The California Public Utilities Commission (CPUC) has approved new long-term energy efficiency objectives for the state’s investor-owned utilities. The decision aims to promote cost-effective programs that reduce energy use, lower customer costs, and help meet California’s climate and clean energy goals.
The adopted framework relies on the CPUC’s 2025 Energy Efficiency Potential and Goals Study, which projects achievable cost-effective energy savings and fuel substitution through 2037. The study introduces the Total System Benefit (TSB) metric, which quantifies the dollar value of long-term savings from both energy efficiency measures and fuel substitution efforts. TSB considers factors such as reduced greenhouse gas emissions and avoided costs in electricity generation, transmission, and distribution.
For 2026, the statewide forecasted TSB is estimated at $589 million, indicating substantial opportunities for cost-effective energy savings across California.
The updated objectives reflect changes in available efficiency options and market trends. These include increased adoption of fuel substitution—such as replacing natural gas appliances with electric ones—a decrease in traditional industrial and agricultural efficiency measures, and a more stringent threshold for cost-effectiveness.
According to the CPUC, “These updated objectives not only guide utility programs but also play a critical role in statewide energy planning, supporting the CPUC, the California Energy Commission, and the California Independent System Operator in ensuring energy efficiency is factored into long-term resource planning.”
The commission clarified that while performance targets have been set by this decision, budget determinations will be made separately when utilities submit funding requests to meet these goals.
“The framework adopted today is based on the CPUC’s 2025 Energy Efficiency Potential and Goals Study, which estimates the amount of cost-effective energy savings and fuel substitution that can be achieved through 2037.”
Additional information about this initiative can be found at www.cpuc.ca.gov.
