USA – CALIFORNIA Trends and Developments Contributed by: Nora Sheriff and Samir Hafez, Buchalter
Cap and Trade Legislation may be adopted in 2025 indicating an intent to reauthorise CARB’s Cap-and-Trade Program beyond 2030. Alternatively, legislation simply deleting or extending the 2030 date may be proposed and passed, or it could be deferred. Affordability The Governor, legislators, and regulators have publicly recognised the urgency of addressing California’s worsening energy affordability crisis. However, the complex, interrelated challenges underlying this crisis highlight the difficulty of crafting policies that balance environmental sus - tainability, grid reliability, and consumer afford - ability. In 2025, Governor Newsom may push for cost- cutting measures within existing energy pro - grammes, as seen in the October 2024 Execu - tive Order. Legislators are expected to push for affordability-driven rate restructuring and CPUC process reforms, while regulators at the CPUC will continue evaluating ways to limit cost shifts, manage wildfire mitigation expenses, and streamline energy procurement. Uncertainty surrounds the state’s ability to suc - cessfully navigate these challenges.
reforms proposing targeted CEQA changes to facilitate housing and infrastructure projects. Open Questions for 2025 Regional Organisation Legislation to authorise the California Independ - ent System Operator and California utilities to join a new Regional Organization is expected to pass, due to broad support from environmen - tal groups, labour, and industry stakeholders. The bill aligns with the state’s clean-energy and grid-reliability goals while positioning California to compete with the Southwest Power Pool’s Markets+ initiative. Aliso Canyon California’s decision on Aliso Canyon is a key test of its long-term energy goals. As the state’s largest gas storage site – and the site of a 2015 methane leak – Aliso Canyon remains under scrutiny. Despite pledges from Governor News - om and others to close it by 2027, the CPUC ruled that timeline premature, instead adopting a biennial review to assess whether its closure would jeopardise reliability or drive up energy costs. The CPUC’s approach to Aliso Canyon will sig - nal how aggressively California balances climate goals with reliability and affordability.
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