Last week, California Governor Jerry Brown signed the Clean Energy and Pollution Reduction Act of 2015.  The law establishes ambitious energy efficiency and renewable energy goals for California, including increasing from 33% to 50% the procurement of California’s electricity from renewable sources and doubling the energy efficiency savings through energy efficiency and conservation.

Key provisions of the new law:

  • Renewable Energy: California’s existing Renewables Portfolio Standards Program aims to increase the amount of electricity generated from renewable energy sources to at least 33% by December 31, 2020.  The new law increases that renewable energy target to 50% by December 31, 2030, with interim targets of 40% by the end of 2024 and 45% by the end of 2027.
  • Energy Efficiency: The new law requires the California’s Energy Resources Conservation and Development Commission to set annual targets for statewide energy efficiency savings, with the goal of doubling of statewide energy efficiency savings in electricity and natural gas final end uses of retail customers (such as homes, businesses and factories) by January 1, 2030.  California’s Public Utilities Commission must establish efficiency targets for electrical and gas corporations consistent with this goal.
  • California Independent Systems Operator (“ISO”): Current law requires the ISO to ensure efficient and reliable operation of California’s electrical transmission grid.  The new law provides for the transformation of the California ISO into a regional organization to promote the development of regional electricity transmission markets in the western states.  Specifically, the new law requires the ISO to propose governance modifications to accomplish this goal, which must be approved and implemented by the state legislature.