USA – CALIFORNIA Law and Practice Contributed by: Nora Sheriff, Gwenneth O’Hara, Samir Hafez, Antonio Carrejo and Timothy Lee, Buchalter LLP
• evaluates proposed generation and storage pro- jects for system integration. CAISO does not own any grid infrastructure – it con- trols facilities owned by IOUs and independent trans- mission developers. CPUC The CPUC regulates IOUs, CCAs and ESPs, and is the lead agency for long-term resource planning and distribution systems oversight. While the CPUC does not have rate-making responsibility for transmission lines, it does have a significant role in permitting trans- mission and substation facilities. Scope of authority The CPUC performs the following within its scope of authority: • ensures that IOUs, CCAs and ESPs procure suf- ficient resources to meet demand and achieve state renewable energy goals through integrated resource planning (IRP) and procurement man- dates, including procurement of distributed energy resources; • sets reliability standards for utilities and mandates compliance with resource adequacy requirements; • reviews IOU proposals for new generation, storage and distribution investments; • approves IOU power purchase agreements; and • approves funding and cost recovery for IOUs’ distribution infrastructure operations and capital projects. CEC The CEC is a state administrative agency responsible for statewide planning and forecasting. Scope of authority The CEC performs the following within its scope of authority: • conducts long-term electricity demand forecasts; • leads energy policy development and building standards; and • certifies the siting of new thermal power plants of 50 MW and above.
On 7 October 2023, Governor Gavin Newsom signed into law Assembly Bill (AB) 1373, authorising the CPUC to request that the Department of Water Resources (DWR) act as a central procurement entity (CPE). The CPE is responsible for procuring electric- ity from certain long lead-time resources on behalf of customers of all load serving entities (LSEs) subject to the CPUC’s IRP procedure. In August 2024, the DWR was directed, as the CPE, to procure 10.6 GW of long lead-time emerging technologies. Regional Organization for Western Energy (ROWE) In an effort to establish durable, independent over- sight of wholesale electricity markets in the west, stakeholders across 11 states are in the process of establishing a new Regional Organization for Western Energy (ROWE). The ROWE would serve as an inde- pendent entity with authority over existing and volun- tary market services, including the Western Energy Imbalance Market (WEIM) and Extended Day-Ahead Market (EDAM). While ROWE would set policy and be the governing body for the WEIM and EDAM, Cali- fornia Independent System Operator (CAISO) would still perform operational functions. ROWE is currently working towards seating an initial board of directors and forming legal and organisational structures. 1.6 Recent Changes in Law or Regulation Over the past year (May 2025 to May 2026), Califor- nia’s power sector has seen several material changes in law and regulations affecting the State’s carbon market framework, resource adequacy compliance, long-term procurement planning, energy storage over- sight, and regional wholesale market co-ordination. Cap-And-Trade Extension and Programme Redesign In September 2025, California enacted AB 1207, extending the State’s cap‑and‑trade programme through 2045 and reframing the programme as “Cap‑and‑Invest”, establishing a longer-term statu- tory platform for the carbon market and related cost‑containment/affordability mechanisms. AB 1207 also directs CARB to update implementing regulations to reflect the legislature’s revised programme design and policy priorities.
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