Should California spend nearly $200 million helping public schools install healthier and more efficient heating, ventilation, air-conditioning, and plumbing systems? Or should it send the money back to the state\u2019s biggest utilities so their customers can pay roughly a\u00a0dollar less on their monthly bills over the course of a\u00a0single year?<\/p>\n
That\u2019s the choice that California lawmakers must make in the coming months.<\/p>\n
The funds at stake are part of the California Schools Healthy Air, Plumbing, and Efficiency program, or CalSHAPE<\/a>, which funds schools\u2019 HVAC and plumbing repairs and upgrades. The state required its three big utilities \u2014 Pacific Gas &\u00a0Electric, Southern California Edison, and San Diego Gas &\u00a0Electric \u2014 to fill the initiative\u2019s coffers with about $1 billion in fees collected from customers between 2020 and\u00a02023.<\/p>\n Although much of that total has already been doled out, $194 million in CalSHAPE funds has been frozen since 2024 as state leaders debate ways to curb skyrocketing energy bills. Because current law sunsets CalSHAPE at the start of 2027, the leftover money will revert to utilities by year\u2019s end without legislative action.<\/p>\n They want leaders to leverage a\u00a0sprawling budget-negotiating document, known as a\u00a0budget trailer bill<\/a>, to extend the looming deadline and to direct the California Energy Commission, which administers CalSHAPE, to disburse the money to schools \u2014 many of which have already identified projects they want to pursue. That includes replacing old AC equipment to keep students comfortable as climate change fuels extreme heat, improving air-filtration systems, and swapping fossil-fueled heaters for all-electric heat pumps that can both warm and cool buildings.<\/p>\n \u201cThe $200 million or so that\u2019s sitting unused would help about 120,000 students in California electrify their schools, which would reduce their air pollution and give them access to air conditioning,\u201d said Leah Stokes, an associate professor of environmental politics at the University of California, Santa Barbara. That work, she added, is \u200b\u201cnot optional \u2014 it\u2019s to protect kids from extreme weather events, from climate change, from fires, from heat\u00a0waves.\u201d<\/p>\n Nine members of the state Assembly have signed a\u00a0letter<\/a> asking lawmakers who chair key budget committees to extend the CalSHAPE funds. Unless legislation is introduced to alter the current state of affairs, the final decision on whether the $194 million will remain available for schools or be returned to the utilities on Dec. 1\u00a0will be made in budget negotiations between lawmakers and Democratic Gov. Gavin Newsom. While a\u00a0final budget package must be settled by July 1<\/a>, budget trailer bills that modify state law to implement a\u00a0broader budget agreement have until Aug. 31, the end of this year\u2019s legislative session, to be completed.<\/p>\n A long-running battle over utility rate relief<\/p>\n CalSHAPE was created by a\u00a0law passed in 2020 that aimed to make schools \u2014 especially those in underserved areas and \u200b\u201cfenceline\u201d communities near polluting facilities \u2014 more energy efficient, healthy, and resilient. It has since given out nearly $800 million to more than 1,000 projects<\/a>, according to a\u00a02025 report<\/a> from the California Energy Commission.<\/p>\n But the agency abruptly closed further grant applications in mid-2024.<\/p>\n It said it closed the program to ensure that schools had enough time to fully spend their awards before the program\u2019s sunset. But according to a\u00a0March analysis<\/a> from a\u00a0state Senate budget subcommittee, the funding was frozen \u200b\u201cin part because legislation and other departmental reports focusing on energy affordability proposed to revert CalSHAPE funds to ratepayers.\u201d<\/p>\n Critics of that plan pointed out that pushing that money back to utilities was likely to yield only $30 to $50\u00a0in one-time rebates for customers \u2014 an amount they said was too little to validate axing the programs. Those arguments won the day, with AB 3121 failing to advance.<\/p>\n