California officials have prematurely ended a program intended to provide air conditioning and heating system upgrades to the state's schools, leaving many students to endure hot classroom conditions. The CalSHAPE program, established in 2020 with utility ratepayer funding, was intended to allow schools to evaluate and then upgrade their HVAC systems. However, the California Energy Commission cut the program short in 2024, two years ahead of schedule, meaning only 172 of the more than 4,500 schools that needed improvements received funding.
School districts expressed dismay over the decision, highlighting the impact on students during periods of extreme heat. Greg Page, energy management specialist for the Temecula Valley Unified School District, described ongoing challenges with aging units that struggle to keep up during hot weather. His district received $4.6 million for the evaluation phase and was able to conduct surveys and implement some early upgrades, including HVAC system repairs and thermostat replacements. However, the district could not secure funding for phase two to replace roughly a third of its older systems.
Similarly, the Torrance Unified School District identified 300 air conditioning units as beyond repair but missed the application window for further funding. Keith Butler, deputy superintendent for Torrance Unified, stated that the district has been performing temporary fixes on its cooling systems, expressing concern that these will fail in the near future.
Funding Concerns and Audit Findings
The California Energy Commission cited budget constraints for ending the program. A 2025 audit from the California Public Utilities Commission, however, indicated that a complex funding application process contributed to the program's early termination. This process put school districts at risk of missing deadlines tied to legal requirements mandating the return of unspent funds to utilities once a program concludes. The audit recommended that the energy commission either find a way to fully utilize the allocated money or allow the state legislature to enact a law returning the funds to ratepayers.
According to Elaine Kahan, a spokesperson for the commission, the CalSHAPE funds were initially collected from ratepayers by utility companies. If returned to utilities, these funds could potentially be used to offset future charges to customers or be directly returned to them. Initial estimates suggest individual ratepayer refunds would be minimal, likely between $2 and $24.
Alternative Proposals and Ongoing Negotiations
Lawmakers are currently considering dedicating $70 million in interest accrued from these funds to a virtual power plant energy program. This proposal has drawn criticism from advocates like JuNelle Harris, founder of Clean Air Allies, who argue that it prioritizes administrative concerns over the immediate needs of students. Harris questioned the logic of abandoning a functioning program with available funds.
Last year, Gov. Gavin Newsom issued an executive order directing the energy commission to review ratepayer-funded programs. The fate of CalSHAPE now rests with Newsom and state lawmakers. Senate staff have recommended extending the program, and negotiations between the governor's office and the legislature are ongoing, expected to continue through August, typically the hottest month in California.