Refineries: decommissioning and remediation: cost estimates.

The bill was restructured from adding two separate sections (13267.6 and 13267.7) to adding a single Article 4.5 (commencing with Section 13277) to the Water Code, consolidating all provisions into one article.

Legislative findings were substantially expanded to frame the bill as a proactive governance tool for managing the petroleum-to-decarbonized fuel transition, emphasizing the state's need for early visibility into operational and financial pressures on refineries before closures become inevitable, rather than merely a reactive closure management framework.

Retirement plans must now include estimated workforce needed during and one year prior to decommissioning, with job classifications, workforce numbers per classification, and duration of employment by phase. A parallel workforce estimate is required for remediation activities.

New provision allows the retirement plan to identify intent to sell or transfer the refinery to a third party for decommissioning and remediation, requiring disclosure of prospective purchaser or category, anticipated timeline, and allocation of obligations between refiner and purchaser.

Refiners must now file the final retirement plan concurrently with the Energy Commission and the Division of Occupational Safety and Health in addition to the State Water Resources Control Board.

The board, in coordination with the Energy Commission, must compile a survey by December 31, 2027 of existing local, state, and federal statutory and regulatory requirements applicable to refiners concerning decommissioning, closure, financial assurance, and site remediation obligations.

Consultation requirements were expanded to include the Division of Occupational Safety and Health and the California Environmental Protection Agency in addition to previously listed agencies.

Cost estimation methodology changed from requiring multiple alternative closure dates (2030, 2035, 2040, 2045) to a single assumption of 10 years from the submittal date for present value calculations.

Refiners may now incorporate existing local, state, or federal filings, permits, retirement plans, or regulatory submissions by reference into their retirement plan, provided they demonstrate the material is current, applicable, and sufficient in scope and detail.

The board's overview of remediation methods, costs, and timelines changed from 'develop an overview' to 'publicly provide an overview,' making public availability explicit.

The refiner definition was narrowed: the renewable feedstock conversion provision changed from covering persons who 'formerly owned, operated, or controlled' refineries to those who currently 'own, operate, or control' such facilities.

The detailed trade secret claim process (assertion upon submission, 30-day board decision, judicial review) was removed and replaced with a general confidentiality provision. The Energy Commission may share information only if the recipient agrees to maintain confidentiality.

The board's report assessing total decommissioning and remediation liabilities must now be published publicly on the board's internet website, with the trigger changed from 'one year after receiving the reports' to 'one year after the retirement plans are deemed final.'

A new definition of 'Energy Commission' (State Energy Resources Conservation and Development Commission) was added to the article's definitions section.

Regulatory authority shifted from the State Water Resources Control Board (the board) to CalEPA throughout the bill. All references to 'the board' were replaced with 'CalEPA,' making CalEPA the sole agency responsible for receiving, reviewing, and finalizing retirement plans.

A new effective date trigger was added: the closure notice requirement now applies only to refiners who give notice of intent to permanently shut down, reconfigure, or sell a refinery 'on or after January 1, 2026.' This means notices given before that date are not subject to the retirement plan submission requirement.

Several legislative findings were revised to remove language about evaluating whether state intervention could have supported continued refinery operation. Finding (c) no longer references 'whether intervention could have supported continued operation,' and finding (n) no longer references 'whether those drivers are remediable' or 'supporting continued operation where that serves the public interest.'

The requirement that CalEPA consult with the applicable regional water quality control board when reviewing retirement plans was removed. The old text required consultation; the new text simply states CalEPA shall review the plan for completeness and reasonableness.

The required report on total decommissioning and remediation liabilities was expanded. In addition to assessing total liabilities, CalEPA must now also 'identify opportunities for greater transparency prior to the closure notice.'

A new legislative finding (paragraph q) was added stating that retirement plans are 'intended to be estimates of decommissioning and site remediation needs to facilitate statewide preparation for and management of future changes to the state's petroleum infrastructure.' This clarifies the non-binding, planning-oriented nature of the plans.

In the confidentiality sharing provision, 'a state or local agency' was changed to 'a state or local governmental agency,' adding the word 'governmental' for precision.

The bill now includes a new definitions section (Section 13277) that explicitly expands 'refiner' and 'refinery' to cover facilities that formerly processed crude oil feedstock but now process renewable feedstocks, bringing converted refineries within the bill's scope.

The required document is renamed from a 'draft report' to a 'retirement plan,' and the bill is restructured into a new Article 4.5 (Sections 13277-13278) of Chapter 4, Division 7 of the Water Code rather than being contained in a single section.

Update frequency changed from annual updates to updates every three years, beginning three years after the retirement plan is final. This significantly reduces the ongoing reporting burden on refiners.

Cost estimation method changed: instead of presenting results assuming multiple alternative closure dates (2030, 2035, 2040, 2045), refiners now assume a single retirement date of 10 years from the submittal of the plan for present value calculations.

The board's role in developing guidance was simplified: the Senate version required 'default technology-based guidelines for estimation' with ranges and probabilities, while the Assembly version requires only an 'overview of methods, costs, and timelines' that have been employed at refineries that have already undergone decommissioning.

The public comment period timing changed: the Senate version initiated a 45-day comment period promptly upon receipt of the draft report. The Assembly version requires the board to first complete its completeness and reasonableness review (within 6 months) before making the plan available for public comment.

The retirement plan must now include explicit documentation of a source of funds available to cover decommissioning costs and remediation costs, as well as a specific description of applicable financial assurance laws, regulations, or orders.

Remediation cost estimates must now include the cost of remediating the site 'to the intended land use of the site,' adding a forward-looking land-use component to the cost analysis.

Consultation requirements were made more specific, naming particular agencies (regional board, state board, DTSC, air quality management district, certified unified program agency) and requiring a record of consultation to be included in the retirement plan.

The trade secret dispute process was simplified. The Senate version required public notice of claims on the board's website, allowed third-party intervention in court with attorney's fees for prevailing opponents, and set a one-year judicial review window. The Assembly version removes the public posting requirement, eliminates the intervention and fee-shifting provisions, and routes judicial review through standard Government Code administrative enforcement procedures.

Primary regulatory authority for reviewing and overseeing refinery retirement plans is shifted from the State Water Resources Control Board to CalEPA throughout the bill. A new definition of 'CalEPA' is added to Section 13277.

Assembly Member Muratsuchi is added as principal coauthor, indicating expanded legislative sponsorship beyond the original Senate authors.

New provision requires that any information already accessible by the public through CalEPA, DTSC, a certified unified program agency, or a local government must be made publicly available even if it is also contained in a retirement plan, preventing confidentiality from shielding already-public data.

The requirement that retirement plans analyzing multiple decommissioning and remediation alternatives must use 'probabilistic estimation methodologies' is removed, reducing the technical rigor standard for alternative analyses.

Authority to share confidential retirement plan information with other agencies and governments is expanded from the Energy Commission alone to CalEPA, the Energy Commission, and the Division of Occupational Safety and Health collectively.

New legislative findings (o) and (p) are added. Finding (o) quotes the Energy Commission's May 2026 draft assessment on the value of standardized remediation estimates. Finding (p) explains that accounting principles require a settlement date for asset retirement obligation calculations, but refiners report 'indeterminate lives' for their plants, creating a reporting gap.

Legislative finding (j) is rewritten to emphasize the state's interest in understanding 'refinery operational and financial health' and its ability to 'distinguish between refineries facing genuine market-driven transition and those facing pressures that state policy could address,' broadening the stated purpose beyond cost prevention.

The 10-year assumed retirement date for present value calculations is clarified with new language stating it 'should not be construed as a bona fide intention or direction to close at that time,' addressing potential confusion about whether the bill sets a closure deadline.

The deadline for every refiner to submit a draft decommissioning and remediation report to the State Water Resources Control Board was extended from December 31, 2027 to December 31, 2028.

In subdivision (i), the trigger for the 30-day submission requirement changed from refiners giving notice 'on or before December 31, 2027' to those giving notice 'on or after December 31, 2027,' effectively flipping which group of refiners must submit within 30 days of a shutdown announcement.

The deadline for refiners who gave notice between January 1, 2024 and the bill's effective date (but had not completed shutdown as of November 1, 2025) to present their report was extended from March 31, 2027 to March 31, 2028.

The threshold date for when a refiner giving notice must submit an 'update' rather than a full draft report was changed from 'after December 31, 2027' to 'after December 31, 2028.'

A new section (13267.7) is added to the Water Code, expanding the bill's scope beyond the single section (13267.6) in the prior version. The content of this new section is not visible in the truncated diff.

The date range for refiners who gave notice between January 1, 2024 and a specified date was made explicit ('on or after January 1, 2024, and on or before December 30, 2027') rather than referencing 'the effective date of the bill.'

Detailed report content requirements: each refiner must submit a draft report including a decommissioning plan (technical description, cost, duration, funding source, applicable financial assurance laws) and a site remediation description with the same components. Reports must use separate cost estimates per component, consult with state and local agencies, document all cost calculation bases, and present results assuming alternative closure dates of 2030, 2035, 2040, and 2045.

Annual update requirement: refiners must present annual updates to their reports incorporating new information about site conditions, decommissioning and remediation methods, board guideline updates, and cost changes.

The Water Board must develop default technology-based guidelines for estimating soil and groundwater remediation methods, costs, and timelines at refinery sites. These guidelines must be made publicly available on the board's website and revised as appropriate.

New public comment and board review process: the Water Board must initiate a 45-day public comment period upon receiving a draft report, may hold public hearings, must review and comment within six months, can order changes, and can reject a final report requiring further revisions. Refiners must submit the final report within 60 days of receiving board comments (extendable up to six months).

New Section 4 provides the constitutional findings required by California Constitution Article I, Section 3, demonstrating the public interest in balancing trade secret protection with public access to refinery decommissioning information.

New definition of 'trade secret' with specific categorical exclusions: information about contamination type/extent, anticipated decommissioning or remediation processes, potential methods, cost calculations and methodologies, and funding sources are explicitly NOT trade secrets. A refiner must assert a trade secret claim at submission, the board decides within 30 days, and the decision is subject to judicial review within one year with attorney's fees awarded to prevailing opponents.

Specific deadlines tied to shutdown announcements: refiners giving notice on or before December 31, 2027 must submit a draft report within 30 days; those giving notice after that date must update their report within 30 days; refiners who gave notice between January 1, 2024 and January 1, 2027 but had not fully completed shutdown as of November 1, 2025 must present a report by March 31, 2027.

The Energy Commission must publish a report within one year of receiving refinery reports assessing total decommissioning and remediation liabilities statewide. The report must consider existing financial assurances, assess the risk that those mechanisms are inadequate, and may contemplate alternative funding mechanisms. The commission is authorized to contract for this work without Department of General Services review or approval.

Legislative findings expanded to include new findings about SEC reporting gaps for publicly traded refiners (asset retirement obligations can be delayed until a firm retirement date is announced and may exclude postclosure remediation costs), and modified existing findings to add 'environmental impacts' as a concern from rising groundwater and to broaden the list of sectors with closure requirements to include 'fossil fuel extraction' and 'nuclear generating facilities.'

Authorship changed from Senator Blakespear (coauthor Gonzalez) to Senators Blakespear and Gonzalez (coauthor Stern), adding Senator Stern as a coauthor.

Section 25371.5 of the Public Resources Code is deleted entirely. This removed the requirement for the Energy Commission to incorporate refinery decommissioning reports into its transportation fuels transition strategy, publish a report on total state-wide decommissioning and remediation liabilities within one year, and enter contracts for that work without Department of General Services approval.

The requirement for the board to provide copies of each refinery report to the Energy Commission (old subdivision (k)) is removed, severing the data-sharing link between the Water Code provisions and the Energy Commission.

Senator Allen is added as a coauthor alongside Senator Stern, expanding the bill's legislative sponsorship.

The board's review process is restructured. Previously the board would 'review and comment' and 'order any changes.' Now the board must make a formal determination that the report either (A) complies, (B) requires minor nonsubstantive corrections, or (C) does not comply. If non-compliant, the board must disclose the specific material deficiencies. The refiner then has 60 days to revise (extendable up to six months). Once deemed compliant, the report goes through a 45-day public comment period before being finalized.

The board's December 31, 2027 deliverable is changed from 'default technology-based guidelines for estimation of the methods, costs, and timelines associated with soil and groundwater remediation at refinery sites' to an 'overview of the methods, costs, and timelines associated with soil and groundwater remediation at refinery sites that have been employed at refineries that have undergone decommissioning and remediation.' This shifts from forward-looking prescriptive guidelines to a backward-looking descriptive summary of what has actually been done.

A new consistency requirement is added: refinery reports must be 'reasonably consistent where applicable' with the board's overview, with the board considering factors including length of operation, facility capacity, and levels of remediation when determining consistency.

A new judicial review provision is added allowing any person to seek judicial review of the board's compliance determination under Government Code Part 4 (Administrative Procedure Act) procedures, providing a formal legal challenge pathway that did not exist in the prior version.

The deadline for every refiner to submit a draft decommissioning and remediation report was extended from December 31, 2027 to December 31, 2028.

A new fallback deadline was added: if the board has not developed its default guidelines by December 31, 2027, a refiner announcing a shutdown after that date must submit its report within three months after the board develops those guidelines.

The deadline for refineries that announced shutdowns between January 1, 2024 and the effective date but had not completed shutdown by November 1, 2025 was extended from March 31, 2027 to March 31, 2028.

The deadline for the board to develop default technology-based guidelines for soil and groundwater remediation estimation was set at December 31, 2027 (previously left blank as an unspecified date).

The requirement that the board first develop guidelines (in consultation with DTSC and regional water boards) for estimating decommissioning costs and timelines before refiners submit reports was removed as a standalone prerequisite step.

The prior notice window for shutdown announcements was changed from 'on or before December 31, 2027' to 'after December 31, 2027,' and the lookback period for prior notices was expanded from 'between January 1, 2024, and January 1, 2027' to 'on or after January 1, 2024, and on or before December 30, 2027.'

References to 'confidential business information or other sensitive data' were replaced with the defined term 'trade secrets' throughout the bill.

New legislative findings (i) and (j) were added referencing a June 27, 2025 letter from SERC vice chair Siva Gunda to Governor Newsom and SB 237 (Chapter 118 of 2025), which directed the commission to evaluate recommendations from that letter.

Finding (d) was revised to list 'nuclear generating facilities, wind and solar installations, and fossil fuel extraction' as sectors with existing closure requirements, replacing the prior reference to 'oil and gas extraction wells, nuclear energy facilities, and nuclear generating facilities.'