Chapter 7.4 - Long-Duration Energy Storage Program

California Public Resources Code — §§ 25640-25645

Sections (6)

Amended by Stats. 2025, Ch. 395, Sec. 2. (AB 1280) Effective January 1, 2026.

For purposes of this chapter, the following definitions apply:

(a)“Energy storage system” has the same meaning as defined in Section 2835 of the Public Utilities Code.

(b)“Thermal energy storage” means the storage of thermal energy for direct use for heating or cooling at a later time in a manner that avoids the need to use electricity at that later time.

(c)“Financial incentive” includes a contract, grant, loan, rebate, block grant, or other appropriate funding mechanism.

(d)“Under-resourced community” has the same meaning

as defined in Section 71130.

§ 25641

Amended by Stats. 2025, Ch. 395, Sec. 3. (AB 1280) Effective January 1, 2026.

(a)The commission shall establish and implement the Long-Duration Energy Storage Program to provide financial incentives for eligible projects, located at eligible storage facilities, that have power ratings of at least one megawatt and are capable of reaching a target of at least eight hours of continuous discharge of electricity at that power rating in order to deploy innovative energy storage systems to the electrical grid for purposes of providing critical capacity and grid services.

(b)The commission shall establish and implement an Industrial Facilities Thermal Energy Storage Program within the Long-Duration Energy Storage Program to provide financial incentives for

eligible projects located at eligible facilities to decarbonize industrial facilities’ use of heat and power. The commission may establish project and industrial facility guidelines for the purposes of this section that support the broader transformation of industrial facilities to ensure program resources support high-road jobs, community benefits, and the transition from fossil fuels to clean energy.

§ 25642

Amended by Stats. 2025, Ch. 395, Sec. 4. (AB 1280) Effective January 1, 2026.

(a)The commission may establish project and storage facility eligibility guidelines for purposes of this chapter.

(b)Any eligibility guidelines established pursuant to subdivision (a) shall be consistent with both of the following requirements:

(1)“Eligible storage facility” shall include, but not be limited to, an energy storage system that is interconnected to the electrical grid in California or to a California balancing authority.

(2)(A) “Eligible project” shall include, but not be limited to, an eligible storage facility that includes any of the

following:

(i)Compressed air or liquid air technologies.

(ii) Flow batteries, advanced chemistry batteries, or mechanical energy storage.

(iii) Thermal energy storage or aqueous battery systems.

(iv) A hydrogen demonstration project.

(B) “Eligible project” shall not include a pumped storage project or lithium-ion-based storage technology.

§ 25643

Added by Stats. 2022, Ch. 61, Sec. 5. (AB 205) Effective June 30, 2022.

In implementing the Long-Duration Energy Storage Program, the commission may do all of the following:

(a)In addition to any other authorized method of providing moneys to participants in the Long-Duration Energy Storage Program, use financial incentives.

(b)Award Long-Duration Energy Storage Program moneys for technical assistance, including, but not limited to, providing outreach to eligible industries, identifying promising technologies, assessing market conditions needed to accelerate commercial traction of the technology, assisting with technical review of proposals and deliverables, identifying opportunities that provide significant benefits to the electrical grid, and performing benefits

analysis. The commission may contract for, or through interagency agreement obtain, technical, scientific, and administrative services and expertise from one or more entities to support the Long-Duration Energy Storage Program.

(c)Adopt guidelines or other standards at a business meeting for the Long-Duration Energy Storage Program. The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to the adoption of the guidelines or other standards adopted by the commission pursuant to this chapter.

(d)(1) Notwithstanding any other law, noncompetitively award Long-Duration Energy Storage Program moneys through an amendment to, or a new agreement with a party to or recipient of, contracts or grants from California governmental entities or a federal agency if the recipient

has received funding for the original project through a competitive bid process from a California governmental entity or federal agency and the awarding of those moneys is consistent with the stated goals and criteria of the Long-Duration Energy Storage Program.

(2)Notwithstanding any other law, noncompetitively award Long-Duration Energy Storage Program moneys to a governmental entity, national laboratory, entity contracted by the federal government to operate a national laboratory, or foundation established to serve the University of California or California State University.

(3)Notwithstanding any other law, noncompetitively award Long-Duration Energy Storage Program moneys to any entity if the cost to the state is reasonable and the commission makes any of the following determinations:

(A)The expertise,

service, or product is unique.

(B)A competitive solicitation would frustrate the obtainment of necessary information, goods, or services in a timely manner.

(C)The moneys to be awarded would fund the next phase of a multiphased project, the multiphased project was funded through competitively awarded agreement, and the entity satisfactorily performed the competitively awarded agreement.

(D)It is in the best interests of the state to do so.

(E)The entity will use the moneys as matching funds for federally awarded moneys.

(e)Notwithstanding any other law, in its discretion, advance up to 25 percent of the Long-Duration Energy Storage Program moneys awarded pursuant to this

chapter.

§ 25644

Added by Stats. 2022, Ch. 61, Sec. 5. (AB 205) Effective June 30, 2022.

Notwithstanding any other law, a commission agreement entered into for purposes of the Long-Duration Energy Storage Program shall not require the review, consent, or approval of the Department of General Services or any other state department or agency and are not required to comply with the requirements of the State Contracting Manual, the Public Contract Code, or the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code.

§ 25645

Amended by Stats. 2025, Ch. 395, Sec. 5. (AB 1280) Effective January 1, 2026.

(a)In providing financial incentives pursuant to this chapter, the commission shall give preference to an eligible project that does one or more of the following:

(1)Increases the reliability and resiliency of the electrical grid.

(2)Adds electrical grid services when the electrical grid is stressed or anticipating pending energy challenges.

(3)Increases the use of renewable energy, through reducing curtailment and shifting power usage from peak to off-peak times, and reduces the impact of climate change on the electrical grid or on connected facilities or

communities, including by improving air quality, reducing emissions of greenhouse gases, or providing under-resourced communities with increased reliability and resiliency.

(4)Lowers energy costs and provides employment opportunities for residents of under-resourced communities.

(5)Interconnects to the electrical grid and is commercially operational by 2028.

(b)For applications received after January 1, 2027, the commission shall provide

financial incentives to a project that involves the performance of work by contractors in the construction industry only if that work is performed pursuant to a project labor agreement that, at a minimum, meets the requirements of Section 2500 of the Public Contract Code.