The upside of missing deadlines

Politico

15 hours ago

With help from Camille von Kaenel and Jordan Wolman
SILENCE IS GOLDEN: California regulators' reluctance to implement the state's nation-leading climate disclosure laws could be their saving grace in court.
The California Air Resources Board was supposed to finish writing rules for SB 253 and SB 261 — the contentious laws that will require large companies to disclose their carbon footprint and climate-related financial risks — on Tuesday, under an agreement lawmakers hashed out with the agency and Gov. Gavin Newsom last year.
CARB Chair Liane Randolph made it clear in an exclusive interview last week that those rules won't be finalized until the end of the year and that the agency isn't planning to put out any updates in the short term.
That's potentially a potent — if unintentional — legal strategy.
State attorneys were in a Los Angeles federal courtroom Tuesday morning, arguing against the U.S. Chamber, the California Chamber of Commerce, the Farm Bureau and other groups' request that Judge Otis D. Wright II immediately block the two laws as the case over whether they violate the First Amendment plays out.
The crux of Deputy Attorney General Caitlan McLoon's argument is that the rules businesses will need to follow haven't even been finalized yet, so there's no reason to put the laws on hold.
'If there is no requirement to speak, there can be no First Amendment harm,' McLoon said.
If Wright buys that argument — and there's reason to think he could, after he dismissed two claims earlier this year that the laws violate Congress' authority to regulate interstate commerce, in part because companies hadn't proved any immediate harm — it would be an ironic twist in the years-long fight between CARB, Newsom and the laws' authors over how quickly and aggressively to implement what will be first-of-their-kind standards in the United States.
Focus on SB 253 and SB 261 has been heightened since President Donald Trump's victory in November and his promise to immediately roll back climate rules. California's laws could offer a model for other Democrat-led statehouses, after Trump's Securities and Exchange Commission announced in March that it would stop defending a Biden-era federal disclosure law in court.
But Trump's win wasn't enough to defuse tensions with Sen. Scott Wiener, the influential Senate Budget Committee chair who wrote SB 253, who slammed CARB in December for telling companies covered under the law that they'll get a break from having to perfectly tally their greenhouse gas emissions during the first year of the rule.
Wiener and CARB are playing nice at the moment. Wiener said in an interview Tuesday that he's been in communication with the agency and that he understands officials need more time.
'My hope was to get it done July 1, but that's not feasible for them,' Wiener said. 'It's fine, because it's not going to impact the disclosures themselves, which are the most important thing.'
CARB has told companies to start getting ready for when the disclosure laws take effect in 2026, a point that Eugene Scalia, the lead attorney (and son of former Supreme Court Justice Antonin Scalia) representing the plaintiffs, highlighted in his oral arguments.
'My client members are incurring costs, and are on the cusp of having to engage in unconstitutional speech,' he told the judge.
Both sides also offered arguments on the merits of the First Amendment debate: McLoon said that the state has the right to regulate emissions disclosures and that the vast majority of companies that already disclose emissions as part of their business strategies do so in a way that is incomplete or misleading. Scalia countered that companies have a First Amendment right to remain silent and picked apart the studies CARB has cited to bolster their claims of misleading business practices.
That fight to untangle those arguments could stretch into next year, but Wright's decision on the preliminary injunction — which he didn't offer a specific timeline for — is expected to come much sooner. — AN
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INSIDE THE BILL: The California Chamber of Commerce is taking its swing at one of the boogeymen of the year: electric bills.
The business group released a study Tuesday by the Blue Sky Consulting Group that determined that the costs of wildfire mitigation and rooftop solar represent 13 and 14 percent of the average residential monthly bill from an investor-owned utility, with another 7 percent coming from state public purpose programs like one to subsidize low-income customers. (The study largely reflects the findings of legislative analysts in January.)
The Chamber is touting its new numbers as a reason to support its preferred policy fixes, which include reducing rooftop solar incentives, as proposed by Assemblymember Lisa Calderon.
It's also arguing against limiting the infrastructure costs utilities can recoup from ratepayers and creating a new financing authority for transmission projects — measures proposed by energy chairs Assemblymember Cottie Petrie-Norris and Sen. Josh Becker as part of their energy affordability packages. — CvK
RAKE TIME: Newsom trolled Trump from a fire lookout tower near Colfax on Tuesday morning, challenging the White House to adopt a 'model executive order' to increase firefighter pay and staffing.
It's not the first time either of them have tried to score political points by criticizing the other on wildfire management. But Newsom's dig reflects his fraying relationship with the president over federal immigration enforcement raids in California.
It also comes as peak fire season is ramping up, with red flag warnings blanketing Northern California on Tuesday and evacuations underway in the San Jacinto Mountains of Riverside County, where a fire has grown beyond 2,000 acres.
Newsom hammered the point that the federal government owns 57 percent of the forested land in California, compared to the state's 3 percent. And he attacked the Trump administration's job cuts at federal land management, science and disaster response agencies.
'The president of the United States needs to do more to back up his rhetoric with investments and resources,' Newsom said. The White House did not respond to a request for comment by publication time. — CvK
AROUND THE CAMPFIRE: Water agencies, Big Tech and timber companies are banding together to ask state lawmakers for more money for wildfire prevention.
The Association of California Water Agencies, the Bay Area Council and the California Forestry Association are all members of a new coalition called the 'Wildfire Solutions Coalition,' along with more than a dozen conservation groups.
Their ask: As part of the slated reauthorization of the state's landmark cap-and-trade program this year, they want ten percent of future revenues to go to 'regionally appropriate wildfire resilience strategies, as part of a larger set of dedicated investments for nature-based solutions.' They'll be fighting with transit agencies and various energy groups for the pot of money. — CvK
AND FIRETECH TOO: Fire Aside, a company that sells software streamlining defensible space inspections, has signed contracts with a series of new Bay Area fire agencies, including municipal departments in El Cerrito, Hayward, Fremont and Richmond, it told POLITICO exclusively this week. It's one of a number of companies making inroads as both the Newsom and Trump administrations try to claim the growing sector for their own.
MEGA MEGA: The U.S. Senate softened its phase-out of a tax credit for wind and solar projects to get holdouts on board with the massive tax and spending bill it passed on Tuesday.
But renewable energy groups are still fuming, with American Clean Power Association CEO Jason Grumet calling the bill 'an intentional effort to undermine the fastest-growing sources of electric power [that] will lead to increased energy bills, decreased grid reliability, and the loss of hundreds of thousands of jobs.'
The last-minute compromise, as POLITICO's Josh Siegel and Kelsey Tamborrino report, strikes a proposed added excise tax on wind and solar projects. But it still requires most solar and wind energy projects to be placed in service by the end of 2027 to get the tax credit, potentially derailing hundreds of planned projects.
The bill also kills the $7,500 tax credit for electric vehicles that automakers have been trying to save.
The megabill is now back in the House, where California Reps. David Valadao and Young Kim are among the few Republicans who have stumped for clean energy tax credits and have said they'll vote against it.
— The NYT has a deep dive on the former EPA employee whom Project Veritas recorded calling federal climate funding 'gold bars.'
— It's not just California — the Sunbelt is also starting to experience a house-building slowdown.
— Farmers can sell their groundwater rights to urban developers desperate for water in Arizona under a new state law.