New Bills Target a Range of Energy Issues, with a Focus on Affordability
Legislators introduced an array of new legislation in the 2026 legislative session. With the February 20 deadline for new bills, several policy themes begin to emerge with several areas continuing from the 2025 session. (See Year in Review: Key Energy Bills from 2025 Legislative Session).
The rising costs of gasoline and electricity has emerged as a key legislative issue with concerns surrounding the impact of data centers. Efforts to prevent oil companies from drilling offshore and to hold them liability of climate risks are likely to bring much debate. Additionally, expanding the regulation of carbon emissions and promoting renewable energy projects come in response to recent actions from the Trump administration in these areas.
Below is a brief summary of pending legislation in California.
Energy costs
SB 1161 would require the California Air Resources Board (CARB) to prepare an economic impact assessment that assesses whether and to what extent a proposal to adopt, amend, or repeal a regulation will affect low- and middle-income California households and disadvantage communities.
Electricity prices
AB 2611 would require the CEC to ensure that each electrical rate schedule does not cause an unreasonable hardship on public schools, or economically vulnerable residential customers, in hot climate zones.
SB 1233 saves a legislative spot to introduce a bill on utility rates through amendments at a later date.
AB 1677 would state the intent of the legislature to enact future legislation to require electrical corporations and gas corporations to reduce ratepayer bills by 25%.
AB 710, which would require the CPUC to require California utilities to offer a dynamic pricing option by 2028, advanced out of the Committee on Utilities and Energy.
Power and utilities
AB 2463 would require the California Energy Commission (CEC) to conduct a systemwide review of the methodologies used to determine the cost of capital and authorized return on equity for utilities and require the commission to establish and apply a baseline capital-market risk framework to serve as the analytical foundation for determining authorized returns on equity.
SB 943 would authorize the California Public Utilities Commission (CPUC) to direct larger electrical corporations to assist industrial companies in switching to electricity for industrial heat by applying “an adjustment factor to the per kilowatthour rate so as to limit the nonbypassable charge ratio.”
SB 875 would state the intent of the legislature to enact legislation that would authorize cities within the Pacific Gas and Electric Company (PG&E) service area to withdraw and separate from PG&E and either create their own public utility or join an existing municipal utility.
Data centers and utility prices
SB 886 would establish a tariff on data centers to protect ratepayers from the increased costs of supplying data centers.
SB 887 would clarify that data centers are eligible for streamlined environmental review under the California Environmental Quality Act (CEQA) but are not ministerial projects exempt from CEQA review and do not qualify for the CEQA exemption for an advanced manufacturing facility.
SB 978 would require the CPUC to establish a special rate structure for large-scale energy users, who would be defined as customers of electrical corporations operating facilities with operational requirements of at least 75 megawatts of electricity.
SB 1168 would impose surcharges on natural gas consumed by a data center or a person that consumes natural gas to produce electricity primarily for a data center and a surcharge on electricity consumed by a data center that is purchased from an electric utility.
Data center regulation
AB 1577 would require data centers to report monthly to the California Energy Commission on their power and water “usage effectiveness” and their total water consumption and the quantity of fuel consumed by onsite generators or other fuel-based energy systems.
SB 1011 would require utility companies that use AI for automated decisions to use humans to “modify or override the output of the automated decision systems and to take other specified actions.”
Offshore oil
AB 1536 is placeholder legislation that would state the intent of the legislature to introduce legislation to “establish or uphold existing local and state protections for communities impacted by the transportation and procurement of offshore oil.”
Climate liability for oil companies
SB 982 would authorize the state attorney general to bring a civil action against a responsible party for “climate-attributable damage.” (see Bill to Hold Oil Companies Liable for Climate Disasters Reintroduced.)
Gasoline tax study
AB 1421 would require the California Energy Commission to research and provide recommendations on a road user charge or a mileage-based fee system by January 1, 2027.
Carbon emissions
AB 1777 would empower the California Air Resources Board (CARB) to adopt regulations targeting emissions linked to “indirect sources,” which are facilities and land uses that attract significant mobile emissions but have historically fallen outside direct regulatory control by state authorities. (see Bill Would Expand CARB Authority over Indirect Emissions Sources.)
Renewables infrastructure
SB 1097 would state the intent of the legislature to enact subsequent legislation to streamline the permitting of energy generation, storage, and transmission projects.
AB 2516 would require the Energy Unit to serve as the state’s central entity for aggregating demand for critical electricity grid components, to coordinate the procurement of electricity grid components, and to incentivize new or existing in-state manufacturing of electricity grid components.
SB 222 would streamline permitting for heat pump HVAC and water heater systems.
SB 868 would streamline approvals for plug-in solar systems.
Nuclear moratorium
AB 2647 would end the state’s moratorium on building nuclear reactors.