New California Energy Laws Expand Wholesale Market Access
Business owners may soon gain revenue potential from aggregated energy resources under newly signed state regulations.
Updated on Oct. 28, 2026 in Utilities
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Governor Gavin Newsom signed SB 905 and SB 913 into law on September 30, 2026, to expand the role of distributed energy resources (DERs) in California's wholesale electricity market. These regulations allow customers to aggregate multiple behind-the-meter energy resources while requiring utilities to adopt new performance-based reporting metrics.
Why it matters
Lawmakers passed these bills to address the states ongoing energy affordability crisis by better utilizing existing infrastructure and incentivizing more efficient grid participation. For business owners, these changes aim to unlock new value from onsite energy systems that were previously limited to local usage.
The legislation targets a 2 GW expansion in wholesale market participation for distributed energy resources. The CPUC has until June 2028 to establish full resource adequacy frameworks for these aggregated systems.
The players
Gavin Newsom
The Governor of California who signed the energy legislation into law.
California Public Utilities Commission
The state agency responsible for regulating utility services and enforcing compliance with the new energy metrics.
The details
The laws enable device-level telemetry, allowing multiple aggregators to manage distinct resources behind a single meter. To maintain market integrity, the legislation prohibits duplicate compensation for resources already enrolled in existing net billing tariffs. Additionally, the California Public Utilities Commission must now develop performance-based metrics for major utilities and investigate alternative financing models for capital investments.
Timeline
September 30, 2026: Governor Gavin Newsom signed SB 905 and SB 913 into law.
June 2028: Deadline for the CPUC to establish DER aggregation resource adequacy.
Market Landscape
These laws follow the precedent set by the California Public Utilities Commission's net billing tariffs to manage decentralized power. This move marks a departure from restrictive single-resource models by allowing multi-aggregator management.
Business owners with onsite energy assets should evaluate how new aggregation rules impact their current net billing agreements to avoid conflicts. Monitor upcoming CPUC guidance on performance metrics to identify potential new incentives for grid-supportive operations.
The takeaway
California is shifting toward a model where behind-the-meter assets become active grid participants rather than passive local savings tools. Operators should review their existing utility contracts to see if their equipment qualifies for aggregation under the upcoming CPUC framework.
What happens next
Operators should track the upcoming CPUC proceedings regarding performance-based metrics and the June 2028 deadline for DER aggregation eligibility.
Further reading
For more on the changing grid environment, see our Utilities coverage.
Source note: This article includes information reported by Utility Dive.
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