Utility Structure - California Climate and Energy Collaborative

Barrier 6: Utility Structure

Barrier Statement

Investor-owned utilities’ concentrated control over energy infrastructure limits public power and community solutions, creating legal and procedural hurdles for municipalization and keeping many projects unnecessarily under utility purview.

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How communities are experiencing this barrier

View the details on what communities have shared with SLECC from across the state.

Key challenge discussed in - San Diego, Statewide

Local governments and tribes often learn of CPUC decisions affecting utility operations only after they are made, leaving them without meaningful input on structural decisions that shape energy access and costs

Key challenge discussed in - San Diego, Statewide

Utility resistance and misaligned incentives: Investor-owned utilities (IOUs) prioritize shareholder profits and large-scale transmission projects that generate returns, while resisting or delaying distributed solutions such as rooftop solar, community solar, microgrids, and battery storage. They have little incentive to value or compensate distributed energy resources, undervalue battery reserves, and often oppose regulatory changes that would enable local or community-driven resilience. As a result, local governments, tribes, and communities face persistent legal, procedural, and financial hurdles in advancing decentralized clean energy solutions.

Key challenge discussed in - San Diego, Statewide

Efforts to create public power utilities or municipalize existing systems face extensive legal battles, long timelines, and high costs, discouraging communities from pursuing alternatives

Key challenge discussed in - Statewide

Additional coordination challenges arise when jurisdictions have a different electrical and natural gas utility.

Key challenge discussed in - San Diego

Stakeholders voiced mistrust that utilities and energy markets are manipulating rates and slowing reforms to protect profits, increasing skepticism about decarbonization policies

Local Solution Opportunities

SLECC stakeholders have brainstormed the following solution opportunities that can be taken by local leaders. Existing examples of progress or pathways to make further progress are highlighted if known.

State Solution

Exploring alternatives to IOU service in response to persistent barriers. Some jurisdictions described examining municipalization or other alternatives due to interconnection and service delays.

Existing Examples of Progress:

Further Progress Pathways

Region(s): Statewide

Local Solution

Align CAPs with community power goals – Local climate plans should include explicit pathways for public or community-led energy solutions, helping frame municipalization as part of climate action

Existing Examples of Progress:

Further Progress Pathways

Region(s): San Diego

Local Solution

Regional governance advocacy – Establish regional coordination tables to push collectively for fairer utility processes and accountability

Existing Examples of Progress:

Further Progress Pathways

Region(s): San Diego

State Solution Opportunities

SLECC stakeholders have brainstormed the following solution opportunities that can be taken by state leaders. Existing examples of progress or pathways to make further progress are highlighted if known.

State Solution

Increase transparency in utility decision-making – Mandate open and public review processes for utility planning and investment decisions

Existing Examples of Progress:

Further Progress Pathways

Region(s): San Diego, Statewide

State Solution

Reform IOU incentive structures – Require utilities to support distributed resources and community-scale projects, not just centralized assets

Existing Examples of Progress:

Further Progress Pathways

Region(s): San Diego, Statewide

State Solution

Support CCA expansion – State should provide technical and financial assistance to CCAs, recognizing them as key actors in democratizing energy

Existing Examples of Progress:

San Diego Community Power, a Community Choice Aggregator (CCA) focused on providing more renewable energy at lower costs. It manages procurement of locally-sourced energy and energy efficiency programs, including SD Regional Energy Network, and implements programs like Solar Battery Savings, which placed batteries in 1,600 homes.

Further Progress Pathways

Region(s): San Diego, Statewide

Solution Spotlight

San Diego Community Power, a Community Choice Aggregator (CCA) focused on providing more renewable energy at lower costs. It manages procurement of locally-sourced energy and energy efficiency programs, including SD Regional Energy Network, and implements programs like Solar Battery Savings, which placed batteries in 1,600 homes.

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Additional Resources

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