February 26, 2026 CPUC Voting Meeting Preview: IRP 6,000 MW Order; Closure on Winter Gas Price Investigation

The CPUC's February 26 voting meeting is set to include significant decisions in the Integrated Resource Planning docket and the Natural Gas Price Spike investigation.

• A proposed decision in the IRP orders 2,000 MW of Net Qualifying Capacity by 2030, and an additional 4,000 MW by 2032, with no more than half of each tranche met by storage.
• A PD in the Price Spike investigation treats the winter 2022–2023 gas price spike as a system-level stress event rather than a failure of utility conduct.

The remainder of the agenda includes actions related to the Electric Program Investment Charge (EPIC), PG&E's Vehicle-to-Everything Microgrid Pilot at the Redwood Coast Airport Microgrid, and two SDG&E mid-term reliability contracts resulting from the company's Tranche 3 solicitation, authorizing 92 MW of standalone battery storage projects.

INTEGRATED RESOURCE PLANNING

A proposed decision requires California load-serving entities to procure additional clean reliability resources to address forecasted system needs in the 2029–2032 period.

The PD orders 2,000 MW of NQC online by June 1, 2030, and an additional 4,000 MW by June 1, 2032, with no more than half of each tranche met by storage. The PD also transmits updated base and sensitivity portfolios to the CAISO for use in its 2026–2027 Transmission Planning Process.

The procurement finding is based on updated Integrated Energy Policy Report load forecasts, reliability modeling using SERVM, and the risk of delayed long-lead-time resources. Eligible resources must follow the Mid-Term Reliability framework and be new, non-GHG-emitting and/or RPS-eligible, with limited credit for repowering only to the extent of incremental capacity added.

The PD does not impose a separate energy-procurement mandate, relying instead on ELCC-based capacity requirements and existing RPS and Resource Adequacy programs.

• An accompanying attachment allocates the 6,000 MW NQC obligation across investor-owned utilities, Community Choice Aggregators, and aggregated Electric Service Providers based on adjusted 2026 load shares (see table below).
• The largest shares fall on PG&E and SCE bundled service, followed by major CCAs such as Clean Power Alliance, East Bay Community Energy, and San Diego Community Power. ESP obligations are shown only in aggregate and will be conveyed confidentially to individual providers within two weeks of the decision's adoption.

INSTANT ANALYSIS: On resource eligibility, the PD excludes fossil resources, limits repowering to incremental capacity only, and permits energy-only resources solely when co-located with fully deliverable storage. The 50% storage cap is the central policy choice: it constrains over-reliance on storage and indirectly drives additional energy procurement without reopening the Renewables Portfolio Standard or imposing a separate energy mandate.

Why the PD matters for CRI readers: it establishes the next reliability obligation after Mid-Term Reliability, shapes procurement behavior through 2032, and feeds directly into the CAISO's transmission approvals with cost-recovery implications. The PD also creates a narrow window for projects to secure remaining federal incentives, increasing near-term procurement pressure even as the Reliable and Clean Power Procurement Program remains under development.

NATURAL GAS PRICE SPIKE INVESTIGATION

A proposed decision in I.23-03-008 finds that the winter 2022–2023 natural gas price spike resulted from a convergence of adverse market conditions, not misconduct by regulated utilities or storage providers.

The PD concludes that sustained cold and high precipitation significantly increased gas demand, while interstate pipeline outages and maintenance (particularly on the El Paso system) restricted supply into California at critical moments. These constraints were compounded by reduced inflows from Western Canada, the Rockies, and the Permian Basin, low regional storage inventories, and bid-week pricing that captured peak spot prices during Winter Storm Elliott.

After reviewing extensive record evidence, the PD finds no improper or imprudent conduct by PG&E, SoCalGas, SDG&E, their core procurement departments, or independent storage providers. The PD emphasizes application of the Prudent Manager Standard, rejecting hindsight-based critiques of procurement, contracting, or storage decisions. It also finds no evidence of prohibited affiliate transactions, intentional withholding of supply, or manipulation of storage withdrawals.

Rather than attempting to regulate gas commodity prices, the PD adopts a bill-shock mitigation and transparency framework for future events. It defines a "gas price spike event" as a 150% increase in the monthly core procurement charge relative to the 10-year monthly average for that month during the winter season (November–March), which would trigger a temporary cap on core procurement charges and amortization of any resulting undercollection over nine months. Under this framework, utilities would also be required to provide earlier, clearer customer notifications and information about assistance options.

The PD further orders reforms to PG&E’s Core Procurement Incentive Mechanism and SoCalGas’s Gas Cost Incentive Mechanism. Any shareholder rewards would require approval through an application rather than an advice letter, and utilities must document procurement performance and risk management more clearly. In addition, the PD directs utilities to incorporate the specific constraints observed in 2022–2023 into future procurement and hedging strategies, to expand public reporting of storage inventories, and to improve transparency for both core and noncore customers.

INSTANT ANALYSIS: The PD treats the 2022–2023 gas price spike as a system-level stress event rather than a failure of utility conduct, concluding that extreme weather, pipeline outages, reduced regional inflows, low storage inventories, and bid-week timing combined to overwhelm California’s gas supply chain. Applying the Prudent Manager Standard, the PD clears PG&E, SoCalGas, SDG&E, their core procurement departments, and independent storage providers of wrongdoing, rejecting hindsight critiques of contracting, storage use, or affiliate activity.

Rather than pursuing commodity price intervention, the PD pivots toward future bill-shock mitigation by defining a "gas price spike event" as a 150% increase relative to the ten-year monthly average for that month during the winter season (November–March), triggering a temporary cap on core procurement charges, nine-month amortization of undercollections, and enhanced customer notice requirements. The cap and notice obligations apply to PG&E, SoCalGas, SDG&E, and Southwest Gas Corporation. The PD also tightens oversight of procurement incentive mechanisms by requiring formal applications for any shareholder rewards and expands transparency through standardized monthly storage inventory reporting.

ELECTRIC PROGRAM INVESTMENT CHARGE

A proposed decision in R.19-10-005 establishes the framework for the EPIC Program's next investment cycle.

The PD adopts 13 measurable Strategic Objectives to guide EPIC 5 investments from 2026 through 2030, authorizes PG&E, SCE, and SDG&E to continue as administrators, and sets total annual funding at $185 million ($147.26 million to the California Energy Commission, the remainder split among the three IOUs).

The PD refines intellectual property rules, allowing open-source waivers and adopting the CEC's declaration-at-outset practice for pre-existing intellectual property, while denying SCE's broader request to exempt enhancements to pre-existing IP from flow-down requirements.

The PD also denies waivers of state march-in and direct licensing rights for projects involving federal entities. A more comprehensive program evaluation is ordered for 2028, and the EPIC 5 investment plan application deadline is extended to June 26, 2026.

INSTANT ANALYSIS: This PD narrows EPIC's focus rather than expanding it. The 13 Strategic Objectives shift accountability from spend to outcomes, and retaining the IOUs as administrators is a conditional extension; real leverage moves to those objectives and the 2028 evaluation. SCE's pre-existing IP exemption request is denied outright. EPIC 5 is positioned as an implementation vehicle for affordability, electrification, and resilience; whether the new objectives are used to shape or reject project proposals will be the test.

PG&E/ELECTRIC VEHICLES

Draft Resolution E-5434 approves (with modifications) PG&E’s requests to extend and restructure Pilot #3 of its Vehicle-to-Everything (V2X) Microgrid Pilot at the Redwood Coast Airport Microgrid.

The draft resolution grants PG&E additional time to complete Phase I testing and data collection, extending the deadline to June 30, 2026, after documented delays tied to Federal Aviation Administration funding, vendor instability, firmware issues, and charger damage during testing.

While Energy Division acknowledges meaningful technical progress in Phase I (particularly the validation of frequency-based controls for bidirectional EV charging), it explicitly notes that the original success metric of demonstrating five to 10 bidirectional EVs has not yet been fulfilled, given that only two vehicles are currently participating. The draft resolution directs PG&E to explain how it intends to close that gap.

For Phase II, the draft resolution approves PG&E’s proposal to abandon the original customer-enrollment and incentive structure and instead adopt a Hybrid Support Model, under which PG&E will close enrollment, return approximately $750,000 in unspent incentive funds to ratepayers, and provide V2X technical consulting to Microgrid Incentive Program projects using non-pilot resources. Energy Division concludes that this approach reasonably adapts the pilot to current market and technology constraints while preserving lessons learned and protecting ratepayers from further costs.

The earliest the Commission will consider this item is February 26.

INSTANT ANALYSIS: This draft resolution marks a retreat from scale rather than a failure of the underlying technology. It allows PG&E to complete Phase I because the operational data remains valuable, but it refuses to extend a customer-facing incentive program that lacked viable sites, equipment, and timelines. By approving a pivot to a hybrid support model and requiring unused funds to be returned to ratepayers, the draft resolution reinforces a clear principle: experimental pilots must either produce usable evidence or wind down cleanly. For stakeholders, the message is that V2X and community microgrids remain conceptually supported, but the CPUC is no longer willing to finance prolonged demonstrations ahead of real-world readiness.

SDG&E ENERGY STORAGE

Draft Resolution E-5446 approves two SDG&E mid-term reliability contracts resulting from the company's Tranche 3 solicitation, authorizing a combined 92 MW of standalone battery energy storage projects expected to come online June 1, 2027.

The draft resolution approves a 44 MW four-hour battery and a 48 MW eight-hour battery, both under 15-year tolling agreements with Golden Fields Solar VI, LLC (a Clearway project), procured to help SDG&E meet its mid-term reliability obligations under prior Integrated Resource Planning decisions.

Energy Division found the contracts were supported by a competitive least-cost/best-fit solicitation process overseen by an independent evaluator, and reasonable despite price adjustments driven by evolving supply-chain and tariff conditions.

Contract costs remain confidential, but the draft resolution approves SDG&E’s proposed cost recovery through the Power Charge Indifference Adjustment, allocating the eight-hour battery costs to the 2021 vintage and the four-hour battery costs to the 2023 vintage, with charges borne by bundled and departing-load customers as applicable.

INSTANT ANALYSIS: This draft resolution continues the CPUC’s steady build-out of mid-term reliability resources through utility-contracted storage rather than new generation, with SDG&E adding 92 MW of standalone battery capacity timed for a June 2027 online date. While contract pricing remains confidential, the draft resolution locks in long-duration (8-hour) and shorter-duration (4-hour) storage as compliance tools under the IRP-driven mid-term reliability framework, reinforcing storage's role as a reliability resource under California's capacity planning framework rather than a bridge to new gas.

The PCIA vintage split is notable: costs are explicitly assigned to 2021 and 2023 vintages, ensuring that departing load customers share in the cost responsibility and limiting future cost-shift disputes. More broadly, the approval suggests continued regulatory comfort with negotiated price adjustments in response to tariff and supply-chain volatility, provided utilities can demonstrate least-cost/best-fit outcomes under independent evaluator review.

DISTRIBUTED GENERATION

Draft Resolution E-5436 increases funding for the California Distributed Generation Statistics platform to $2.6 million per three-year contract and allows annual inflation-indexed adjustments to support ongoing maintenance and expansion.

The draft resolution directs PG&E, SCE, and SDG&E to improve data quality by revising their online interconnection application interfaces, including standardized equipment drop-downs, stronger cost validation, corrected system size calculations, and retroactive fixes to existing data.

The item also orders a rebranding of DGStats to reflect the inclusion of non-distributed-generation programs and authorizes publication of anonymized Contractors State License Board disclosure document data. Finally, the IOUs must host a public workshop and improve tracking and reporting of system decommissioning to address growing accuracy gaps as legacy systems retire.

INSTANT ANALYSIS: This draft resolution upgrades DGStats into useful regulatory infrastructure by nearly tripling funding, allowing inflation adjustments, and positioning the platform as a long-term backbone for forecasting, planning, and enforcement. The draft resolution targets data quality failures directly, mandating automated sizing, validated equipment lists, retroactive corrections, standardized cost inputs, and structured decommissioning tracking (changes that will alter historical and forward-looking Distributed Energy Resource analyses). Publishing anonymized CSLB disclosure data and rebranding the platform expands DGStats from a reporting site into a transparency and compliance tool with real market discipline effects.

SELF-GENERATION INCENTIVE PROGRAM

A proposed decision denies Bloom Energy Corp.'s petition to modify a 2011 decision (D.11-09-015) governing the Self-Generation Incentive Program, finding the request procedurally deficient.

Bloom sought to raise the program's 25% cap on annual electricity exports from incentivized systems to 50%, arguing that advances in fuel-cell technology now make greater grid exports commercially viable.

SoCalGas, filing jointly with the Center for Sustainable Energy, supported the petition on broader grounds, contending that SGIP's post-2011 policy evolution toward renewable gas constituted independent justification for revisiting the cap. The Bioenergy Association of California also supported the petition. Cal Advocates opposed it, maintaining that SGIP exists to promote on-site self-generation, not grid exports.

The PD rejects all justifications for the petition's timing, finding that technological progress and policy evolution over time are insufficient grounds for late-filed petitions.

INSTANT ANALYSIS: This is a procedural denial, not a policy judgment, but the practical effect is the same: the 25% export cap stays intact and SGIP's behind-the-meter focus is preserved. The PD demonstrates clearly that legacy program rules will not be reopened through petitions tied to technology, and any expansion of export flexibility requires a new rulemaking or legislation. Going forward, SoCalGas will need a different procedural vehicle to advance export flexibility goals for its gas-adjacent distributed resource strategy. Developers and distributed resource players should treat the constraint as durable absent a future-focused policy proceeding.