WeVote
Log In

Bill

Bill

AB 2182

Energy efficiency: financing options: custom agricultural and industrial efficiency projects.

2025-2026 Regular Session Introduced by Jacqui Irwin

Creates a utility-administered grant program to reduce industrial emissions and boost efficiency, funded by existing energy-efficiency charges with grants up to 50% of costs.

Re-referred to Com. on APPR.
#energyefficiency #customagriculturalandindustrialefficiencyprojects #financingoptions
1
WeVote Research Nonpartisan
Bill Summary · AB 2182

Summary of AB 2182 (2025-2026) – Electrical Corporations: Industrial Decarbonization and Energy Efficiency Program

Purpose and intent
- Establish a new Industrial Decarbonization and Energy Efficiency Program (the “Program”) within the Public Utilities Code, to be administered by large electrical corporations.
- Channel funding for the Program from energy efficiency charges collected from eligible industrial facilities, with the goal of reducing greenhouse gas emissions and improving energy efficiency in California industry.

Key provisions and changes
- Definitions:
- Eligible facility: industrial/manufacturing facility in a large electrical corporation’s service territory that is enrolled in a medium/large energy tariff (e.g., TOU-8, B-19, B-20, etc.), has a minimum peak load of 500 kW, and is not a residential/state/local government customer.
- Eligible project: a range of projects including energy efficiency improvements (at least 20% energy savings or meeting industry standards), industrial process heat recovery, behind-the-meter renewable energy (solar, wind), energy storage, electrification of industrial processes, and carbon capture, utilization, and sequestration (CCUS) subject to cost-effectiveness criteria.
- Large electrical corporation: an electric utility with more than 3,000,000 California customer accounts.
- Office: Governor’s Office of Business and Economic Development (GO-Biz).
- Program: Industrial Decarbonization and Energy Efficiency Program enacted by the bill.

  • Program establishment and funding:

    • By August 1, 2027, each large electrical corporation must file a Tier 2 advice letter with the California Public Utilities Commission (CPUC) to establish the Program.
    • Funding: the Program’s funding must be allocated from energy efficiency charges that would otherwise be collected from eligible facilities; i.e., no net increase in charges above existing energy-efficiency collections.
    • CPUC review: CPUC must act on the Tier 2 advice letter by November 1, 2027.

  • Grant structure and prioritization:

    • Programs must award grants to eligible facilities for eligible projects.
    • Grants may cover up to 50% of documented project costs.
    • Prioritization criteria include:
    • Durable, verifiable greenhouse gas emission reductions.
    • Overall reductions in electricity or fuel use.
    • Improvements to electrical grid efficiency or reductions in peak demand.
    • Independent review: GO-Biz (Office) provides independent review and approval of grants and may refine eligibility criteria to ensure investments yield meaningful energy savings and emission reductions.
    • Cumulative cap and rollover:
    • An eligible facility’s total grants cannot exceed the total amount it has contributed via energy-efficiency charges (as allocated under subsection 1550(a)).
    • If funds remain unawarded after five years, they may be redirected to other eligible facilities on a first-come, first-ready, first-served basis. Amount redirected does not count toward the facility’s cumulative cap.

  • Administration and data handling:

    • Large electrical corporations administer the program, including intake, data validation, eligibility evaluation of facilities and projects, and grant payments.
    • GO-Biz provides independent program oversight and grant approval.
    • The bill contemplates cost-sharing (up to 50%) and emphasizes measurable savings and emissions outcomes.

  • Legal and fiscal notes:

    • The bill creates a new program within the Public Utilities Act; violations (e.g., failing to comply with CPUC directives) could be treated as crimes under existing Public Utilities Code enforcement.
    • Because it involves a new state program with potential criminal enforcement, it is considered a state-mandated local program; however, it explicitly states no local reimbursement is required for certain costs.
    • No appropriation is included in the bill; it relies on reallocation of existing energy-efficiency charges to fund the program.

  • Effective dates and process timing:

    • August 1, 2027: Deadline for large electrical corporations to file the Tier 2 advice letter establishing the Program.
    • November 1, 2027: CPUC deadline to act on the Tier 2 advisory filing.
    • Ongoing: Administered by large electrical corporations with GO-Biz independent review.

What would be affected
- Large electrical corporations (e.g., investor-owned utilities serving California) would administer the Program and oversee grant processes.
- Eligible industrial and manufacturing facilities meeting the defined criteria could apply for grants to implement eligible projects.
- GO-Biz would provide independent review and approval of grants.
- The CPUC would review and approve the establishing filings and oversee program compliance.

Procedural and timeline highlights
- New Chapter 8.6 added to Part 1, Division 1, Chapter 8.6 (Sections 1550 and following) of the Public Utilities Code.
- Two-stage filing/timeline:
- By 8/1/2027: Tier 2 advice letters filed by each large electrical corporation to establish the Program.
- By 11/1/2027: CPUC must act on filings.
- Grants capped at 50% of project cost; cumulative grants limited to total funds collected from the eligible facility via energy-efficiency charges.
- Five-year sunset-like reallocation window for unawarded funds, with adjustments to the cumulative cap as needed.

Overall impact
- The bill aims to accelerate decarbonization and energy efficiency in California industry by leveraging utility-administered grants funded through existing energy-efficiency charges, prioritizing projects with proven emissions reductions, efficiency gains, and grid benefits. It introduces new governance (GO-Biz oversight) and emphasizes cost-sharing and durability of benefits.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.