EE Regulatory Roundup | A $5 Billion Budget Cycle and a Pivotal CPUC Settlement

2026 is a particularly busy year in California for energy efficiency.  While a number of ongoing matters addressed in prior blog posts remain pending at the CPUC, the biggest development is the start of the four-year EE portfolio budget cycle.   

Portfolio Administrators’ EE Portfolio and Business Plans

The second quarter of 2026 got off to a busy start when the 13 EE portfolio administrators in California filed their 2028–2031 Portfolio Plans and 2028–2035 Business Plans with the California Public Utilities Commission (CPUC) for approval.  The Portfolio and Business Plans are part of the CPUC’s ongoing efforts to promote and implement EE programs across the state.  The portfolio administrators—which include the investor-owned utilities, Community Choice Aggregators (CCAs), and Regional Energy Networks (RENs)—are the entities responsible for managing a wide range of specific EE initiatives within their respective service areas.  The CPUC’s budget and portfolio process will determine what EE programs will be available to California residents and how much utility customer funding will be allocated to support those programs during the 2028–2031 period. 

The Portfolio and Budget Plan applications describe each portfolio administrator’s EE portfolios and program offerings in the CPUC’s EE market segments, which are:

  • Resource Acquisition: Programs that support electrification and installation of energy-efficient appliances for commercial and residential customers, with the purpose of reducing unnecessary investments in the natural gas and electric systems.

  • Market Support: Programs designed to support the long-term success of the EE market through customer educations, workforce training, community and vendor partnerships, and technology improvement. 

  • Equity: Programs designed to provide EE to hard-to-reach or underserved customers and disadvantaged communities.

  • Codes and Standards: Programs designed to improve compliance with existing building code requirements for EE, to influence future standards and code-setting bodies, to assist local governments in developing EE ordinances that exceed statewide minimum requirements, and to coordinate with other programs and entities to support California’s EE policy goals.

  • EM&V: Programs that contribute to statewide evaluation, measurement, and verification studies and working groups to assess the performance of existing EE measures and identify opportunities for improvement. 

The applications present a wide range of individual EE program offerings across the various market segments, including programs designed to provide EE improvements to residential and business customers, workforce education and training, behind-the-meter solar and battery projects, programs to help customers meet new building code requirements for EE, electrification and fuel-switching programs, and many more.  The total projected budget costs for all of the four-year portfolios are approximately $5 billion, with estimated cost savings to customers from the EE measures in the tens to hundreds of millions for each individual portfolio administrator. 

The CPUC process to review and approve all 13 applications is expected to take at least 18 months, though it may run longer given the number of participants and broad scope of issues to be addressed.

Update on SDG&E’s Request to Stop Providing Regional EE Programs

Our November 2025 Regulatory Roundup blog post provided an overview of SDG&E’s CPUC application to withdraw from most of its regional EE programs.  The CPUC proceeding is still underway and no final determination has been made.  However, on May 1, 2026, SDG&E and Cal Advocates, the CPUC’s internal ratepayer advocacy division, filed a motion asking the CPUC to adopt a settlement between the two parties. 

The proposed settlement terms are:

  • SDG&E will be allowed to withdraw from administering its regional EE programs, including its regional Codes and Standards program;

  • Any new, expanded, or additional EE programs authorized in SDG&E’s service territory will meet the CPUC’s cost-effectiveness requirements; and

  • SDG&E and Cal Advocates will make a separate joint filing that proposes the CPUC consider cost-effectiveness standards for all EE portfolio administrators.

The six other active parties in the proceeding, which include Southern California Edison and several RENs, were given the opportunity to join the settlement and declined.  While the CPUC has in the past approved settlements that were not joined by all parties to a proceeding, it is not certain that the CPUC will approve a two-party settlement where the majority of the other parties do not support it. 

Comments on the proposed settlement from non-settling parties are due June 1, 2026.  It is likely that the commenting parties will oppose the settlement with various levels of vehemence

June 2026Megan SomogyiEE Reg Roundup, regulatory, CPUC