The California Energy Center must now assess costs and benefits related to health and environmental externalities of energy generation and transmission.
Environmentalists, public health advocates, and renewable energy supporters scored a win in California, as the California Energy Commission (CEC) approved a petition that requires it assess “non-energy benefits” of various energy technologies in its policy decisions.
The approved change now requires that CEC institute a transparent rulemaking proceeding regarding how non-energy benefits (NEBs) and social costs are incorporated into CEC planning and decision-making, including the 2025 Senate Bill 100 report.
Senate Bill 100 required the state to source 60% of its electricity from emissions-free sources by 2030 and requires 100% clean energy by 2045. It also requires that California Public Utilities Commission (CPUC), the CEC, and California Air Resources Board issue a joint report to the legislature every four years, with the next report due in 2025.
For the first time, the agencies will be required to transparently create policies that pursue the 100% clean energy goal while placing a value on the environment and public health, integrating these outcomes into its determinations, planning, and decision-making processes.
The CEC will also be required to consider local benefits such as improved public health from reduced pollution and the resiliency of distributed renewable energy resources. For example, energy-efficiency programs targeting low-income and disadvantaged communities have been deemed not “cost-effective” under a cost-benefit analysis that has ignored the benefits to these families’ wellbeing.
“This is an enormous first step toward making sure California’s energy decisions don’t harm communities, air and water to benefit polluting industries and corporate utilities, and it will tip the scales toward clean energy,” said Roger Lin, a senior attorney at the Center for Biological Diversity.
The rulemaking decision marks the first positive development for distributed renewable energy in California, a state that has taken numerous regressive policy actions over the past eighteen months. The CPUC has effectively cratered rooftop, commercial, and community solar, siding with large investor-owned utilities at every turn, despite public outcry and protest.
CPUC approved NEM 3.0, which has tanked residential rooftop solar value and led to tens of thousands of jobs lost. It passed a rulemaking decision that made it harder for schools, farms, and renters to benefit from solar. It effectively put an end to the emergent community solar market, which has been massively successful in bringing more renewables online in states like New York and Massachusetts. And it is working on placing fixed monthly utility bill charges on ratepayers based on their income level, which analysts say will discourage energy efficiency and disproportionately impact lower-income customers.
While utilities are interconnecting large utility-scale solar projects, which are hailed as cost-effective solutions, electricity prices are skyrocketing in the state. The set of rulemaking decisions amount to protection of an effective monopoly by the state’s large investor-owned utilities. CPUC approved PG&E to hike electricity rates by 16% this year, continuing the trend of exploding electricity prices.
In a related bill, California Assemblymember Laura Friedman has introduced AB 2256, which would require the California Public Utilities Commission (CPUC) to fully consider the costs and benefits of rooftop solar when revisiting its net energy metering (NEM) tariff.
“The commission’s leadership will go a long way toward bringing climate justice to California’s hardest hit communities and sets a precedent that other states should follow,” said Lin. “We’ll see less pollution and unlock more clean energy funding for overburdened communities that have been last in line.”
