Energy.

Assembly Member Garcia's industrial decarbonization legislation expands California's Climate Catalyst Revolving Fund Program to include projects that reduce emissions from industrial heat and power systems. The bill authorizes the California Infrastructure and Economic Development Bank to provide financing for industrial heat pump and thermal energy storage initiatives, with oversight from the State Energy Resources Conservation and Development Commission and Air Resources Board.

The legislation establishes an Industrial Facilities Thermal Energy Storage Program within the existing Long-Duration Energy Storage Program to support industrial decarbonization through financial incentives. Projects must demonstrate grid benefits, emissions reductions, and compliance with labor standards, including project labor agreements for construction work after January 2026. The bill renames the Industrial Grid Support program to the Industrial Decarbonization and Improvement of Grid Operations Program, adding requirements for pollution remediation plans at facilities with past air permit violations.

For project financing decisions, the legislation directs agencies to prioritize initiatives that enhance grid reliability during peak demand, maximize greenhouse gas reductions, and benefit under-resourced communities. Projects must develop community benefit funds or agreements with surrounding neighborhoods. The bill maintains existing exclusions for oil and gas facilities while adding new provisions for thermal energy storage systems that directly provide heating or cooling without using electricity. All financial assistance under the program must receive approval by December 31, 2031.