California Limits Utility Profits and Expands Home Energy Role

In the final days of the 2026 legislative session, Gov. Gavin Newsom signed several energy-related bills aimed at curbing utility profits and harnessing home-based clean energy. Senate Bill 913, from Sen. Josh Becker (D-Menlo Park), directs the California Public Utilities Commission to establish a pathway for virtual power plants, networks of home batteries, solar panels, EV chargers, and smart thermostats, to export electricity to the grid by June 30, 2027. Becker said the law helps leverage existing customer-owned equipment, promoting competition, reliability, and lower costs.

Becker’s Senate Bill 905 requires the CPUC to review reducing utility profit margins on lower-risk investments like undergrounded power lines, where returns often reach 9% to 10%. It also mandates utilities identify underused grid capacity to better integrate distributed resources. While Pacific Gas & Electric and Southern California Edison opposed SB 905 over concerns it may dampen investment, they expressed support for SB 913’s virtual power plant framework.

Together, the laws represent California’s clearest effort this session to hold down electricity bills by expanding the role of customer-owned systems rather than relying on utility infrastructure expansion, according to the California Solar and Storage Association.