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Subcommittee advances AB 825 to create public financing option for transmission projects to lower ratepayer costs
Summary
AB 825 would create a public financing program for transmission projects, using $325 million in seed capital and public borrowing options to reduce the cost of building new transmission and lower long-term costs for ratepayers.
Assemblymember (sponsor, AB 825) presented AB 825, which would create a public transmission financing program administered through the I-Bank (or a development authority) and seeded with $325 million in Proposition 4 funds, with authority to leverage additional funding from other sources. The bill would enable public entities — including a revitalized California Power Authority or local joint power authorities — to partner with investor-owned utilities to own and finance minority shares of transmission projects.
Supporters including The Utility Reform Network, Net 0 California, and labor groups said public financing and minority public ownership can substantially lower the cost of transmission because municipal bonds and tax-exempt debt carry lower interest rates than investor-owned utility financing and equity returns. Net 0 California recommended using public capital strategically for early-stage project development and as an equity cushion to support revenue bonds.
Utility representatives generally welcomed the broad concept but asked for refinements; the California Coalition of Utility Employees said it was engaged in productive discussions. The committee recorded a vote and passed AB 825 to appropriations.
