Energy policy in California

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Energy policy in California
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Quick facts
Energy department:
California Energy Commission[1]
State population:
38 million
Per capita income:
Energy consumption
Total energy consumption:
7,858 trillion BTU[2][3]
Per capita energy consumption:
209 million BTU
Energy spending
Total state energy spending:
$136, 096 million
Per capita energy spending:
Residential natural gas price:
$10.36 per thousand cubic foot
Residential electricity price:
15.71 cents per kWh
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Energy PolicyEnergy policy in the United StatesFracking in CaliforniaEnergy and environmental news
Energy policy in California depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in California, and many other states, focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and the use of renewable energy.[4] As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves trade-offs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in California

Energy overview

State facts

Below are quick facts about California's energy climate.


  • imports one-fourth of its electricity consumption.
  • has fossil fuels in the form of crude oil, as well as some natural gas reserves, but no coal.
  • has renewable energy in the form of biomass and biofuels, hydropower, geothermal, wind and solar energy.
  • consumes almost 10 percent of the nation's ethanol, and is the 15th largest producer of ethanol.[5]
  • is one of the nation's top producers of crude oil, producing about 10 percent of the nation's total oil.
  • has five interstate natural gas pipelines and eight crude oil pipelines.
  • has the 3rd largest petroleum refining capacity in the nation.
  • mandates that 33 percent of all electricity come from renewable sources by 2020.[6]

In California

  • residential energy use per person is among the lowest in the nation.
  • the transportation sector consumes about 38 percent of the total energy consumed, making it the largest consumer of energy in the state.
  • natural gas is the main source of energy and gasoline is the second largest source.
  • two out of three homes use natural gas as the main source of heat for homes.
  • over 25 percent of electricity was generated from renewable sources.[7]
  • renewable energy sources made up about 32 percent of net energy generation in 2011.[6]

Available energy resources

California has traditional energy resources such as oil and natural gas. California is one of the top three refiners of crude oil. California has petroleum reservoirs along the Pacific Coast and in the Central Valley. The San Joaquin basin in the Southern part of the Central Valley has the greatest potential. There are further potential reserves offshore of both oil and natural gas. The supply of natural gas is located in the Central Valley, along the Southern California Coast, and the coastal basins onshore in Northern California. California also has over a dozen natural gas storage fields. California produces no coal, and has shifted away from coal use in all its forms.[6]

California has renewable energy resources that contributed about 25 percent of the electricity in 2011 according to the U.S. Energy Information Administration (EIA). California is a leading producer of energy from renewable sources such as geothermal, solar and biomass. Further, California is a top producer of electricity from hydropower. Geothermal and wind power resources exist along the coast and mountain ranges, as well as its border with Nevada. Solar power is used in the state's deserts and the California Solar Initiative offers cash back for installing solar power systems on rooftops of homes and businesses. California has the largest hydroelectric facility in the world, which is known as "The Geysers," and is located in the Mayacamas Mountains (a range north of San Francisco). Much of the state is ripe for wind energy, but developments are hindered because about three-fourths of the state's land is excluded from development because the land is set aside as wilderness. Still, California is second in the nation for wind energy installations.[8] Biomass is another renewable energy area in which California leads the nation in production.[6]

Consumption and prices

Energy consumption in California
CA energy consumption chart.png

     Transportation       Residential     Industrial       Commercial
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As shown on the pie chart to the right, in 2011 roughly one-third of California's energy use was for transportation and one quarter for manufacturing; the rest was used mostly in residential and commercial buildings--for heating, cooling, lighting and other functions. Agriculture accounts for a sizable part of total energy use in California, ranking 16th in total farmland. Most of the energy used in the state is in the form of natural gas (used primarily for heating homes), followed closely by petroleum.[6]

Petroleum is used primarily in the form of gasoline and diesel fuel in California and prices of both track the national average, though the price in California has been higher than the national average for the last five years. [10][11] According to the EIA's February 2014 report, the federal excise tax is 18.40 cents/gallon of gasoline and 24.40 cents/gallon of diesel fuel. In addition to that, California collects a total tax of 38.16 cents on every gallon of gasoline and gasohol fuel, as well as an 12.16 on diesel, which ranks it at the second highest in the United States.[12][13] Reformulated gasoline is required in the state. There is a special blend, California Reformulated Gasoline (CaRFG), that was created to limit the amount of chemicals such as sulfur and benzene burning the fuel may emit. There are stricter requirements in ozone non-attainment areas. California leads the nation in registered alternatively fueled vehicles as well as sale of reformulated gasoline because everyone in the state has to purchase reformulated gasoline.[6]

Comparisons tables

The table below compares California's consumption and spending for energy, as well as prices for natural gas and electricity and carbon emissions to those of Texas, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Texas's rank of first in carbon emissions means that it has the highest emissions in the nation, meaning California is second in the nation behind Texas.
  • Per capita income in California is higher than the national average, and much higher than in Texas, which at 26th ranks 10 places behind California’s ranking of 16th in per capita income.
  • These two states are very similarly placed in the most populous, highest overall energy consumption and spending.
  • Per capita energy consumption in California (at 47th) is significantly lower than in Texas (at sixth).
  • Per per capita spending in California is significantly lower because it ranks 47th to California's ranking of fifth.
  • California's natural gas price is much lower, ranking 49th, than Texas's natural gas price, ranking 11th.
  • Electricity prices are significantly higher in California which was ranked at the sixth highest price in the nation, compared to Texas's ranking of 21. This means that only five states have higher electricity prices than California.
Consumption and Expenditures Comparisons Summary
Type CaliforniaTexasU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population38 million126.1 million2313.9 million
Per Capita Income Average$44,98016$41,47126$42,693
Total Consumption7,858 trillion BTU212,207 trillion BTU197,301 quadrillion BTU
Per Capita Energy Consumption209 million BTU47476 million BTU6312 million BTU
Total Spending on Energy$136.096 billion2$169.290 billion1$1,394,088 million
Per Capita Spending on Energy$3,61247$6,6055$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$10.3649$18.5511$12.48
Price of Electricity, cents per kWh15.71611.72112.31
Total Carbon Dioxide Emissions, million metric tons (2010)369.82652.615,631
*Rank is from highest to lowest.

Two out of three homes in California use natural gas as their primary heating source, which is greater than the national average. This is most likely due to the low cost of natural gas in the state. One quarter of the state still uses electricity despite the higher than average price in California.[6]

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in California
Source California 2011 U.S. average 2011
Natural gas 66.2% 49.5%
Fuel oil 0.3% 6.5%
Electricity 25.5% 35.4%
Liquid Petroleum Gases (LPG) 3.1% 5%
Other/none 4.8% 3.6%

Production and transmission

California produced about 2,624 trillion BTU of energy in 2011. Of that about half came from crude oil, approximately 32 percent from renewables (making renewable resources the second largest source of energy in the state). Also, about 15 percent of total energy production came from nuclear power, making it the third largest source. 30.97 percent came from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[6]

Energy production by type in California, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 1,123.4 42.8% 9.39%
Natural gas 279.7 10.66% 1.06%
Nuclear 383.6 14.62% 4.64%
Biofuels 25 0.95% 1.3%
Other 812.8 30.97% 11.41%

Average electricity consumption in Californian homes is among the lowest in the nation, according to the EIA's Residential Energy Consumption Survey. The electricity produced and consumed in California is primarily from natural gas, which produces about three fifths of the total. Most of the natural gas used in electricity generation is imported through pipelines from Arizona, Nevada and Oregon. Over 25 percent of the electricity generated in California in 2011 was from renewable sources such as hydropower or what the EIA classifies as ‘other’ renewable energies. About 10 percent of electricity generated in California is from nuclear reactors.[6][14]

There are eight major natural gas utilities in California. The largest providers are Pacific Gas and Electric and Southern California Gas. The primary interstate pipelines that deliver imported natural gas to California customers are the Gas Transmission Northwest Pipeline, Kern River Pipeline, Transwestern Pipeline, El Paso Pipeline, the Ruby Pipeline, Questar Southern Trails and Mojave Pipeline. The Federal Energy Regulatory Commission (FERC) regulates the transportation of natural gas on the interstate pipelines. The California Public Utilities Commission (CPUC) often participates in the FERC regulatory process in order to ensure that the interests of California natural gas consumers are represented adequately.[15][16]

There are 32 major electric utilities in California and there are several smaller utilities that are run by local municipalities. The two major companies are Pacific Gas and Electric and Southern California Electric.[17] The California Independent System Operator (CAISO) manages most of the electricity transmission grid in California. The California ISO is the only independent grid operator in the western part of the nation.[18]

Where electricity comes from in California[19]
Type Amount generated (MWh) % of state** % of U.S.**
Natural gas-fired 10,080,000 60.26% 0.99%
Coal-fired 76,000 0.45% 0%
Nuclear 1,581,000 9.45% 0.2%
Hydroelectric 1,469,000 8.78% 0.46%
Other renewables 2,853,000 17.06% 1.41%
Total net electricity generation 16,728,000 100% 0.41%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Energy policy

Policy Issues
California was the first state to regulate greenhouse gas emissions. The state is in a unique position of having high levels of both traditional and renewable energy resources and the state generally attempts to balance the extraction and use of the two. California also has a very high Renewable Portfolio Standard of 33 percent renewable energy by 2020.
See also: Fracking in California

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves trade-offs in which energy production and prices are weighed against environmental concerns and efficiency. The California Renewable Portfolio Standard (RPS), first created in 2002, set a goal of 33 percent of electricity generation from renewable resources by 2020. Eligible resources that count towards the 33 percent goal include wind, solar, geothermal, biomass, biogas and small hydroelectric generation facilities. California leads the nation in electricity generation from geothermal energy, solar energy and biomass. Utilities can comply with the RPS goals in two ways, by purchasing electricity generated from renewable resources, or by purchasing renewable energy credits. California's RPS legislation allows the purchase of renewable energy credits in order to meet the standard. The Western Renewable Energy Generation Information System (WREGIS) tracks renewable energy generation and creates the renewable energy credits that are purchased in order to meet the standard. The California Public Utilities Commission also authorized the use of tradable renewable energy credits (TRECS) for RPS compliance.[20][21][22][23]

California was ranked as the second most efficient state by the American Council for an Energy-Efficient Economy in November of 2013.[24] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gain in energy efficiency will be eroded as consumers consume additional goods and services."[25][26] California ranked second most energy efficient state in the nation by the American Council for an Energy-Efficient Economy.[27]

Major legislation

  • Assembly Bill No. 327 (2013), updated the existing RPS legislation in California. California's RPS goal is to have 33 percent of its electricity from renewables by 2020, and then to maintain that in subsequent years. Assembly Bill 327 allows the CPUC to create procurement requirements in excess of the already implemented interim goals. Publicly owned municipal utilities (POUs) are not regulated by the CPUC but are still affected by the law. Their governing boards are charged with establishing procurement requirements based on the interim goals above.[28][29]
  • Senate Bill 1,565 (2004) requires that the California Public Utilities Commission adopt a strategic plan for the state's electric transmission grid in order to foresee and prevent problems. The plan's recommendations are included in the Strategic Transmission Investment Plan produced by the California Energy Commission.[30][31]
  • Global Warming Solutions Act, Assembly Bill 32 (2006) requires that the state create a plan to cap greenhouse gas emissions at the state's 1990 levels by 2020. California was the first state in the nation to impose a cap on greenhouse gas emissions (GHG) and include enforceable penalties. The bill also includes a cap-and-trade program, which is a market-based method of decreasing the emissions of the state.[32][33]
  • Senate Bill 375 (2008) expands California's climate action goals to reduce GHG emissions through coordinating transportation and land use planning in order to create more sustainable communities. The legislation mandates that each community create a Sustainable Communities Strategy (SCS) which delineates how a community will decrease its GHG emissions.[34][35]
  • Title 13, California Code of Regulations, Sections 2250-2273.5 requires California residents to purchase reformulated gasoline. California Oxygenated Clean Burning Gasoline is being implemented in three phases. The first phase eliminated lead from gasoline, the second phase set specifications for certain kinds of emissions (sulfur and benzenes) and the third phase eliminated methyl-tertiary-butyl-ether from California gasoline.[36]
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State energy policy

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Energy policy ballot measures

Voting on Energy
Energy policy
Ballot Measures
By state
By year
Not on ballot
See also: Energy on the ballot and List of California ballot measures

Ballotpedia has tracked 15 ballot measures relating to state and local energy policy in California.

  1. California's AB 32, the "Global Warming Solutions Act of 2006"
  2. California Proposition 10, Alternative Fuels Initiative (2008)
  3. California Proposition 12, Regulation of Public Utilities (1974)
  4. California Proposition 12 (1976)
  5. California Proposition 16, Bonds for Water and Electrical Projects (1924)
  6. California Proposition 16, Supermajority Vote Required to Create a Community Choice Aggregator (June 2010)
  7. California Proposition 3, Tax Exemption for Alternative Energy (June 1978)
  8. California Proposition 39, Income Tax Increase for Multistate Businesses (2012)
  9. California Proposition 3 (1976)
  10. California Proposition 7, Standards for Renewable Resource Portfolios (2008)
  11. California Proposition 7, Tax Assessments of Solar Energy Improvements (1980)
  12. California Proposition 8, Bonds for Alternative Energy (June 1980)
  13. California Proposition 80, Regulation of Electric Service Providers (2005)
  14. California Proposition 87, Alternative Energy Oil Tax (2006)
  15. California Proposition 9, Mandates on Internal Combustion Fuels (June 1972)

Utility policy ballot measures

See also: Local utility tax and fees on the ballot

Ballotpedia has tracked 1 ballot measures relating to local utility tax and fees in California.

  1. California Utility User Taxes

Government agencies and committees

  • The California Energy Commission is the state's primary energy policy and planning agency. The commission plans for future energy needs, promotes energy efficiency and supports research for innovations dealing with renewable energy. The governor appoints the members of the commission, but the Senate has to approve the appointments. Of the members, at least one must be from the public, and the remaining members represent different fields of study such as economics and engineering. The commission also runs the California Energy Almanac that provides information on utilities and other energy related issues for the public.[40][41]
  • The California Public Utilities Commission (CPUC) regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit and passenger transportation companies. The commission is formed of five Governor-appointed members. The mission of the CPUC is dedicated to ensuring consumer safety, reliable utility service at reasonable rates, protecting against consumers from fraud and promoting the health of California's economy.[42]
  • The California Natural Resources Agency is responsible for the historical, cultural and natural resources in the state. The agency oversees 8 departments, 5 boards, 11 commissions, 2 councils and 10 conservancies. The California Secretary for Natural Resources is responsible for providing strategic help to the organizations the agency oversees.[43][44]

Major organizations

  • The California Municipal Utilities Association (CMUA) was incorporated in order to protect the interests of California’s consumer-owned utilities before the California Legislature. CMUA advocates for policies that may have a large impact on California's energy and utilities. The CMUA also educates its members by holding meetings and providing press releases.[45]
  • The Stanford Precourt Institute for Energy (PIE) serves as a common hub for a deep network of experts. PIE funds research and provides a venue for intellectual exchange among scholars and those seeking energy solutions. PIE holds weekly energy seminars to inform the Stanford community.[46]
  • The University of South California's Energy Institute (USCEI) was created in 2008 in order to facilitate a university-based framework to expand and support energy-related research. The USCEI develops new renewable energies, helps implement more energy efficient technologies and evaluates the impacts of climate change.[47]
  • The Desert Renewable Energy Conservation Plan (DRECP) strives to conserve and manage plant and wildlife communities in the desert. DRECP ensures that renewable energy developments in desert areas are done so in a timely way. DRECP maintains that it is necessary to streamline the process of permitting renewable energy projects in order to meet the state's RPS goal. DRECP provides press releases and research on energy projects.[48]
  • The Energy Upgrade California builds a network of different energy related groups in California. Energy Upgrade California has a broad value proposition that encourages consumer behaviors that save energy and reduce emissions. Energy Upgrade California also works with contractors and builders to help educate them about the ways that energy efficiency that can benefit them. The group provides assistance in obtaining incentives and rebates for energy efficiency and renewable technologies.[49]

In the news

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See also

External links


  1. California Energy Commission, "About the California Energy Commission," accessed March 6, 2014
  2. These figures come from the EIA State Profiles and Energy Estimates, California Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Prices will be updated on this page biannually.
  3. U.S. Energy Information Administration, "California Overview," accessed February 5, 2014
  4. California Energy Commission, "2013 Integrated Energy Policy Report," accessed March 6, 2014
  5. Nebraska Government, "Ethanol Facilities' Capacity by State," January 14, 2014
  6. 6.0 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 U.S. Energy Information Administration, "California Profile Analysis," December 18, 2013
  7. California Energy Commission, "California Renewable Energy Overview and Programs," April 10, 2013, accessed March 6, 2014
  8. American Wind Energy Association, "California Wind Energy," March 6, 2014
  9. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  10. Gas Buddy, "California," accessed March 10, 2014
  11. To compare current gasoline prices in California to the U.S averages, go to
  12. U.S. Energy Information Administration, "Petroleum Marketing Monthly" February 2014," accessed February 14, 2014
  13. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  14. U.S. Energy Information Administration, “State Energy Data System, Production,” accessed February 18, 2014
  15. California Public Utilities Commission, "California Energy Maps," accessed March 7, 2014
  16. California Public Utilities Commission, "Natural Gas and California," September 7, 2013
  17. California Energy Commission, "California Electric Utility Service Areas," accessed March 7, 2014
  18. California ISO, "Understanding the ISO," accessed March 7, 2014
  19. These figures come from the EIA State Profiles and Energy Estimates California Overview, accessed March 6, 2014
  20. Database of State Incentives for Renewables and Efficiency, "Renewables Portfolio Standard," October 30, 2013
  21. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  22. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  23. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  24. American Council for an Energy-Efficient Economy (ACEE), 2013 State Energy Efficiency Scorecard, November 2013," accessed February 21, 2014
  25. International Risk Governance Council, "The Rebound Effect: "Implications of Consumer Behavior for Robust Energy Policies," accessed March 17, 2014
  26. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013
  27. American Council for an Energy-Efficient Economy, "California," November 8, 2013, accessed March 7, 2014
  28. Database of State Incentives for Renewables and Efficiency, "Renewables Portfolio Standard," October 30, 2013
  29. California Legislature, "Assembly Bill No. 327," October 7, 2013
  30. California Energy Commission, "Transmission," accessed March 7, 2014
  31. California Energy Commission, "Strategic Transmission Investment Plan," December 2009
  32. California Environmental Protection Agency, "Assembly Bill 32: Global Warming Solutions Act," accessed March 7, 2014
  33. Institute for Energy Research, "California," accessed March 7, 2014
  34. California Environmental Protection Agency, "Sustainable Communities," March 5, 2014
  35. Institute for Energy Research, "California," accessed March 7, 2014
  36. California Environmental Protection Agency, "The California Reformulated Gasoline Regulations," October 9, 2012
  37. California State Senate, "Welcome to the Senate Standing Committee on Energy, Utilities and Communications," accessed March 7, 2014
  38. California State Assembly, "Welcome to the Committee on Natural Resources," accessed March 10, 2014
  39. California State Assembly, "Welcome to the Committee on Transportation," accessed March 10, 2014
  40. California Energy Commission, "About the California Energy Commission," accessed March 7, 2014
  41. California Energy and Commission, "California Energy Almanac," accessed March 7, 2014
  42. California Public Utilities Commission, "About Us," January 28, 2014
  43. California Natural Resources Agency, "Mission Statement," accessed June 30, 2011
  44. California Natural Resources Agency, "Home," accessed July 7, 2011
  45. California Municipal Utilities Association, "About CMUA," accessed March 7, 2014
  46. Stanford Precourt Institute for Energy, "About the Precourt Institute for Energy," accessed March 7, 2014
  47. University of South California's Energy Institute, "About Us," accessed March 7, 2014
  48. Desert Renewable Energy Conservation Plan, "What is DRECP," updated July 10, 2012, accessed March 7, 2014
  49. Energy Upgrade California, "About Us," accessed March 7, 2014