The California Public Utilities Commission (CPUC) has adopted new long-term energy efficiency objectives for the state’s investor-owned utilities. The decision aims to support cost-effective programs that reduce energy use, lower customer costs, and advance California’s climate and clean energy goals.
The framework is based on the CPUC’s 2025 Energy Efficiency Potential and Goals Study, which projects achievable savings through 2037. The study uses a metric called Total System Benefit (TSB) to assign a dollar value to long-term savings from energy efficiency and fuel substitution. TSB measures benefits such as reduced greenhouse gas emissions and avoided electricity generation, transmission, and distribution costs.
For 2026, the statewide forecasted TSB is $589 million, highlighting significant opportunities for cost-effective energy savings in California.
The updated objectives account for changes in market conditions. These include an increase in fuel substitution—such as moving from natural gas to electric appliances—a decrease in traditional efficiency measures within industrial and agricultural sectors, and a stricter threshold for determining cost-effectiveness.
According to the CPUC, these targets not only guide utility programs but also play an important role in broader statewide planning. They support agencies like the California Energy Commission and the California Independent System Operator by ensuring that energy efficiency is considered in long-term resource planning.
“Today’s decision sets performance targets but does not establish a budget. Utilities will request funding through separate applications to the CPUC, which will determine the appropriate budgets to meet the goals,” according to the commission.
The CPUC regulates services and utilities across California with a mission to protect consumers, safeguard the environment, and ensure access to reliable utility infrastructure. More information about their work can be found at www.cpuc.ca.gov.
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