California’s energy policy will be shaped by many factors in 2021.  In the snapshots that follow, we have taken a high-level view at what we anticipate for the year ahead.  While we expect the pandemic will continue to move policy as it did in 2020, the realities of a new Federal Administration, while less combative in the Golden State, will embolden environmental policy in California on several fronts.   

 As the new year begins, here are some things that we are expecting to happen.

The Federal Impact on California

Once President-Elect Joe Biden is sworn into office, it is expected that he will strike most of the executive orders issued by President Trump.  He will also move to bring the United States back into compliance with the Paris Climate Accords. 

President-Elect Biden’s appointments will also push the nation towards a greener future.  However, we do not believe that any of the positions will go further than California’s current environmental policies.  Instead, it will be a push on the rest of the nation to go greener.  We also expect an increased emphasis on environmental justice and ensuring that underserved communities benefit from a green economy. 

Congress will work on a jobs package to address job losses because of COVID restrictions.  However, expect a good portion of the jobs package to push for more “green jobs.” 

Identified already are some $40 billion in unspent EPA funds – so the anticipation is for the Biden Administration to bring back Obama-era incentives for “green ideas.”

Governor Newsom on Energy and the Environment in 2021

With an outside chance of a recall, Governor Newsom will be spending the first half of the year focusing on reducing COVID’s impact on healthcare, vaccine deployment, the state budget, and jump-starting the economy.  It is likely that as COVID goes, so will the recall effort. 

Newsom will also be looking to make more appointments – the Attorney General’s position, should Becerra be confirmed, and a new member of the CPUC.  With all of this, he will have limited time to focus on other issues, especially if the recall qualifies.  Newsom will likely limit his push for more robust California environmental policies, as he is no longer at war with the President.  Instead, the Governor will probably try to work with the Biden Administration to bring the nation more in line with California’s policies.

California’s Energy Agencies and their Policy Priorities in the New Year

CAISO – The California Independent System Operator is under new leadership.  There will be growing pains as the staff get accustomed to the new CEO Elliott Mainzer, who takes over for the retired Steve Berberich, who was in charge for nine years.  Already several staffing changes have occurred and we expect more to come.  New leadership will lead to other changes within the CAISO as the agency continues to study the impacts of the new post-COVID economy on power usage as well as the impacts of renewables on system reliability.

CEC – The California Energy Commission is one agency without much change.  The Commission will continue to study ways to expedite SB 100, which calls for solely clean energy resources by 2045.

CPUC – The California Public Utilities Commission will be running with four members until the Governor appoints a successor for Liane Randolph.  The CPUC’s emphasis will be to ensure grid reliability after the blackouts of 2020 as well as minimize the impacts of wildfires and public safety power shutoffs on the grid. 

CARB – Liane Randolph is the new chair of the California Air Resources Board, replacing Mary Nichols.  With this change in leadership, we expect CARB’s focus to shift to implementing existing policies.  We also expect more emphasis on disadvantaged communities to address assertions in 2019 and 2020 that CARB was tone-deaf to its impacts on people of color. 

California Legislative Priorities on Energy and the Environment for 2021

The 2021 Legislature will begin the year by focusing on COVID, economic stimulus, and the state budget.  Unlike last year, there will be a more significant effort to move energy-related bills or have them in a position to be moved in 2022.  Among the items that we anticipate seeing:

Oil & Gas – There is already a bill calling for no new gas hookups in new home construction.  Other anticipated bills include suggesting an end to fracking, limiting new oil drilling permits, and calling for Aliso Canyon’s closure.  

Thermal Plants – Last year, there were efforts to stop once-through cooling facilities from receiving extensions to stay in operation.  Expect a similar push this year, calling for no more extensions.  It is also anticipated that studies and bills will call for all energy facilities to move away from combustion of any kind. 

Storage – NextEra has spent more than $10 million over the past four years in lobbying and campaign donations in hopes of getting their Eagle Crest Pumped Storage Project approved.  While NextEra has not had success to date, it is anticipated that another Eagle Crest bill will be introduced.  In addition, look for the Legislature to push for more storage requirements and incentives to address some reliability issues.

Other Energy Bills – There will be a push for more renewable fuels such as hydrogen.  Northern California legislators will be looking into wildfire mitigation legislation as well as more oversight on the public safety power shutoffs.  The Legislature is looking for guidance from the CPUC regarding any potential system reliability legislation, although new thermal generation will meet significant opposition.  The Legislature will once again look at microgrids to help solve some of the system’s problems.  Bills regarding energy affordability as well as greening the system will also be introduced.

As stated previously, the realities of the pandemic’s impacts on life and the economy will be the prime mover during the 2021 Legislative Session. As the pandemic goes, so too will movement or non-movement of policies on all things not related to the pandemic.