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Politico
01-07-2025
- Business
- Politico
How enviros lost CEQA
With help from Jordan Wolman, Eric He and Blake Jones SEE YA, CEQA: Environmental groups lost one of California's landmark environmental laws slowly, piece by piece, then almost all at once. State lawmakers at press time on Monday were poised to pass a bill exempting a wide array of projects from the California Environmental Quality Act, including wildfire fuel breaks, water system upgrades, portions of the high-speed rail project, and advanced manufacturing facilities like semiconductor and EV plants. Environmental groups are apoplectic. 'They're conditioning the funding of essential services like health care, education, to this huge policy change that would dramatically roll back environmental review for some of the most polluting facilities in California,' said Asha Sharma, the state policy director of the Leadership Counsel for Justice and Accountability. It's the latest — and one of the most consequential — turns in Sacramento's years-long trend of poking holes in CEQA, a foundational 1970s-era law requiring construction projects to not only analyze their environmental impacts, as federal law also requires, but address those impacts. Environmentalists defend the law as essential and pro-growth advocates deride it as an obstruction to critical housing, infrastructure and industrial development. The measure, AB 131, triggered a last-ditch lobbying frenzy from environmental and labor groups over the weekend after its introduction on Friday. They were still lobbying as late as Monday morning, with the Teamsters, United Auto Workers and United Steelworkers linking the measure to the Trump administration's rollback of the National Environmental Policy Act and warning it 'would give carte blanche to companies like Tesla to expand without any environmental oversight.' But they had little leverage: Gov. Gavin Newsom has tied his signature on the state's $320 billion budget to passage of the bill, which he could sign as soon as Monday evening. And one of the biggest labor players, the State Building and Construction Trades Council, stayed out of the fight, having secured the removal of another provision last week that would have likely lowered wages for unionized construction workers. The maneuver showed even more muscle than Newsom's last big CEQA push, when he convinced lawmakers in a 2023 trailer bill to shorten the time period for CEQA-related lawsuits against key infrastructure projects. 'There's less transparency and more at stake every year,' said longtime environmental lobbyist Jennifer Fearing. She said she hadn't yet fully processed how it might impact other environmental priorities this session, including extension of the state's emissions trading program for greenhouse gases and a proposal to cap prices for transportation emissions. The short turnaround predictably caused an outcry among environmental advocates and some lawmakers, including Sen. John Laird, who had voted against an earlier version of the bill, Sen. Scott Wiener's SB 607, and progressive Assemblymembers. But Wiener defended the measure as a compromise, saying he had removed some of his more ambitious CEQA reform ideas from the bill because of pushback from environmental groups. Sen. Chris Cabaldon went further, suggesting that hammering out the policy through the legislative process would have led to so many trade-offs it wouldn't have yielded the outcome Newsom and pro-building lawmakers wanted. 'I'm not convinced that we could produce a workable, comprehensive bill that would get to the core of what the challenges are,' Cabaldon said. Case in point: Environmental groups were gearing up for a hard push in the Senate against AB 306, a measure by Assemblymember Nick Schultz to temporarily freeze most building code updates. But the language got folded into one of the housing trailer bills poised to pass on Monday. Industry and pro-housing groups like the California Chamber of Commerce and California YIMBY are cheering the win. 'The fact that people are so vociferously opposed to this — all of these common-sense solutions to problems that we've all known about for decades — is just more proof that we need leadership on this,' said Louis Mirante, senior vice president of public policy with the Bay Area Council, which represents Intel and Apple, among others. Opponents were left licking their wounds — and hoping for a second chance later in the legislative session. In particular, labor groups representing auto workers, machinists and scientists and environmental groups coalesced in opposition to a provision that would remove the CEQA review for advanced manufacturing facilities like semiconductor and EV plants, which they said can leach toxic waste into neighborhoods. The argument seems to have stuck. Wiener said on Monday afternoon the Senate is 'committed' to working on provisions related to the advanced manufacturing, tribal consultation and endangered species protections in potential follow-up legislation. — CvK Did someone forward you this newsletter? Sign up here! SEE YOU IN COURT: The fate of California's nation-leading emissions disclosure law will get put to the test Tuesday in federal court in Los Angeles, when the U.S. Chamber of Commerce, CalChamber and other business groups will argue that the program is unconstitutional and should be struck down. The arguments tomorrow against SB 253 and SB 261, which compel all large companies operating in California to disclose their carbon footprint and climate-related financial risks starting next year, will center on the business groups' claim that the laws violate the First Amendment and follow months of discovery. Remember: The court already sided with California in the plaintiffs' two other arguments, that the laws violated the Supremacy Clause and limitations on extraterritorial regulation. The hearing comes on the same day that the Air Resources Board is due out with rules to implement the laws, which won't happen. Chair Liane Randolph told CC last week that she's aiming to finalize the rules by the end of this year. — JW WINDS ARE BLOWING: Congress is in the throes of a fight over wind and solar incentives as Republicans tee up a vote on President Donald Trump's megabill. A handful of Senate Republicans are staging a last-minute rally to preserve wind and solar incentives from Democrats' 2022 climate law, report POLITICO's Josh Siegel, Caitlin Oprysko and Meredith Lee Hill. Conservatives thought they secured a major win ahead of floor action on their megabill when Trump successfully urged Senate Majority Leader John Thune to crack down on tax credits for wind and solar energy from the Inflation Reduction Act. Now, a diverse group of Republicans — led by conservative Sen. Joni Ernst (R-Iowa) and including Sens. Lisa Murkowski (R-Alaska) and Chuck Grassley (R-Iowa) — are offering an amendment to undo the harsher language that could get a vote during Monday's Senate 'vote-a-rama.' Sens. Thom Tillis (R-N.C.), John Curtis (R-Utah) and Mike Rounds (R-S.D.) also suggested Monday they were sympathetic to the push to ease the gutting of wind and solar credits. The amendment could set up a clash of Republicans with energy projects planned for their states with staunch conservatives and Trump administration officials, who vehemently oppose continuing subsidies for intermittent wind and solar resources that they claim are unreliable. INSURANCE INSULT: Former Insurance Commissioner and current Rep. John Garamendi had some words for Insurance Commissioner Ricardo Lara's handling of the Los Angeles wildfires at Consumer Watchdog's 40th anniversary gala on Saturday in Beverly Hills. 'The current insurance commissioner doesn't have the courage to stand up to the insurance companies and hold them accountable,' he said. 'I am disappointed, the consumers of California are disappointed. The commissioner has by law, by Prop 103 and the regulations, the power to hold insurance companies accountable to pay fully on their claims ... and make sure they don't get a rate increase when they're doing badly on paying their claims.' In response, Lara's office sent us prepared prepared remarks he made in May at an insurance conference held by the Capitol Weekly. In them, Lara hit back, naming Garamendi as one of the members of Congress who was unable to pass the federal funds for home hardening he had requested. 'I'm the clean up guy,' Lara said. 'Past Commissioners left a mess and they have the gall to tell me I missed a spot.' — DK, CvK SPEAKING OF FIRE: Oregon lawmakers last week voted to repeal the wildfire hazard maps that they ordered in 2022, Adam Aton writes for POLITICO's E&E News. The repeal, which is now awaiting Gov. Tina Kotek's signature, means property owners in the riskiest areas — about 5 percent of the state's private properties — won't have to meet stronger building codes and defensible space requirements. The maps had been a political hot potato since their release, getting tangled up in the public's mind with insurance hikes and nonrenewals. Democrats tried to salvage the program — restarting a second mapping effort with more public meetings, and passing a law to explicitly bar insurance companies from using the maps — before Kotek finally froze it in February. 'The rollout of the maps and the perception of the maps on the ground really undermined their effectiveness,' Democratic state Rep. Pam Marsh, one of the maps' architects, said Tuesday before voting to nix them. The Legislature's lone professional firefighter, Democratic state Rep. Dacia Grayber, was the sole dissenting vote. 'I know that politically this is the right thing to do for a lot of us,' Grayber, a firefighter with Tualatin Valley Fire and Rescue, said on the state House floor before the 50-1 vote. 'We have a tool here that we're walking away from,' she said, 'that could potentially be a game changer.' — Protecting Marin County's Stinson Beach from sea-level rise could cost the equivalent of $2.4 million apiece for each of its approximately 500 residents. — Immigration enforcement raids in the agricultural area north of Los Angeles have left fruits and vegetables unharvested. — The Santa Rosa Press-Democrat goes inside the country's next big dam removal along the Eel River.
Politico
18-06-2025
- Business
- Politico
Enviros, utilities and tech bros walk into a data center
With help from Eric He, Blake Jones and Annie Snider ASK CHATGPT: For a state that considers itself a leader in both tech and climate, California is falling behind in both building data centers and putting guardrails around their environmental impacts. Democrats in Sacramento are taking cues from lawmakers in Indiana, Ohio and West Virginia as they explore special electricity rates for data centers aimed at controlling costs for other customers. They're also weighing new energy reporting standards to better understand the supercomputers' impacts on California's electric grid. Those proposals come as electric utilities are embracing data centers as a potential business savior that promises to increase electrical demand several fold after an era of energy efficiency. 'This trend is absolutely real for us,' Pacific Gas and Electric CEO Patti Poppe said during the utility's most recent quarterly earnings call in April. 'This will be so beneficial for our customers.' The handful of bills this year are a reaction to PG&E's November 2024 application to energy regulators for a special tariff for all the new data centers it anticipates connecting to its grid in Northern California — enough to require the power of roughly 6.5 million new homes in the next 10 years and four times the output of its Diablo Canyon nuclear plant. Tentatively planned projects would add an additional 1.5 million homes worth of power. 'It's a big change, and not expected,' said Hunter Stern, assistant business manager with IBEW 1245, which represents PG&E electrical workers. 'For years, California's goal was to reduce emissions through efficiency and load growth was an indication that emissions would be going up, and we've changed that.' But for ratepayer and environmental advocates, it could go either way: Data centers could, if managed properly, bring down the per-customer grid costs that have been dominating the political conversation for months — or they could leave ratepayers with costly stranded assets and even outpace the growth of renewable energy on the grid. Another concern is pollution from data center power sources. The NAACP announced Tuesday it intends to sue Elon Musk's xAI over public health risks posed by 35 unpermitted natural gas turbines it says are polluting minority communities in Memphis, Tennessee. 'Will [data centers] use clean generation and battery storage?' Matt Freedman, a staff attorney at The Utility Reform Network, asked at a Senate hearing in April. 'The requirements established by the Legislature will largely determine what type of on-site generation is used by these data centers.' Enter state Sen. Steve Padilla and Assemblymember Rebecca Bauer-Kahan. Both Democratic lawmakers are carrying bills designed to protect ratepayers from cost spikes as data centers come online. Padilla's SB 57 would direct the California Public Utilities Commission to set a special tariff for all power customers with at least 50 megawatts of load, while Bauer-Kahan's AB 222 broadly requires commissioners to minimize ratepayer cost-shifting that might stem from an uptick in data centers joining the grid. Each contains added sustainability components. Padilla's measure would allow the CPUC to set zero-carbon procurement targets for data centers. Bauer-Kahan's plan targets transparency by requiring data center operators to report how much energy is used to power AI models and assigns the California Energy Commission to track supercomputer energy consumption trends. Tech players like the Data Center Coalition and the business-aligned Silicon Valley Leadership Group have balked at the bills, arguing Padilla's special tariffs are ill-defined and that Bauer-Kahan's measure will force companies to reveal trade secrets. 'We're all kind of left to throw up our hands and kind of speculate as to what the economic impact of all of this may be,' said Peter Leroe-Munoz, Silicon Valley Leadership Group's general counsel. 'It could have a very real chilling effect on the development of needed data centers here in California.' But Bauer-Kahan thinks the real issue is cost. 'They won't say it out loud because you can't say we should be shifting these to ratepayers,' she said. 'It's a ridiculous thing to say.' Yet if lawmakers don't find a way forward soon, they risk losing the advanced infrastructure fueling Silicon Valley's artificial intelligence boom to other states while simultaneously failing to align in-state data centers with California's ambitious climate goals. 'Data centers are the can of spinach for the AI Popeye,' Leroe-Munoz said. 'Clearly, we're putting ourselves at a competitive disadvantage by making it more difficult [to build] while other states are actively working to make themselves more attractive.' — CvK, TK Did someone forward you this newsletter? Sign up here! STILL GOT SOME JUICE?: State Sen. Ben Allen's latest bid to require recycling of electric vehicle batteries advanced this afternoon, but he said 'intense conversation' with the Newsom administration lies ahead after the governor vetoed a similar bill last year. Gov. Gavin Newsom in his 2024 veto message bemoaned the administrative burden that would be placed on the Department of Toxic Substances Control — which would have been charged with regulating battery repurposing and recycling. Newsom suggested that Allen consider using a producer responsibility organization, in which battery-makers would take on more of the work, instead. For now, Allen's SB 615 looks much the same as last year's version, forgoing the PRO model and requiring the DTSC to set rules for how batteries are repurposed, refurbished and eventually recycled at the end of their useful life. 'We're still a little stuck on how to … read the most we can' out of the producer responsibility organization portion of Newsom's message, Allen — the author of another producer responsibility law for plastic packaging that Newsom delayed enforcement of in March — told the Assembly Environmental Safety and Toxic Materials Committee today. 'It's funny, because their folks have not been as positive about producer responsibility organizations in other contexts,' he said. Nevertheless, Allen said he was 'feeling good' about negotiations with the administration so far as his bill cleared the Assembly committee. It now heads to the lower house's natural resources panel. — BJ 'LIVES AT RISK': Seven California prisons have halted work on how to protect prisoners from extreme heat after U.S. EPA canceled an Inflation Reduction Act grant last month, Ariel Wittenberg reports for POLITICO'S E&E News. The nonprofit Land Together's $1.7 million grant was intended to last three years and benefit more than 90,000 incarcerated people in the state. The group's executive director is warning that the cancellation could prove deadly. 'The cancellation of Land Together's EPA grant puts lives at risk,' Andrew Winn, the group's executive director, wrote in an email to the affected communities. 'Incarcerated people have very little agency over most aspects of their lives, including their exposure to harmful and even potentially lethal conditions.' Prisons are exempt from state rules that went into effect last year requiring employers to provide cooling areas and other alleviating measures at certain temperatures, leaving many of those employed in prisons — including incarcerated workers — without air conditioning. Many of California's prisons are located in the desert, and 60 percent of respondents in a 2023 survey of more than 2,000 incarcerated people by the Ella Baker Center of Human Rights said they had no access to air-conditioned rooms during extremely hot days. — EH AND THE WINNER IS…: After months of speculation, President Donald Trump has finally named his pick for Bureau of Reclamation commissioner: longtime Arizona water manager Theodore 'Ted' Cooke. The Arizonan's selection suggests that the high-stakes negotiations over the Colorado River — which supplies 40 million people across seven states, including one out of every two Californians, as well as 5.5 million acres of irrigated agriculture — may trump the president's fascination with California's intramural water wars. The seven states that share the West's most important river have been divided for more than a year over how to rein in use along the drought-stricken waterway. The current battle lines pit the Lower Basin states of California, Arizona and Nevada against the Upper Basin states of Colorado, Utah, New Mexico and Wyoming. Cooke's selection appears to be a win for the Lower Basin states — but those battle lines could get redrawn at any time. Cooke's pick also indicates that the administration is carefully attuned to the political salience of Arizona in those negotiations. The state, which is the most closely divided politically, is the most vulnerable to cuts under the century-old legal system governing the river. Its legislature must also approve any new deal to govern the drought-stricken waterway. — AS JUMPING RIGHT IN: The environmental law nonprofit Earthjustice has tapped Los Angeles-based attorney Adrian Martinez as the new head of its Right to Zero campaign aimed at increasing electrification. Martinez previously was a deputy managing attorney for the group's California office where he worked on air pollution cases. He replaces the retiring Paul Cort, who oversaw the campaign's launch, at a time when the Trump administration is threatening to repeal clean air regulations. 'There's never been a more pressing time for cities and states to step up to the plate and protect their health, their air quality, and their future,' Martinez said in a statement. — EH — Offshore wind opponents are targeting a federal grant to upgrade a Humboldt County port for turbine construction. — Tesla plans to shut down production of two of its models the week of July Fourth, and investors look skittish. — San Clemente is shipping in sand — and considering more creative methods — to slow shoreline erosion.
Politico
16-05-2025
- Business
- Politico
David Alvarez needs convincing
Presented by With help from Camille von Kaenel and Eric He LEERY OF LCFS: Assemblymember David Alvarez is stepping into one of California's trickiest climate policy arenas. The San Diego Democrat is co-chairing a new Assembly committee devoted to studying the low-carbon fuel standard, the hot-button trading program for transportation emissions that the California Air Resources Board amended last year amid a flurry of debate over how much it would raise gasoline prices. Assembly Speaker Robert Rivas convened the committee last month as part of his push to address 'the biggest cost drivers for Californians.' The LCFS made the list, alongside child care, nutrition and housing. Alvarez spoke with POLITICO about his plans for the committee, the economic challenges of phasing out fossil fuels and the need to focus on disadvantaged communities. This interview has been edited for length and clarity. Why are you focusing on LCFS now, when it was last year's fight? It's generally an approach by the speaker, who has a focus on looking at everything we do in California and trying to be responsive to the cost of living, and we haven't really done that with LCFS. It was created under [Gov. Arnold] Schwarzenegger, and then has been interpreted by CARB on their own without any legislative direction. It's grown into a multi-billion-dollar-a-year program, of which the state sees no revenue, as an exchange between private parties, but there's a cost associated with that. This is costing Californians in many ways, and so we have to determine what is the point that's worth the return on that investment, that is worth it from California's consumer standpoint. What will this committee produce? I think for sure, at minimum, a report. We should at least be considering whether there is any legislative authority that should be inserted into this program that has been 100 percent driven by regulators. How concerned are you about the Energy Commission considering a profit cap on refiners and requiring them to keep more supplies on hand if they go down for maintenance? I was pretty vocal during the special session last year and continue to be that this cannot come at the expense of consumers. That's the directive they received from the Legislature, and it's the expectation that I would have going forward. The Valero refinery in Benicia is likely going to close. Should the Legislature respond? I think everybody should be rethinking the policies that we implement when they lead to closures, and, ultimately, what it leads to in terms of cost to consumers, absolutely. As far as more directly saying, 'No more closures,' I don't see that. How do you legislate no more closures? It's a private industry, and they do respond to their shareholders. I think we just should be very mindful that there are repercussions to all the actions we take. Going forward, whatever comes before us, I think there will be a new lens through which we see legislation, and that's going to be, 'Is this going to cause potential closures, loss of supply that then leads to increasing costs?' And if so, it's going to be a much more difficult lift for a legislator who's trying to do that. Is there an interest in rolling back Energy Commission rules if they prove to be a cost burden or cause refinery closures? I know it's top of mind to the Energy Commission and Vice Chair [Siva] Gunda. I'm expecting to have a more at length conversation with him on this topic. I think it'd be fair to say they're not underestimating the concern of Valero, and what is otherwise happening. I think they have expressed themselves in a way that this is not being taken lightly; it's being taken seriously. Thirty-five House Democrats, including a couple in California, joined Republicans last week in voting to roll back CARB's vehicle electrification rules last week. What do you think of them? Who has access to these vehicles? I think you may be seeing some waning of interest, because for the average middle class family, certainly the lower income family, the realities of an electric vehicle serving their needs when of those families are commuting many, many miles for employment because it's become unaffordable to live in the urban core centers of communities, that's an issue. Then you have communities like mine which are urban, but they are older, more middle class and lower income, where, again, access to electrification is just unrealistic. We need to analyze the reality of where we can get to, and aim for that. Whatever percentage it is, by whichever year, that is realistically accomplishable. Something that I'd like to hear from CARB is, 'We can do this, and these are the strategies on how we're going to get there and that are measurable,' and have outcomes that are more accountable on a more regular basis, not when there's a scoping plan every five years. — AN Did someone forward you this newsletter? Sign up here! SORRY SCHOOLS: Gov. Gavin Newsom is pushing a proposal to fund programs designed to reduce electricity use during grid emergencies with money earmarked for school heating and air conditioning upgrades. A budget bill released by the Department of Finance this week would redirect any unused funds in the CalSHAPE school facilities program to programs that incentivize residents to reduce their power during emergencies, POLITICO's Eric He reports. School advocates are not happy. Mitch Steiger, a legislative representative for the California Federation of Teachers, slammed the bill during a climate budget hearing Thursday. 'The bill is actually just going to eliminate the CalSHAPE program that funds badly-needed HVAC and plumbing upgrades in public schools,' Steiger told lawmakers. 'It will give kids cancer and will force kids to learn in classrooms that are over 90 degrees,' he added. — EH, AN AT THE SHORE: Rivas on Friday shook up the Coastal Commission, the high-stakes agency overseeing coastal development, appointing Monterey County Supervisor Chris Lopez. Lopez replaces the board's current chair, Santa Cruz County Supervisor Justin Cummings. Rivas and Lopez, longtime allies whose districts overlap, cast the move as giving rural, inland farmworker communities more of a voice in coastal issues. The change comes at a crucial time for the Coastal Commission, which has come under close political scrutiny in recent months by both President Donald Trump and Newsom over its decision to reject SpaceX's plan for increased rocket launches off the coast and its role overseeing coastal building in the wake of the Los Angeles fires. — CvK STUCK IN NEUTRAL: California's electric vehicle sales are stalled, and that's complicating matters for officials backing the state's EV mandate. Battery-electric and plug-in hybrid vehicles accounted for 23 percent of all new car sales between January and March, according to data released Friday by the California Energy Commission, a nearly 1 percent decrease compared to the same period last year. Tesla's sharp decline — sales dropped by more than 21 percent — is the main culprit for the overall sales slump. Registrations of EV models by other makers jumped by 14 percent, and automakers like BMW and Honda are gaining on Elon Musk's high-profile company, which failed to account for at least half of the state's EV sales for the first time since the commission started collecting data. Automakers, car dealers and the oil industry are pushing to delay or nix California's mandate, which phases out sales of new gas and hybrid models by 2035, saying the leveling off of EV sales require the course change. State officials also acknowledge that EV sales have slowed, but argue the market is still on track. 'California's clean vehicle market continues to show strong sales, and we are undeterred by this period of limited growth, which is a normal, anticipated part of the technology adoption cycle,' said Liane Randolph, chair of the California Air Resources Board. — AN THE DELTA IN THE DELTA: Environmental groups have a new message for the California state agencies they're leaning on to deliver stronger protections for endangered species in the sensitive Sacramento-San Joaquin River Delta: You can't trust the feds. In a letter to the State Water Resources Control Board on Friday, a collection of eight groups detailed a series of examples from the past few months of federal water managers choosing to pump more water out of the Delta than their state counterparts, which the groups said harmed endangered species of fish. In one example, the federal government failed to match the state, which reduced its pumping last month in line with a deal brokered with water agencies three years ago to reduce water use and pay for habitat conservation. (For the true water wonks out there, those are called the 'voluntary agreements.') The environmental groups argue that the fed's inaction is sufficient grounds for the board to reject the 'voluntary agreements.' The board is considering adopting them this year as it updates its water quality rules in the Delta region. The Bureau of Reclamation 'cannot be allowed to exploit seeming ambiguities' in the 'voluntary agreements,' they wrote. 'Clear, understandable, and enforceable rules must be established.' The board, the Bureau of Reclamation and the Department of Water Resources did not immediately respond to a request for comment Friday afternoon. — CvK — An Arizona swing district that supplies power to California could be a roadblock for the GOP megabill. — We need to be cautious about overestimating the risks of nuclear power, but not ignore them entirely, warns the author of a book on how nuclear energy became a hot climate change topic. — You may want to act fast if you're planning to use federal tax credits to help install solar panels.
