EE Regulatory Roundup | Your Guide to Navigating California's Energy Efficiency Landscape

Welcome to our new series, EE Regulatory Roundup! This quarterly blog post will provide updates on what’s happening with the entities that are responsible for setting EE regulations and program requirements for the entire state: the California Public Utilities Commission (CPUC); the utilities and Regional Energy Networks (RENs); and the Legislature. This is a busy time for EE programs and providers because the CPUC recently adopted new EE goals for 2026-2037 and is considering whether utilities can step back from their roles as EE program providers. 

New EE Goals for 2026-2037
For over a decade, the CPUC has had a series of ongoing rulemakings to set EE goals, approve new RENs, approve utility and other program provider EE budgets, and generally decide what state policy on EE will be.  The CPUC opened the latest rulemaking in April 2025 in response to the Governor’s Executive Order N-5-24, which, among other things, directed the CPUC to examine the costs and benefits of electric ratepayer programs and to modify or close down programs where costs exceed benefits.  The new rulemaking will address a wide range of issues in the coming years, including natural gas retirement goals, policies and targets for program providers’ portfolio applications, program oversight and cost-effectiveness requirements, and options for multifamily buildings and programs.  The new rulemaking is available here.

The CPUC’s first official step in the new rulemaking was to adopt the 2036-2037 EE goals for the large utilities, which it did in an August 2025 decision, available here.  EE goals are based in part on a study performed by the CPUC, in consultation with the California Energy Commission, that analyzes cost-effectiveness for EE programs, statewide and local benefits provided by EE programs, energy savings potential for residential and commercial buildings and equipment, and energy savings potential for the industrial, agricultural, and mining sectors.  The study is available here. 

The CPUC adopted the study framework that used a higher cost-benefit ratio for deciding which EE programs are cost-effective, with the idea that the higher ratio will meet the Executive Order’s requirements and help minimize programs that do not provide enough benefits to balance out the costs.  The decision sets many different EE goals for the utilities for each year, for three-year periods, and for different EE programs.  The goals are projected to provide between $65 million and $1.27 billion in total system benefits each year, depending on the utility and the program, and to produce between tens and hundreds of megawatts in energy savings. 

Even though the recent decision set the EE goals for 2026-2037, the CPUC will revise the goals in the next few years to ensure that they are based on the best available information.

Can Utilities Stop Providing EE Programs?
In April 2025, San Diego Gas & Electric Company (SDG&E) filed an application at the CPUC asking for permission to providing most of its regional EE programs. SDG&E believes this change will save customers about $300 million each year, and it also believes that other EE program providers should be able to fill in any resulting gaps.  The application is available here.

SDG&E’s request caused a stir among other EE program providers and ratepayer advocacy groups, who argued that SDG&E cannot legally stop being an EE program provider and, even if it could, SDG&E’s withdrawal would harm customers and would not save the money SDG&E claims. 

The CPUC will first decide whether SDG&E can legally stop providing EE programs.  If the answer is yes, the CPUC will then examine whether allowing SDG&E to withdraw is a good idea and what the impacts might be on customers and EE programs generally.  The parties filed briefs on the legal question September 2025, and they will submit testimony and briefing on the potential impacts of SDG&E’s withdrawal in the first half of 2026.  The CPUC expects to issue a decision on SDG&E’s request in July or August 2026.  Stay tuned!