AB 2163

AB2163:v97#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 2163

An act to add Section 25216.7 to the Public Resources Code, and to amend Section 454.53 of the Public Utilities Code, relating to electricity. energy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2163, as amended, Jeff Gonzalez. Electricity: Energy: Strategic Clean Energy and Critical Mineral Development Zones.

Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations. Existing law, the Warren-Alquist State Energy Resources Conservation and Development Act, establishes the State Energy Resources Conservation and Development Commission (Energy Commission) and prescribes the authorities, duties, and responsibilities of the Energy Commission commission pertaining to energy matters. Existing law establishes a state policy that eligible renewable energy resources and zero-carbon resources supply 90% of all retail sales of electricity to California end-use customers by December 31, 2035, 95% of all retail sales of electricity to California end-use customers by December 31, 2040, 100% of all retail sales of electricity to California end-use customers by December 31, 2045, and 100% of electricity procured to serve all state agencies by December 31, 2035, as provided. Existing law requires the PUC, the Energy Commission, State Air Resources Board, and all other state agencies to ensure that actions taken in furtherance of that state policy meet certain criteria.

This bill would require those state agencies to ensure that actions taken in furtherance of that state policy also consider the development potential of regions within the state capable of supporting large-scale clean energy production, critical mineral supply chains, advanced manufacturing, and other energy-intensive industries, including regions designated as Strategic Clean Energy and Critical Mineral Development Zones.

This bill would require the Energy Commission, commission, in consultation with the Governor’s Office of Business and Economic Development and other relevant state agencies, to identify and designate Strategic Clean Energy and Critical Mineral Development Zones. The bill would authorize the county in which a proposed zone is located to submit a request for designation and would authorize the county board of supervisors to, by resolution, authorize the request for designation. The bill would require the Energy Commission commission to approve or deny a complete submission within 180 days. The bill would require a zone to consist only of geographic areas located within the jurisdictional boundaries of the county submitting the request for designation and would require that certain criteria be satisfied, including that the proposed zone be in an area identified by state or federal agencies as containing significant deposits or identified production potential of critical minerals used in battery, clean energy, or advanced manufacturing supply chains, as specified. The bill would require the Energy Commission commission to review the designated zones at least every 5 years and authorize the Energy Commission commission to update the designated zones as appropriate based on changes in energy resources, infrastructure, or economic development planning.

The bill would require state agencies administering programs related to energy infrastructure, economic development, advanced manufacturing, workforce development, or critical mineral supply chains to give priority consideration to projects, infrastructure investments, and technical assistance located within designated zones that support large-scale clean energy production or energy-intensive industrial development. The bill would require the Governor’s Office of Business and Economic Development to consider designated zones when administering programs intended to support advanced manufacturing, clean technology industries, energy storage supply chains, and other energy-intensive industries. The bill would authorize the Governor’s Office of Business and Economic Development to coordinate with the Energy Commission commission and other relevant state agencies to support site readiness, infrastructure development, and attracting investment within designated zones.

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 certain provisions of this bill would be a part of the act and therefore a violation of the bill’s requirements, or of a PUC action implementing its requirements, would be a crime, the bill would impose a state-mandated local program.

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 a specified reason.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESNO

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 25216.7 is added to the Public Resources Code, to read:

25216.7.

(a) (1) The commission, in consultation with the Governor’s Office of Business and Economic Development and other relevant state agencies, shall identify and designate Strategic Clean Energy and Critical Mineral Development Zones.

(2) A Strategic Clean Energy and Critical Mineral Development Zone shall consist only of geographic areas located within the jurisdictional boundaries of the county submitting the request for designation pursuant to subdivision (c).

(3) It is the intent of the Legislature that the designation process established by this section be applied on a statewide basis to identify zones capable of supporting large-scale energy production, critical mineral development, and related industries.

(b) A proposed zone may be designated as a Strategic Clean Energy and Critical Mineral Development Zone if the proposed zone satisfies the criteria described in paragraph (1) and two or more of the additional criteria described in paragraph (2), as follows:

(1) The proposed zone is located within the county submitting the request for designation and the county has been identified by state or federal agencies as containing significant deposits or identified production potential of critical minerals used in battery, clean energy, or advanced manufacturing supply chains.

(2) (A) The county submitting the request for designation contains baseload renewable electrical generation facilities, including geothermal resources, with a combined capacity of at least 250 megawatts.

(B) The county submitting the request for designation has identified geothermal resource potential exceeding 1,000 megawatts, as estimated by the commission, the United States Geological Survey, or other recognized authorities.

(C) The proposed zone is located in proximity to existing high-voltage electrical transmission infrastructure of 230 kilovolts or greater capable of supporting large-scale renewable energy generation or industrial load.

(D) The proposed zone is the subject of an adopted or proposed regional planning effort, including a specific plan or programmatic environmental review, that evaluates renewable energy production, critical mineral extraction, advanced manufacturing, or related industries.

(3) The criteria described in paragraphs (1) and (2) shall be based on resources, infrastructure, or planning efforts located within the jurisdictional boundaries of the county submitting the request for designation.

(c) The county in which a proposed zone is located may submit a request for designation of a Strategic Clean Energy and Critical Mineral Development Zone and the county board of supervisors may, by resolution, authorize the request for designation. Cities, joint powers authorities composed of public agencies, and regional planning agencies established pursuant to state law may participate in the preparation of the request for designation and may be identified as supporting entities within the submission. The county submitting the request for designation shall serve as the lead coordinating entity for activities related to any designated Strategic Clean Energy and Critical Mineral Development Zone, including coordination with participating local jurisdictions and state agencies. A request for designation shall include sufficient documentation demonstrating that the proposed zone satisfies subdivision (b).

(d) Counties may submit requests for designation on an ongoing basis. The commission shall approve or deny a submitted request for designation within 180 days of receiving a complete submission. The commission may also independently identify and designate qualifying proposed zones consistent with subdivision (b).

(e) The commission shall not accept multiple requests for designation covering substantially the same geographic area unless those requests are submitted jointly by the relevant public agencies.

(f) The commission shall review the designations of Strategic Clean Energy and Critical Mineral Development Zones at least every five years and may update those designations as appropriate based on changes in energy resources, infrastructure, or economic development planning.

(g) (1) State agencies administering programs related to energy infrastructure, economic development, advanced manufacturing, workforce development, or critical mineral supply chains shall give priority consideration, to the extent consistent with law, to projects, infrastructure investments, and technical assistance located within designated Strategic Clean Energy and Critical Mineral Development Zones that support large-scale clean energy production or energy-intensive industrial development.

(2) The Governor’s Office of Business and Economic Development shall consider designated Strategic Clean Energy and Critical Mineral Development Zones when administering programs intended to support advanced manufacturing, clean technology industries, energy storage supply chains, and other energy-intensive industries.

(3) The Governor’s Office of Business and Economic Development may coordinate with the commission and other relevant state agencies to support site readiness, infrastructure development, and attracting investment within designated Strategic Clean Energy and Critical Mineral Development Zones.

SEC. 2.Section 454.53 of the Public Utilities Code is amended to read:

454.53.

(a)It is the policy of the state that eligible renewable energy resources and zero-carbon resources supply 90 percent of all retail sales of electricity to California end-use customers by December 31, 2035, 95 percent of all retail sales of electricity to California end-use customers by December 31, 2040, 100 percent of all retail sales of electricity to California end-use customers by December 31, 2045, and 100 percent of electricity procured to serve all state agencies by December 31, 2035. The achievement of this policy for California shall not increase carbon emissions elsewhere in the western grid and shall not allow resource shuffling. The commission and Energy Commission, in consultation with the State Air Resources Board, shall take steps to ensure that a transition to a zero-carbon electrical system for the State of California does not cause or contribute to greenhouse gas emissions increases elsewhere in the western grid, and is undertaken in a manner consistent with clause 3 of Section 8 of Article I of the United States Constitution. The commission, the Energy Commission, the State Air Resources Board, and all other state agencies shall incorporate this policy into all relevant planning.

(b)The commission, Energy Commission, State Air Resources Board, and all other state agencies shall ensure that actions taken in furtherance of subdivision (a) do all of the following:

(1)Maintain and protect the safety, reliable operation, and balancing of the electrical system.

(2)Prevent unreasonable impacts to electricity, gas, and water customer rates and bills resulting from the implementation of this section, taking into full consideration the economic and environmental costs and benefits of renewable energy and zero-carbon resources.

(3)To the extent feasible and authorized under law, lead to the adoption of policies and taking of actions in other sectors to obtain greenhouse gas emission reductions that ensure equity between other sectors and the electricity sector.

(4)Not affect in any manner the rules and requirements for the oversight of, and enforcement against, retail sellers and local publicly owned utilities pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3) and Sections 454.51, 454.52, 9621, and 9622.

(5)Not consider the energy, capacity, or any attribute from the Diablo Canyon Unit 1 or Unit 2 powerplant after August 26, 2025, in achieving the policy described in subdivision (a).

(6)Consider the development potential of regions within the state capable of supporting large-scale clean energy production, critical mineral supply chains, advanced manufacturing, and other energy-intensive industries, including regions designated as Strategic Clean Energy and Critical Mineral Development Zones pursuant to Section 25216.7 of the Public Resources Code.

(c)This section does not affect a retail seller’s obligation to comply with the federal Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Sec. 2601 et seq.).

(d)The commission, Energy Commission, and State Air Resources Board shall use programs authorized under existing statutes to achieve the policy described in subdivision (a).

(e)This section does not authorize the commission to establish any requirements on a nonmobile self-cogeneration or cogeneration facility that served onsite load, or that served load pursuant to an over-the-fence arrangement if that arrangement existed on or before December 20, 1995.

(f)This section does not limit any entity, including local governments, from accelerating their achievement of the state’s electrical sector decarbonization targets.

SEC. 3.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only 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.