SB 1295: Electrical corporations: distributed energy storage systems.
The bill aims to increase the deployment of energy storage systems in California. The Public Utilities Commission must consider procurement strategies for a statewide total of up to 40,000 megawatts of energy storage systems by January 1, 2030. Load-serving entities must also procure viable and cost-effective energy storage systems, with a target of achieving this by December 31, 2040. Load-serving entities can meet up to 50% of their procurement target through energy storage systems they own. The commission must reconsider procurement strategies and targets every three years.
| Aug. 13, 2026 | August 13 hearing: Held in committee and under submission. |
| Aug. 05, 2026 | August 5 set for first hearing. Placed on suspense file. |
| Jun. 29, 2026 | Read second time and amended. Re-referred to Com. on APPR. |
| Jun. 25, 2026 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 14. Noes 1.) (June 24). |
| Jun. 04, 2026 | Referred to Com. on U. & E. |
| Amended IN Assembly June 29, 2026 |
| Amended IN Senate April 28, 2026 |
| Amended IN Senate April 09, 2026 |
| Introduced by Senator Stern (Coauthor: Senator Becker) |
February 20, 2026 |
LEGISLATIVE COUNSEL'S DIGEST
The people of the State of California do enact as follows:
The Legislature finds and declares all of the following:
(a)Energy storage system deployment can provide grid capacity and grid services, and help meet resource adequacy requirements of the California electricity grid.
(b)Front-of-the-meter battery deployment within the service territory of the Independent System Operator is rapidly expanding, with batteries comprising roughly 46 percent of total capacity in the interconnection queue as of mid-2025.
(c)From 2018 through mid-2025, battery storage capacity in California increased from 500 megawatts to more than 16,900 megawatts, with state projections envisioning 52,000 megawatts of battery storage needed by 2045.
(d)Energy storage is increasingly an affordable and attractive resource option for load-serving entities and regulators to consider, in part due to its declining costs, its modularity, and its fast average development timelines.
(e)Distributed energy storage systems of not more than 10 megawatts in capacity are well suited to meet near-term priority grid zones and high-risk grid soft spots, including constrained distribution areas and local capacity areas, areas that have been deemed higher risk for failure, have higher documented history of deenergization event occurrence, or are overly constrained with documented need for a reduction in aggregate demand serving the substation or feeder, and that can help defer traditional grid upgrade investments in the near term.
(f)The inclusion of energy storage, including distributed energy storage systems, in integrated resource planning, distribution resource planning, and rate design can help incentivize load-serving entity and third-party ownership and procurement of these systems while lowering Californian’s energy costs and enabling improved grid resiliency and grid services.
(g)The Public Utilities Commission and the State Energy Resources Conservation and Development Commission can leverage lessons learned from previous distributed energy resource deployment programs, including, but not limited to, the locational net benefit analysis methodology and subsequent distribution planning frameworks, to inform future distributed energy resource plans and to aid in effective systemwide rollout to address constrained distribution areas.
SEC. 2.SECTION 1.
469.5.
(a)(c)The commission shall not approve rate recovery for a proposed infrastructure investment unless the electrical corporation demonstrates either of the following:
(1)Nonwire alternatives are not feasible within the required timeframe.
(2)Nonwire alternatives are not cost effective based on the evaluation required pursuant to subdivision (b).
(d)An electrical corporation may procure, own, or enter into a long-term contract for distributed energy storage systems interconnected at the distribution level to meet identified reliability or capacity needs.
(e)The commission shall authorize an electrical corporation to recover the reasonable costs of, and earn a return on, distributed energy storage systems and contracts procured pursuant to this section, if those resources are determined to be cost effective.
(f)
(g)
SEC. 3.SEC. 2.