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Top Stories from the California Energy Journal

Newsom Signs Energy Bills on Utility Rates, Distributed Power, and Grid Development (October 1, 2026) – Gov. Gavin Newsom signed legislation increasing scrutiny of utility costs, expanding access to distributed energy resources, and establishing new requirements for data centers before the September 30 deadline for action on bills from the 2025–2026 legislative session. Read more.

BLM Schedules December Oil and Gas Lease Sale Covering 35,000 Acres in California (October 2, 2026) – The U.S. Bureau of Land Management announced October 1 that it will offer 43 oil and gas parcels covering approximately 35,000 acres in Kern, Kings, San Luis Obispo, and Fresno counties at a December 1, 2026 lease sale. A public protest period is open through November 2, 2026. Read more.

California Challenges Trump Administration over Federal Fuel Economy Rollback (October 5, 2026) – California filed a lawsuit October 2, 2026 as part of a coalition of 26 states and local governments challenging the Trump administration’s final rule weakening corporate average fuel economy (CAFE) standards for new passenger cars and light trucks. Read more.

California News and Analysis

Grid and electricity markets

• Portland General Electric joins CAISO’s extended day-ahead market. PGE began participating in EDAM on October 1, expanding the regional market after PacifiCorp became the first outside utility to join earlier this year. The expansion increases the amount of Western generation and load participating in CAISO’s day-ahead optimization. California ISO, October 1, 2026.

Electricity rates and utilities

• CPUC will hold public forums on Bear Valley Electric’s general rate case. The CPUC announced forums on October 13 and October 27 on Bear Valley Electric Service’s request for new rates, providing customers an opportunity to comment on the utility’s proposed revenue requirement. California Public Utilities Commission, September 29, 2026.

Clean-energy manufacturing

• CEC-backed lithium-ion battery factory opens in Vista. American Lithium Energy opened an expanded 82,000-square-foot manufacturing facility in San Diego County, up from 23,000 square feet. The CEC provided more than $13 million through the Clean Transportation Program and EPIC to support battery-cell production and a pilot line for silicon-anode batteries. California Energy Commission, October 2, 2026.

California energy policy

Commentary and analysis

• California energy policy faces competing pressures as state manages transition. Analysts interviewed by S&P Global examine California’s energy-policy direction amid refinery closures, rising electricity and gasoline costs, oil-production declines, and efforts to maintain reliability while pursuing the state’s climate targets. The analysis considers how economic and affordability concerns are influencing the state’s approach to oil, refining, electricity, and the broader energy transition. S&P Global Commodity Insights, September 29, 2026.

Beyond California

Oil, refining, and infrastructure

• Global fuel-price shock increasingly reflects refining constraints rather than crude shortages. An analysis examines how refinery closures, limited global refining capacity, and disruptions to refined-product flows are contributing to elevated diesel and jet-fuel prices even as crude supplies improve. MarketWatch, October 2, 2026.

• Federal government offers another 40 million barrels from Strategic Petroleum Reserve. The Energy Department announced plans to offer loans of up to 40 million barrels of crude from the SPR as part of the international response to petroleum-market disruptions associated with the Iran conflict. The action is the final U.S. tranche of a broader coordinated IEA reserve release. Reuters, September 29, 2026.

Data centers and electricity demand

• FERC orders PJM to revise plan for meeting data-center-driven electricity demand. FERC accepted parts of PJM’s proposal for addressing a projected 6,800-MW capacity shortfall but suspended its backstop procurement mechanism for five months and ordered further proceedings over cost allocation and other issues. Reuters, September 30, 2026.

• Senate blocks federal data-center ratepayer legislation. The Senate voted 57–43 on the Ratepayer Protection Act, short of the 60 votes needed to advance the measure. The legislation, previously approved 417–3 by the House, sought to establish federal principles encouraging large electricity users to bear incremental infrastructure costs associated with their demand. Reuters, September 30, 2026.

• Conservation group seeks moratorium on AI data centers on federal land. The Wilderness Society called October 5 for a federal moratorium on AI data-center development on public lands, citing electricity, water, habitat, and public-access concerns. Reuters, October 5, 2026.

Electricity and utility ownership

• Lawmakers ask FERC to reject $33.4 billion AES acquisition. A bipartisan group of federal lawmakers asked FERC to reject the proposed acquisition of AES by BlackRock’s Global Infrastructure Partners, EQT, and other investors, raising concerns about electricity rates, private-equity returns, and potential conflicts involving data-center investments. AES says the transaction would not affect regulated utility rates and would improve access to capital. Reuters, September 29, 2026.

Federal permitting

• Senators unveil bipartisan energy permitting agreement. Senators announced a 417-page permitting package designed to accelerate approvals for transmission, renewable energy, fossil-fuel projects, mines, and other infrastructure. Reuters, September 30, 2026.

Climate litigation

• Supreme Court considers whether federal law blocks state climate-liability lawsuits. The U.S. Supreme Court heard arguments October 5 in an effort by ExxonMobil and Suncor Energy to block a Colorado lawsuit seeking damages for alleged climate-related harms. The outcome could affect climate-liability cases brought by state and local governments elsewhere, including California. Reuters, September 30, 2026; ABC News, October 5, 2026; Brief from State AGs.

Climate disclosure

• UK regulator drops plan for mandatory climate-transition disclosures by listed companies. Britain’s Financial Conduct Authority abandoned plans to require listed companies to publish climate-transition plans, shifting instead toward a comply-or-explain approach. Reuters, September 30, 2026.

Renewable energy

Commentary and analysis

• Renewable developers race to complete projects before federal incentives and deadlines tighten. U.S. renewable-energy developers are accelerating construction as changes in federal policy threaten tax incentives and impose new deadlines and restrictions on wind and solar projects. The near-term construction surge could be followed by a slowdown as projects face a more difficult federal policy environment. Axios, September 30, 2026.

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The coalition argues that NHTSA adopted standards less stringent than the “maximum feasible level” Congress requires under federal law. Attorney General Rob Bonta’s office said stronger fuel economy requirements have helped motorists save money by reducing the amount of fuel their vehicles use. The coalition brought the challenge in the U.S. Court of Appeals for the First Circuit.

NHTSA’s final rule lowers the projected fleetwide fuel economy average for model year 2031 to 34.9 miles per gallon, compared with 50.4 mpg under the Biden administration’s standards, according to news reports.

The U.S. Department of Transportation released the rule on September 28, 2026. The administration said in its release that the Biden administration standards went “far beyond the requirements mandated by Congress” and “created a backdoor electric vehicle mandate.”

Coalition challenges agency analysis

In its lawsuit, the coalition alleges that NHTSA violated the Energy Policy and Conservation Act and the Administrative Procedure Act by failing to establish the maximum feasible fuel economy standards. It argues that the agency improperly excluded existing electric vehicles from its baseline analysis and adopted requirements below the efficiency the fleet achieved in 2021.

Bonta’s office also challenges the agency’s treatment of fuel savings, vehicle affordability, safety, and climate damages. It says the rollback would eliminate nearly $220 billion in fuel savings available under the previous standards. The rule also ends CAFE credit trading in 2028, which the state says would harm California’s electric vehicle industry.

Administration cites vehicle affordability

The Trump administration defended the rollback as a way to lower vehicle prices and reverse standards the administration considers an indirect electric vehicle mandate.

The administration’s analysis estimates that model year 2031 vehicles would cost an average of $1,289 less under the revised rule. Drivers would, however, incur more than $1,600 in additional fuel costs over the ​life of the vehicles, compared to the previous standards. The U.S. Department of Transportation said the rule would increase US gasoline consumption by 4.6% through 2050, compared to the prior standard, and would increase new car sales, according to news reports.

The announcement advances the specific lease sale that BLM began reviewing in July, following completion of broader environmental reviews. BLM’s June 23 decision allowed oil and gas leasing to resume within the Bakersfield Field Office. The December offering covers approximately 35,000 acres.

Lease offering narrows following public review

BLM initially sought public input on 50 parcels totaling approximately 36,000 acres. By August, the proposal included 44 parcels after the agency combined several adjacent parcels. The October announcement lists 43 parcels covering approximately 35,000 acres.

The offering includes public lands and parcels where the federal government owns mineral rights beneath privately owned land. Most fall within the Bakersfield Field Office’s jurisdiction, with one under the Central Coast Field Office.

The BLM published a Draft environmental assessment for the proposed lease sale on August 21, 2026.

The broader planning process included a draft supplemental environmental impact statement released in January. That review followed litigation and settlement agreements requiring BLM to revisit earlier environmental analyses.

California disputes environmental analysis

California Attorney General Rob Bonta submitted comments challenging the environmental assessment for the proposed sale. In a September 21 announcement, his office argued that BLM inadequately evaluated public health, water supply and quality, air pollution, and sensitive habitats and species.

The attorney general’s office said approximately 16 parcels in the earlier, 44-parcel proposal fell within California’s 3,200-foot public health and safety setback around homes, schools, and other sensitive locations.

Drilling requires additional approval

Leasing does not itself authorize drilling. Before operations begin, an operator must submit a drilling permit application describing its plans. BLM says it will review applications, provide public review, conduct environmental analysis, and coordinate with state partners and stakeholders.

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The measures also address transmission development, offshore oil infrastructure, natural gas investment, and nuclear and fusion energy planning. Newsom vetoed bills that would have revised California’s community renewable energy program, created a California Public Utilities Commission (CPUC) inspector general, and established a refinery workforce task force.

The following recap groups signed and vetoed measures by policy area. Bill numbers link to California’s legislative information website.

Utility rates and oversight

Several signed bills change how the CPUC reviews utility returns, financing, and costs recovered from customers.

• SB 905 requires the CPUC to consider a lower return on equity for specified capital expenditures, including certain undergrounding investments outside general rate cases. It also requires a proceeding on alternative financing for grid investment and a report to the Legislature by December 31, 2028.

• AB 2463 requires CPUC cost-of-capital decisions issued on or after December 31, 2030, to include independent analysis, identify the financial models used, and explain material changes from previous methodologies.

• AB 2589 requires investor-owned utilities to pass savings from specified federal tax changes to customers.

• SB 327 prohibits utilities from charging electricity customers for campaigns opposing the formation of publicly owned utilities.

• AB 2065 expands restrictions on expenses utilities may recover through rates.

• SB 1098 addresses CPUC oversight of utility memorandum and balancing accounts.

• AB 1715 requires utilities to report public grants and pass resulting savings to customers.

• AB 2700 requires a CPUC report on wildfire-victim restitution shortfalls involving electrical corporations and potential restitution mechanisms.

• AB 2618 prohibits former CPUC commissioners from working for regulated companies for two years after leaving office.

Newsom vetoed AB 353, which would have created a CPUC inspector general. His veto message cited concerns about the independence of the Public Advocates Office and unbudgeted costs.

He also vetoed AB 1761, which would have required disclosure of information used to calculate nonbypassable charges, and AB 2124, which would have required third-party review of electricity and gas mandates.

Distributed energy and plug-in solar

Newsom signed two distributed energy bills September 30.

• SB 913 directs the CPUC, working with the California Energy Commission (CEC) and California Independent System Operator (CAISO), to improve pathways for aggregated distributed energy resources to qualify as resource adequacy capacity by June 30, 2028. The measure provides for qualifying aggregations, including customer-owned batteries, to be used in resource adequacy filings and CPUC-directed procurement. It also includes safeguards against double compensation for customers participating in net energy metering or net billing programs. (see CEJ, August 29, 2026).

• SB 868 exempts qualifying portable plug-in solar devices from utility interconnection requirements, approval, and related fees until January 1, 2030. Utilities may require online registration. Extending the exemption would require further legislative action. (see CEJ, September 1, 2026).

Data centers

Newsom signed seven data center bills September 21, establishing requirements for electricity rates, energy and water reporting, and environmental review (see CEJ, September 23, 2026).

• SB 886 requires new CPUC tariffs or updated electricity rules for qualifying large loads, including data centers, to prevent stranded costs and cost shifts to other customers.

• SB 1168 and AB 2383 address electricity rate structures and allocation of data center costs. (see CEJ, August 31, 2026).

• AB 1577 requires large data centers to report electricity use and other operating information to the CEC and provide projected demand when seeking specified local permits. (see CEJ, August 28, 2026).

• AB 2469 and AB 2619 establish water-use disclosure and water-supply information requirements.

• SB 887 limits access to California Environmental Quality Act (CEQA) categorical exemptions for data centers. It also allows qualifying data centers and geothermal projects to seek expedited judicial review through the environmental leadership program.

Transmission and grid connections

The signed transmission and energization measures address project financing, construction oversight, and delays in connecting customers.

• AB 192, a budget measure, establishes a transmission infrastructure accelerator and revolving fund for eligible high-voltage projects selected through CAISO’s competitive solicitation process. Program guidelines are due by December 31, 2027.

• AB 2493 requires the CPUC to establish a transmission development monitor by October 1, 2027. The monitor will track utility schedules and progress on transmission projects and interconnection network upgrades. The measure requires CPUC-directed remedial action following reports of specified material deficiencies.

• AB 2518 creates a San Diego Gas & Electric energization pilot with deadlines of 40 to 70 business days for construction-ready projects.

• SB 1196 directs the CPUC to establish statewide energization timelines for smaller projects, including accessory dwelling units, electric vehicle chargers, and home batteries.

Additional measures include SB 1158 on energy reliability planning, AB 2111 on transmission planning and facilities, and AB 2266 on load-serving entity reporting and grid planning.

Oil and refineries

• AB 1448 prohibits existing oil and gas infrastructure on state tidelands and submerged lands from supporting federal offshore leases issued after January 1, 2026. The measure restricts the use of that infrastructure to transport production from newly issued federal leases. (see CEJ, August 29, 2026).

• SB 1337 directs the CEC to pursue memoranda of understanding with air districts and local governments hosting refineries. The agreements would address fuel-market management and environmental, labor, economic, and consumer protections.

• AB 1661 directs the first $5 million paid by Inglewood Oil Field operators into the Equitable Community Repair and Reinvestment Account toward assistance for eligible nearby families whose children have respiratory conditions.

Newsom vetoed AB 605, which would have created a refinery workforce task force, and AB 2543, which would have required an emergency assessment of fuel and transportation resources.

Natural gas transition and building electrification

Two signed bills address gas distribution investment and customer electrification.

• SB 1359 requires annual reporting on gas distribution replacement and upgrade spending. It also directs the CPUC to consider depreciation approaches that reflect foreseeable changes in gas demand and limit customers’ exposure to stranded-asset costs.

• AB 2313 requires gas utilities to offer eligible residential customers an electrification incentive as an alternative to replacing a gas service line. The program is due by January 1, 2028.

• SB 222 streamlines permitting for residential heat pump water heaters and heating and cooling systems.

Renewable energy and storage

• AB 1156 allows specified Williamson Act cancellation fees to be waived or deferred for qualifying solar projects and addresses contracts on land approved for certain streamlined solar facilities.

• AB 2163 directs the CEC to identify clean energy and critical mineral development zones.

• AB 550 addresses California Endangered Species Act requirements at renewable generation facilities.

• AB 864 addresses hazardous waste rules for photovoltaic modules.

• AB 2234 revises the definition of “geothermal exploratory project” to include equipment and activities necessary to establish interconnectivity between wells and reservoirs. Projects are divided into “exploration” and “development” components for purposes of California Environmental Quality Act (CEQA).

Newsom vetoed AB 1813, which would have revised the community renewable energy program, including its bill-credit structure and project and program limits.

He also vetoed AB 2369, concerning energy-only storage resources, citing an existing CPUC proceeding addressing storage procurement, interconnection, and market participation.

Nuclear and fusion

• AB 2647 requires the CEC to assess the potential role of new nuclear power plants, including advanced reactors, in meeting California’s 2045 zero-carbon electricity goal. The final measure requires a study rather than lifting the state’s restrictions on new nuclear plants.

• SB 925 requires a CEC strategic plan for fusion energy and addresses certification and environmental review for fusion projects.

Wildfire

• SB 742 requires utilities to remove permanently abandoned transmission equipment and designate emergency-response liaisons.

• AB 1934 directs the State Fire Marshal to plan a home-hardening certification program.

• SB 1079 creates a Cal Fire innovation unit for wildfire technology. Newsom’s signing message called for coordination to avoid duplicating existing programs.

Newsom vetoed AB 1891, which would have dedicated a share of Cal Fire funding to community-led beneficial fire. He also vetoed SB 877 and SB 878, concerning insurance claim disclosures and payment requirements.

Electric vehicles and hydrogen

The signed electric vehicle package includes SB 969, SB 1283, AB 1820, SB 1213, SB 1267, and SB 615. Collectively, the measures address charger inspection and permitting, charging access at multifamily properties, fees, and disclosures concerning zero-emission truck incentives and batteries.

Newsom also signed SB 804, establishing hydrogen pipeline safety requirements, and AB 2505, addressing electrical corporations and hydrogen refueling stations.

Environmental review

AB 40 requires environmental impact reports for specified approvals involving large coal-handling facilities and certain changes in coal type or volume.

Newsom vetoed SB 954, concerning the CEQA exemption for advanced manufacturing facilities.

Climate funding and high-speed rail

• SB 193, a budget measure, sets Greenhouse Gas Reduction Fund spending priorities, including $1 billion annually for high-speed rail and $1 billion reserved for legislative appropriation.

• SB 1425 allows the High-Speed Rail Authority to permit utility and other work within the project right-of-way.

Selected implementation and expiration dates

Implementation now moves to the CPUC, CEC, and other agencies, with several deadlines in 2027 and 2028.

• October 1, 2027: CPUC to establish transmission development monitor under AB 2493.

• December 31, 2027: Transmission Infrastructure Accelerator to issue guidelines under AB 192.

• January 1, 2028: CPUC to establish gas service line replacement alternatives program under AB 2313.

• June 30, 2028: CPUC and CAISO to improve resource adequacy pathways for aggregated distributed resources under SB 913.

• December 31, 2028: CPUC to submit report on alternative grid financing under SB 905.

• January 1, 2030: Plug-in solar interconnection exemption under SB 868 expires unless extended.

Questions, comments, or tips? Contact editor@californiaenergyjournal.com.

Top Stories from the California Energy Journal

California Sues to Block Second Morro Bay Offshore Wind Lease Buyout (September 23, 2026) – California filed a federal lawsuit September 22, 2026 seeking to block the Trump administration’s agreement to pay Invenergy $111.8 million in connection with the cancellation of its offshore wind lease near Morro Bay. The case follows California’s August 28 challenge to a separate agreement involving Golden State Wind’s Morro Bay lease. Read more.

CEJ Alert: Newsom Signs Seven Data Center Bills on Electricity Costs, Water Use, and Environmental Review (September 23, 2026) – Governor Gavin Newsom signed seven data center bills on September 21, establishing new requirements for electricity rates, energy and water reporting, and project approvals. Read more.

Environmental Groups Challenge Federal Safety Permit for Sable Pipelines (September 23, 2026) – Environmental groups filed a petition in the U.S. Court of Appeals for the Ninth Circuit on September 22, 2026, challenging a federal special permit for Sable Offshore Corp.’s Las Flores Pipeline System. The case contests a June 25 decision by the Pipeline and Hazardous Materials Safety Administration (PHMSA) that allows an alternative approach to meeting a federal corrosion-repair requirement. Read more.

CEJ Alert: California Moves Toward a Three-Jurisdiction Carbon Market (September 28, 2026) –Governor Gavin Newsom announced September 23 that he had made the findings required for California to pursue linkage of its Cap-and-Invest program with Washington’s carbon market. The action allows the California Air Resources Board (CARB) to begin the public rulemaking needed to add Washington to the market California already shares with Québec. Read more.

California News and Analysis

EVs

• CEC report finds reservation-based shared charging can expand multifamily EV access. A state-funded demonstration installed 124 Level 2 chargers at 21 multifamily properties in four counties and recorded more than 6,200 charging sessions, finding that shared public-private access can improve utilization and help offset installation costs. California Energy Commission, September 23, 2026.

Emissions

• House votes to revoke California’s maritime-emissions waivers. The House approved measures targeting federal waivers that allow California to require shore power for large ships and cleaner engines for some commercial vessels. The measures still require Senate approval and the president’s signature, while litigation continues over whether Clean Air Act waivers may be repealed under the Congressional Review Act. Los Angeles Times, September 24, 2026.

Electricity supply

• California agencies project positive electricity-supply margins for summer 2026. The third-quarter SB 846 assessment says the CAISO system is expected to retain a margin above 6,750 MW under planning conditions and above 3,000 MW during a 2022-style extreme-heat event, although wildfires, new loads, and project delays remain risks. California Energy Commission, September 21, 2026.

Electricity affordability

• Southern California customers receive $886 million in utility-bill credits. Residential customers of PG&E, Southern California Edison and SDG&E are receiving credits averaging approximately $75, funded through the state’s Cap-and-Invest program. Governor of California, September 22, 2026.

CPUC and utility regulation

• Newsom signs two measures intended to shorten utility-energization delays. AB 2518 establishes deadlines of 40 to 70 business days for SDG&E to energize construction-ready projects, while SB 1196 directs the CPUC to set statewide timelines for ADUs, EV chargers, home batteries and other small projects.

• Newsom signs law to prohibit utilities from charging customers for campaigns against municipal power. SB 327 prohibits investor-owned utilities from using electricity-customer funds to oppose efforts to establish publicly owned utilities.

• CPUC staff propose a $16 million wildfire penalty against Liberty Utilities. The proposed enforcement order alleges violations of overhead-line requirements connected with the 2020 Mountain View Fire, which burned approximately 20,835 acres and damaged or destroyed 97 structures. California Public Utilities Commission, September 25, 2026.

• CPUC administrative law judges issue several consequential energy proposals. Proposed decisions would establish a climate-adaptation policy framework, create an application process for utility orchestration of distributed resources, require load-flexibility scenarios in distribution planning, provide two years of bridge funding for demand-response programs and deny SoCalGas’ proposed optional microgrid tariff without prejudice. California Public Utilities Commission, September 28, 2026.

• San Francisco advances its effort to acquire PG&E’s local electric system. The Board of Supervisors rejected PG&E’s challenge to the city’s environmental review, allowing the municipal-power proposal to proceed toward CPUC valuation and other regulatory steps. San Francisco Chronicle, September 23, 2026.

Wildfires

• Southern California Edison seeks a special legislative session on wildfire liability. Edison International CEO Pedro Pizarro said the absence of a new liability framework is increasing utility borrowing costs and could ultimately raise customer costs. Reuters, September 24, 2026.

Refining and fuels

• Newsom authorizes the early sale of winter-blend gasoline. The action allows California fuel suppliers to begin transitioning to the less expensive winter formulation several weeks early in response to high gasoline and diesel prices. Governor of California, September 28, 2026.

• Newsom requests public reporting on wholesale fuel prices. In the same letter authorizing the early release of winter-blend gasoline, Newsom also directed the CEC, CARB, and DPMO to publish “a regular public spot-market report for gasoline and diesel using aggregated, anonymized trading data, including a transparent process to mitigate illiquidity and volatility.” He also directed the CEC to collect information on renewable diesel. Governor of California, September 28, 2026.

• Newsom signs law to direct the CEC to pursue refinery-transition agreements with local governments. SB 1337 calls for memoranda of understanding with air districts and jurisdictions containing refineries to coordinate fuel-market management and environmental, labor, economic and consumer protections.

• Newsom vetoes a broader assessment of emergency fuel and transportation resources. The governor said AB 2543 would duplicate existing state preparedness work and create an estimated $1 million in implementation costs. Governor’s veto message, September 27, 2026.

Offshore oil

• Santa Barbara County opposes proposed federal intervention supporting Sable Offshore. County supervisors condemned language added to federal defense legislation that could authorize federal acquisition of property needed for Sable’s pipeline operations, overriding state and local constraints. Santa Barbara Independent, September 23, 2026.

Oil

• Newsom signs law requiring payments for families near Inglewood Oil Field. AB 1661 requires the state’s Department of Conservation to distribute the first $5,000,000 paid into the Equitable Community Repair and Reinvestment Account by well operators in the Los Angeles County Inglewood Oil Field to be used for cash assistance to families living within 21/2 miles of the identified low production wells whose children have respiratory health conditions. Governor of California, September 27, 2026.

Critical minerals

• Newsom signs law to establish strategic clean-energy and critical-mineral development zones. AB 2163 directs the California Energy Commission to identify regions capable of supporting large-scale clean-energy production, critical-mineral supply chains, and energy-intensive manufacturing.

Energy storage

• Newsom vetoes a proposal to expand treatment of energy-only storage resources. The governor said AB 2369 would duplicate an existing CPUC proceeding on storage procurement, interconnection and market participation. Governor’s veto message, September 27, 2026.

Data centers and electricity demand

• Bay Area cities move toward moratoria on new data centers. Oakland and Richmond adopted or considered restrictions, while San Francisco pursued its own pause amid concerns over electricity demand, diesel backup generation, water use, and infrastructure costs. San Francisco Chronicle, September 24, 2026.

• California’s large-data-center inventory could grow from 55 facilities to approximately 85. Thirty additional projects are planned for 2027 and beyond, and the next generation of facilities is projected to use an average of 2.5 times as much power as those opening in 2026. Axios, September 28, 2026.

Commentary and analysis

• Jeff St. John, “Should we get excited about California’s latest virtual power plant?,” Canary Media, September 23, 2026.

Solar energy

• Second federal judge rules that EPA unlawfully canceled Solar for All grants. U.S. District Judge Tanya Chutkan concluded that EPA incorrectly interpreted federal law when it terminated the $7 billion program and vacated the agency’s decision. California’s grant includes approximately $250 million for community solar, storage and workforce programs. Reuters, September 23, 2026.

International

• California expands international clean-energy cooperation during Climate Week. The state signed an agreement with Spain covering electrification, battery storage, carbon markets, methane reduction, and climate resilience. It also advanced partnerships with Australia, Finland and Catalonia. Governor of California, September 22, 2026.

Energy policy

Commentary and analysis

• James Gallagher, “How to fix California’s disastrous energy policies & high costs,” The Ceres Courier, September 23, 2026.

Beyond California

Transportation and emissions

• Trump administration lowers federal vehicle fuel-economy standards. The Transportation Department reduced the required fleetwide average for 2031 from 50.4 to 34.9 miles per gallon and will end credit trading among automakers in 2028. The department estimates that the rule will lower manufacturers’ compliance costs but increase fuel consumption and carbon emissions. Reuters, September 28, 2026.

Oil

• U.S. Strategic Petroleum Reserve inventories fall to their lowest level since 1982. Federal data showed the reserve at 283.8 million barrels following continued releases, increasing attention to fuel-security policy as California develops its own petroleum-reserve framework. Reuters, September 28, 2026.

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The markets are not yet linked. California and Québec must complete further steps before a three-jurisdiction market can begin operating. Washington expects linkage could take effect in 2027.

Governor clears statutory requirement

SB 1018 of 2012 requires the governor to make specified findings about a potential partner’s carbon market before CARB can link California’s program to it. CARB requested the findings in early September. Newsom made them September 21 and announced the action two days later.

California and Québec have operated a linked carbon market since 2014. The three jurisdictions released a draft linkage agreement in March and signed the agreement in June. The agreement does not itself put linkage into effect; each jurisdiction must complete its own legal and regulatory process.

Linkage would expand allowance trading

Under the proposed linkage, regulated entities could use eligible allowances issued by any of the three jurisdictions to meet their compliance obligations. The governments would conduct joint allowance auctions, and market participants could trade allowances across jurisdictions, according to the Washington Department of Ecology.

California’s Cap-and-Invest program covers large industrial facilities, energy companies, fuel suppliers, and other major emitters. The Newsom administration says covered emissions account for approximately 80% of the state’s greenhouse-gas emissions. Allowance costs can therefore matter to businesses beyond the utilities and oil companies that are directly associated with energy policy.

A larger market could give covered businesses more options for obtaining allowances. Washington’s Department of Ecology concluded that linkage should reduce compliance costs for Washington businesses and make prices more stable. The effect on California allowance prices is less certain and will depend in part on allowance supply and demand across the three programs.

Washington files linkage rules

Washington’s Department of Ecology signed its rule adoption order September 17 and filed it September 23. The rules are scheduled to take effect October 24. California and Québec still must complete their remaining regulatory and statutory steps.

Washington says it will give market participants at least 90 days’ notice before linkage takes effect. Until then, businesses cannot trade compliance instruments between Washington and the existing California–Québec market.

CARB rulemaking is next for California

California lawmakers extended Cap-and-Invest last year with the passage of AB 1207 and directed regulators to address affordability, employment, and industrial competitiveness as the program evolves. The Newsom administration estimates that the program has generated $37 billion for state climate investments.

CARB’s linkage rulemaking will determine how California adds Washington to the existing market. For covered businesses, the effect on compliance costs will become clearer as regulators finalize the rules and the three jurisdictions establish a date for trading to begin.

The package directs regulators to protect other utility customers from costs incurred to serve data centers while giving local governments more information about proposed facilities. Several of the electricity provisions require tariffs or further action by the California Public Utilities Commission (CPUC).

Electricity tariffs aim to prevent cost shifts

SB 886 requires the CPUC to establish new tariffs or update electric rules by January 1, 2028, and to prevent stranded costs or cost shifts to customers outside those tariffs. For data centers entering new agreements to receive retail service at the transmission level beginning January 1, 2027, the law calls for a tariff assigning responsibility for transmission upgrades. It also requires an early termination fee if a covered customer leaves the system within 10 years or fails to reach an adequate level of electricity use.

AB 2383 adds requirements for transmission, distribution and generation tariffs. It directs investor-owned utilities to account for costs including wildfire mitigation and incremental electricity procurement. Its generation provisions include minimum payment commitments, upfront collateral or prepayment, and fees intended to protect other customers if a project is canceled or uses less power than projected. Community choice aggregators and electric service providers must adopt generation tariffs for covered data centers by January 1, 2028.

SB 1168 separately directs the CPUC to assess rate structures that make data centers pay a reasonable share of transmission, distribution, and power procurement costs, including when they connect at the distribution level. The commission must also consider ways to ease cost pressures on residential customers. (For a more in-depth discussion, see CEJ Alert: Legislature Passes Bill to Examine Data-Center Rate Structures.)

Energy demand reporting requirements

Under AB 1577, data center owners and operators must submit operating information to the California Energy Commission through a process the agency will establish. The commission must publish submitted information in aggregated, anonymized form and assess data center electricity demand trends beginning with its 2029 integrated energy policy report. Applicants for certain local permits must also provide projected energy use and other information to the local agency. (For a more in-depth discussion, see CEJ Alert: Legislature Passes Data-Center Energy Reporting Bill.)

Water use reporting requirements

AB 2469 conditions permits for new data centers and expansions that increase peak water use on disclosures that include a water supply assessment and projected use. A water scarcity plan is required beginning January 1, 2028. Applicants must assume the full cost of water infrastructure improvements needed to serve the project, as determined by the water supplier.

AB 2619 requires water-use estimates in initial business license applications and reporting of the prior year’s water use in renewal applications.

CEQA review remains required

SB 887 bars specified data center projects from using categorical exemptions under the California Environmental Quality Act (CEQA). It also allows qualifying projects to seek the law’s environmental leadership designation, which provides a streamlined process for litigation over environmental approvals. To qualify, a project must meet conditions covering grid costs, energy supply, storage, water use and community benefits. The designation does not exempt a project from CEQA review.

The next decisions will come through CPUC tariff proceedings and the Energy Commission’s reporting process. Those actions will determine how the electricity cost rules apply to individual projects and what data becomes available to regulators, local governments and the public.

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California’s latest complaint challenges a June 17 agreement under which the Interior Department would provide Invenergy more than $111 million after the company “voluntarily terminate[s]” four offshore wind leases, including OCS-P 0565 in Morro Bay. Invenergy’s corporate affiliates would make qualifying investments in other energy projects, and the federal government would pay Invenergy an equivalent amount from the Judgment Fund. The Department of the Interior officially canceled the lease on July 10, 2026.

California alleges that the agreement and cancellation bypassed procedures under the Outer Continental Shelf Lands Act, including provisions giving affected states a role in federal offshore-energy decisions. The state also argues that the Judgment Fund cannot be used for the payment because the agreement did not settle an existing or imminent lawsuit. Rather, it addressed claims Invenergy might have brought had the federal government issued a suspension order.

California is asking the U.S. District Court for the Northern District of California to invalidate the agreement and prevent its implementation.

Invenergy won the lease in the federal government’s 2022 California offshore wind auction. Its $145.3 million bid included approximately $33.5 million in commitments for workforce training, supply-chain development, and community benefits. The lease was one of five offshore wind developments proposed for California federal waters, with two leases in Humboldt and three in Morro Bay.

The federal government has since moved to unwind multiple offshore wind leases.

The case adds to litigation over federal agreements to end California offshore wind leases. Its outcome could affect the Invenergy lease and the federal government’s ability to use similar agreements for other California leases.

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The challenge adds to litigation over federal oversight of the pipeline system connecting Santa Ynez Unit offshore production with inland transportation facilities. It follows an earlier lawsuit against an emergency special permit issued in December 2025. According to the Center for Biological Diversity, the court ruled that the permit issued in June rendered the earlier permit challenge moot.

Permit changes corrosion-repair requirements

PHMSA’s issued-permit list identifies Sable’s permit as PHMSA-2026-0464, issued June 25, 2026. The permit, included in the petition’s exhibits, waives a requirement to remediate certain corrosion along longitudinal seam welds within 180 days of discovery. PHMSA says its alternative conditions require more frequent integrity assessments, stricter anomaly-repair criteria, and additional corrosion analysis.

Under PHMSA’s special-permit program, operators may seek relief from particular regulatory requirements when the agency determines that doing so is consistent with pipeline safety. PHMSA says it typically requires alternative measures providing an equal or greater level of safety.

Groups contest safety findings and federal jurisdiction

The petitioners include the Environmental Defense Center, Center for Biological Diversity, Get Oil Out!, Santa Barbara County Action Network, Sierra Club, Santa Barbara Channelkeeper, and Wishtoyo Foundation. Their announcement alleges violations of federal pipeline-safety and environmental laws and challenges PHMSA’s assumption of jurisdiction over the pipelines from California regulators.

PHMSA prepared an environmental assessment and a finding of no significant impact supporting the June permit. The petition challenges those documents and the U.S. Fish and Wildlife Service’s concurrence with PHMSA’s determination concerning effects on protected species. The groups ask the court to set aside the challenged agency actions.

Inspection work raises separate coastal-permit questions

The lawsuit comes as Sable investigates newly identified pipeline anomalies. The company sought county clearance to excavate 12 locations for inspection and possible repair, the Santa Barbara Independent reported. County officials had not determined how many locations would require repairs.

The report also described a separate state-court ruling requiring California Coastal Commission authorization for pipeline repair work in the coastal zone. The overlapping disputes concern both the federal safety conditions governing operation and the state approvals needed to perform work along the pipeline route. The September 22 petition seeks judicial review of the federal permit; its filing does not itself establish that the permit is unlawful or suspend pipeline operations.

Questions, comments, or tips? Contact editor@californiaenergyjournal.com.

Top Stories from the California Energy Journal

Santa Barbara County Adopts Ban on New Onshore Oil and Gas Wells (September 16, 2026) – The Santa Barbara County Board of Supervisors voted 3-2 on September 15, 2026 to prohibit new onshore oil and gas wells in unincorporated areas, completing the first phase of a broader county effort to phase out local oil and gas production. The action applies only to onshore development under county jurisdiction. It does not apply to offshore drilling. Read more.

Trump Administration Appeals Ruling on California Emissions Waivers (September 18, 2026) – The Trump administration appealed a federal court order on September 15 that prevents the Environmental Protection Agency (EPA) from treating certain California emissions waivers as rules subject to repeal under the Congressional Review Act (CRA). The appeal seeks review of a preliminary injunction; it does not resolve the underlying dispute. Read more.

California News and Analysis

Utilities, rates and grid policy

• Newsom vetoes bill creating a CPUC inspector general. Gov. Gavin Newsom vetoed AB 353, which would have established an inspector general for the California Public Utilities Commission (CPUC). Newsom cited conflicts with the Public Advocates Office and unbudgeted costs. Utility Dive, September 21, 2026.

• Newsom vetoes bill requiring disclosure of data used in calculation methodology. AB 1761 would have required utilities and the CPUC to disclose the data used to calculate charges imposed on customers who leave investor-owned utilities for community choice aggregators. Utility Dive, September 21, 2026.

• Newsom signs legislation creating a transmission infrastructure accelerator. AB 192 establishes an accelerator and revolving fund to support eligible high-voltage transmission projects selected through the CAISO competitive-solicitation process. Utility Dive, September 21, 2026.

• Southern California Edison outlines its strategy for adapting the grid to climate risks. A new white paper describes how SCE is incorporating projections for extreme heat, wildfire, flooding, and sea-level rise into infrastructure planning and investments. Southern California Edison, September 18, 2026.

Commentary and analysis

• Robert Bryce, “California Is So Screwed,” Robert Bryce, September 19, 2026.

Data centers

• Newsom signs seven-bill package regulating data center development. The legislation requires reporting on data center electricity and water use, directs regulators to develop new rate structures and seeks to prevent infrastructure costs from shifting to other customers. Office of Gov. Gavin Newsom, September 21, 2026.

• San Francisco supervisors propose 45-day moratorium on new data centers. San Francisco supervisors proposed a 45-day moratorium on new data-center approvals while the city studies electricity, water, pollution, noise and other impacts and develops updated regulations. The proposal follows Gilroy’s adoption of a temporary moratorium, while additional Bay Area communities are considering restrictions. KQED, September 15, 2026

Distributed energy and building electrification

• California lawmakers send Newsom bills streamlining permits and inspections for distributed energy projects. SB 222 would standardize and expedite heat-pump permitting, while AB 1738 would require qualifying cities and counties to offer remote inspections for heat pumps, rooftop solar and battery systems. Canary Media, September 14, 2026.

Oil, gas and fuel markets

• Sable plans excavations at 12 pipeline locations following corrosion testing. Sable Offshore sought county approval to inspect locations identified through internal pipeline testing and make repairs if necessary, potentially creating another dispute over state and local permitting requirements. Santa Barbara Independent, September 17, 2026.

• Record diesel prices increase costs for California farmers during harvest. California’s average diesel price exceeded $8 per gallon as international supply disruptions and seasonal demand increased fuel and transportation expenses for agricultural producers. San Francisco Chronicle, September 19, 2026.

• Newsom signs bill clearing the way for E15 gasoline sales. SB 795 removes a remaining regulatory barrier to selling gasoline containing as much as 15% ethanol in California, implementing authorization enacted in 2025. Office of Gov. Gavin Newsom, September 19, 2026; Reuters, September 21, 2026.

• Newsom vetoes bill on task force for staffing oil refineries. AB 605 would establish a state task force to examine refinery staffing and workforce issues following announcements that facilities will close or reduce operations. Newsom said in his veto message that diverting staff to this task could “diminish their ability to focus on holding refineries accountable for meeting required health and safety standards, potentially putting refinery workers at greater risk.”

Commentary and analysis

• Eric Eisenhammer, “California’s Energy Problem Is Now a National Security Problem,” California Globe, September 15, 2026.

• “Trump Wants More Oil Production from California’s Offshore,” Institute for Energy Research, September 18, 2026.

Transportation and emissions

• House votes to overturn another California emissions program. The House voted to repeal California emissions requirements for ocean-going vessels, continuing congressional efforts to use the Congressional Review Act against EPA approvals of state programs. Politico Pro, September 16, 2026.

• Newsom signs legislation intended to accelerate electric-vehicle charging. Six new laws address charger permitting, access to charging, consumer choice and disclosure of zero-emission truck incentives. The Governor signed SB 969, SB 1283, AB 1820, SB 1213, SB 1267, and SB 615. Office of Gov. Gavin Newsom, September 20, 2026.

EVs

• CEC program installs 384 EV charging ports at multifamily properties. The Multifamily Electric Vehicle Charging Accelerator deployed Level 2 chargers at 43 communities representing 2,701 housing units; 40 of the properties were affordable communities serving low-income

Permitting and environmental review

• Newsom vetoes restrictions on the CEQA exemption for advanced manufacturing. SB 954 would impose additional environmental-review requirements on certain advanced-manufacturing projects seeking expedited treatment under state law. Los Angeles Times, September 18, 2026.

Beyond California

Nuclear energy

• NRC’s overhaul of nuclear licensing rules will continue into 2027. The Nuclear Regulatory Commission is considering narrower environmental reviews, revised radiation-protection requirements, and a licensing framework for microreactors as the administration seeks faster approvals for new reactors. Reuters, September 15, 2026.

Carbon markets and global energy

• EU lawmakers vote to remove the carbon-border levy’s emergency brake. The European Parliament voted to eliminate a provision allowing temporary suspension of the levy during unexpected price increases, setting up negotiations with EU member states over the final rules. Reuters, September 15, 2026.

• France calls for a G7 summit on releasing additional oil reserves. French President Emmanuel Macron said G7 leaders should consider further releases from strategic oil and fuel reserves as international supply disruptions continue to pressure prices. Financial Times, September 18, 2026.

The case concerns whether an EPA decision allowing California to enforce an emissions standard can be submitted to Congress as an agency rule. California argues that waivers are adjudicatory approvals rather than rules. The EPA states that the CRA requires it to submit them for congressional review.

Court ordered EPA to reverse four reclassifications

On September 2, 2026, U.S. District Judge Beryl Howell’s blocked the Trump administration from reclassifying four California Clean Air Act waivers as federal rules subject to expedited congressional repeal, preserving California’s authority to enforce emissions standards affecting vehicles and small off-road engines.

The order requires the EPA to withdraw or correct its reclassifications and prevents the agency from giving effect to those or other reclassifications of waiver orders as rules while the injunction remains in place.

The four waivers at issue allow California to enforce emissions requirements for cars and small off-road engines. The EPA later sought to reclassify two additional waivers covering ocean-going vessels in port and commercial harbor craft, according to the Attorney General’s office. The waivers do not include Advanced Clean Cars II.

Congress and President Trump acted separately in 2025 to disapprove waivers associated with that program and two other vehicle programs.

California is challenging those actions in separate litigation.

Dispute extends to marine standards

After transmitting the four waivers in June, EPA submitted two additional waivers to Congress in July. They concern California emissions standards for ocean-going vessels at berth and commercial harbor craft. EPA says those approvals are also rules under the CRA.

The distinction could affect future California programs. The Clean Air Act allows California to seek EPA approval to enforce certain emissions standards that differ from federal requirements. If waiver approvals are subject to the CRA, Congress could use its expedited procedures to attempt to overturn them after EPA grants them.

Howell’s preliminary injunction remains in effect unless a court changes it. The appeal will determine whether that restriction continues while the courts consider EPA’s authority to classify the waivers as rules.

The distinction matters beyond the six waivers. Under the Clean Air Act, California may seek EPA approval to enforce certain emissions standards that differ from federal requirements. Treating those approvals as CRA rules would give Congress an additional route to challenge future waivers after EPA grants them.

The injunction remains in effect unless a court changes it. The appeal will test whether EPA may classify California’s waiver approvals as rules for congressional review, a question with consequences for how the state’s future emissions programs are approved and challenged.

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The ordinance amendments prohibit drilling new wells and reentering abandoned wells. Existing operations may continue, and the prohibition does not prevent drilling already authorized under a vested land-use permit or an approved Oil Drilling and Production Plan.

Supervisors Laura Capps, Joan Hartmann and Roy Lee supported the amendments. Supervisors Bob Nelson and Steve Lavagnino opposed them, according to the Santa Barbara Independent.

Ban covers coastal and inland areas

The amendments apply to areas governed by the county’s Land Use and Development Code and Coastal Zoning Ordinance. The Montecito Community Plan area is not affected because oil and gas drilling is already prohibited there.

The inland zoning amendments can take effect without further state approval. The Coastal Land Use Plan amendment must be certified by the California Coastal Commission before the prohibition becomes effective in the county’s coastal zone.

Approximately 1,039 active wells may continue operating, while the amendments would prevent the reentry of approximately 1,221 abandoned wells, according to the Santa Barbara News-Press.

The county has no pending applications for new oil and gas wells. Its most recent approval of a new drilling project was a 2019 land-use permit for the Amrich Casmalia Oil Field southwest of Santa Maria.

The county’s oil and gas amendments page contains the ordinances, staff reports, and related project materials.

County divided phaseout into two stages

The Board of Supervisors voted in May 2025 to develop a framework for ending oil operations in the county. In October 2025, the board directed county staff to prepare a two-part plan. The first phase prohibits new wells, and the second phase would develop a long-term plan for phasing out existing oil and gas facilities and operations.

The Santa Barbara County Planning Commission recommended approval in April, sending the amendments to the Board of Supervisors for final consideration.

County staff divided the project into two phases because of its legal, regulatory, and economic complexity. The September 15 action completes the county portion of the first phase, subject to Coastal Commission certification of the coastal amendment.

The second phase is expected to require an environmental impact report and an amortization study. The study would assess how long operators must be allowed to continue producing oil to recover their investments before the county may require facilities to close.

The county has allocated $250,000 for the amortization study. Developing the phaseout proposal could take approximately three years, while implementation could extend over a substantially longer period.

State law expanded local authority

The county’s action follows California’s 2024 enactment of AB 3233. That law authorizes cities and counties to limit or prohibit oil and gas operations or development within their jurisdictions, including through requirements that are more protective of public health, the climate, or the environment than state rules.

The Board of Supervisors adopted Santa Barbara County’s 2030 Climate Action Plan in August 2024. The plan calls for phasing out oil and gas production as part of the county’s effort to reduce greenhouse-gas emissions 50 percent below 2018 levels by 2030.

Supporters argued that the prohibition would prevent additional emissions and health effects while giving the county time to plan for workers and communities affected by a future phaseout. Opponents argued that restricting local production would eliminate well-paying North County jobs, reduce tax revenue, and increase reliance on imported oil.

The Coastal Land Use Plan amendment will require certification by the California Coastal Commission before it becomes effective in the county’s coastal zone. The inland zoning amendments are not subject to that certification process.

Questions, comments, or tips? Contact editor@californiaenergyjournal.com.

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Top Stories from the California Energy Journal

California Congress Members Challenge Federal Use of DPA for Sable Pipeline Restart (September 10, 2026) – A group of Democratic members of Congress has asked a federal court to invalidate the Trump administration’s use of national security emergency powers to support the restart of Sable Offshore Corp.’s Santa Ynez Pipeline System. Read more.

Trump Expands Interior’s Energy Authority Under Defense Production Act (September 14, 2026) – President Donald Trump expanded the Interior Department’s authority over energy production and distribution under the Defense Production Act. The change could increase the department’s role in federal efforts to restart offshore oil production in California. Read more.

California News and Analysis

Offshore oil

• Lawmakers file brief challenging federal intervention in Sable pipeline restart. A group of 18 members of Congress led by Rep. Salud Carbajal and Sens. Sheldon Whitehouse, Alex Padilla and Adam Schiff filed an amicus brief in California v. Wright challenging the federal government’s use of the Defense Production Act to facilitate the restart of Sable Offshore’s Santa Ynez pipeline system. The brief argues that the federal government has not established the national-defense need required to invoke the statute. Santa Barbara Independent, September 8, 2026.

Regional electricity markets

• CPUC prepares rulemaking on California’s transition to a regional electricity market. The California Public Utilities Commission is preparing to open a proceeding implementing the 2025 legislation authorizing changes to CAISO governance needed for participation in a broader Western electricity market. RTO Insider, September 10 2026.

Electricity rates and reliability

• Affordability report identifies four drivers of California’s high electricity rates. Energy Innovation and GridLab argue that California can slow and eventually reverse electricity-rate increases through changes to utility capital-investment incentives, wildfire financing, distributed-energy policy, and the way climate and public-policy programs are funded. Energy Innovation, September 10, 2026.

• CPUC explains how it measures electric reliability. The California Public Utilities Commission (CPUC) published an overview of the reliability metrics and regulatory processes it uses to assess utility performance, including outage duration and frequency. California Public Utilities Commission, September 8, 2026.

Energy storage and distributed energy

• CEC reduces size and state funding for Form Energy long-duration storage demonstration. The California Energy Commission approved changes reducing Form Energy’s planned iron-air storage demonstration at PG&E’s Mendocino Substation from 1.5 MW/150 MWh to 1 MW/100 MWh. CEC funding falls from $25 million to about $16.7 million. California Energy Commission, September 9, 2026.

• EPA begins final phase of Moss Landing battery cleanup. EPA began the final phase of cleanup at Vistra’s fire-damaged Moss Landing battery storage facility, including demolition needed to reach remaining severely damaged batteries and processing the material for off-site disposal. U.S. Environmental Protection Agency, September 8, 2026.

Distributed energy, solar and storage

• Google funds PG&E virtual power plant demonstration. Google is funding a PG&E demonstration designed to aggregate tens of thousands of batteries, thermostats, and other distributed resources in two Northern California counties. Utility Dive, September 10, 2026.

• Study identifies 17.5 GW of potential distribution-connected solar and storage. An analysis by Kevala estimates that front-of-meter solar and storage connected to substations owned by California’s three major investor-owned utilities could serve approximately 17.5 GW of local summer peak load, equivalent to about 32% of forecast 2032 peak demand. Utility Dive, September 9, 2026.

Natural gas and power generation

• California gas-fired electricity generation continues steep decline. Natural gas generation fell by 15 percent in 2025 and another 26 percent during the first half of 2026, according to federal data. Growth in solar and battery storage is a major factor, although gas plants continue to provide reliability and flexibility when renewable generation is unavailable. Inside Climate News, September 10, 2026.

Hydrogen

• Environmental groups challenge Los Angeles plan to convert Scattergood power plant to hydrogen. A coalition sued Los Angeles and the Department of Water and Power over plans to convert part of the city’s largest natural-gas power plant to hydrogen, alleging the city violated CEQA when it approved the project. Los Angeles Times, September 10, 2026.

Geothermal

• BLM schedules California geothermal lease sale for October. The Bureau of Land Management plans to offer 19 parcels covering approximately 40,000 acres in six California counties at an online auction on October 27. A lease would allow exploration and potential development, subject to further review before surface disturbance. Bureau of Land Management, September 11, 2026.

Data centers

• California cities consider moratoria and restrictions on new data centers. Gilroy approved a 45-day moratorium on new data-center development applications while officials develop zoning and operating standards for future projects. Local governments in Hayward, and San Francisco are considering restrictions on new data-center development amid concerns about electricity and water use, environmental effects, and infrastructure demands. City of Gilroy, September 10, 2026; City of Hayward, September 8, 2026; Mission Local, September 10, 2026. NBC Bay Area, September 14, 2026.

Nuclear

• Coastal erosion renews scrutiny of spent nuclear fuel stored at San Onofre. Recent storm-driven erosion has revived questions about the long-term storage of approximately 3.6 million pounds of radioactive waste near the Pacific Ocean at the decommissioned San Onofre Nuclear Generating Station. Los Angeles Times, September 12, 2026.

Commentary and analysis

• Ivan Penn, “Why California Is Reconsidering Its Decision to Shun Nuclear Power, New York Times, September 9, 2026.

Climate and federal policy

• California opposes proposed changes to the National Climate Assessment. Attorney General Rob Bonta joined a multistate coalition opposing a federal proposal to amend the Fifth National Climate Assessment to restrict federal agencies’ use of findings based on certain high-emissions scenarios. California Department of Justice, September 10, 2026.

Commentary and analysis

• “Stopping California’s Climate Imperialism,” Wall Street Journal, September 8, 2026.

Permitting and siting

• Proposition 45 would expedite environmental reviews for certain projects. California voters will decide November 3 whether to create expedited California Environmental Quality Act procedures for designated projects, including clean energy, water, transportation and wildfire-mitigation projects. Proposition 45 would impose tighter review deadlines, generally give agencies 365 business days to complete environmental impact reports, and limit aspects of judicial review. CBS News Sacramento, September 8, 2026.

Beyond California

Data centers and electricity demand

• Congress to address data-center electricity costs. House leaders said the chamber would take up the bipartisan Ratepayer Protection Act, which is aimed at preventing electricity infrastructure costs associated with data-center expansion from being shifted to residential customers. Reuters, September 10, 2026.

• Microsoft reportedly plans 38 GW of data-center capacity by 2032. The company’s planned global capacity would more than triple its current roughly 12 GW footprint. Reuters, September 10, 2026.

• EPA considers easing environmental rules affecting data-center power. The Trump administration is considering regulatory changes that could make it easier to deploy temporary gas turbines and other power infrastructure serving data centers, potentially reducing permitting barriers while raising air-quality concerns. Axios, September 10, 2026.

• South Korea considers more nuclear generation as AI increases electricity demand. South Korean electricity demand is expected to rise substantially as AI data centers expand, contributing to a government debate over additional nuclear generation. Reuters, September 8, 2026.

Federal emissions policy

• EPA repeals federal greenhouse-gas standards for power plants. The EPA finalized repeal of federal greenhouse-gas standards for existing coal-fired and new natural-gas power plants, arguing that the Clean Air Act does not provide authority for the regulations. State emissions requirements remain in place. Reuters, September 14, 2026.

Nuclear

• Federal government provides up to $1.9 billion to restart Iowa nuclear plant. NextEra Energy secured a Department of Energy loan to support restarting the 615-MW Duane Arnold Energy Center, which closed in 2020. Google has agreed to purchase the plant’s output under a 25-year contract, linking another nuclear restart directly to growing data-center electricity demand. Reuters, September 8, 2026.

• Nuclear expansion remains well short of global targets. An analysis of World Nuclear Association projections finds that annual reactor construction would have to increase roughly fivefold by the late 2030s to meet international ambitions to triple nuclear capacity by 2050. Financial Times, September 8, 2026.

Oil and geopolitics

• IEA increases estimate of oil-supply losses. The International Energy Agency projected that global oil supply could fall 5.7 million barrels per day in 2026 as Middle East disruptions persist, while diesel and other refined-product markets remain particularly tight. Reuters, September 11, 2026.

Solar

• Commerce Department finalizes steep tariffs on solar imports from India, Indonesia and Laos. The U.S. Department of Commerce finalized antidumping duties of 123% on Indian solar products, 94% on Indonesian products and 65% on products from Laos, along with substantial countervailing duties after finding that producers benefited from government subsidies. Reuters, September 11, 2026.

Commentary and analysis

• Rachel Millard et. al, “‘Offensively cheap’: solar power is looking up: Chinese-made panels on rooftops across the world are changing the facts of life for big utilities,” Financial Times, September 13, 2026.

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The executive order, issued September 8, 2026, gives the secretaries of the Interior and Energy departments overlapping authority to use certain DPA powers for energy resources within their respective jurisdictions. Each secretary may exercise the delegated authority independently.

Interior gains independent energy authority

The DPA allows the federal government to prioritize contracts and allocate materials, services, and facilities considered necessary for national defense.

Executive Order 14427 amends a 2012 order that previously assigned several energy-related responsibilities principally to the Energy Department. It adds the Interior secretary to provisions covering energy production, construction, distribution, use, and related activities.

The order also gives the Interior, Commerce, and Energy secretaries independent authority under DPA provisions concerning the allocation of materials, services, and facilities.

Disputes between the Interior and Energy secretaries involving energy would generally go first to the National Energy Dominance Council. Matters involving national-defense infrastructure or military operations would also involve the National Security Council and coordination with the Department of War.

Order follows federal intervention in Sable restart

The change comes as the Trump administration seeks to help Sable restore production from the Santa Ynez Unit and transport oil through its pipeline system along the Santa Barbara County coast.

Energy Secretary Chris Wright directed Sable in March to restore the Santa Ynez Unit and pipeline system, invoking DPA authority delegated under an earlier executive order.

The Energy Department said the project could produce approximately 50,000 barrels of oil per day and reduce California’s dependence on imported crude. It characterized the pipeline system as important to energy security and military readiness.

Sable’s restart effort remains the subject of disputes involving state and local regulators, environmental organizations, and the federal government. Those disputes include questions about pipeline oversight, permit requirements, and the extent of federal authority over infrastructure connected to offshore leases.

The Interior Department oversees offshore oil and gas operations through agencies including the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement. Giving the Interior secretary independent Defense Production Act authority could provide another potential basis for federal action affecting offshore production or related infrastructure.

For more information, see the CEJ Sable Offshore issue hub.

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The lawmakers filed an amicus brief September 8 in California v. Wright, a case pending in the U.S. District Court for the Central District of California. The litigation challenges Energy Secretary Chris Wright’s March order directing Sable to restore operations under the Defense Production Act.

California Senators Alex Padilla and Adam Schiff, Rhode Island Senator Sheldon Whitehouse, and Santa Barbara-area Representative Salud Carbajal led the filing. Sixteen other Democratic senators and representatives joined them.

The brief argues that the Department of Energy failed to establish the national-defense need required to invoke the Defense Production Act. It says the department did not explain how crude produced by the Santa Ynez Unit would address an unmet military-fuel requirement or why restarting Sable’s pipelines was necessary for national defense.

The lawmakers also distinguish crude oil from the finished fuels used by the military. In their view, general references to California’s military facilities and dependence on imported oil do not establish the statutory connection between the Sable project and a specific defense requirement.

The Department of Energy ordered Sable to restore operations on March 13. The department said the Santa Ynez Unit could produce up to 50,000 barrels of oil per day and characterized its restoration as necessary to protect national security and reduce reliance on foreign oil.

The order directed Sable to restore production at the offshore Santa Ynez Unit, operate the associated pipeline system and deliver oil to California refineries. It relied on authority delegated to Wright after President Donald Trump invoked the Defense Production Act.

California subsequently sued Wright and the Department of Energy, arguing that the federal directive exceeded the government’s statutory authority and improperly displaced state law, regulatory requirements and court orders governing the pipeline.

The litigation is separate from, but related to, proceedings involving a federal consent decree governing the pipelines after the 2015 Refugio oil spill. In August, a federal judge allowed Sable to continue operating the system under federal oversight while imposing a $1.45 million penalty for violating the consent decree.

The dispute now presents a broader question about how far the federal government may use national-security authority to override or preempt state restrictions on energy infrastructure. A decision accepting the administration’s position could expand federal control over projects characterized as important to domestic energy security. A ruling for California could limit the government’s ability to invoke the Defense Production Act without demonstrating a more specific connection to national defense.

For more information, see the CEJ Sable Offshore issue hub.

Questions, comments, or tips? Contact editor@californiaenergyjournal.com.

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Top Stories from the California Energy Journal

California Threatens Lawsuit Over Cancellation of Humboldt Offshore Wind Lease (September 2, 2026) – California Attorney General Rob Bonta and the California Energy Commission (CEC) notified the Trump administration on September 1 that they intend to sue over the cancellation of a federal offshore wind lease capable of supporting up to 1.6 gigawatts off Humboldt County. California argues that the federal agreement violates the Outer Continental Shelf Lands Act. Read more.

PG&E Defers $2 Billion of Grid Investment After Wildfire Reform Fails (September 3, 2026) – PG&E Corp. announced that it will defer approximately $2 billion of planned California infrastructure investment in 2027 and review how the company is organized and financed, following the Legislature’s failure to change the state’s utility wildfire-liability system. Read more.

Federal Judge Blocks EPA Effort to Target California Emissions Waivers (September 4, 2026) – A federal judge blocked the Trump administration from reclassifying four California Clean Air Act waivers as federal rules subject to expedited congressional repeal, preserving California’s authority to enforce emissions standards affecting vehicles and small off-road engines. Read more.

California News and Analysis

Electricity rates

• CPUC opens proceeding to revise utility General Rate Case rules. The California Public Utilities Commission (CPUC) opened a rulemaking to revise its Rate Case Plan for investor-owned energy utilities. The proceeding will consider standardized filings, additional affordability information, utility return and cost reporting, wildfire-mitigation spending and measures intended to make General Rate Cases more efficient and transparent. California Public Utilities Commission, September 3, 2026.

Distributed energy, solar, and storage

• CEC considers proposed Corby battery storage project. The California Energy Commission held a public meeting on its staff assessment of the proposed Corby Battery Energy Storage System near Vacaville. The proceeding is testing the CEC’s expanded opt-in siting authority for large storage projects as commissioners weigh the project’s grid benefits against safety, land-use and environmental concerns. RTO Insider, September 7, 2026.

• California declines new funding for major virtual power plant program. California’s budget agreement did not provide additional funding for the Demand Side Grid Support program for the coming year. The program aggregates batteries and other distributed resources to provide electricity during periods of grid stress. Canary Media, September 1, 2026.

• Google, Tesla, Sunrun and PG&E launch California virtual power plant initiative. Google, Tesla, Sunrun and PG&E are among participants in a new California virtual power plant initiative bringing together residential batteries and other flexible energy resources to test their ability to provide grid services. Energy-Storage.news, September 7, 2026.

Renewable energy

• CEC evaluates wave and tidal energy development off California. A draft SB 605 assessment examines the feasibility, costs, benefits, potential development areas, environmental effects, and mitigation approaches for wave and tidal energy projects in state and federal waters. California Energy Commission, September 4, 2026.

Cap-and-Invest and climate policy

• CARB’s revised Cap-and-Invest regulations take effect. CARB’s latest amendments to California’s Cap-and-Invest Program took effect September 1. The changes tighten allowance budgets through 2045 while providing bill credits, industrial assistance and a new Manufacturing Decarbonization Incentive Fund. California Air Resources Board, September 1, 2026.

• Lawmakers approve reallocation of California climate funding. California lawmakers approved legislation revising how proceeds from the state’s Cap-and-Invest program will be allocated. The measure is part of the broader restructuring of climate spending following the extension of the carbon market through 2045. Politico Pro, September 1, 2026.

Transportation and emissions

• Federal court blocks EPA action involving California clean-car waivers. A federal judge temporarily blocked the EPA from treating California Clean Air Act waivers as rules subject to the Congressional Review Act. The dispute concerns the federal government’s effort to overturn California’s authority to enforce vehicle-emissions standards more stringent than federal requirements. The Hill, September 2026.

• Republican legislation would restrict California Clean Air Act waivers. Republican lawmakers introduced federal legislation that would limit California’s ability to obtain Clean Air Act waivers allowing the state to impose vehicle-emissions requirements more stringent than federal standards. The proposal creates another potential avenue for restricting California’s vehicle-emissions authority. Politico Pro, September 2026.

Critical minerals and geothermal

• California’s Lithium Valley projects face delays. California’s effort to develop lithium production around the Salton Sea is progressing more slowly than initially anticipated as projects face legal, financing and market challenges. CalMatters, September 1, 2026.

Oil, refining, and infrastructure

• California Resources Corporation completes acquisition of Crimson Midstream. California Resources Corporation completed its approximately $63 million acquisition of Crimson Midstream Holdings after receiving CPUC approval. California Resources Corporation, September 1, 2026.

• Study says Kern County could weather California’s transition away from oil. A new academic study concludes that Kern County could transition away from oil and gas production without major long-term economic losses if workers move into comparable jobs and governments replace revenue now generated by the industry. The study projects California oil and gas production could reach zero between 2042 and 2055 and examines how employment and public-service funding could be maintained during the transition. Bakersfield Californian, September 7, 2026.

• Legislature passes law requiring payments for families near Inglewood Oil Field. AB 1661 would require the state’s Department of Conservation to distribute the first $5,000,000 paid into the Equitable Community Repair and Reinvestment Account by well operators in the Los Angeles County Inglewood Oil Field to be used for cash assistance to families living within 21/2 miles of the identified low production wells whose children have respiratory health conditions.

Nuclear

• California opposes proposed federal nuclear-safety changes. Attorney General Rob Bonta joined multistate comments opposing Nuclear Regulatory Commission proposals to revise radiation-protection requirements and reactor-safety oversight. California Department of Justice, September 1, 2026.

Opinion, commentary, and analysis

• John Mac Ghlionn, “California’s green policies defeat its green goals — unlike in Nevada,” New York Post, September 3, 2026.

• Edward Ring, “Where does California get its energy?,” California Policy Center, September 3, 2026.

• “California opines on who profits from wildfires but not on who pays,” Financial Times, September 2, 2026.

• California’s energy legislation enters the governor’s office. The Los Angeles Times examines the package of climate and energy bills sent to Newsom at the end of the legislative session. Los Angeles Times, September 2, 2026.

Beyond California

Nuclear

• Nuclear start-ups confront shortage of plutonium. A shortage of plutonium available for civilian use is creating a potential constraint for some next-generation reactor developers whose designs depend on plutonium-based fuels. Financial Times, September 1, 2026.

Data centers and electricity demand

• Texas freezes new data-center grid connections amid concerns over speculative demand. Texas temporarily halted new data-center grid connections while examining whether large volumes of proposed electricity demand represent projects likely to be built. Reuters, September 1, 2026.

• NERC warning puts focus on reliability effects of large data-center loads. The power industry continues to respond to NERC’s Level 3 Essential Action Alert addressing sudden, large changes in computational loads, as data centers increasingly become an operational grid-reliability issue as well as a source of long-term demand growth. Energy-Storage.news, September 1, 2026.

• Google backs solar and long-duration storage project in West Virginia. Google, MN8 Energy and Eos Energy are supporting an 86-MW solar and long-duration storage project in West Virginia intended to provide around-the-clock clean electricity into PJM while supporting Google’s data-center operations. PV Tech, September 7, 2026.

Oil and geopolitics

• Spain proposes EU oil and gas profits tax to finance climate adaptation. Spain called for the European Union to establish a permanent levy on oil and gas company profits to help finance climate-adaptation measures following droughts, wildfires and other extreme weather. Financial Times, September 4, 2026.

Renewable energy

• India considers mandatory storage for new wind and solar projects. India’s Central Electricity Authority has proposed requiring new wind and solar projects to incorporate energy storage and grid-forming inverter capabilities beginning in 2027. PV Tech, September 4, 2026.

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U.S. District Judge Beryl Howell of the District of Columbia issued a preliminary injunction September 2 directing the Environmental Protection Agency to stop further action on the reclassification and take steps to restore the regulatory status quo that existed before June 12.

EPA’s use of the Congressional Review Act

The dispute stems from EPA’s decision in June to treat four previously granted California preemption waivers as “rules” under the Congressional Review Act (CRA), which allows Congress to overturn qualifying federal regulations using expedited procedures. California argued that Clean Air Act waivers are adjudicatory approvals rather than rules and therefore cannot legally be submitted to Congress for repeal under the statute.

Howell concluded that California had shown a likelihood of succeeding on its claim that EPA’s reclassification was arbitrary and capricious and exceeded the agency’s statutory authority. She ordered EPA to refrain from giving the reclassifications effect and to withdraw or correct its June action.

The four waivers at issue allow California to enforce emissions requirements for cars and small off-road engines. EPA later sought to reclassify two additional waivers covering ocean-going vessels in port and commercial harbor craft, according to the Attorney General’s office.

Implications for California emissions programs

The decision has broader implications for California Air Resources Board programs because federal Clean Air Act waivers have supported California’s ability to adopt emissions standards that are more stringent than federal requirements.

For automakers and fuel suppliers, the litigation affects the regulatory framework governing future vehicle sales and petroleum demand.

Earlier waiver repeals remain in dispute

The ruling does not restore every California vehicle policy challenged by the federal government. Congress previously used the CRA to overturn waivers associated with several California vehicle regulations, including the state’s Advanced Clean Cars II program, which was designed to phase out sales of new gasoline-only passenger vehicles beginning in 2035. California is challenging those earlier congressional actions in separate litigation.

The September 2 decision instead prevents EPA from extending the same strategy to additional California waivers while the current lawsuit proceeds.

That distinction makes the ruling significant beyond the individual emissions programs at issue. If California ultimately prevails, it could restrict the federal government’s ability to use the CRA as an alternative mechanism for dismantling CARB regulations that have already received Clean Air Act waivers.

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The company now expects to invest approximately $11.4 billion in 2027, down from its previous capital plan of about $13.4 billion. The revised plan would allow PG&E to borrow approximately $2 billion less in 2027, reducing financing costs that could otherwise be recovered from customers.

PG&E said it will continue to fund critical safety programs and comply with its Wildfire Mitigation Plan, safety-certification requirements and other regulatory obligations. The reductions could delay some electrical connections for new housing and renewable-energy projects, PG&E CEO Patti Poppe said, according to Reuters.

Wildfire legislation dies without a vote

The announcement followed the collapse of SB 492, a wildfire measure negotiated by Gov. Gavin Newsom and legislative leaders during the closing days of the session.

Newsom had sought broader structural changes intended to stabilize California’s Wildfire Fund, contain electricity rates, and reduce the risk that another catastrophic fire could force an investor-owned utility into bankruptcy.

The compromise would have accelerated compensation for wildfire victims, restricted investments in insurance claims, limited executive bonuses under certain circumstances, and created a statewide wildfire strategy. It did not include the more substantial changes to utility liability that Newsom and the utilities had sought.

Assembly leaders declined to bring the measure to a vote before the session ended. Newsom responded that the proposal did not address the system’s underlying structural problems and called on lawmakers to pursue more comprehensive reform.

PG&E strategic review

PG&E’s board created a committee of four independent directors to examine “the full range of regulatory, financial, operational and strategic alternatives” available to the company.

Poppe said California’s wildfire-liability framework “continues to create financing risks that drive higher costs, affect customer affordability, and limit investment in the energy system.”

Lower financing costs but slower investment

The reduction gives California’s wildfire-liability debate a direct infrastructure consequence. Investor-owned utilities must raise substantial amounts of capital to finance wildfire mitigation, transmission expansion, renewable-energy interconnections, electrification and service for new homes and growing electricity demand.

Higher perceived wildfire risk can increase the cost of utility debt and equity. Because regulated utilities generally seek to recover authorized financing costs through customer rates, those costs can contribute to higher electricity bills.

PG&E said deferring investment will reduce its immediate borrowing needs and benefit customers through lower financing costs. The corresponding tradeoff is that some grid projects and customer connections could take longer.

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The action challenges the California portion of a $1.22 billion settlement between the U.S. Department of the Interior and RWE U.S. Offshore covering three offshore wind leases. California alleges that federal officials violated the Outer Continental Shelf Lands Act by failing to follow statutory procedures for canceling the lease.

The notice of intent to sue gives the federal government 60 days to address the alleged violations before California may file a lawsuit.

Which Humboldt offshore wind lease is affected?

The dispute involves federal lease OCS-P 0561 in the Humboldt Wind Energy Area off California’s North Coast.

RWE acquired the 63,338-acre lease in the federal government’s 2022 California offshore wind auction and assigned it to its Canopy Offshore Wind subsidiary in 2024. The area was expected to support up to 1.6 gigawatts of floating offshore wind generation.

RWE paid approximately $157.7 million for the lease. The bid included $36.4 million in credits for workforce training, domestic supply-chain development and community benefits.

How the RWE offshore wind settlement works

RWE announced on August 6 that it had reached a $1.22 billion settlement with the Interior Department covering leases off California, Louisiana and New York.

Under the California portion, Canopy or its affiliates would invest approximately $121.3 million in other domestic energy projects. The federal government would then reimburse Canopy for the same amount and cancel the Humboldt lease.

RWE separately announced a $900 million investment for an indirect 16% interest in the Louisiana LNG project and a $300 million agreement to reserve natural-gas turbines for a planned portfolio of 15 generating projects.

RWE said it concluded that its offshore wind projects had no foreseeable path to federal permits and that the settlement would allow it to redirect capital toward projects with greater development certainty.

California alleges violations of federal offshore-energy law

California contends that the Interior Department violated the Outer Continental Shelf Lands Act by cancelling the lease without first holding a hearing or suspending it for five years. The state also alleges that federal officials failed to coordinate with affected governors, follow lease-relinquishment regulations, or consider the statutory factors governing offshore energy development.

California contends that the Interior Department cannot cancel the lease through the negotiated agreement without complying with the Outer Continental Shelf Lands Act and its implementing regulations.

California also argues that the proposed $121.3 million reimbursement exceeds the compensation permitted under federal law.

California cites offshore wind investments and targets

California says it has invested more than $100 million in ports, transmission planning and other infrastructure intended to support offshore wind development.

The state’s strategic plan calls for as much as 25 gigawatts of offshore wind capacity by 2045, which the CEC estimates could provide approximately 13% of California’s electricity. Cancellation of the Humboldt lease reduces the federal acreage available to support that goal and creates additional uncertainty for planned port and transmission investments on the North Coast.

California expands its offshore wind legal challenges

The Humboldt notice is California’s third formal legal challenge to federal agreements involving offshore wind leases off the state’s coast.

California has also challenged agreements involving Golden State Wind and Invenergy in the Morro Bay Wind Energy Area. On August 28, the state filed a lawsuit seeking to block the Golden State Wind lease cancellation and a related $120.24 million federal payment.

The Humboldt dispute could test whether the Interior Department may use negotiated settlements to terminate offshore wind leases without following the suspension, consultation and cancellation procedures California says federal law requires.

Questions, comments, or tips? Contact editor@californiaenergyjournal.com.

From the California Energy Journal

California Sues to Block Federal Buyout of Morro Bay Offshore Wind Lease (August 31, 2026) – California sued the Trump administration and Golden State Wind on August 28 to block a Trump administration agreement that would terminate a potentially 2-gigawatt offshore wind project near Morro Bay and reimburse the developer up to $120 million after investments in fossil-fuel projects. Read more.

Legislature Passes Bill Restricting Offshore Oil Expansion (August 29, 2026) – The California Legislature passed AB 1448, which would prevent existing oil and gas infrastructure on state-controlled tidelands and submerged lands from supporting new federal offshore leases issued after January 1, 2026. Read more.

Legislature Passes Virtual Power Plant Reliability Bill (August 29, 2026) – The California Legislature passed SB 913, which would create new pathways for networks of residential batteries and other customer-owned energy resources to receive compensation for supplying capacity needed to maintain grid reliability. Read more.

Legislature Passes Data-Center Energy Reporting Bill (August 29, 2026) – The California Legislature passed AB 1577, which would require large data centers to report electricity consumption and other operating information to the California Energy Commission and provide projected energy-demand information when applying for certain local permits. Read more.

Legislature Passes Bill to Examine Data-Center Rate Structures (August 31, 2026) – The California Legislature passed SB 1168, which would direct state utility regulators to examine electricity rate structures intended to ensure data centers pay an appropriate share of the costs associated with serving their substantial power demands. Read more.

Legislature Passes Plug-In Solar Bill (September 1, 2026) – The California Legislature passed SB 868, which would allow customers to use small plug-in solar devices without obtaining utility approval, signing an interconnection agreement, or paying interconnection fees. Read more.

See below for updates on additional legislation.

California News and Analysis

Oil, gas, and fuels

• Oil and gas industry sets California lobbying record. Oil and gas interests spent more than $17 million lobbying California officials during the first half of 2026, including a record $10.3 million during the first quarter, according to an analysis cited by Grist. (Grist, August 27, 2026).

• Air District releases preliminary health risk assessment for Chevron refinery. A preliminary assessment found that emissions from Chevron’s Richmond refinery produce cancer and short-term health risks above allowable levels, potentially requiring Chevron to submit a risk-reduction plan or install retrofit pollution controls. (Bay Area Air District, August 25, 2026).

Commentary and analysis

• Paasha Mahdavi and Michael L. Ross, “The worst energy policy in the world,” Science, August 27, 2026.

Offshore oil

• California prepares for federal offshore-drilling fight. California officials and lawmakers are strengthening legal and regulatory barriers against potential Trump administration efforts to expand oil development in federal waters off the state’s coast. (Politico, August 28, 2026).

Commentary and analysis

• David Helvarg, “To stop Trump’s pillaging, ‘vote the ocean’ this fall,” Los Angeles Times, September 1, 2026.

Power and utilities

• PacifiCorp proposes suspending efficiency programs. PacifiCorp and the CPUC’s Public Advocates Office proposed suspending the utility’s ratepayer-funded California energy-efficiency programs by January 1 because they have not met cost-effectiveness standards. (Utility Dive, August 25, 2026).

• CPUC approves 22.36% rate increase in Southern California. The California Public Utilities Commission (CPUC) approved a 22.36% increase in Southwest Gas rates for its Southern California territory and a 5.17% increase for its consolidated Northern California and South Lake Tahoe territory as part of the utility’s 2026 general rate case. (CPUC, August 20, 2026).

Nuclear

• Bonta opposes changes to nuclear-project environmental reviews. California Attorney General Rob Bonta joined a multistate coalition opposing proposed Nuclear Regulatory Commission changes to its National Environmental Policy Act procedures. (California Department of Justice, August 26, 2026).

EVs

• West Coast governments launch electric-truck corridor. California, Oregon, Washington, British Columbia and Baja California agreed to coordinate charging infrastructure, technical standards and policies supporting electric heavy-duty trucks along the 1,381-mile Interstate 5 corridor. (Los Angeles Times, August 27, 2026).

Climate policy

Commentary and analysis

• Russ Greene and James Conde, “California Leads a Climate Insurrection,” Wall Street Journal, August 27, 2026.

Data centers

Commentary and analysis

• Katherine Ortiz and Khari Johnson, “The data center backlash is here — and Big Tech is spending big to combat it,” CalMatters, August 28, 2026.

• Steve Puterski, “Data center debate missing a key component,” NC Pipeline, August 30, 2026.

Additional News and Analysis

Power and utilities

• Trump declares emergency over foreign power-system equipment. President Trump declared a national emergency concerning foreign-produced equipment in the U.S. bulk-power system. The order authorizes the Department of Energy to prohibit or impose conditions on transactions presenting cybersecurity, sabotage, supply-chain or national-security risks. (The White House, August 26, 2026).

Transportation

• Administration moves to reverse truck-engine efficiency rule. The National Highway Traffic Safety Administration moved to reverse an earlier interpretation allowing federal fuel-efficiency standards to regulate standalone medium- and heavy-duty truck engines. (The Hill, August 28, 2026).

Climate policy and renewable energy

• Trump administration challenges Biden-era climate findings. The Trump administration is challenging a Biden-era federal climate report as part of its broader effort to reconsider federal climate findings and regulations. (The Hill, August 27, 2026).

Commentary and analysis

• Jay Inslee, “States can build America’s affordable energy future,” The Hill, August 25, 2026.

Energy politics

• Electricity’s growth begins to reshape energy politics. The expansion of electrification, renewable generation and data-center demand is shifting political attention from gasoline prices and oil production toward electricity affordability, reliability and grid investment. (Politico, August 30, 2026)

Energy geopolitics and global markets

• China’s solar capacity surpasses coal. Solar became China’s largest source of installed generating capacity at the end of July, reaching 1,286 gigawatts and 31.5% of the country’s total capacity. (Bloomberg, September 1, 2026).

• United States announces major Venezuelan oil agreement. President Trump announced an agreement giving the United States majority control over Venezuelan fields containing more than 65 billion barrels of proven oil reserves. (NBC News, August 28, 2026; CNBC, August 28, 2026).

Legislation

The 2026 California Legislature ended on September 1, 2026. Here are the latest updates.

Passed legislature (awaiting the governor’s approval)

Utility rates and customer protections

• SB 327, which would prohibit investor-owned utilities from using electricity-customer funds to oppose efforts to establish publicly owned utilities.

• SB 905, which would require the CPUC to consider reducing utility returns on certain investments made outside their general rate cases, including some undergrounding expenditures.

• AB 2589, which would require savings that investor-owned utilities receive from specified federal tax-law changes to be returned to customers rather than retained as utility profits.

• AB 2463, which would require the CPUC to provide an independent and more transparent analytical basis when setting utilities’ authorized returns on equity.

Transmission and generation

• AB 2493, which would require the California Public Utilities Commission to establish a transmission development monitor to track utility schedules and progress on transmission projects and generator-interconnection upgrades.

Renewable and emerging energy resources

• AB 1813, which would revise California’s community-renewable-energy program and the compensation available to participating projects.

• SB 925, which would require the California Energy Commission to develop a strategic plan for advancing fusion energy and address certification and environmental-review procedures for fusion projects.

• AB 1156, which would reduce Williamson Act cancellation fees for qualifying solar projects to facilitate the conversion of drought-stricken agricultural land to photovoltaic generation.

Data centers and electricity rates

• SB 886, which would require the CPUC to establish a separate electricity-rate structure for data centers and other qualifying large-load customers intended to protect other ratepayers from infrastructure costs attributable to those facilities.

• SB 887, which would prevent most data-center projects from using categorical exemptions under the California Environmental Quality Act. It would allow qualifying data centers and geothermal power plants to receive expedited judicial review as environmental leadership projects.

• AB 2383, which would impose special electricity-rate and cost-allocation requirements on data centers.

Natural-gas transition and electrification

• SB 1359, which would require the California Public Utilities Commission (CPUC) to examine ways to protect natural-gas customers from the costs of infrastructure that may become underused or abandoned as gas demand declines.

• AB 2313, which would require gas utilities to offer eligible customers an incentive to electrify instead of replacing certain residential gas service lines.

• SB 1283, which would require cities and counties to update their ordinances to expedite permitting for electric-vehicle charging projects.

Refinery closures and workforce protections

• AB 605, which would establish a state task force to examine refinery staffing and workforce issues following announcements that facilities will close or reduce operations.

Environmental review

• SB 954, which would impose additional environmental-review requirements on certain advanced-manufacturing projects seeking expedited treatment under state law.

• AB 40, which would impose additional California Environmental Quality Act requirements on certain coal-handling and coal-export projects.

Greenhouse Gas Reduction Fund allocations

• SB 193, a budget trailer bill, would establish allocation priorities for cap-and-invest proceeds, including $1 billion annually for high-speed rail and $1 billion reserved for legislative appropriation, while continuing funding for housing, transit, air-quality, wildfire-prevention and drinking-water programs.

Did not pass

• SB 1259, which would have required refineries announcing closures to disclose decommissioning and remediation cost estimates, was placed on the Assembly inactive file after its author determined it lacked the votes to pass.

• SB 493, which would have added war to the emergencies that can trigger California’s price-gouging restrictions, was withdrawn before a final vote.

• AB 193, a bill substantially similar to SB 193, would revise the allocation of proceeds from California’s cap-and-invest program, including $1 billion annually for high-speed rail, $1 billion reserved for legislative appropriation and continuing allocations for affordable housing, transit, community air protection, wildfire prevention and safe drinking water.