EE Regulatory Roundup | CPUC Rejects SDG&E EE Withdrawal & Results from the Legislative Session
The end of summer 2026 has brought some clear policy declarations by the state on the benefits of EE programs.
CPUC Rejects SDG&E’s Request to Stop Providing Regional EE Programs
On September 2, the California Public Utilities Commission (CPUC) issued the long-awaited proposed decision on SDG&E’s request to stop administering its regional EE programs. The proposed decision denies SDG&E’s request and rejects the proposed settlement between SDG&E and the CPUC’s Public Advocates Office (Cal Advocates), and the CPUC used the proposed decisions as an opportunity to affirm the benefits of EE programs and the large regulated utilities’ critical role in securing those benefits for customers.
While the CPUC concluded that it does have legal authority to grant a utility request to withdraw from EE program administration, the agency made it clear that SDG&E failed to provide any justification for why it should be allowed to stop providing its regional programs now. The CPUC reiterated the ongoing legal requirements for electric and gas utilities to invest in EE programs that are cost-effective, reliable, and feasible, and observed that EE programs are among the most effective tools in the regulatory environment for customers facing affordability changes, due to the ability to make permanent reductions to energy use. The CPUC also reminded SDG&E that, since 2005, the regulated utilities have been the main administrators of EE portfolios overseen by the CPUC and that regional utility EE portfolios are the foundation on which all other administrators’ EE portfolios are built. The CPUC admonished SDG&E that, if the agency were to reevaluate the EE administrator framework, it would require more than a lone application from a single utility.
Turning to the merits of SDG&E’s arguments in support of its withdrawal request, the CPUC concluded that SDG&E’s claimed $300 million in customer savings did not account for the $286 million loss in total system benefits from the withdrawal, which would shrink customer savings to $14 million over six years, or roughly $1.36 per customer per month. The CPUC dismissed SDG&E’s arguments about program overlap with Regional Energy Networks (RENs), reminding SDG&E that programmatic and geographic overlap between utilities and RENs is not prohibited—to the contrary, the overlap is by design and consistent with longstanding CPUC policy that REN programs should complement utility regional programs. The CPUC additionally found that cancelling SDG&E’s regional programs would have negative impacts on equity and hard-to-reach customers.
After this extensive discussion, the CPUC’s rejection of the SDG&E–Cal Advocates settlement, discussed in last quarter’s blog post, was a formality. The CPUC reiterated the lack of justification for allowing SDG&E to withdraw from its regional program administration, which would have been required for a successful settlement.
Finally, the CPUC declared that any future utility attempts to withdraw from regional EE program administration obligations will require, at a minimum, a comprehensive strategy for preserving or enhancing benefits to customers and the grid, a plan and timeline to transition administrative duties to other willing administrators, and a strategy to maintain a comprehensive and balanced portfolio in the overall region—none of which SDG&E provided.
The parties to the proceeding will have the opportunity to submit opening and reply comments on the proposed decision before the CPUC adopts it. While SDG&E and Cal Advocates are likely to object to the decision’s conclusions and reasoning, it is unlikely that the CPUC will reverse its conclusions in response to that feedback.
Legislature Extends the School Energy Efficiency Stimulus Program through 2030
Senate Bill 193 made its way to the Governor’s desk at the end of the 2025–2026 legislative session and is awaiting his signature (or veto) as of the time of this post. SB 193 extends the School Energy Efficiency Stimulus (SEES) Program through 2030, which will provide continued funding from the large electric and gas utilities for grants to undertake EE projects focused on HVAC systems, as well as plumbing upgrades, in schools in underserved and other communities. The SEES Program is administered by the California Energy Commission.