California school air‑conditioning grant cut leaves $200 million unspent

In 2024 the California Energy Commission halted the California Schools Healthy Air, Plumbing and Efficiency (CalSHAPE) program two years early, leaving about $200 million of allocated grant money unused. The program was intended to fund upgrades of heating and cooling systems in public schools; only 172 of more than 4,500 schools received funds before the stop.

A 2025 audit by the California Public Utilities Commission found the commission’s overly complex application process prevented schools from completing the grant‑funded upgrades in time, forcing the return of unspent funds to utilities. Lawmakers are now debating whether to spend the accrued interest of roughly $70 million on a separate virtual‑power‑plant initiative, while the governor’s October executive order directs the commission to review ratepayer‑funded programs for alternative financing.

The commission said the money was originally collected from utility ratepayers and that any returned funds could either be refunded to ratepayers or offset future collections. The cut leaves many school districts without resources to replace aging air‑conditioning units as heatwaves become more intense.