I-Bank board decides which transmission projects get financing

The accelerator may select transmission projects for possible public financing, and the I-Bank board decides whether to approve that financing. The process covers eligible projects selected by the accelerator and sponsors seeking money from the California Transmission Accelerator Revolving Fund. The accelerator must evaluate draft results from the Independent System Operator’s transmission planning process. A selected project must have a connection point in the operator’s area and support new high-voltage lines that meet state reliability and clean energy goals. Sponsors must meet experience and financial criteria, including reducing federal cost recovery requests by tax credit savings and working to maximize ratepayer savings. The bank board must approve financing, and money must be available in the revolving fund. The accelerator must develop program guidelines by December 31, 2027. The financing program ends January 1, 2036, but approved financing terms continue for each contract’s full term.

Certain developers and owners must certify under penalty of perjury that they selected experienced contractors. These rules cover projects financed by the bank, not owned by the bank or an electrical corporation, and located in or directly connected to a large electrical corporation’s service area. The developer must select a prime contractor that served on at least two California transmission projects during the prior 10 years. The owner must select a maintenance contractor that frequently worked on transmission infrastructure for an electrical corporation or local public electric utility during the prior 10 years. The contractor experience must fall within the 10 years before the contractor is selected.

The revolving fund must be separate, be organized as a public enterprise fund, and may use additional investment and deposit options. These rules apply to the California Transmission Accelerator Revolving Fund and I-Bank fund money used for program financing. The digest says the bill removes the requirement for legislative approval before certain I-Bank fund money can be spent on program financing. Federal appropriation money and money for administrative costs still require legislative appropriation before spending. The act took effect immediately as a budget-related appropriation measure.

The law changes which transmission projects qualify for the existing state income tax credit. The change applies to participating party taxpayers seeking the personal or corporate income tax credit for eligible transmission project costs. The credit remains 20 percent of qualifying costs, up to $20 million per taxpayer per year. A taxpayer claiming the credit cannot earn a return on equity on the part of the project covered by the credit. The credit applies to tax years beginning on or after January 1, 2026, and before January 1, 2036.