If you follow California energy policy closely, you’ve probably noticed that almost every fight — over rates, reliability, offshore drilling, data center demand, wildfire liability — gets framed as brand new. It isn’t. California has been building this system, piece by piece, for over fifty years, and the tensions playing out today are the direct descendants of choices made in the 1970s, 1990s, and 2000s.
Understanding where we are means understanding two things: how we got here, and who actually holds the levers now. Below is a map of both.
How We Got Here: Four Eras
Era 1: Building the Regulatory State (1973–1995). The oil shocks of 1973–74 turned energy security into a state priority, and California responded by building institutions rather than just riding out the crisis. The California Energy Commission was created in 1974 to handle planning and siting. Title 24 building standards followed in 1978, and by 1988–90 the state had rolled out appliance efficiency standards that would later become a national model. This era set a pattern that still holds: when California hits an energy shock, it builds a new layer of regulatory apparatus rather than a temporary fix.
Era 2: The Market Experiment (1996–2001). Then came a sharp turn. In 1996, AB 1890 deregulated the state’s electricity markets, betting that competition would do a better job than regulation. It didn’t go well. The 2000–01 electricity crisis — rolling blackouts, Enron’s market manipulation, utility near-collapse — is still the reference point anyone invokes when they want to warn against market restructuring gone wrong. By 2002, the state had pulled back, returning utilities to long-term procurement under CPUC oversight.
Era 3: Climate Policy Takes Over (2002–2018). This is the era most people associate with “California energy policy” today. The 2002 Renewable Portfolio Standard set the first real renewable growth targets. AB 32, the Global Warming Solutions Act of 2006, committed the state to cutting emissions to 1990 levels by 2020 — a genuinely aggressive bet at the time. The Low Carbon Fuel Standard (2010) took aim at transportation emissions specifically, Cap-and-Trade launched economy-wide carbon pricing in 2012, and by 2018 SB 100 had committed California to 100% clean electricity by 2045. Over sixteen years, climate policy went from one program among several to the organizing logic of the whole system.
Era 4: The Energy Trilemma (2019–present). This is where it gets harder. Wildfires and Public Safety Power Shutoffs (2019–20) put reliability back at the center of the conversation after two decades of climate policy taking priority. Storage scaled up fast in 2021–22, and Diablo Canyon’s extension signaled that nuclear wasn’t leaving after all. By 2025, AI and data centers had become a major new driver of electricity demand — a variable almost nobody was planning around a decade ago. And 2025–26 brought Cap-and-Trade reform, refinery closures, and the Sable Offshore litigation, all pointing to the same underlying problem: reliability, affordability, and decarbonization are now in open tension, and every policy choice trades off against the other two.
Who’s Actually in Charge
The history explains the pressure. The structure explains who has to respond to it.
At the top, the Governor and Legislature set policy priorities and enact the legislation and budget that everything else operates within. Below them sit the five bodies doing the actual work:
CEC (California Energy Commission) — energy planning and forecasting, efficiency and conservation, building standards, R&D.
CPUC (California Public Utilities Commission) — regulates the investor-owned utilities: rates, service, resource adequacy, procurement oversight, safety and reliability.
CARB (California Air Resources Board) — climate programs, Cap-and-Invest, the Low Carbon Fuel Standard, vehicle and fuel standards.
CAISO (California ISO) — operates the bulk power grid, manages markets, ensures reliability in real time.
Local governments — land use and permitting, building codes, local ordinances, and increasingly, Community Choice Aggregation, which has quietly shifted a meaningful share of procurement decisions down to the local level.
Around that core sit the entities that don’t run the system day-to-day but shape what it can do: the State Fire Marshal on pipeline safety, the Coastal Commission on coastal development, air districts on local air quality, and CALSTA/Caltrans on transportation infrastructure.
And California doesn’t operate in isolation. Federal partners set real boundaries: FERC on markets and transmission, DOE on funding and programs, BOEM on offshore energy, PHMSA on pipeline safety, and the EPA on Clean Air Act enforcement. Federal policy, funding, and regulation flow down into the state system and constrain what Sacramento can do unilaterally — a fact that matters more, not less, as jurisdictional fights like Sable Offshore Corp.’s litigation play out.
Why This Matters Now
Every one of the Era 4 flashpoints — wildfire liability, data center demand, offshore litigation, Cap-and-Trade’s future — runs through this same structure. Nothing gets decided by one agency alone, and almost nothing gets decided quickly. The trilemma isn’t an abstraction; it’s built into the fact that CEC, CPUC, CARB, and CAISO each optimize for a different piece of the puzzle, under legislative direction that doesn’t always resolve the tension between them.
That’s the lens worth keeping as you read whatever comes out of Sacramento next: not “what changed,” but “which era’s unfinished business is this, and which agency actually has to execute it.”