provide the CARE program participant with information and assistance in reducing the CARE program participant’s energy usage. Continued participation in the CARE program shall be conditioned upon the CARE program participant agreeing to participate in ESAP within 45 days of a notice made by the electrical corporation pursuant to this paragraph. The electrical corporation may require the CARE program participant to notify the utility of whether the residence is rented, and, if so, a means by which to contact the landlord, and the electrical corporation may share any evaluation and recommendation relative to the residential structure that is made as part of an energy assessment, with the landlord of the CARE program participant. Following the completion of the energy assessment, if the CARE program participant’s electricity usage continues to exceed 600 percent of baseline usage, the electrical corporation may remove the CARE program participant from the program if the removal is consistent with procedures adopted by the commission.

This paragraph does not prevent a CARE program participant with electricity usage exceeding 600 percent of baseline usage from participating in an appeals process with the electrical corporation to determine whether the participant’s usage levels are legitimate.
(3) A CARE program participant in a rental residence shall not be removed from the program in situations where the landlord is nonresponsive when contacted by the electrical corporation or does not provide for ESAP participation.

SEC. 10. Section 739.9 of the Public Utilities Code is amended to read:
739.9. (a) “Fixed charge” means any fixed customer charge, basic service fee, demand differentiated basic service fee, demand charge, or other charge not based on the volume of electricity consumed. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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(b) Increases to electrical rates and charges in rate design proceedings, including any reduction in the California Alternate Rates for Energy (CARE) discount, shall be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect before January 1, 2014. (c) Consistent with the requirements of Section 739, the commission may modify the seasonal definitions and applicable percentage of average consumption for one or more climatic zones. (d) The commission may adopt new, or expand existing, fixed charges for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. The commission shall ensure that any approved charges do all of the following:
(1) Reasonably reflect an appropriate portion of the different costs of serving small and large customers. (2) Not unreasonably impair incentives for conservation, energy efficiency, and beneficial electrification and greenhouse gas emissions reduction.
(3) Are set at levels that do not overburden low-income customers. (e) (1) For the purposes of this section and Section 739.1, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account. The fixed charge shall be established on an incomegraduated basis with no fewer than three income thresholds so that a low-income ratepayer in each baseline territory would realize a lower average monthly bill without making any changes in usage. The commission shall, no later than July 1, 2024, authorize a fixed charge for default residential rates. (2) For purposes of this subdivision, “income-graduated” means that low-income customers pay a smaller fixed charge than high-income customers.
(f) Notwithstanding the requirements of subdivision (d) of Section 739 and Section 739.7, the commission shall not apply the composite tier method to the treatment of any revenues resulting from any fixed charge adopted pursuant to this section.

SEC. 11. Section 2827.1 of the Public Utilities Code is amended to read:
2827.1. (a) For purposes of this section, “eligible customer-generator,” “large electrical corporation,” and “renewable electrical generation facility” have the same meanings as defined in Section 2827. (b) Notwithstanding any other law, the commission shall develop a standard contract or tariff, which may include net energy metering, for eligible customer-generators with a renewable electrical generation facility that is a customer of a large electrical corporation no later than December 31, 2015. The commission may develop the standard contract or tariff prior to December 31, 2015, and may require a large electrical corporation that has reached the net energy metering program limit of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827 to offer the standard contract or tariff to eligible customer-generators. A large electrical corporation shall offer the standard contract or tariff to an eligible customer-generator beginning July 1, 2017, or prior to that date if ordered to do so by the commission because it has reached the net energy metering program limit of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827. The commission may revise the standard contract or tariff as appropriate to achieve the objectives of this section. In developing the standard contract or tariff, the commission shall do all of the following:
(1) Ensure that the standard contract or tariff made available to eligible customer-generators ensures that customer-sited renewable distributed generation continues to grow sustainably and include specific alternatives designed for growth among residential customers in disadvantaged communities. (2) Establish terms of service and billing rules for eligible customer-generators. (3) Ensure that the standard contract or tariff made available to eligible customer-generators is based on the costs and benefits of the renewable electrical generation facility. (4) Ensure that the total benefits of the standard contract or tariff to all customers and the electrical system are approximately equal to the total costs.
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(5) Allow projects greater than one megawatt that do not have significant impact on the distribution grid to be built to the size of the onsite load if the projects with a capacity of more than one megawatt are subject to reasonable interconnection charges established pursuant to the commission’s Electric Rule 21 and applicable state and federal requirements.
(6) Establish a transition period during which eligible customer-generators taking service under a net energy metering tariff or contract prior to July 1, 2017, or until the electrical corporation reaches its net energy metering program limit pursuant to subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827, whichever is earlier, shall be eligible to continue service under the previously applicable net energy metering tariff for a length of time to be determined by the commission by March 31, 2014. Any rules adopted by the commission shall consider a reasonable expected payback period based on the year the customer initially took service under the tariff or contract authorized by Section 2827. (7) The commission shall determine which rates and tariffs are applicable to customer generators only during a rulemaking proceeding. Any fixed charges for residential customer generators that differ from the fixed charges allowed pursuant to subdivision (e) of Section 739.9 shall be authorized only in a rulemaking proceeding involving every large electrical corporation. The commission shall ensure customer generators are provided electric service at rates that are just and reasonable. (c) Beginning July 1, 2017, or when ordered to do so by the commission because the large electrical corporation has reached its capacity limitation of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827, all new eligible customer-generators shall be subject to the standard contract or tariff developed by the commission and any rules, terms, and rates developed pursuant to subdivision (b). There shall be no limitation on the amount of generating capacity or number of new eligible customer-generators entitled to receive service pursuant to the standard contract or tariff after July 1, 2017. An eligible customer-generator that has received service under a net energy metering standard contract or tariff pursuant to Section 2827 that is no longer eligible to receive service shall be eligible to receive service pursuant to the standard contract or tariff developed by the commission pursuant to this section.

SEC. 12. Section 17131.20 is added to the Revenue and Taxation Code, to read:
17131.20. (a) For taxable years beginning on or after January 1, 2022, and before January 1, 2027, gross income does not include a bill credit or credits received by a customer from a utility applicant under the 2022 California Arrearage Payment Program, pursuant to Article 13 (commencing with Section 16429.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code.
(b) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.

SEC. 13. Division 29 (commencing with Section 80700) is added to the Water Code, to read:

DIVISION 29. Electricity Supply Strategic Reliability Reserve Program CHAPTER 1. General Provisions and Definitions
80700. (a) The Legislature finds and declares all of the following:
(1) California is a leader in driving the affordable and equitable transition to a clean reliable energy system and economy. However, the impacts of climate change are occurring sooner and with more intensity and frequency than previously anticipated.
(2) Extreme events from climate change, including heat waves, wildfires, and drought, combined with other factors, such as supply chain disruptions, are jeopardizing California’s ability to build out the electrical infrastructure needed to maintain affordability and reliability. (3) As California transitions to a clean energy future and contends with climate impacts and other challenges, sufficient capacity of new and existing generation assets will be required to maintain reliability during extreme events.
(4) California must ensure electricity reliability during this period of heightened risk, which includes extraordinary near-term measures and substantive changes to mid-term energy policy, while also ensuring the 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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multifaceted California electrical grid is best positioned to sustainably and equitably achieve California’s clean energy future, climate targets, and air quality requirements. (b) It is the intent of the Legislature that:
(1) The enactment of this division further the purposes of Chapter 8.9 (commencing with Section 25790) of Division 15 of the Public Resources Code. The development and operation of a program as provided in this division is in all respects for the welfare and the benefit of the people of the state, to protect public peace, health, and safety, and constitutes an essential governmental purpose. This division shall be liberally construed in a manner so as to effectuate its purposes and objectives. (2) The powers and responsibilities of the department established under this division are not governed by the provisions related to the State Water Resources Development System pursuant to Chapter 8 (commencing with Section 12930) of Part 6 of Division 6, and this division should not constitute a limitation on, or modification of, the department’s authority pursuant to Chapter 8 (commencing with Section 12930) of Part 6 of Division 6. 80701. For purposes of this division, the following definitions apply:
(a) “California balancing authority” has the same meaning set forth in Section 399.12 of the Public Utilities Code. (b) “Commission” means the State Energy Resources Conservation and Development Commission. (c) “Load-serving entity” has the same meaning as defined in Section 380 of the Public Utilities Code. (d) “Local publicly owned electric utility” has the same meaning as defined in Section 224.3 of the Public Utilities Code.

CHAPTER 2. Electricity Supply Strategic Reliability Reserve Agreements 80710. (a) The department, in consultation with the commission, shall implement projects, purchases, and contracts to carry out the purposes of Chapter 8.9 (commencing with Section 25790) of Division 15 of the Public Resources Code, including, but not limited to, the Distributed Electricity Backup Assets Program and the Demand Side Grid Support Program.
(b) (1) In furtherance of subdivision (a) and notwithstanding any other law, the department may construct, own and operate, or contract for the construction and operation of, contract for the purchase of electricity from, or finance through loans, reimbursement agreements, or other contracts actions to secure resources for summer reliability or to preserve the option to extend the life of, facilities, including any of the following:
(A) Extension of the operating life of existing generating facilities planned for retirement. (B) New emergency and temporary power generators of five megawatts or more. If a generator is operated using diesel fuel, the department shall not operate it after July 31, 2023. (C) New energy storage systems of 20 megawatts or more that are capable of discharging for at least two hours.
(D) Generation facilities using clean, zero-emission fuel technology of any size to produce electricity. (E) Supporting the development of zero-emission generation capacity with a point of interconnection at a California balancing authority, with the majority of its capacity contracted for by a load-serving entity that has a service area primarily in California, with an operational date no later than December 31, 2026. For purposes of this subparagraph, only a facility with a net qualifying capacity of at least 50 percent of its nameplate capacity, as estimated at 8:00 p.m. on a date in September, shall be eligible. (2) In furtherance of subdivision (a) of Section 80700, the department may reimburse electrical corporations, as defined in Section 218 of the Public Utilities Code, for the value of imported energy or import capacity products that was (A) delivered or capable of being delivered between July 1, 2022, and on or before September 30, 2022, and (B) was procured at above-market costs or in excess of procurement authorizations set by the Public Utilities Commission and above the requirements needed to serve its bundled customers in support of summer electric service reliability.
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(c) Facilities constructed by the department or under a contract with the department pursuant to this division shall not constitute State Water Resources Development System facilities under Chapter 8 (commencing with Section 12930) of Part 6 of Division 6.
(d) (1) The department shall consult with the commission, the Public Utilities Commission, the Independent System Operator or other applicable California balancing authorities, and the State Air Resources Board in carrying out the purposes of this division.
(2) Beginning October 1, 2022, and at least every three months thereafter, the department shall provide an update on the investments made and being considered into the strategic reliability reserve at a commission business meeting. The President of the Public Utilities Commission or the president’s designee and the President of the Independent System Operator or the president’s designee shall attend the presentation. (3) The department shall prioritize investments that do not compete with generating facilities already planned for development and disclosed by load-serving entities or local publicly owned electric utilities. (4) In fulfilling the requirements of this division to achieve electricity reliability, the department shall prioritize investments in feasible, cost-effective zero-emission resources, and then feasible, cost-effective conventional resources.
(e) The department shall develop, execute, and implement contracts covering power generation, operation and maintenance, fuel management, site leases, power settlements, invoice verification, billing, and other associated items. The department shall also enter into contracts for external services to provide specialized expertise. (f) (1) Contracts entered into pursuant to this division, amendments to those contracts during their terms, or contracts for services reasonably related to those contracts, and entered on or before December 31, 2023, shall not be subject to competitive bidding or any other state contracting requirements, shall not require the review, consent, or approval of the Department of General Services or any other state department or agency, and are not subject to the requirements of the State Contracting Manual, the Public Contract Code, or the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code.
(2) This subdivision shall not apply to any contract, grant, or loan entered into for purposes of this chapter that does not directly contribute to electrical grid reliability by October 31, 2027. (3) This subdivision is inoperative December 1, 2026.
(g) For contracts entered into pursuant to this division, amendments to those contracts during their terms, or contracts for services reasonably related to those contracts, and executed after December 31, 2023, Sections 10295, 10297, and 10340 of the Public Contact Code do not apply to a contract that meets the conditions established by the department for those contracts.
(h) For contracts entered into pursuant to this division by the department after October 31, 2022, the department shall notify the commission of the terms, costs, and scope at a commission business meeting and the commission shall consider the investment plan for approval in a meeting held consistent with the terms of Chapter 3 (commencing with Section 25200) of Division 15 of the Public Resources Code. No less than 10 days after the commission approves the contract, grant, investment, or loan, the executive director of the commission shall give written notice to the Joint Legislative Budget Committee of the action. (i) A contract entered into, or an approval granted by, the department pursuant to this division is not subject to the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) and regulations adopted pursuant to that act.
(j) The department may adopt guidelines to implement this division. The Administrative Procedure Act (Chapter

3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation or guidelines adopted by the department pursuant to this division. 80711. The department, in consultation with the commission, shall recover all of the costs it incurs pursuant to this chapter from the Department of Water Resources Electricity Supply Reliability Reserve Fund established 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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pursuant to Section 80720. The department and its customers shall not bear any of the costs associated with carrying out the purposes of Chapter 8.9 (commencing with Section 25790) of Division 15 of the Public Resources Code, and those costs shall not be included in the prices, rates, and charges for water and electricity under the water supply contracts executed pursuant to Chapter 8 (commencing with Section 12930) of Part 6 of Division 6.
80712. The department may do any of the following as necessary, as determined by the department, for purposes of this division:
(a) Engage the services of private parties to render professional and technical assistance and advice and other services in carrying out the purposes of this chapter.
(b) Contract for the services of other public agencies. (c) Engage in activities or enter into contracts or arrangements as may be necessary or desirable to carry out the department’s duties and responsibilities pursuant to this division. (d) Hire personnel necessary and desirable for the timely and successful implementation and administration of the department’s duties and responsibilities pursuant to this division. The State Personnel Board and the Department of Human Resources shall assist the department in expediting that hiring.

CHAPTER 3. Department of Water Resources Electricity Supply Reliability Reserve Fund 80720. (a) There is hereby established in the State Treasury the Department of Water Resources Electricity Supply Reliability Reserve Fund.
(b) Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the department, without regard to fiscal years, and shall be available for the purposes of Chapter 2 (commencing with Section 80710).
(c) Obligations authorized and expenses incurred by the department in administering this division shall be payable solely from the fund.
(d) All revenues payable to the department for activities undertaken by the department under Chapter 2 (commencing with Section 80710) shall be deposited into the fund. (e) The fund shall be separate and distinct from any other fund and moneys administered by the department and any interest earned on the moneys in the fund shall be used solely for purposes of this division. (f) When fixed assets procured under the authority of this division are sold or otherwise disposed of, the revenue from the sale or disposition, including any gain or loss, measured by the difference between book value and selling price, shall be deposited into the fund and available to the department for purposes of Chapter 2 (commencing with Section 80710). Any remaining revenue from the sale or other disposition of fixed assets procured under the authority of this division shall be returned to the General Fund once all obligations of the department are satisfied after the wind down of this division and the closure of the fund. While any obligation of the department incurred under this division remains outstanding and not fully performed or discharged, the rights, powers, duties, and existence of the department shall not be diminished or impaired in any manner that will adversely affect the interests and rights of the holders of or parties to those obligations.

CHAPTER 4. Miscellaneous
80730. Beginning on January 31, 2023, and every May 1, August 1, and December 1 annually thereafter, the department shall issue a written report to the Joint Legislative Budget Committee, detailing the actions undertaken by the department in the period since the previous report was submitted pursuant to this division and up until that date, including, but not limited to, all of the following:
(a) Amount of funds expended.
(b) Purpose of funds expended.
(c) Status of actions funded.
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(d) For new and expanded resources, the amount by megawatt, resource type, operational date, and expected lifetime of that capacity.
(e) The frequency at which resources funded by the department have been used and the extent to which they complied with the requirements of this chapter.
(f) In consultation with the state board, estimate or provide the best available information on the emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants emitted by the resources funded by the department over the period since the previous report.
(g) Summary of contracts, grants, and loans issued pursuant to this division.

SEC. 14. (a) In regards to Section 739.9 of the Public Utilities Code, as amended by this act, the Legislature finds and declares all of the following:
(1) The Public Utilities Commission has found that electrical corporation customers are facing two areas of increasing cost pressures: growing electric transmission and distribution infrastructure and operation costs, including wildfire mitigation costs, and equitable recovery of utility fixed costs. (2) The majority of an electrical corporation’s revenue requirement, including funds for electric generation, transmission and distribution investments, and operations and maintenance work, is recovered from customers by a volumetric rate. However, only a portion of the electrical corporation’s costs directly vary based on how much electricity a customer consumes, while many infrastructure and operational costs do not. (3) The current default residential customer rate structure in electrical corporation territories leads to a situation in which rates must rise to recover sufficient revenue to support certain fixed utility costs and can lead to year-to-year rate increase volatility, especially with declines in electricity sales that result from greater adoption of distributed energy resources.
(4) The disparity between volumetric revenue recovery and fixed costs that do not vary with electricity consumption also contributes to potential inequities among customers. (b) In regards to Section 739.9 of the Public Utilities Code, as amended by this act, it is the intent of the Legislature to do both of the following:
(1) Authorize the Public Utilities Commission to establish reasonable fixed charges on default residential customer rates to help stabilize rates and equitably allocate and recover costs among residential customers in each electrical corporation’s service territory.
(2) If the Public Utilities Commission establishes fixed charges on default residential customer rates, ensure that the fixed charges are established to more fairly distribute the burden of supporting the electric system and achieving California’s climate change goals through the fixed charge.

SEC. 15. (a) For the purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Section 17131.20 of the Revenue and Taxation Code, as added by this act, the Legislature finds and declares that the purpose of the exclusion allowed by Section 17131.20 of the Revenue and Taxation Code is to provide financial relief to California residents, to alleviate, in part, the adverse impacts of the economic disruptions and hardships resulting from the COVID-19 emergency.
(b) In order to provide information on the exclusion allowed by Section 17131.20 of the Revenue and Taxation Code, the Department of Community Services and Development shall prepare a written report that includes the number of households receiving a 2022 CAPP benefit as provided in accordance with the 2022 California Arrearage Payment Program (Article 13 (commencing with Section 16429.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code).

SEC. 16. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 17. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SEC. 18. (a) The sum of two hundred million dollars ($200,000,000) is hereby appropriated from the General Fund to the State Energy Resources Conservation and Development Commission for the 2021–22 fiscal year.

These funds shall be used for a program to provide incentives for demand side grid support and associated mitigation costs.
(b) With these funds, the State Energy Resources Conservation and Development Commission may do any of the following:
(1) Adopt regulations, guidelines, or other standards for the program at a State Energy Resources Conservation and Development Commission business meeting. The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to regulations, guidelines, or other standards for the program adopted at the State Energy Resources Conservation and Development Commission business meeting. (2) Use any type of third-party block grant or contract with incentive program implementers for the purposes of implementing the program.
(3) Advance up to 25 percent of the awarded funds at a time to parties that are eligible for funding for purposes of the program.
(c) Contracts, grants, or loans entered into with these funds shall not require the review, consent, or approval of the Department of General Services or any other state department or agency and do not need to comply with requirements under the State Contracting Manual, the Public Contract Code, or the contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code.
(d) These funds shall be available for encumbrance or expenditure by the State Energy Resources Conservation and Development Commission until June 30, 2026, and shall be available for liquidation until June 30, 2030.

SEC. 19. This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately. 9/16/24, 11:21 AM Bill Text - AB-205 Energy.
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Opt-in Certification Program
Opt-in Certification Program 
Permitting is crucial to deploy renewable energy power plants, which are essential to meet the state’s climate goals. With half a century of permitting experience under the California Environmental Quality Act, Assembly Bill 205 (2022) has broadened the California Energy Commission's (CEC) authority. This expansion allows the CEC to oversee the permitting of clean and renewable energy facilities, including solar photovoltaic, onshore wind, and energy storage systems, and facilities that produce or assemble clean energy technologies or their components. Known as the Opt-In Certification Program,  Power Plants
Enter keywords, e.g. Energy Code 

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this permitting process offers developers an optional pathway to submit project applications, facilitating faster deployment of renewable technologies.

Under AB 205, the CEC is the lead CEQA agency for environmental review and permitting for any facility that elects to opt into the CEC’s jurisdiction. The Optin program requires the CEC to:

The following types of facilities are eligible to apply to the Opt-in Certification Program:

A key part of creating a safe and reliable electric system is ensuring that the review of these proposed facilities includes a process for public input. Within five days of each project application being deemed complete, the CEC sends an invitation to request consultations with California Native American tribes.

Within 30 days, the CEC holds a public scoping and informational meeting. By day 150, the CEC posts a draft Environmental Impact Report (EIR), and within Complete in 270 days an environmental impact report (EIR) under CEQA.

Certify compliance with requirements for community benefits agreement, project labor agreements, and economic benefits.

Ensure consistency with all laws, ordinances, regulations, and standards (LORS) under the Warren-Alquist Act.

Solar photovoltaic or terrestrial wind electrical generating power plants generating 50 megawatts (MW) or greater.

Energy storage systems capable of storing 200 megawatt-hours (MWh) or more
Stationary power plants 50 MW or greater using any source of thermal energy, excluding fossil or nuclear fuels.

Transmission lines associated with these generating and storage facilities.

Specified facilities that manufacture or assemble clean energy or storage technologies or related components
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30-60 days of posting the draft EIR, the CEC holds a public meeting on the draft EIR and provides 60 days for public comment. On or before the 270th day, the proposed project and final EIR will be brought to a CEC business meeting for license consideration.

Proposed Projects
There are two ways to receive updates and notifications about the Opt-In Certification Program.

For specific projects, subscribe on the project webpage to receive all documents filed to the project’s docket.

Compass Energy Storage Project
Darden Clean Energy Project
Fountain Wind Project
Perkins Renewable Energy Project
Potentia-Viridi Battery Energy Storage System
Soda Mountain Solar Project
For general program updates and notifications about major project milestones, such as new project applications, upcoming public meetings and publication of reports, subscribe for Opt-In Certification Program Updates in the box on the right side of this page.

Fact Sheets
FAQ on Opt-in Certification
Opt-in Certification
9/16/24, 2:55 PM Opt-in Certification Program
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The CEC is required to prepare an environmental impact report (EIR) under the California Environmental Quality Act (CEQA) and make its decision at a public meeting on the application within 270 days of receiving a complete application. The law identifies certain factors that could impact the CEC’s ability to render a decision within 270 days, including the identification of new significant effects after publication of the Draft EIR that requires additional public comment.

The CEC is required to coordinate its review of opt-in applications with the California Department of Fish and Wildlife (CDFW), the State Water Resources Control Board, and applicable Regional Water Quality Control Boards (“Water Boards”), and the Department of Toxic Substances Control (DTSC). CEC must consult with CDFW to ensure necessary information is submitted during the CEC certification process to grant any authorizations under the Fish and Game Code (e.g., authorized take of a listed species) in lieu of CDFW, and for the agencies that retain their permitting authority to issue their respective permits. The CEC is required to consult with all responsible and trustee agencies on the scope and content of the EIR under CEQA.

The CEC must also certify the administrative record within 5 days of certifying the EIR and granting a certificate to a project.

Agencies that retain their permitting authority are required to issue permits within 90 days of a CEC decision to certify a project. Per memorandums of understanding, CDFW, Water Boards, and DTSC may also participate in pre-filing meetings and CEQA review of proposed projects.

Yes. Within five days of an application being deemed complete, the CEC is required to send requests for consultation letters to tribes that are culturally and traditionally associated with the geographic area of a proposed project. During the consultation process, the CEC is required to solicit the traditional ecological knowledge of What is CEC required to do?
What are other agencies required to do?
Will CEC consult with California Native American tribes? 9/16/24, 2:55 PM Opt-in Certification Program
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affiliated tribes and incorporate this knowledge where feasible in the EIR. The CEC is required to take all feasible measures to avoid or minimize adverse effects to tribal cultural resources.

Yes. There are multiple opportunities for the public to provide comments. The CEC will announce the receipt of an opt-in application through its email subscription service, and by advertising in a newspaper of general circulation in the project area.

Within 30 days of an application being deemed complete and prior to publication of the Draft EIR, the CEC is required to hold a public information and scoping meeting as close as practicable to the proposed project site. There will be a comment period on the Draft EIR, and the CEC will hold at least one public workshop in the project area to take public comment. All public meetings will be announced at least 10 days in advance.

Yes. If a project is approved, CEC’s certificate is in lieu of any local permit or local law or ordinance. However, to grant a certificate to a project, the CEC must make findings that the project will comply with all applicable laws, ordinances, regulations, and standards, or make findings that despite the non-conformance, the project is required for public convenience and necessity, and that there are not more prudent and feasible means of achieving public convenience and necessity.

The CEC is required to invite the local government to attend a mandatory pre-filing meeting with an applicant.

To approve an opt-in project, the CEC must find that the project will provide an overall net positive economic benefit to the local government, that the applicant has entered into a community benefits agreement, and that the applicant has Will this process allow the public an opportunity to
comment on a proposed project?
Can the CEC approve a project that was denied by a local government, or does not conform to local ordinances?
What findings must the CEC make to approve a project?
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certified payment of prevailing wage, or equivalent, for all construction, and the use of a skilled and trained workforce, or equivalent, for all construction.

The CEC must also find that the project will comply with all applicable laws, ordinances, regulations, and standards (LORS). If a project will not comply with any applicable LORS, the CEC must find that the project is required for public convenience and necessity, and that there are not more prudent and feasible means of achieving public convenience and necessity. In making the determination, the CEC must consider the entire record of the proceeding, including, but not limited to, the impacts of the facility on the environment, consumer benefits, and electric system reliability.

The CEC must make findings under CEQA for any project that would have a significant effect on the environment. For each significant effect, the CEC must find that project changes have been required to avoid or substantially lessen the significant effect, or that mitigation or alternatives to avoid or substantially lessen the significant effect are infeasible. To approve a project that is found to have a significant and unavoidable impact on the environment, the CEC will need to adopt a statement of overriding considerations that identifies how the project’s benefits will outweigh any unavoidable impact.

The CEC’s certificate is in lieu of any permit that would normally be required by the local land use authority and most but not all state permits. The CEC’s permit will not supersede the permitting requirements of the California Coastal Commission or San Francisco Bay Conservation and Development Commission for projects in these agencies’ jurisdiction. Nor will the CEC’s permit supersede the permits of the applicable Regional Water Quality Control Board, and in the case of manufacturing facilities, the permits required by the applicable local air district and Department of Toxic Substances Control.

Opt-in Process Timeline
Requirements
Is CEC’s certificate in lieu of all permits an applicant will need to build and operate an eligible facility?
9/16/24, 2:55 PM Opt-in Certification Program
https://www.energy.ca.gov/programs-and-topics/topics/power-plants/opt-certification-program 6/11

Prefiling Meeting
Must occur at least 30 days prior to filing an application.

Application Filing
Environmental Review
CEC must conduct an Application Completeness Review within 30 days of application filed
CEC can request additional information
CEC must share application with local governments, interested parties, and media
CEC must issue a Determination of Completeness Notice

1. If application deemed incomplete, the CEC issues a notice that incudes the data and information still needed.

2. If application deemed complete, the CEC issues a completeness notice and begins the environmental review process
A complete Environmental Impact Report must be conducted and finalized within 270 days. (Note that statute identifies certain factors that could impact the CEC’s ability to render a decision within 270 days, including the identification of new significant effects after publication of the Draft EIR that requires recirculation of the Draft EIR for public comment.)
Process and Deadlines **
Day 0: File the Determination of Complete Application
Day 3: File and circulate the Notice of Preparation of an EIR Day 5: Send invitation to request tribal consultations. 9/16/24, 2:55 PM Opt-in Certification Program
https://www.energy.ca.gov/programs-and-topics/topics/power-plants/opt-certification-program 7/11

After the CEC approves the application, the project must comply with all provisions of their CEC license including the construction, the operation life, and the decommissioning and eventual closure. Also, per California Code of Regulations § 1882, if there are any proposed changes to the design, operation, or performance of a CEC licensed project then the CEC must approve that project change.

Day 30: Hold public informational and scoping meeting as close as practicable to the project site.

Day 150: File and circulate the draft EIR and Notice of Availability and public comment period begins.

Day 180 – 210: Hold a public meeting on the draft EIR at a location as close as possible to the proposed project site.

Day 210: Close the public comment period on draft EIR (60 days from publication date).

Day 240: File final EIR
Day 240: File the CEC’s executive director’s recommendation.

Day 270: Present final EIR and staff recommendation at a publicly noticed CEC Business Meeting. The CEC Commissioners can approve or disapprove project, or require additional information or analysis.

Day 360: State agencies retaining permit authority make permit decisions on application approved by the CEC

CONTACT
Power Plant Licensing
Eric Knight
[email protected]
916-591-9931
9/16/24, 2:55 PM Opt-in Certification Program
https://www.energy.ca.gov/programs-and-topics/topics/power-plants/opt-certification-program 8/11

Media and Public Communication Office
[email protected]
916-654-4989

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STATE OF CALIFORNIA — NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION CENTRAL COAST DISTRICT
725 FRONT STREET, SUITE 300
SANTA CRUZ, CA 95060
PHONE: (831) 427-4863
WEB: WWW.COASTAL.CA.GOV
August 2, 2024
Airlin Singewald, Director
City of Morro Bay Community Development Department
955 Shasta Avenue
Morro Bay, California 93442
Subject: Morro Bay Battery Energy Storage System
Dear Mr. Singewald:

As you know, there are a number of questions and issues swirling around regarding the proposed Battery Energy Storage System (“BESS”) project in the City of Morro Bay, including related to the Coastal Commission’s role related to potential City Local Coastal Program (LCP) changes and City/Commission coastal development permits (CDPs). This letter seeks to provide clarity on our understanding of the LCP and permitting processes for the BESS project, including in relation to Assembly Bill (AB) 205, the City’s local A-24 ballot measure, and Coastal Act/LCP/CDP requirements.

Current CDP Application and LCP Amendment Efforts
As you know, the project applicant, Morro Bay Power Company LLC, is seeking to develop a battery energy storage facility (again, the BESS) on the former power plant site in the City. Under the LCP, the existing land use designation for the site is VisitorServing Commercial (and Commercial/Recreational Fishing, but not where the BESS is proposed), which means the BESS is currently not an allowed use. Thus, an LCP amendment would be required in order to allow for approval of a CDP application for such a project on allowable use issues alone. In addition, the LCP also requires preparation of a Master Plan for the site that would be certified as part of the LCP Land Use Plan (LUP) prior to processing any CDP applications for development on the site (see LUP Policy LU-5.4). Per that policy, the intent of the Master Plan effort is to identify the appropriate kinds, locations, and intensities of uses on the roughly 70-acre site, including based on a community process, and a Coastal Commission process to certify a final Master Plan as part of the LCP LUP, all of which would be a precursor to the applicant pursuing such development through a CDP application. At a minimum, the applicant’s pursuit of a CDP application for the BESS would require that the certified Master Plan allow for the use in question. In any case, and also at a minimum, we would expect any approvable Master Plan to identify potential allowable uses (e.g., visitor-serving commercial, recreational, open space, housing, industrial, etc.) and applicable resource protection provisions (e.g., avoiding sensitive habitats, coastal hazards, etc.) for the overall site, where preferably that is done with as much detail as possible so as to be most instructive for future CDP applications.

Morro Bay BESS

As we understand it, the City is currently processing both the applicant’s CDP application and a proposed Master Plan for the site. As part of that effort, the City determined that the proposed project (where, for this CEQA purpose, the City lumped both the Master Plan and the CDP for development of the battery storage facility into a singular ‘project’) requires preparation of an Environmental Impact Report (EIR) under CEQA, where the City has already prepared a Draft EIR (DEIR), and would need to certify a final EIR as a precursor to City approval of any version of the Master Plan.

After City approval of a Master Plan, that Plan would then need to be submitted to the Commission to be incorporated into the LCP via an LUP amendment where the Coastal Act would serve as the standard of review for such amendment. Thus, it is our understanding that given the applicant’s current CDP application with the City, an LCP amendment for the required Master Plan must be certified by the Commission prior to any local decision on the CDP, as the Master Plan would dictate the allowable development parameters for the site under the LCP. In addition, we note that any subsequent CDP approval by the City would be appealable to the Coastal Commission.

Measure A-24
At the same time that that Master Plan process is underway, we also understand that Measure A-24 will be on the City’s November 2024 general election ballot. If passed, the ballot measure would require City-voters to vote to approve any changes to the existing land use designations applicable to the site, where it also would require submission of an LCP amendment specifying as much to the Commission. Thus, the current Master Plan LCP amendment effort and the potential ballot measure LCP amendment requirement appear likely to intersect one another if Measure A-24 passes in November, which is likely to require some coordination on our parts if that is the case to understand the overlaps, and how best to process LCP amendment(s) pertaining thereto.

AB 205
Separately, questions have been raised regarding whether the BESS project applicant could use the process envisioned by AB 205 as an alternative means of obtaining approvals for the project through the California Energy Commission (CEC), and thus circumvent the process described above. We have reviewed the law associated with AB 205, and it appears clear that the process envisioned there would render the above process moot as it relates to City-specific efforts, but it would still require certain Coastal Commission processes to remain in effect. Specifically, in terms of CEQA, this alternate route would require the CEC to prepare an EIR (see Government Code Section 25545.4). CEC staff would then prepare a recommendation for the CEC’s consideration at a publicly noticed meeting on whether to certify the EIR and issue a certificate for the site and related facilities (see Government Code Section 25545.6).1 However, an application under AB 205 would not supersede the authority of the Coastal Commission 1 See, Public Resources Code Section 25500 which gives the CEC the authority to certify power facility sites and related facilities in the State. According to the CEC’s website, the terms license, certificate, and permit are used interchangeably in applicable law (https://www.energy.ca.gov/programs-andtopics/topics/power-plants/power-plant-licensing).

Morro Bay BESS

under the Coastal Act (see Government Code Section 25545.1(b)(2)). Thus, if the applicant chooses to apply for authorization for the BESS project under the auspices of AB 205, the project would require an approval from the CEC and also approval (of a CDP) from the Coastal Commission, where the standard of review for the CDP would be the Coastal Act with the LCP providing non-binding guidance (see Government Code 25545.5 (d)(1)). In such reviews within areas with certified LCPs when the Coastal Act is the standard of review, the Commission has historically sought to find projects consistent with underlying LCP provisions as well, although this is not a legal requirement. Thus, it is possible that the Commission could approve a CDP for a project that is inconsistent with one or more LCP provisions, although it is difficult to predict the outcome of any such application at the current time. In any case, if the applicant decides to apply to the CEC for approval under the provisions of AB 205, both CEC and Coastal Commission approvals would be required in the ways described above.

Development Constraints
And finally, we have spent some time looking at the preliminary information that is available as it pertains to the site of the proposed BESS, and it has become clearer that there are likely significant development constraints to that – or other – development in that area, which we wanted to highlight for the purposes of full transparency here.

Specifically, and as we noted in our May 28, 2024 letter on the DEIR, our staff ecologist, Dr. Rachel Pausch, has reviewed the relevant materials, including those available from the DEIR, and has determined that the proposed site for the BESS includes dune habitat, including habitat that supports special status species (such as Blochman’s leafy daisy (Erigeron blochmaniae)). While we are unable to conclude with certainty at this time without further site-specific information, based on our current understanding it is likely the BESS area in question constitutes environmentally sensitive habitat area, or ESHA, under the Coastal Act and LCP. In addition, areas that might not be ESHA appear to be within the areas where required buffers of at least 50 feet would need to be applied under the LCP (see LCP Policy C-1.5). Put another way, it appears that the BESS portion of the site is either ESHA or required ESHA buffer, and that, if confirmed, significantly limits what can be developed there. Specifically, if the ESHA analysis is confirmed, the proposed BESS project use is not allowable under the ESHA provisions of either the Coastal Act (Section 30240) or the LCP (LUP Policy C-1.2) because it is not a resource-dependent use (e.g., restoration, scientific study, low intensity interpretive recreation in some cases, etc.), and it would be expected to significantly disrupt and degrade ESHA habitat values. As such, and absent other relevant information to the contrary, any such non-resource dependent development, whether it’s battery storage or other such non-resource dependent development, can only be sited in non-ESHA areas and outside of required buffers at the site, where such areas appear to be limited to the existing more developed areas of the site (e.g., the former power plant building/stack area). All of this needs to be taken into consideration in the current and ongoing Master Plan effort. 2
2 In addition, although we have not been able to research the full history yet, it appears as though there may be some restoration/remediation requirements that still accrue here and that are associated with the former tank farm area of the site, including as may emanate from the Commission’s Federal Consistency

Morro Bay BESS

In addition, we would also note that the proposed battery storage use at such an important opportunity site in the City also raises a host of other Coastal Act/LCP consistency issues, including as identified in our DEIR comment letter (not repeated verbatim here, but considered to be part of this letter by reference). In particular, coastal hazards concerns at the site are acute, including regarding the current and future impacts of flooding and sea level rise at the project site, and any proposed development would have to be able to be found safe from such hazards without reliance on shoreline armoring (see Coastal Act Section 30253 and LCP Policy PS-2.2), where we again note that the proposed BESS facility does not qualify for reliance on shoreline armoring since the proposed facility is neither an existing structure nor a coastal-dependent use/development under the applicable rules (see Coastal Act Section 30235 and LCP Policy PS-3.3). On that latter, a coastal-dependent use/development “requires a site on, or adjacent to, the sea to be able to function at all” (see Coastal Act Section 30101, LCP Policy LU-4.1 to LU-4.6, and LUP page 6-40 of the glossary section) and the BESS does not so qualify, including as it doesn’t require such sensitive shoreline siting, and can readily be sited at inland locations not near the coast.

Conclusion
In sum, it appears clear that there are two main options available to the City and the applicant: the LCP-envisioned Master Plan and CDP application process, and the AB 205 process that circumvents City processes, as described above (with a third potential permutation where the City continues to pursue the Master Plan/Measure A-24 (if passed) LCP amendments at the same time that the applicant pursues relief under AB 205). It also appears clear that the proposed BESS site is subject to significant coastal resource constraints that need to be carefully evaluated in any case, some of which at the current time appear to preclude such a use/development altogether under the Coastal Act and the LCP. We are available for consultation on all of these issues. And, no matter how this process unfolds, we continue to be a ready partner for the City as it navigates the various pathways and concerns as it pertains to the former power plant site, including related to LCP amendments, but also related to CDP applications, and in whatever context such amendments/CDPs find themselves in the future. Please feel free to contact me if you’d like to discuss these matters further.

Sincerely,
Sarah MacGregor
Coastal Planner
Central Coast District
California Coastal Commission
cc: John Rickenbach, City Consultant for BESS/Master Plan Claudia Morrow, Morro Bay Power Company LLC (BESS Applicant) actions related to the site. It is possible that such residual requirements too could be a constraint to development here as well.

Prepared By: ___YK__ Dept Review:____________
City Manager Review: __YK____ City Attorney Review: __CFN______ Staff Report
TO: Honorable Mayor & City Council DATE: September 18, 2024 FROM: Yvonne Kimball, City Manager
SUBJECT: Approval of Offshore Wind (OSW) sub-recipient agreement with San Luis Obispo County

RECOMMENDED ACTION
Approval of the agreement and authorize the City Manager to execute the funding sub-recipient agreement with the County of San Luis Obispo. The fund supports staffing costs associated with development of the joint Operations and Maintenance Waterfront Infrastructure Facility Siting Study and Site Readiness Plans.

ALTERNATIVES
The Council may choose not to enter into the agreement. This alternative is not recommended.

FISCAL IMPACT
Receiving a grant in the amount of $127,675 for intended purposes

BACKGROUND/DISCUSSION
SLO County received a $1 Million state earmark funded in 2021. The purpose of the funding is to conduct the Operations and Maintenance (O&M) Waterfront Infrastructure Facility Siting Study and Site Readiness Plans. This study intends to analyze whether the offshore wind waterfront infrastructure for O&M could be located at Morro Bay, Port San Luis, and/or the Cal Poly pier. If feasible, the study would determine how the infrastructure sites can be best sited in each location and recommend next steps accordingly. Examples of the OSW infrastructure include berths for service operations vessels, crew transfer vessels, warehouses, offices, and storage yards. Morro Bay City team was involved in determining the scope to ensure that our community’s unique needs are represented.

As a result of this highly collaborate approach, the study cost for Morro Bay is $341,200 while the San Luis Bay area study is $281,300. As such, the total study cost including 10% contingency is $684,750. A breakdown can be found in Attachment 2. The County Board of Supervisors approved the study contract with Mott MacDonald Group at their September 10, 2024 meeting.

The remainder of the earmark fund totaling $315,250 has been determined to be divided among Morro Bay, Port San Luis Harbor District, and Cal Poly. Morro Bay is granted $127,695. The detailed breakdown is attached. The enclosed sub-recipient agreement provides for the details of this “grant” funding. City will collaborate with County administration on fund disbursement and reimbursement details.

AGENDA NO: 9.b
MEETING DATE: September 24, 2024

Additionally, the County, the City of Morro Bay, Port San Luis Harbor District and Cal Poly are currently working on a joint communication plan which is funded by a separate state earmark funding that the County received.

It is worthwhile to note that this funding is the result of months of dedicated work by city team.

Reflecting on the past year, when we had zero OSW funding and our isolated plea for assistance seemed isolated, we can now appreciate the significant progress. The potential funding and partnership with the County are testaments to the leadership and determination exhibited by the OSW subcommittee and the City Council which have truly strengthened our stance in the OSW discussions.

ATTACHMENTS

1. Subrecipient agreement (has been reviewed and approved to form by both county and city attorneys)

2. Distribution detail memo (provided by County staff)

3. County staff memo concerning OSW Siting Study contract with Mott MacDonald.

01181.0001/988827.1

SUBRECIPIENT AGREEMENT

BETWEEN THE COUNTY OF SAN LUIS OBISPO AND THE CITY OF MORRO BAY

REGARDING IMPLEMENTATION OF FUNDS TRANSFER AGREEMENT FOR THE

DEEP-WATER PORT FEASIBILITY STUDY FOR OFFSHORE WIND ENERGY

PROCUREMENT
This Subrecipient Agreement (“Agreement”) is hereby made this day of 2024, (the “Effective Date”) by and between the County of San Luis Obispo (“County”) and the City of Morro Bay (“Morro Bay” or “Agency”). County and Morro Bay may be referred herein individually as “Party” or collectively as the “Parties.” WHEREAS, in 2022, pursuant to Section 19.56(e)(5) of the Budget Act of 2022, the State of California (“State”) appropriated $1,000,000 (the “Funds”) from the State General Fund to the California Department of Transportation (“Caltrans”) to be allocated to the County for the development of a Deep-Water Port Feasibility Study for Offshore Wind Energy Procurement (the “Feasibility Study”); and
WHEREAS, the intent of the Feasibility Study is to build off of prior studies including a December 15, 2022 study entitled “Central Coast Emerging Industries Waterfront Siting and Infrastructure Study” commissioned by REACH and authorized by Mott MacDonald as well as a July 2023 study entitled “AB 525 Port Readiness Plan” commissioned by the California State Lands Commission, which identified Morro Bay, the Cal Poly pier, Diablo Canyon’s Parcel P and Port San Luis in Avila Beach as potential operations and maintenance facilities; and WHEREAS, the County intends on using a portion of the Funds for the purpose of contracting with Mott MacDonald to implement the Feasibility Study by developing a technical study for the preparation of a detailed Operations and Maintenance Waterfront Infrastructure Facility Study and Site Readiness Plans (the “Waterfront Infrastructure Facility Study”) for the areas of Morro Bay, the Cal Poly pier, and Port San Luis in Avila Beach; and WHEREAS, by this Agreement, the County intends on allocating a portion of the balance of the Funds to Agency for the purpose of providing supplemental funding for Agency resources associated with the development of the Waterfront Infrastructure Facility Study.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledges, County and Morro Bay do hereby agree as follows:

1. Recitals. The above recitals are true and correct and are incorporated herein by this reference.

2. Grant of Portion of Funds. Within ten days of the Effective Date, County shall pay to Agency a portion of the Funds in the total sum of $127,675(“Initial Subrecipient

01181.0001/988827.1

Funds”), which Agency shall use to exclusively perform the scope of services as described in Section 3 below. Once the Initial Subrecipient Funds have been expended, Agency may request subsequent Subrecipient Funds (“Subsequent Subrecipient Funds”) if any, which result from any cost savings associated with the County’s preparation of the Waterfront Infrastructure Facility Study. The Initial Subrecipient Funds and any Subsequent Subrecipient Funds are collectively referred to herein as “Subrecipient Funds.” Agency acknowledges that Subrecipient Funds are also being allocated to Cal Poly and Port San Luis and that any Subsequent Subrecipient Funds shall be allocated pro-rata based on the amounts of the Initial Subrecipient Funds that each agency receives. Agency acknowledges and agrees that County received from the State and that its use of the Subrecipient Funds shall comply with all terms and conditions in that certain Funds Transfer Agreement between County and the State (the “State Contract,” copy attached as Exhibit A) for the purpose of performing the Scope of Services. Agency acknowledges and agrees that County shall have no obligation whatsoever to provide agency with any other funding or compensation based on this Agreement other than the Subrecipient Funds.

3. Scope of Services. The Subrecipient Funds may only be used for (1) supplemental funding for administrative resources for the development of the Waterfront Infrastructure Facility Study as more particularly described in Exhibit “B” attached hereto, including internal staff resources and external consultant resources; and (2) communication and community engagement for promoting the Waterfront Infrastructure Facility Study and related offshore wind matters (collectively the “Scope of Services”). Morro Bay shall not use the Subrecipient Funds for any other purpose other than the Scope of Services based on the understanding and goal of developing Waterfront Infrastructure Facility Study which provides an objective analysis of operations and maintenance as well as site readiness for each site discussed above.

4. Term of Agreement. This Agreement is effective upon the Effective Date and shall remain in full force and effect until the earlier of: (1) Agency’s use of all of the Subrecipient Funds and satisfactory completion of all obligations in this Agreement; or (2) termination of this Agreement for convenance or for cause as provided in Section 5 below.

5. Termination of Agreement.
a. Termination for Cause. County may terminate this Agreement immediately in writing based on Agency’s material breach of this Agreement, provided County notify Agency in writing of the nature of the material breach and allows Agency ten (10) business days to respond. Within four (4) business days of receiving Agency’s response, County shall provide Agency with its decision as to whether such action constitutes a material breach and termination of this Agreement or if County determines the breach to be remedied based on agency’s response.

01181.0001/988827.1

b. Termination for Convenience. Either Party may terminate this Agreement for any reason whatsoever upon forty-five (45) days written notice to the other party.

Upon notice of termination of this Agreement, either for cause or for convenience, Agency shall cease performing the Scope of Services and all Subrecipient Funds, that are both unexpended and unencumbered, shall be refunded to the County which then may be used to fund additional Scope of Services with another agency or as a refund to the State.

6. Reporting Requirements and Record Keeping. Agency acknowledges that the use of the Funds is subject to review and audit by the State and Caltrans per 48 CFR, Part 31 and 2 CFR Part 200. Agency shall only use the Subrecipient Funds for the Scope of Services and no such funds shall be used for “unallowable costs” as defined in the preceding regulations. Should Agency seek verification regarding whether or not a cost is allowable, it shall submit a description of the cost to the County, with an explanation regarding how the cost is applicable to the Scope of Services. County will then submit the information to Caltrans for verification. Agency agrees to document and keep track of its use and expenditure of the Subrecipient Funds in a manner where County or the State or Caltrans can audit and confirm that the use of the funds were actually used for the Scope of Services per the terms and conditions of this Agreement. Agency agrees that County or its designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to performance under this Agreement. The Subrecipient agrees to provide County, or its designee, with any information requested relevant to these requirements.

Agency agrees to retain all recordkeeping a for a minimum period of five (5) years after the termination of this Agreement.

Agency acknowledges that the State Contract requires County to submit a Project Closeout Report within 30 days of expending all of the Funds. Agency agrees to cooperate with County and provide any and all information, records or documents necessary for County to timely prepare and submit said report to Caltrans.

7. Indemnification. Agency agrees to indemnify, defend and hold harmless County, its officials, employees, contractors and agents from and against any and all liability, administrative action, fine or penalty, or any claim, demand, loss, demand, cost (including attorney’s fees) arising from or related to Agency’s performance under this Agreement including its use of the Subrecipient Funds. Agency shall not be liable for any liability arising from County’s negligence or willful misconduct.

8. General Provisions:
a. Amendments. Either party may request changes to this Agreement. Any changes, modifications, revisions or amendments to this Agreement which are mutually agreed upon by and between the parties to this Agreement shall be incorporated

01181.0001/988827.1

by written instrument, and effective when executed and signed by all parties to this Agreement.
b. Applicable Law. The construction, interpretation and enforcement of this Agreement shall be governed by the laws of the State of California. The courts of the State of California shall have jurisdiction over any action arising out of this Agreement and over the parties, and the venue shall be determined according to the County in which any contested act or activity occurs within. c. Notices. Any notice to be given to a Party hereunder shall be in writing and shall be delivered, either personally or by mail, to such Party as follows:

If to County:

Rebecca Campbell, San Luis Obispo County Administrative Office 1055 Monterey St.

San Luis Obispo, CA 93408
If to Agency:

Yvonne Kimball, Morro Bay City Manager
595 Harbor Street
Morro Bay, CA 93442
d. Points of Contact. The Parties acknowledge that the individuals identified in Section 8.c above shall be the primary points of contact for the purposes of performing the terms and obligations set forth in this Agreement. e. Severability. Should any portion of this Agreement be judicially determined to be illegal or unenforceable, the remainder of the Agreement shall continue in full force and effect, and either party may renegotiate the terms affected by the severance. f. Counterpart Signatures. This Agreement may be executed in separate counterpart signatures.
g. Electronic Signatures. An electronically signed copy of this Agreement shall have the same force and effect as if it were signed manually.

01181.0001/988827.1

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

County of San Luis Obispo
By:

County Administrative Office
APPROVED AS TO FORM:

RITA NEAL, County Counsel
Jon Ansolabehere, Assistant County Counsel
City of Morro Bay
By:_________________________
Title:________________________
Date: ________________________

Project Number-PLBPL-5949(191)
Advantage ID 0523000189
Funds Transfer Agreement Between the California Department of Transportation and the County of San Luis Obispo

1.1 The California Department of Transportation (Caltrans) and the County of San Luis Obispo (County) hereby enter into this Funds Transfer Agreement (Agreement) on the terms and conditions set forth below.

1.2 This Agreement is not valid until signed by both parties. This Agreement shall expire on County’s completion of its obligations under this Agreement, but may be extended by amending this Agreement.

BACKGROUND

2.1 Section 19.56, subdivision (e)(5) of the Budget Act of 2022 (the Act) appropriated $1,000,000 (the Funds) from the State General Fund to Caltrans, to be allocated to County for the Deep Water Port Feasibility Study for Offshore Wind Energy Procurement project.

2.2 Caltrans determined the best method for allocation to ensure the funds are used for the purposes specified in Section 19.56 of the Act is a funds transfer agreement.

2.3 The Deep Water Port Feasibility Study for Offshore Wind Procurement (Study) will analyze the multitude of factors influencing offshore wind development necessary for supporting offshore wind development at locations in San Luis Obispo County.

The Central Coast Emerging Industries Waterfront Siting and Infrastructure Study (REACH study), commissioned by the Regional Economic Action Coalition (REACH) through funding by the Counties of San Luis Obispo and Santa Barbara and the City of Morro Bay, was published in December 2022. This study assessed all waterfront infrastructure in Santa Barbara and San Luis Obispo Counties to identify locations potentially suitable for supporting offshore wind construction and operations and maintenance. The REACH study was the first study examining in detail how waterfront infrastructure constructed specifically on the Central Coast could support the emerging offshore wind energy industry. The study explored the breadth of possibilities on the Central Coast to inform further examination and consideration to inform decision-making on policy and investment.

Given the large geographical scope of the REACH study, there is a need to narrow the breadth of options presented from that study to focus on a limited

EXHIBIT A

Funds Transfer Agreement Between the California Department of Transportation and the County of San Luis Obispo
2 number of sites for further technical analysis, including matters related to infrastructure, workforce development, environmental matters, and etcetera.

The goal of the Study is to inform offshore wind related decision-making by identifying opportunities and constraints for the San Luis Obispo County region.

SCOPE OF WORK

3.1 The Funds provided under this Agreement will be used to: 1) hire a consultant to complete a technical analysis pertaining to topics related to offshore wind development, including infrastructure, workforce development, environmental matters in San Luis Obispo County; 2) develop a communication and community engagement strategy for promoting the Study and related offshore wind matters; and 3) provide County administrative resources to accomplish the aforementioned scopes of work, including internal staff resources and external consultant resources. (Project).

The deliverable of this Project will be the completed Study.

3.2 County shall only use Funds for the Project specified in the Act. County’s selfattestation verifying the intended use of funds shall be provided to the Department prior to the release of any funds.

FUNDING, COSTS, COST LIMITATION, & PAYMENT

4.1 The Funds will be encumbered within 2 days of the effective date of this Agreement. Pursuant to Section 19.56 of the Act, funds must be encumbered by June 30, 2024, and expended by June 30, 2026, or the funds will revert to the State’s General Fund by operation of law.

4.2 Payments shall be made as authorized by Sections 19.56(a) of the Act, including, but not limited to the provisions noted below:
a. Notwithstanding any other law, a designated state entity administering an allocation pursuant to this section may provide the allocation as an advance lump sum payment, and the allocation may be used to pay for costs incurred prior to the effective date of the act adding this paragraph.
b. Funding provided in this section shall not be used for a purpose subject to Section 8 of the Article XVI of California Constitution.

4.3 Within 30 days of expending all of the Funds or upon completion or termination of Project, whichever comes first, County shall submit to Caltrans a Project Closeout Report. The Project Closeout Report at a minimum shall include

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Funds Transfer Agreement Between the California Department of Transportation and the County of San Luis Obispo
3 a description of completed Project component(s) and a description of Project outcomes. Photographs of the Project are encouraged to be included.

4.4 Any Project costs paid using the Funds that are determined by subsequent audit to be unallowable under 48 CFR, Part 31 or 2 CFR, Part 200, are subject to repayment by County to Caltrans.

4.5 County shall return any unspent Funds to Caltrans at the conclusion, completion, or termination of the Project.

4.6 Upon written demand by STATE, any overpayment to County of amounts invoiced to CALTRANS shall be returned to STATE.

4.7 Should County fail to refund any moneys due CALTRANS as provided herein or should County breach this AGREEMENT by failing to complete Project without adequate justification and approval by STATE, then, within thirty (30) days of demand, or within such other period as may be agreed to in writing between the PARTIES, STATE, acting through the State Controller, the State Treasurer, the CTC or any other public entity or agency, may intercept, withhold and demand the transfer of an amount equal to the amounts paid by or owed to CALTRANS for each Project, from future apportionments or any other funds due [Agency Title] from the Highway Users Tax Fund or any other sources of funds, and/or may also withhold approval of future STATE-FUNDED projects proposed by ADMINISTERING AGENCY.

INQUIRIES & NOTICES

5.1 All inquiries during the term of this Agreement will be directed to the representatives listed below:

For Caltrans:

Name: Tammy Mar Giuliano
Address: 3232 S. Higuera St, San Luis
Obispo, CA 93401
Phone Number: (805) 550-2050
Email: [email protected]
For County:

Name: Laura Fiedler
Address: 1055 Monterey Street,
San Luis Obispo, CA 93408
Phone Number: 805-781-5011
Email: [email protected]

5.2 Each party may change their representative listed above upon 10 calendar days’ written or emailed notice to the other party and without the need for amending this Agreement.

OTHER TERMS & CONDITIONS

6.1 Drug-Free Workplace Requirements: County will comply with the

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Funds Transfer Agreement Between the California Department of Transportation and the County of San Luis Obispo
4 requirements of the Drug-Free Workplace Act of 1990 and will provide a drugfree workplace by taking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution, dispensation, possession or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations.
b. Establish a Drug-Free Awareness Program to inform employees about:
1) the dangers of drug abuse in the workplace;
2) the person's or organization's policy of maintaining a drug-free workplace;
3) any available counseling, rehabilitation and employee assistance programs; and,
4) penalties that may be imposed upon employees for drug abuse violations.
c. Every employee who works on the proposed Agreement will:
1) receive a copy of the company's drug-free workplace policy statement; and,
2) agree to abide by the terms of the company's statement as a condition of employment on the Agreement.

Failure to comply with these requirements may result in suspension of payments under the Agreement or termination of the Agreement or both and County may be ineligible for award of any future State agreements if Caltrans or the State Department of General Services determines that any of the following has occurred: County has made false certification, or violated the certification by failing to carry out the requirements as noted above. (Gov. Code §8350 et seq.)

6.2 Conflict of Interest: County needs to be aware of the following provisions regarding current or former state employees. If County has any questions on the status of any person rendering services or involved with the Agreement, Caltrans must be contacted immediately for clarification.

Current State Employees (Pub. Contract Code §10410):
1). No officer or employee shall engage in any employment, activity or enterprise from which the officer or employee receives compensation or has a financial interest and which is sponsored or funded by any state agency, unless the employment, activity or enterprise is required as a condition of regular state employment.

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Funds Transfer Agreement Between the California Department of Transportation and the County of San Luis Obispo
5 2). No officer or employee shall contract on his or her own behalf as an independent contractor with any state agency to provide goods or services.

Former State Employees (Pub. Contract Code §10411):
1). For the two-year period from the date he or she left state employment, no former state officer or employee may enter into a contract in which he or she engaged in any of the negotiations, transactions, planning, arrangements or any part of the decisionmaking process relevant to the contract while employed in any capacity by any state agency.
2). For the twelve-month period from the date he or she left state employment, no former state officer or employee may enter into a contract with any state agency if he or she was employed by that state agency in a policy-making position in the same general subject area as the proposed contract within the 12-month period prior to his or her leaving state service.

If County violates any provisions of above paragraphs, such action by County shall render this Agreement void. (Pub. Contract Code §10420.) If the Agreement is rendered void, [Agency Title] shall return all Funds.

6.3 Labor Code/Workers' Compensation: County needs to be aware of the provisions which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions, and County affirms to comply with such provisions before commencing the performance of the work described in this Agreement. (Labor Code § 3700.)

6.4. Americans With Disabilities Act: County assures the State that it complies with the Americans with Disabilities Act (ADA) of 1990, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. (42 U.S.C. § 12101 et seq.)

6.5. County Name Change: An amendment is required to change County’s name as listed on this Agreement. Upon receipt of legal documentation of the name change the State will process the amendment. Payment of invoices presented with a new name cannot be paid prior to approval of said amendment.

6.6. Resolution: A county, city, district, or other local public body must provide the State with a copy of a resolution, order, motion, or ordinance of the local

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Funds Transfer Agreement Between the California Department of Transportation and the County of San Luis Obispo
6 governing body which by law has authority to enter into an agreement, authorizing execution of the agreement.

6.7. Air or Water Pollution Violation: Under State law, County shall not be: (1) in violation of any order or resolution not subject to review promulgated by the State Air Resources Board or an air pollution control district; (2) subject to cease and desist order not subject to review issued pursuant to Section 13301 of the Water Code for violation of waste discharge requirements or discharge prohibitions; or (3) finally determined to be in violation of provisions of federal law relating to air or water pollution.

6.8. Audit: County agrees that Caltrans, the California Department of General Services, the California State Auditor’s Office, or other State agency with a legitimate business purpose, or their designated representative(s) shall have the right to review and to copy any records and supporting documentation pertaining to the performance of this Agreement. County agrees to maintain such records for possible audit for a minimum of three (3) years after final payment, unless a longer period of record retention is stipulated.

6.9. Amendments: No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties. Any amendment signed by County must be approved by its Board of Directors as evidenced by a resolution, order, motion, or ordinance of the County and a copy provided to Caltrans. No oral understanding or agreement not incorporated in the Agreement is binding on any of the parties.

6.10. Caltrans and County shall continue with their responsibilities under this Agreement during any dispute.

6.11 This Agreement may be executed in separate counterparts.

6.12 An electronically signed copy of this Agreement shall have the same force and effect as if it were signed manually.

6.13 Should County be declared to be in breach of this AGREEMENT or otherwise in default thereof by STATE, and if County is constituted as a joint powers authority, special district, or any other public entity not directly receiving funds through the State Controller, CALTRANS is authorized to obtain reimbursement from whatever sources of funding are available, including the withholding or transfer of funds, pursuant to Article IV – 21, from those constituent entities comprising a joint powers authority or by bringing of an action against County or its constituent member entities, to recover all funds provided by CALTRANS hereunder.

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Funds Transfer Agreement Between the California Department of Transportation and the County of San Luis Obispo
7 EXHIBIT A

Funds Transfer Agreement Between the California Department of Transportation and the County of San Luis Obispo
8 State:

STATE OF CALIFORNIA

DEPARTMENT OF TRANSPORTATION
Printed Name: Jeanie Ward-Waller
Signature:

Deputy Director for Planning & Modal
Programs
Date:

Local Agency:

County of San Luis Obispo
Printed Name:

Signature:

Title:

Date:

Accounting Certification
Jie Chen 06/01/2023 $1,000,000.00

EXHIBIT A

EXHIBIT A

Central Coast Offshore
Wind O&M Infrastructure
Study
Scope and Fee Estimate
July 2024
San Luis Obispo County
Mott MacDonald
Page i of iii

EXHIBIT B

Mott MacDonald | Central Coast Offshore Wind O&M Infrastructure Study Scope and Fee Estimate

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Mott MacDonald | Central Coast Offshore Wind O&M Infrastructure Study Scope and Fee Estimate
Contents
1 Introduction 1
2 Offshore Wind Developer Lease Holder Engagement 1
3 San Luis Obispo Bay – Port San Luis and Cal Poly Pier 1

3.1 Project team kickoff meeting 1

3.2 Basis of assessment, existing conditions, and gap assessment 1

3.3 Environmental and permitting assessment 2

3.4 Quayside mooring and downtime assessment 2

3.5 Navigation and dredging assessment 2

3.6 Conceptual waterfront infrastructure design and cost estimate 3

3.7 Assessment of potential co-uses and benefits 3

3.8 Deliverables 3
4 Morro Bay 4

4.1 Project team kickoff meeting 4

4.2 Planning and environmental assessment 4

4.3 Basis of assessment and existing conditions assessment 4

4.4 Navigation and dredging assessment 5

4.5 Conceptual waterfront infrastructure design and cost estimate 5

4.6 Public engagement support 7

4.7 Deliverables 7
5 Project Assumptions 7
6 Schedule 9
7 Project Fee Estimate and Invoicing 11
A. Environmental, Permitting, and Planning Assessment Scope of Work and Fee Estimate 12

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1 Introduction
With their proximity to the Central California offshore wind lease areas, San Luis Obispo Bay and Morro Bay have been identified as potential sites to develop offshore wind operations and maintenance (O&M) ports.

O&M facilities support offshore wind farms by serving as a base of operations for offshore wind farms, and for support vessels to travel to wind farm locations and provide the needed maintenance and repairs.

Building upon efforts conducted in 2022 to assess port infrastructure opportunities in support of offshore wind in Central California, the County of San Luis Obispo is seeking to further assess these two (2) areas for their feasibility to host O&M sites. The scope of work is intended to assess and communicate the technical suitability of three (3) locations – Morro Bay, Port San Luis, and Cal Poly Pier – as potential O&M sites by performing site-specific comparisons of the site requirements for OSW O&M facilities with the conditions and constraints at those sites. Examples of potential waterfront infrastructure upgrades that would likely be required to meet OSW facility requirements, and identification of likely favorable sites, will be conducted as part of this work. Further assessment, including more detailed concept development, stakeholder engagement, environmental studies, and site investigations will be needed in subsequent phases.

This effort as described below is separated into two (2) separate scopes: one (1) for San Luis Obispo Bay, including Port San Luis and Cal Poly Pier, and one (1) for Morro Bay. A detailed description of the proposed services is provided below.
2 Offshore Wind Developer Lease Holder Engagement
Lease-holder input to the assessments is important to confirm site requirements for an O&M facility. Mott MacDonald will manage developer outreach to support industry input into and alignment with the waterfront infrastructure assessments. Mott MacDonald’s role in developer outreach will include the following:
● Developer identification and initial outreach, in coordination with the County of San Luis Obispo. ● Organization of engagement meetings with relevant developers to solicit feedback on O&M site requirements, preferences, and constraints.
● Periodic engagement throughout concept design development. 3 San Luis Obispo Bay – Port San Luis and Cal Poly Pier

3.1 Project team kickoff meeting
An initial virtual kick-off meeting will be held between Mott MacDonald and the County of San Luis Obispo, joined by representatives of Port San Luis and Cal Poly to coordinate initial efforts.

3.2 Basis of assessment, existing conditions, and gap assessment Mott MacDonald will develop a Basis of Assessment to communicate initial assumptions and criteria and confirm alignment with the County of San Luis Obispo through a slide deck presentation. This will set the framework for site requirements of an O&M facility in San Luis Obispo Bay that conceptual designs will be based on and is intended to align the team on these primary site requirements. The Basis of Assessment is anticipated to include the following considerations:
● O&M Port Operational Requirements: e.g., vessels, wharf live load requirements, allowable wave conditions, initial berth utilization requirements.
● Site Conditions: Including database review (e.g., bathymetry, abbreviated literature review of work in region, wave conditions) - leveraging our existing databases and models with respect to the locations and requirement, and compilation of additional data (such as condition reports and as-builts).

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● Site Visit: The existing conditions assessment will also include a site visit to the Port San Luis and Cal Poly Pier sites.

3.3 Environmental and permitting assessment
An environmental and permitting assessment will be conducted by Rincon Consultants, Inc., subcontracted to Mott MacDonald. This will include:
● Site identification and data collection for in-water sites ● Environmental constraints analysis and mapping
● Environmental planning and permitting matrix
● Internal project management and administrative support See Appendix A for full details of the environmental and permitting assessment.

The results of this assessment will be considered as a part of the existing conditions assessment and will feed into the concept development at both sites.

3.4 Quayside mooring and downtime assessment
The existing facilities have not previously been used to support moorage of OSW O&M vessels, and an investigation is needed to confirm feasibility or to identify the need for a breakwater. To evaluate the need for a breakwater, Mott MacDonald will conduct a downtime and mooring analysis considering local wave climate. This work will be performed in the following steps:
● Wind/Wave Statistical Analysis: Historical offshore wind and wave conditions near San Luis Obispo Bay will be assessed and characterized so they can be binned into a limited number of representative conditions, meant to estimate a range of likely year-round operational conditions. These sets of conditions will inform input into a wave model.
● Wave Modelling: Mott MacDonald will leverage our extensive wave modelling experience in this area to refine an existing wave model of San Luis Obispo Bay. This model will be used to assess the existing wave climate at each potential O&M site location, using the wind wave conditions identified in the offshore statistical analysis.
● Quayside Mooring and Downtime Analysis: Industry standard static mooring analysis software (OPTIMOOR) will be used to conduct a quayside mooring analysis, using conditions informed by wave modelling results, to capture a Service Operation Vessel’s (SOV) response to potential wave conditions at the berth. The output of this assessment would be static loading results and frequency domain wave motion results, which will be compared with SOV operability criteria and synthesized into an estimated annual downtime at each site.
● Preliminary Breakwater Sizing: If estimated downtime does not meet assumed required operability criteria for an O&M facility, Mott MacDonald will perform a preliminary breakwater sizing assessment, to estimate a level of protection could improve wave conditions at each potential O&M site to meet these criteria.

3.5 Navigation and dredging assessment
A preliminary navigation and dredging assessment will be performed for both Port San Luis and Cal Poly Pier.
● Assumed vessel sizing and navigational requirements from the Basis of Assessment (area, depth) will be used to identify likely areas to be considered for vessel navigation. ● Existing bathymetry will be compared with the identified areas and assumed navigational requirements, and areas where dredging may be required to meet navigational requirements will be identified.

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● Assumed navigational requirements and dredging will be communicated with the United States Army Corps of Engineers (USACE) and the United States Coast Guard (USCG) to solicit feedback. ● Associated estimated dredging requirements will be compiled.

3.6 Conceptual waterfront infrastructure design and cost estimate ● Gap Assessment: Mott MacDonald will update prior gap assessments conducted for each of the identified sites by comparing the existing site conditions and waterfront and upland infrastructure characteristics with the requirements set out in the Basis of Assessment, and then identifying where infrastructure upgrades (e.g., pier strengthening, pier extension, dredging, others) could close this gap. ● Preliminary Concept Options: High-level concept sketches will be developed by Mott MacDonald representing potentially feasible options for infrastructure upgrades of Port San Luis and Cal Poly Pier.

The concepts will be developed based on the gap assessment and will be informed by our previous SOV concepts developed for these locations. These options will be reviewed with the County of San Luis Obispo, Port San Luis, and Cal Poly in a virtual workshop to ensure alignment on concepts that appear to be more technically viable, and a concept for each site will be identified through this alignment to be further investigated. The County of San Luis Obispo shall be responsible for collating feedback from Port San Luis and Cal Poly.
● Concept Drawings: The identified O&M port concept options will be refined at both Port San Luis and Cal Poly Pier. Plan view concept drawings will be created for the identified options for each of the two (2) sites (CAD/PDF). The conceptual design schematics will provide a basis for the Class V Construction Cost Estimate.
● Costs: CAPEX cost estimate will be developed for each of the two (2) O&M port concepts utilizing our internal database for offshore wind facilities and O&M harbors. Construction cost estimates will be based on the Class V estimate scheme of the Association for the Advancement of Cost Estimating (AACE), typically used for concept screening, which aligns with the level of detail considered in this study. The Class V estimates have an accuracy range of -50% to +100% and include considerations of changes in scope, site conditions, and market conditions.

3.7 Assessment of potential co-uses and benefits
A qualitative assessment will be compiled to evaluate potential co-use benefits due to the installation of infrastructure required for an O&M facility. This may include moorage of small craft vessels (either seasonal or year-round), fuel access, research buildings, and activities of the Cal Poly Center for Marine Resources, including current operations, rectification of possible safety issues, and any necessary facility infrastructure upgrades, or other benefits as discussed with the County of San Luis Obispo, Port San Luis, and Cal Poly.

3.8 Deliverables
The following deliverables will be compiled as a part of the Port San Luis and Cal Poly Pier waterfront infrastructure assessments:
● Basis of Assessment: Findings will be provided in a presentation to the County of San Luis Obispo, Port San Luis, and Cal Poly. A PDF copy of the Basis of Assessment presentation will be provided, summarizing initial assumptions and criteria used in the development of waterfront infrastructure upgrade concepts. The County will provide Mott McDonald with one (1) consolidated compilation of review comments. One (1) week is assumed for review and comment following issue of the PDF. ● Draft Report: A draft report will be compiled summarizing the development of waterfront infrastructure upgrade concepts for each site, including:
– A summary of the Basis of Assessment,
– Existing condition assessments,

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– Gap assessments,
– A description of the identified concepts,
– Cost estimates,
– Assessment of potential co-uses and benefits,
– Environmental constraints and permitting matrix, and
– Potential next steps.

The draft report will be delivered to the County of San Luis Obispo in Word and PDF format for review.

The County will subsequently provide the report to Port San Luis and Cal Poly for their review. The County of San Luis Obispo will provide to Mott McDonald one (1) consolidated compilation of review comments for review and comment. Two (2) weeks is assumed for review and comment following issue of the draft report.
● Final Report: A final report will be compiled addressing comments from the County of San Luis Obispo, in PDF format.
4 Morro Bay

4.1 Project team kickoff meeting
An initial virtual kick-off meeting will be held between Mott MacDonald, the County of San Luis Obispo, and the City of Morro Bay to coordinate initial efforts.

4.2 Planning and environmental assessment
A planning and environmental assessment will be conducted by Rincon Consultants, Inc., subcontracted to Mott MacDonald and will comprise of the following:
● Data collection for identified parcels and waterfront properties ● Land use planning due diligence
● Environmental constraints assessment and mapping
● Assessing and refining identified sites and areas for development ● Production of an environmental planning and permitting matrix ● Public engagement material preparations
● Internal project management and client coordination.

See Appendix A for further details on the planning and environmental assessment. This assessment will drive the concept development for Morro Bay, and the scope elements described below will support the planning and environmental assessment.

4.3 Basis of assessment and existing conditions assessment Mott MacDonald will develop a Basis of Assessment to communicate initial assumptions and criteria and confirm alignment through a slide deck presentation. This will set the framework for site requirements of an O&M facility in Morro Bay that the conceptual design will be based on and is intended to align the team on these primary site requirements. The Basis of Assessment is anticipated to include the following considerations:
● O&M Port Operational Requirements: e.g., vessels, wharf live load requirements, allowable wave conditions, initial berth utilization requirements.

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● Site Conditions: Database review (e.g., bathymetry, abbreviated literature review of work in region, wave conditions) - leveraging our existing databases and models with respect to the locations and requirement.
● Site Visit: The existing conditions assessment will also include a site visit to Morro Bay. ● In-Scope Areas: Areas assumed to be considered for evaluation.

4.4 Navigation and dredging assessment
A preliminary navigation and dredging assessment will be performed for a potential O&M site in Morro Bay.

This assessment will include the following:
● Assumed vessel sizing and navigational requirements (channel depth and width, turning basin diameter and depth, berth pocket depth) from the Basis of Assessment will be used to identify areas to be considered for dredging.
● Existing bathymetry and navigation channel parameters will be compared with the identified areas and assumed navigational requirements, and likely navigation channel adjustments will be identified. ● Anticipated navigational requirements and potential navigation channel adjustments will be communicated with USACE and USCG to solicit feedback.
● Associated estimated dredging requirements will be compiled and discussed with the environmental team.

4.5 Conceptual waterfront infrastructure design and cost estimate Mott MacDonald will develop a conceptual design for waterfront infrastructure upgrades for Morro Bay to accommodate offshore wind O&M activities. Areas within Morro Bay will be technically evaluated for their suitability for infrastructure upgrades to accommodate SOV berthing, including the two (2) existing T-piers (shown in Figure 4.1). A preliminary concept will then be developed for the most technically suitable location.

EXHIBIT B

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Figure 4.1: Satellite Imagery of Morro Bay
Source: © 2024 Microsoft Corporation © 2024 Maxar ©CNES (2024) Distribution Airbus DS The conceptual design will be developed in the following steps:
● Gap Assessment: A gap assessment will be performed by comparing existing site conditions and waterfront and upland infrastructure characteristics with the requirements for a facility, and then identifying where infrastructure upgrades (e.g., pier strengthening, pier extension, dredging, others) could close this gap.
● Preliminary Concept Options: High-level concept sketches will be developed by Mott MacDonald representing potentially feasible options for infrastructure upgrades of Morro Bay. These options will be reviewed with the County of San Luis Obispo and the City of Morro Bay to align on concepts that appear to be most technically viable, and a concept will be identified through this alignment to be further investigated.
● Structural Assessment: A conceptual structural assessment will be conducted for the identified infrastructure upgrade concept, and the results compared with structural requirements set out in the Basis of Assessment. Areas where strengthening or other structural modification may be required to suit the needs of an O&M facility will be identified.
● Concept Drawings: Plan view concept drawings will be created for the identified concept option (CAD/PDF). The conceptual design schematics will provide a basis for the Class V Construction Cost Estimate.
● Costs: A CAPEX cost estimate will be developed for the O&M port concept, utilizing our internal database for offshore wind facilities and O&M harbors. The construction cost estimate will be based on

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