In the final hours of California’s 2026 legislative session, Governor Gavin Newsom signed a series of bills aimed at advancing clean energy, reshaping the state’s power system, and strengthening environmental protections. Among the key measures were laws promoting virtual power plants and reinforcing the state’s stance against fossil fuel infrastructure.
Senate Bill 913, authored by Senator Josh Becker (D-Menlo Park), focuses on expanding the role of virtual power plants—networks of customer-owned batteries, solar panels, electric vehicle chargers, and smart thermostats—that can be linked to help stabilize the electric grid during peak demand periods. The law directs the California Public Utilities Commission (CPUC) to develop a regulatory pathway by June 30 for these distributed energy resources to export electricity to the grid, addressing prior limitations on the compensation for such services. Becker emphasized that this approach could lower costs by maximizing existing customer-owned resources instead of investing in expensive infrastructure projects.
Complementing SB 913, Becker’s Senate Bill 905 requires the CPUC to consider lowering utilities’ profit margins on lower-risk infrastructure investments, like underground power lines, where returns currently range from around 9% to 10%. The bill also mandates greater transparency about unused grid capacity to better integrate batteries and distributed resources. The California Solar and Storage Association praised these bills as effective measures to contain electricity costs through reliance on existing home and business equipment rather than traditional utility expansion.
However, two of the state’s largest utilities, Pacific Gas & Electric (PG&E) and Southern California Edison (SCE), expressed opposition to SB 905. SCE spokesperson David Eisenhauer cautioned that maintaining affordability requires policies that balance cost reduction with continued investment in a reliable and resilient grid. PG&E acknowledged support for recognizing the value of distributed energy resources but voiced concern that the law might deter necessary utility contributions to meet rising electricity demand and stabilize rates.
Senator Becker’s proposals were considered part of a broader legislative push for clean energy, alongside a bill from Senator Scott Wiener (D-San Francisco) allowing residents to install small plug-in solar units, sometimes called “balcony solar,” without traditional permitting. This measure is intended to benefit renters and apartment dwellers who previously had limited solar access.
In addition to clean energy initiatives, Newsom signed legislation addressing fossil fuel development in the state. Assemblymember Mia Bonta’s (D-Alameda) bill requires environmental impact reports before approving any major bulk coal facility, a response to a federally backed coal export terminal proposed in Oakland. California, which no longer generates or purchases electricity from coal, has seen local environmental groups support the legislation as a safeguard against increased pollution and climate harm. Ada Waelder of Earthjustice stated the law signifies California’s commitment to public health and environmental protection.
Further measures include a law making it illegal for oil producers to use state waters’ infrastructure for new federal offshore oil leases, countering federal proposals to open California’s coastline to drilling for the first time in decades.
Despite these advances, some advocacy groups faced setbacks as Newsom vetoed bills that would have closed environmental review loopholes for manufacturing facilities in vulnerable communities and reformed the state’s community solar program.
The legislative session also concluded with the signing of SB 895 by Senator Wiener, establishing a $7.5 billion bond for research in fields including climate, wildfire prevention, and public health. The bill will be presented to voters in March 2028.
Overall, California’s recent legislative actions reflect a complex balance between promoting distributed clean energy, managing utility investments, and protecting environmental and community health amid ongoing debates on energy affordability and infrastructure development.