The California Public Utilities Commission (CPUC) approved a major electricity procurement decision requiring utilities and other retail electricity providers to secure 6,000 megawatts (MW) of new clean energy and storage capacity between 2030 and 2032. The procurement decision aims to accelerate project development before federal clean-energy tax incentives begin phasing down.
The February 26, 2026 order directs California electricity providers to procure additional zero-carbon electricity resources—including solar, wind, geothermal, and energy storage—to help meet projected electricity demand and maintain grid reliability.(Fossil-fuel generation is not eligible to meet the procurement requirement.) At least 25% of the new procurement must be from resources that have “the attributes associated with clean, firm power and/or long-duration energy storage.”
The procurement will occur in three phases:
2,000 MW of net qualifying capacity (NQC), which is the total amount of power a generating resource can reliably provide to the electrical grid, by June 2030;
An additional 2,000 MW by June 2031;
A further 2,000 MW by June 2032.
The order builds on earlier long-term procurement mandates issued by the commission through its Integrated Resource Planning process, which determines how utilities will meet California’s climate and reliability targets over the next two decades. Load-serving entities will be required to contract for new clean-energy capacity that can come online between 2030 and 2032, expanding the state’s pipeline of renewable generation projects.
Federal Tax Incentives Drive Urgency
A key driver of the procurement timeline is the schedule for federal tax incentives supporting renewable energy development. By ordering utilities to secure projects earlier, regulators hope to give developers enough lead time to begin construction while federal incentives remain available.
Federal production tax credits (PTC) and investment tax credits (ITC) have historically played a major role in financing wind, solar, and other clean-energy projects. However, federal eligibility rules require projects to meet specific construction timelines in order to qualify for full incentives.
California officials have warned that those federal timelines could limit the number of projects able to receive the credits if development schedules slip. Governor Gavin Newsom previously highlighted the issue in an executive order on clean-energy development.
Transmission Planning Integration
As part of the decision, the CPUC will also submit a generation and storage planning portfolio to the California Independent System Operator (CAISO), which is responsible for evaluating and planning new transmission infrastructure across most of the state’s electric grid.
The portfolio will guide CAISO’s transmission planning process by identifying where new clean generation and storage resources are expected to be developed, allowing the grid operator to design transmission upgrades that support those projects while meeting California reliability standards.
State regulators said the approach will help ensure that transmission infrastructure is built where it delivers the greatest system value while supporting California’s broader electric-sector greenhouse-gas reduction goals.
Meeting Long-Term Climate Mandates
The procurement order also reflects California’s broader clean-energy policy framework. Under SB 100, the state must transition to 100 percent carbon-free electricity by 2045, with interim renewable-energy targets for earlier years.
State energy planners expect electricity demand to grow substantially over the next decade as transportation, buildings, and industrial sectors increasingly electrify.
The CPUC said the additional procurement will help ensure sufficient generation capacity is available to maintain grid reliability as demand grows while advancing the state’s climate goals.