Electrical corporations: distributed energy storage systems.
SB 1295
California Bills
20250SB__129596AMD INTRODUCED 2026-02-20 AMENDED_SENATE 2026-04-09 AMENDED_SENATE 2026-04-28 AMENDED_ASSEMBLY 2026-06-29 2025 SB AMD Introduced by Senator Stern (Coauthor: Senator Becker) LEAD_AUTHOR SENATE Stern COAUTHOR SENATE Becker
An act to add
Section 469.5 to the Public Utilities Code, relating to electricity. electricity Electrical corporations: distributed energy storage systems. Existing law requires the Public Utilities Commission to determine appropriate targets, if any, for each load-serving entity, as defined, to procure viable and cost-effective energy storage systems to be achieved by December 31, 2020. Existing law requires the commission to direct the state’s largest electrical corporations to file applications for programs and investments to accelerate widespread deployment of distributed energy storage systems.
This bill would require an electrical corporation, as part of the distribution planning process, to evaluate whether distributed energy storage systems can meet the identified reliability or capacity need, as provided. The bill would require an electrical corporation, if it determines that a third-party alternative may be feasible, to conduct a competitive solicitation or other transparent process to evaluate third-party solutions. Under existing law, a violation of the Public Utilities Act or of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would be part of the act, and a violation of a commission action implementing the bill’s requirements would be a crime, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.
MAJORITY NO YES YES NO NO NO NO NO NO NO The people of the State of California do enact as follows: <caml:Num>SECTION 1.</caml:Num><caml:Content><xhtml:p>The Legislature finds and declares all of the following:</xhtml:p><xhtml:p>(a)<xhtml:span class="EnSpace"/>Energy storage system deployment can provide grid capacity and grid services, and help meet resource adequacy requirements of the California electricity grid.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>Front-of-the-meter battery deployment within the service territory of the Independent System Operator is rapidly expanding, with batteries comprising roughly percent of total capacity in the interconnection queue as of mid-2025.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>From through mid-2025, battery storage capacity in California increased from megawatts to more than 16,900 megawatts, with state projections envisioning 52,000 megawatts of battery storage needed by 2045.</xhtml:p><xhtml:p>(d)<xhtml:span class="EnSpace"/>Energy storage is increasingly an affordable and attractive resource option for load-serving entities and regulators to consider, in part due to its declining costs, its modularity, and its fast average development timelines.</xhtml:p><xhtml:p>(e)<xhtml:span class="EnSpace"/>Distributed energy storage systems of not more than megawatts in capacity are well suited to meet near-term priority grid zones and high-risk grid soft spots, including constrained distribution areas and local capacity areas, areas that have been deemed higher risk for failure, have higher documented history of deenergization event occurrence, or are overly constrained with documented need for a reduction in aggregate demand serving the substation or feeder, and that can help defer traditional grid upgrade investments in the near term.</xhtml:p><xhtml:p>(f)<xhtml:span class="EnSpace"/>The inclusion of energy storage, including distributed energy storage systems, in integrated resource planning, distribution resource planning, and rate design can help incentivize load-serving entity and third-party ownership and procurement of these systems while lowering Californian’s energy costs and enabling improved grid resiliency and grid services.</xhtml:p><xhtml:p>(g)<xhtml:span class="EnSpace"/>The Public Utilities Commission and the State Energy Resources Conservation and Development Commission can leverage lessons learned from previous distributed energy resource deployment programs, including, but not limited to, the locational net benefit analysis methodology and subsequent distribution planning frameworks, to inform future distributed energy resource plans and to aid in effective systemwide rollout to address constrained distribution areas.</xhtml:p></caml:Content></caml:BillSection>"?>
SECTION
Section 469.5 is added to the Public Utilities Code , to read: 469.5. (
a) As part of the distribution planning process, an electrical corporation shall evaluate, pursuant to the comparison required by subdivision (b), whether distributed energy storage systems can meet the identified reliability or capacity need. (
b) The evaluation required pursuant to subdivision (
a) shall include a comparison of total system costs, including each of the following:
(1) The cost of the proposed infrastructure investment.
(2) The cost of procuring or deploying distributed energy storage systems.
(3) Avoided or deferred infrastructure costs.
(4) Reliability and operational benefits. (c)<xhtml:span class="EnSpace"/>The commission shall not approve rate recovery for a proposed infrastructure investment unless the electrical corporation demonstrates either of the following:</xhtml:p><xhtml:p>(1)<xhtml:span class="EnSpace"/>Nonwire alternatives are not feasible within the required timeframe.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>Nonwire alternatives are not cost effective based on the evaluation required pursuant to subdivision (b).</xhtml:p><xhtml:p>(d)<xhtml:span class="EnSpace"/>An electrical corporation may procure, own, or enter into a long-term contract for distributed energy storage systems interconnected at the distribution level to meet identified reliability or capacity needs.</xhtml:p><xhtml:p>(e)<xhtml:span class="EnSpace"/>The commission shall authorize an electrical corporation to recover the reasonable costs of, and earn a return on, distributed energy storage systems and contracts procured pursuant to this section, if those resources are determined to be cost effective.</xhtml:p><xhtml:p>(f)</xhtml:p>"?> (
c) This
section does not limit the ability of third-party providers to propose or develop distributed energy storage systems or other nonwire alternatives to meet identified system needs. (g)</xhtml:p>"?> (
d) If an electrical corporation determines that a third-party alternative may be feasible, it shall conduct a competitive solicitation or other transparent process to evaluate third-party solutions. (
e) This
section shall not be construed to delay customer energization timelines.
SEC. 2. No reimbursement is required by this act pursuant to
Section of
Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of