In 2020, California launched the CalSHAPE program, offering schools a chance to assess and upgrade their heating and cooling systems with ratepayer-funded grants.
However, in 2024, the California Energy Commission ended the program early, leaving $200 million unspent. Only 172 of over 4,500 schools received funds for necessary upgrades.
A 2025 audit by the California Public Utilities Commission revealed that the program’s complex funding process forced a halt in applications, risking unfinished improvements before deadlines. The audit recommended either spending the funds or returning them to ratepayers. Neither solution was implemented.
As schools face rising temperatures, they struggle with outdated HVAC systems. For instance, Temecula Valley Unified School District identified a third of its systems needing upgrades but couldn’t apply for further funds. The $194 million in unspent funds will revert to utilities by December 1, 2026, unless legislative action occurs.
The state is considering using the $70 million interest from these funds for a virtual power plant program. Advocates argue that the funds should be used for school HVAC upgrades, which are crucial for student comfort and learning.
The decision now lies with lawmakers and Governor Gavin Newsom, with negotiations ongoing. School districts like Torrance Unified are left in limbo, awaiting a resolution that could impact thousands of students.
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