USA – CALIFORNIA Law and Practice Contributed by: Nora Sheriff, Gwenneth O’Hara, Samir Hafez, Antonio Carrejo and Timothy Lee, Buchalter LLP
Senate Bill 254 In September 2025, California enacted SB 254, an omnibus energy bill that includes measures related to public financing and ownership options for electric transmission infrastructure, wildfire mitigation financ- ing, streamlined clean energy permitting, and limits on certain wildfire mitigation capital expenditures earning a return on equity through the IOU rate base. Resource Adequacy Slice of Day Construct Implementation The CPUC has implemented the new resource ade- quacy (RA) framework known as Slice of Day (SOD), and continues to explore refinements. This framework represents a fundamental shift in how RA compliance is measured for IOUs, CCAs, and ESPs. Rather than relying on a single peak demand hour, the SOD con- struct requires LSEs to demonstrate that sufficient capacity is available to meet demand in every hour of The CPUC adopted a final decision directing CPUC‑jurisdictional LSEs to procure 6,000 MW of new clean net qualifying capacity (NQC) for reliability needs in 2029–2032 (delivered in 2,000‑MW tranches by June 2030, June 2031, and June 2032), in response to forecast demand growth and an identified reliability shortfall. Assembly Bill 825 (Pathways/ROWE Governance Framework) In September 2025, California enacted AB 825, which establishes a statutory pathway for CAISO and partici- pating transmission owners to participate in voluntary energy markets governed by an independent region- al organisation. AB 825 conditions participation on specified governance and public‑interest safeguards and contemplates that, no earlier than 1 January 2028, CAISO may implement FERC‑accepted tariff chang- es to operate markets governed by the independent entity, subject to required findings and approvals, including CPUC involvement for electrical corpora- tion participation. a 24-hour period, each month. IRP procurement (2029–2032)
Long‑Term Transmission Planning (CAISO Order 1920 Compliance Filing) On 9 December 2025, CAISO filed tariff revisions in ER26‑704‑000 to implement Order 1920’s long‑term regional transmission planning framework. In the tar- iff sheets, CAISO explains that beginning in 2027 it will transition to two complementary planning tracks: a biennial comprehensive transmission plan (issued every two years, with the first issued in 2030) and a Long‑Term Regional Transmission Plan conducted every five years (also first issued in 2030). Enhanced Standards for Energy Storage Systems In March 2025, the CPUC adopted General Order (GO) 167-C, which significantly expands and updates the operational and safety standards applicable to elec- tric generating assets. These standards now explicitly apply to battery energy storage systems, and include new mandates for maintenance, operation protocols, emergency response planning, incident reporting, and co-ordination with CAISO on outages. 1.7 Announcements Regarding New Policies There have been several new policies and initiatives that would result in material changes for the power industry in California. Federal Policies In early 2025, President Donald Trump issued a series of Executive Orders (EOs) targeting aspects of the Inflation Reduction Act (IRA) (2022), particularly certain clean energy tax credits, and directing the Environmental Protection Agency (EPA) to reconsider regulations for power plants, including emissions and wastewater standards issued in 2024. These efforts, in addition to potential tariff changes, introduce con- siderable uncertainty for renewable energy project development, supply chains and long-term compli- ance planning for fossil fuel generators nationwide. One Big Beautiful Bill Act (2025) The Act represents a federal shift in US energy policy, prioritising expanded domestic fossil fuel production while scaling back federal support for clean energy. It mandates increased oil and gas leasing on feder- al lands and offshore areas, restores favourable tax treatment for fossil fuel producers, and relaxes certain
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