Inside California’s $180bn ‘infra strike team’

Governor Gavin Newsom is looking to accelerate the buildout of the state’s transportation, water, clean energy, electric grid and broadband infrastructure.

Last week saw Governor Gavin Newsom of California announce $180 billion in funding, with the aim of speeding along the timeline of construction for various critical infrastructure projects in the state. It is not clear which agencies will retain the funding and how much of the funding will go towards specific projects.

In addition to the funds, Newsom initiated regulatory reforms around permitting, legal procedures and other red tape in the state of California.

For example, project permitting reform and the streamlining of construction procurement are on the table, alongside the establishment of a green bank financing programme within the existing California Climate Catalyst Fund, a loan programme launched in 2020 by the California Infrastructure and Economic Development Bank.

The governor has proposed a nine-month time limit on lawsuits issued over detailed environmental reviews for public infrastructure projects relating to “water, clean transportation, clean energy, and semiconductor or microelectronic research and development facilities”, as mandated by the California Environmental Quality Act. The governor’s office will also aim to expedite court reviews under the CEQA in general. Implementation of these measures, however, will be subject to approval from the state legislature.

Not subject to the legislature’s approval, though, is Newsom’s establishment of an inter-agency “infrastructure strike team,” which he implemented through executive order. The initiative will be headed by Mark Tollefson, the state’s senior counselor on infrastructure, and comprise various directors from key offices within the governor’s office as well as the secretaries of transportation, food and agriculture and other key cabinet positions. The governor’s office has requested the president of the California Public Utilities Commission to join, too, though the appointment is not confirmed.

The aim of the strike team will be to identify projects to streamline, coordinate cross-agency cooperation and encourage investment in adjacent sectors to support critical infrastructure projects. The strike team will also establish working groups on transportation, hydrogen, energy, the EV rollout, the CHIPS Act, broadband, water and environmental remediation. The group will propose statutory and regulatory reforms needed to help the state reach its goals, among other tasks.

On a deadline

At a news conference in Stanislaus County, Newsom remarked on the initiative. “The question is: are we going to screw it up by being consumed by paralysis and process?”

Dana Palmer, a partner at California-based law firm Allen Matkins specialising in environmental and natural resources and land use, has the same worry. “With massive infrastructure modernisation taking place in an unprecedented and compressed timeframe, meeting proposed deadlines will rely on strategic coordination with all key players. Money is not a simple resolution to the infrastructure and climate funding challenges,” he told Infrastructure Investor.

He continued: “There are many variables when thinking through the funding and execution of the impending infrastructure initiatives. Time, money, deep subject matter expertise, and the willingness of multiple levels of government coordination are some top factors to consider.”

Indeed, the timelines needed for California to meet its goal of being carbon free by 2045 are ambitious at best, and fantastical at worst – especially when one considers that new vehicles sold in the state are mandated to be all-electric by then, too.

While $180 billion is a large sum, sources in the state familiar with project development remain concerned as to whether or not it will be enough to rectify the engineering, legal and human capital issues that will accompany such a large coordination of efforts – at least in time to make those deadlines.

Newsom’s office did not respond to a request for comment.