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State legislators and the governor deferred decisions about the state’s Greenhouse Gas Reduction Fund and voter-approved climate bonds to later in the year.
Dive Brief:
- California Gov. Gavin Newsom, D, approved a $321 billion state budget last week that cut about $18 million in previously appropriated funding from grid reliability programs and deferred decisions about future spending on the programs to a later date, clean energy advocates said.
 - The affected programs – Demand Side Grid Support and Distributed Electricity Backup Assets – are designed to shore up the state’s energy resources by providing on-call emergency supply or load reduction resources during extreme weather events such as heat waves or other grid emergencies.
 - Earlier proposals called for allocating $473 million to the programs through 2028, an amount that was later reduced to $50 million in a revised draft budget in May. The final adopted budget cut $18 million from DSGS without including any new funding for either program, advocates said, as legislators and the governor agreed to hold off on most decisions about the state’s Greenhouse Gas Reduction Fund and voter-approved climate bonds.
Dive Insight:
Advanced Energy United, a trade group representing a diverse array of energy, transportation and tech companies, said in a statement that the budget leaves “crucial clean energy and climate programs in limbo” at a time when California is facing heat waves that strain the grid and a pullback of federal support.
“We recognize the difficult fiscal environment and uncertainty around federal funding, but California cannot keep deferring on tough decisions,” said Edson Perez, California lead at the organization. “Reliability programs like DSGS have delivered real results by keeping the lights on with clean energy and should be strengthened, not scaled back.”
Newsom’s office did not immediately respond to a request for comment. In his past public statements, the governor blamed California’s budget shortfall on President Donald Trump’s “economic sabotage,” including his on-again, off-again tariffs, and market volatility. The state’s finance department had not updated its budget page with the final version of the bill as of Wednesday. It was unclear when lawmakers would take up funding of programs from the Greenhouse Gas Reduction Fund and climate bonds.
Kate Unger, senior policy advisor for the California Solar & Storage Association, said she’s concerned that the cuts to DSGS will discourage participation in the program.
The programs’ funding was at “extreme risk,” she said, calling the lack of certainty “really problematic.”
“These programs … should be growing and providing important, affordable emergency reliability for California’s grid,” she wrote in an email. “With the risk of heat events becoming more extreme, California should be adding to DSGS, not taking existing funds away from it.”
