On May 4, 2026, CLECA submitted comments on CARB’s 15-Day Modifications to the proposed Cap-and-Invest amendments, ahead of the May 28, 2026 hearing. The comments address the revised Cap Adjustment Factor (CAF) trajectory, the restructured Manufacturing Decarbonization Incentive (MDI), and the transition of indirect electricity allocation from the CPUC to CARB.
Adopt the amendments without delay
CLECA’s lead ask was timely adoption, treating regulatory uncertainty as itself a driver of leakage.
CLECA’s primary request is that CARB adopt the 15-Day Amendments without delay… Regulatory uncertainty about compliance costs and allocation levels is itself a leakage driver. Facilities deciding whether to invest in California operations or shift production out of state need a settled allocation framework to make that determination.
The revised CAF trajectory improves near-term protection
CLECA supported the slower near-term decline in the Cap Adjustment Factor.
From 2028 through 2030, the annual decline rate for the standard CAF is reduced from the allowance budget’s 4% decline rate to 3%, and from 2% to 1% for the alternate CAF… these changes materially improve near-term leakage protection and reflect the economic realities facing California EITE industries.
The leakage is real and recent
CLECA grounded the stakes in concrete, recent closures in its member sectors.
In April 2026, CalPortland announced a reduction of 53 employees at its Redding cement plant. In February 2026, Anheuser-Busch closed its 50-year-old Fairfield brewery, resulting in the loss of approximately 238 jobs… These are not hypothetical leakage scenarios. They are recent, real losses in the sectors CLECA represents and in industries that CARB has identified as leakage risks.
Condition post-2030 cuts on a border carbon adjustment
CLECA supported deferring post-2030 CAFs and tying any further reductions to a workable border mechanism or fresh leakage data.
CLECA asks that any further reductions beyond 2030 be conditioned on either the development of a workable BCA or updated robust leakage data demonstrating that additional reductions can occur without further production migration.
The MDI is now more workable
CLECA welcomed the restructured Manufacturing Decarbonization Incentive: a flat modifier, a longer spending window, and broader eligibility.
The 15-Day Modifications replace this with a flat 0.8 CAF modifier applied uniformly in budget years 2028 through 2030 across all sectors. This simplification provides consistent, predictable incentive value across the MDI window…
The 15-Day Modifications extend this to six or seven years… The five-year deadline was too short for the class of investments the MDI is designed to incentivize.
Carbon capture, utilization, and storage (CCUS) capital, electricity, and design costs are added as a conditionally eligible category… CLECA strongly supports this addition.
One open item on the electricity benchmarks
CLECA flagged a possible loss of value in the indirect-allocation transition that CARB should confirm in the Final Statement of Reasons.
CLECA members who receive the CPUC California Industry Assistance Credit report that the electricity efficiency benchmarks implied by their credits appear to be approximately 3-5% higher than the values published in proposed Table 9-1. If accurate, this would reduce effective leakage protection for affected EITE sectors, contrary to CARB’s stated position that the transition is value-neutral.
Read the filing
The excerpts above are drawn from CLECA’s filing. Read the complete comments here: