According to CalMatters Housing, California's school heating and cooling improvement program has come to an abrupt halt, leaving hundreds of millions of dollars unspent and thousands of schools without critical upgrades. The CalSHAPE program, which started in 2020 with ratepayer funding collected by major utilities, was designed in two phases: first to assess HVAC systems in schools, then to pay for necessary upgrades. However, the California Energy Commission abruptly stopped accepting applications in 2024, two years ahead of schedule, leaving around 172 schools out of more than 4,500 with identified problems actually receiving upgrade funding.
The shutdown happened because of what a 2025 audit called an overly complicated funding process that made it impossible for the commission to work within legal timelines. The commission was required to return any unspent money to utilities by a certain date, and the bureaucratic delays made it clear they couldn't process all the applications in time. That left approximately 200 million dollars sitting unused, while school districts that had already completed their assessment phase found themselves unable to apply for the upgrade phase that would have fixed their aging air conditioning systems.
Several school districts identified serious problems during the assessment phase but couldn't move forward. Temecula Valley Unified discovered that about a third of its HVAC systems were reaching the end of their useful life, and Torrance Unified found around 300 air conditioning units that needed replacement. Both districts had received funding for the inspection stage but were shut out when it came time to actually do the work. Now, as California experiences more intense heatwaves, students and staff are working in classrooms that can't stay cool, with maintenance teams working emergency shifts just to keep schools functioning.
The state has not yet decided what to do with the remaining funds. One proposal being considered would use only the interest earned on the original funding, about 70 million dollars, for an unrelated energy program. If the money does return to utilities, ratepayers might see a refund of somewhere between 2 and 24 dollars spread across a year, though there's no guarantee even that will happen since the law says the funds revert to utilities at year's end.
What I am seeing locally here in the Bay Area is that this kind of administrative failure hits harder in communities that were counting on this money to solve real problems. We have older school buildings throughout the East Bay and Fremont that are struggling with temperature control, and parents and educators are rightfully frustrated that the state couldn't follow through on a program that was already funded and ready to go.
