California Grid Manufacturing Initiative.

Utility participation in the centralized procurement program changed from mandatory to voluntary. The old version required each public utility to submit purchasing projections by January 1, 2028. The new version requires utilities to 'affirmatively seek' the Energy Unit's assistance, making participation opt-in.

New section (12100.84) allows a public utility to submit conditions - such as a maximum price threshold, technical specifications, delivery timelines, or other commercial terms - before the Energy Unit issues a solicitation. If the procurement satisfies those conditions, the utility's commitment to purchase becomes binding.

Procurement evaluation criteria were restructured into a strict priority order: (1) timeliness of delivery, (2) cost-effectiveness determined in consultation with the PUC and public utilities, (3) support for long-term high road employment. The old version listed cost/delivery, in-state manufacturing, capacity expansion, and supply chain resiliency as co-equal priorities.

Removed the mandatory five-year purchasing projection requirement (January 1, 2028 through December 31, 2032) that applied to all public utilities regardless of whether they wanted state assistance. Also removed 'anticipated emergency, disaster recovery, and resiliency needs' from the required projection contents.

The definition of 'critical electricity grid components' was changed from a list-based approach (transformers, cables, wires, circuit breakers, reconductors, switchgears) to a condition-based standard: components for which supply constraints, extended lead times, elevated costs, or other limitations are causing delays to transmission and distribution infrastructure. A new broader definition of 'electricity grid components' was added to cover the full product category.

Cost recovery changed from a PUC mandate ('shall approve') to discretionary authority ('may authorize'), with costs required to be just and reasonable, cost-effective, and aligned with state energy policy. A new provision requires the PUC to credit ratepayers when procurement results in costs below prevailing market prices.

New conflict-of-interest provision requires the Energy Unit to adopt policies governing employees and contractors involved in procurement decisions and joint venture negotiations, consistent with the Political Reform Act of 1974.

The Energy Unit's pre-solicitation market assessment now must be conducted in coordination with the PUC, the State Energy Resources Conservation and Development Commission, the Independent System Operator, and the I-Bank. If the market cannot meet demand without intervention, the Energy Unit must notify public utilities.

The Energy Unit's coordination list in Section 12100.81 now explicitly includes 'public utilities' as a coordinating party, which was not listed in the prior version.

New defined term 'Critical electricity grid components' added to Section 12100.80(a), covering any components identified by the Energy Unit under Section 12100.83, including but not limited to transformers, cables, wires, circuit breakers, reconductors, and switchgears.

New defined term 'High road employment' added to Section 12100.80(c), tying the concept to job quality standards in subdivision (s) of Section 14005 of the Unemployment Insurance Code.

Section 12100.83 restructured: the Energy Unit must now first identify which electricity grid components warrant central procurement, and the utility projection requirement is changed from a one-time submission by January 1, 2028 to an ongoing obligation ('on or before January 1, 2028, and regularly thereafter').

Section 12100.86 now requires the Energy Unit to identify critical electricity grid components for which cost, supply constraints, or other limitations inhibit the state's ability to achieve its energy goals, and to work with suppliers to identify barriers to production addressable through regulatory assistance or existing program incentives.

Conditions on incentives expanded in Section 12100.86(d) to include 'community benefits' and 'workforce development' alongside the existing requirements of in-state production, high road job creation, affordability, and capacity expansion.

Additional information requirements added to the request for qualifications process: evidence of experience, competency, capability, and financial condition for similar manufacturing projects, plus high road employment commitments, workplace law compliance history, and safety record.

Section 12100.86 adds explicit authority for the Energy Unit to provide financial assistance to projects that establish or expand manufacturing capacity in California for identified critical components, with evaluation criteria focused on advancing state energy goals (reducing delays and costs) and creating long-term high road employment.

Terminology throughout the bill shifted from 'electricity grid components' or 'critical grid components' to 'critical electricity grid components,' narrowing procurement and incentive actions to components formally identified by the Energy Unit rather than all grid equipment.

The PUC is now required to develop a process, as soon as practicable, to identify critical electricity grid components and assess statewide need for the next 10-year period, with updates at least every five years. This assessment must include specific strategies to reduce delays and ratepayer costs.

The Energy Unit's role is restructured. It no longer serves as the state's central entity for aggregating demand as a standalone duty. Instead, it must identify and procure critical components, determine and provide appropriate forms of state assistance to address delays, incentivize in-state manufacturing, and provide support to joint procurements.

The PUC may now require electrical corporations to engage in joint procurement of critical electricity grid components if it determines this would further the bill's purposes and that corporations would benefit. Within 12 months of the requirement, corporations must engage in joint consultations with suppliers, negotiate joint purchase agreements covering performance, price, quantity, and specifications, and submit proposed agreements to the PUC for approval.

The detailed request for qualifications process and production joint venture provisions (previously Sections 12100.86(e) through 12100.87) appear to be removed or substantially restructured in the Senate version, eliminating the specific framework for state-private manufacturing partnerships.

Local publicly owned electric utilities may voluntarily participate in joint procurement alongside electrical corporations, though they are not required to do so.

Cost recovery language changed from the PUC 'shall approve' recovery to 'may authorize' recovery, making it more discretionary. The reference is now to 'joint procurement' rather than 'procurement through the initiative.'

The I-Bank's role is expanded to include providing financial assistance to a participating party in connection with financing or refinancing of projects to establish or expand manufacturing capacity. A new requirement mandates the I-Bank meet and confer with the Energy Unit for eligible projects, with final authority to provide financial support residing with the Energy Unit.

New definitions added for 'Commission' (meaning the Public Utilities Commission) and 'Electrical corporation' (referencing Section 218 of the Public Utilities Code). The definition of 'critical electricity grid components' is simplified to remove the cross-reference to a specific subdivision.

New liability protection: an electrical corporation shall not be liable for the purchase commitments of another electrical corporation or participating local publicly owned utility under a joint purchase agreement, though equipment sharing arrangements consistent with federal law are permitted with PUC approval.

Section numbering is reorganized throughout the bill. The manufacturing incentive provisions move from Section 12100.86 to 12100.85, and the joint procurement provisions occupy the new Section 12100.84.