AB 2182 California Assembly · 2025-2026 Regular Session

Energy efficiency: financing options: custom agricultural and industrial efficiency projects.

Summary

Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law requires the State Energy Resources Conservation and Development Commission (Energy Commission) to establish a regulatory proceeding to develop and implement a comprehensive program to achieve greater energy savings in California's existing residential and nonresidential building stock. Existing law requires the PUC to investigate the ability of electrical corporations and gas corporations to provide various energy efficiency financing options to their customers for the purpose of implementing the program developed by the Energy Commission. Existing law imposes requirements for custom projects and other custom programs for industrial, agricultural, commercial, residential, and public sector customers. Existing law requires the PUC to develop and maintain rules for custom energy efficiency projects that include eligibility criteria or metrics for determining if a project is eligible for funding. This bill would delete the requirement on the PUC to develop and maintain those rules, and would instead require the commission, as part of the approval of the next Tier 2 advice letters submitted after January 1, 2027, by program administrators for mid-cycle review pursuant to a specific commission decision, to revise the rules adopted for custom agricultural and industrial efficiency projects to replace the commission's ex ante review process with a process that ensures the provision of incentives pursuant to these provisions for custom agricultural and industrial efficiency projects, as specified. Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the PUC is a crime. Because a violation of a PUC action implementing this bill's 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.

Issues: ✓ Energy ✓ Environment

Bill status passed 3 of 5 stages cleared

Introduction

Feb 2026

Committee Review

Aug 2026

Assembly Passage

May 2026

Senate Passage

Governor

Introduced Feb 19, 2026 Last action Aug 13, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

04/13/26 - Amended Assembly → 06/25/26 - Amended Senate · 9 edits · Jun 25, 2026

MAJOR

The Senate amendment significantly expands AB 2182 by adding a new section amending Public Utilities Code Section 381.2, which replaces the PUC's ex ante review process for custom agricultural and industrial efficiency projects with a streamlined approval framework tied to building code exceedance and grid benefits. The bill also narrows eligible project types (removing behind-the-meter renewables and electrification as standalone categories), tightens energy efficiency thresholds, and changes grant prioritization from meeting any one criterion to meeting all three.

Scope change

The bill's scope expanded from solely creating a new Industrial Decarbonization and Energy Efficiency Program (new Chapter 8.6) to also amending existing PUC Code Section 381.2, which governs energy efficiency financing options more broadly for both electrical and gas corporations. This brings the commission's custom project review rules under direct legislative constraint.

SCOPE

New section amends PUC Code Section 381.2 to replace the commission's ex ante review process for custom agricultural and industrial efficiency projects with a new framework requiring projects to exceed California Building Standards Code requirements and provide measurable grid benefits (avoided T&D costs or peak load reductions).

REQUIREMENT

The commission is prohibited from adopting project approval criteria beyond those specified in the new section, and cost shifts between rate classes are explicitly barred.

Grant prioritization changed from meeting 'any' of the three criteria (GHG reduction, electricity/fuel consumption reduction, grid efficiency improvement) to meeting 'all' of them, making it harder for projects to qualify for priority status.

ENFORCEMENT

Detailed procedural timelines added: 15 days for commission to select projects for review, 30 business days to conclude review, deemed approval if commission fails to act within set periods, and a dispute resolution process for unsatisfied parties.

ELIGIBILITY

Behind-the-meter solar, wind, energy storage, and other renewable energy resources removed as a standalone eligible project category under the Industrial Decarbonization program.

Electrification of industrial production process equipment removed as a standalone eligible project category.

Energy efficiency projects now require at least 20 percent reduction in energy consumption compared to replaced technology AND reduced greenhouse gas emissions. The previous alternative standard (achieving industry-standard or greater efficiency based on manufacturer specs) was eliminated.

DEFINITION

Carbon capture category simplified from 'carbon capture, utilization, and sequestration technologies' to 'carbon capture technologies.'

TIMELINE

Unawarded moneys after five years now go to other facilities on a 'first-ready, first-served' basis instead of 'first-come-first-served,' prioritizing projects that are ready for implementation over those that merely applied first.

02/19/26 - Introduced → 04/13/26 - Amended Assembly · 6 edits · Apr 13, 2026

MODERATE

The amended version of AB 2182 tightens eligibility and funding rules for the Industrial Decarbonization and Energy Efficiency Program. Most significantly, projects must now meet all three prioritization criteria (GHG reduction, energy/fuel reduction, and grid efficiency) rather than just one, energy efficiency projects must also result in GHG reductions, and unawarded funds will be redistributed on a first-ready-first-served basis instead of first-come-first-served. The amendment also clarifies that program funding comes from money the utility would otherwise collect, not new collections.

ELIGIBILITY

Energy efficiency projects must now also result in reduced emissions of greenhouse gases, not just reduce energy consumption by 20 percent or meet industry standards.

Carbon capture, utilization, and sequestration technologies must now be sited, installed, or expanded at the eligible facility, adding a location requirement that was not in the introduced version.

REQUIREMENT

Grant prioritization criteria changed from 'do any of the following' to 'do all of the following,' meaning projects must simultaneously deliver GHG reductions, reduce electricity or fuel consumption, AND improve grid efficiency or reduce peak demand impacts to be prioritized.

Unawarded funds (not allocated within five years) will now be made available to other eligible facilities on a 'first-ready, first-served' basis instead of 'first-come-first-served,' favoring facilities whose projects are further along in development over those who simply applied earlier.

FISCAL

Program funding source clarified: each large electrical corporation allocates an amount equal to what it 'would otherwise collect' from eligible facilities for energy efficiency, rather than the amount it actually collects. This suggests the program is funded by redirecting existing revenue rather than imposing new charges.

The 50 percent grant cap was strengthened from 'shall fund up to 50 percent' to 'shall fund up to, and shall not exceed, 50 percent,' making it an explicit hard maximum.

Floor votes · Assembly May 21, 2026

How they voted

71–0

Passed · 8 other

Total votes 79

May 21, 2026

D Democratic59

54 Yea 5

91% Yea

R Republican20

17 Yea 3

85% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Aug 13, 2026

Upper · Passed

In committee: Held under submission.

upper

Aug 3, 2026

Committee

In committee: Referred to APPR. suspense file.

upper

Jun 29, 2026

Committee

Re-referred to Com. on APPR.

upper

Jun 25, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on E.Q.

upper

Jun 24, 2026

Upper · Passed

From committee: Do pass and re-refer to Com. on E.Q. (Ayes 17. Noes 0.) (June 24). Re-referred to Com. on E.Q.

upper

Jun 16, 2026

Upper · Passed

In committee: Set, first hearing. Hearing canceled at the request of author.

upper

Jun 3, 2026

Committee

Referred to Coms. on E., U & C. and E.Q.

upper

May 21, 2026

Lower · Passed

Read third time. Passed. Ordered to the Senate. (Ayes 72. Noes 0. Page 5226.)

lower

May 14, 2026

Lower · Passed

From committee: Do pass. (Ayes 15. Noes 0.) (May 14).

lower

May 13, 2026

Committee

In committee: Set, first hearing. Referred to APPR. suspense file.

lower

Apr 21, 2026

Lower · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 14. Noes 0.) (April 20). Re-referred to Com. on APPR.

lower

Apr 14, 2026

Committee

Re-referred to Com. on NAT. RES.

lower

Apr 13, 2026

Lower · Passed

Read second time and amended.

lower

Apr 9, 2026

Introduced

From committee: Amend, and do pass as amended and re-refer to Com. on NAT. RES. (Ayes 18. Noes 0.) (April 8).

lower

Mar 9, 2026

Committee

Referred to Coms. on U. & E. and NAT. RES.

lower

Feb 20, 2026

Lower · Passed

From printer. May be heard in committee March 22.

lower

1 primary · 0 co-sponsors