California Energy Policy 101 for Entrepreneurs

The Center for Sustainable Energy Policy team, led by Senior Policy Director Rocky Fernandez and Regulatory Affairs Director Sephra Ninow, presented the CALSEED webinar “California Energy Policy 101 for Entrepreneurs.”

Here are key lessons they shared:

For clean energy start-ups, policy doesn’t need to be a barrier.
It can be a valuable asset.

A  start-up or technology innovator may not immediately see the value of engaging in policy — or may even view it as a hindrance to innovation. But the policy landscape can shape the  market success of the solutions they seek to commercialize.  By engaging in policy, entrepreneurs can turn a potential barrier into a competitive advantage.

State legislation and regulation are often the drivers for market shifts. In other words, policy establishes goals and priorities for industry. For example, California Senate Bill 350 set formal greenhouse gas (GHG) emissions reduction targets that increased the state's Renewables Portfolio Standard (RPS) to 50% by 2030, electrified transportation, and increased equity. It further required the state to double energy efficiency savings by 2030, which prompted demand for the identification and removal of barriers to energy efficiency upgrades and provided greater opportunities for entrepreneurs to innovate in this area.

Often, regulations shape the market conditions for new technologies. Understanding how to recognize such opportunities, navigate the rules and engage with decision-making (through participation in public forums and submitting public comments) can help entrepreneurs work to ensure policy frameworks don’t become barriers.

Finally, supportive policy and regulations can create funding and incentive programs that make solutions more cost-effective and accelerate market adoption. For example, California’s Self-Generation Incentive Program (SGIP), established in 2001 through Assembly Bill 970, directed the California Public Utilities Commission (CPUC) to offer financial incentives to electric and gas customers of the major investor-owned utilities (IOUs) to install on-site distributed generation technologies. Over its 20+ years, SGIP continued to evolve through the infusion of additional funding and legislative and regulatory changes to support various behind-the-meter technologies, focusing most recently on the acceleration of battery storage in California.

From concept to implementation

The general policy lifecycle is as follows:

1. A concept is developed, often outside of the governing bodies, through the input of industry, advocacy groups or think tanks.
2. If the concept is compelling to a lawmaker or group of lawmakers, the legislative process is where the concept is drafted into a proposed law by an elected official and ultimately voted upon.
3. Once a law is enacted, it is up to the regulatory agencies to implement the law and oversee its administration, which can include the design of market rules or regulations.
4. In the case of a program, such as SGIP, the program design is often directed to an administrator, who is responsible for finalizing the design and ultimately implementing the program service (such as rebates or technical assistance). 

This lifecycle generally breaks down into two main areas, legislative and regulatory. The legislative process is how the governing body develops concepts, votes on bills to turn them into laws and approves budgets to fund these laws. The regulatory process is where regulatory agencies oversee and administer the laws that have been passed by the legislature.

Jumpstart your policy engagement

With the Legislature 

The main legislative bodies in California are the State Senate, Assembly and Governor. The legislative lifecycle runs on an annual schedule, starting in January/February when bills are introduced. Throughout the legislative cycle, the proposed bills go through a series of votes, committees and budget appropriations, with the final vote occurring in August/September and the approval or veto of the governor in October.

Here are a few ways entrepreneurs can participate in the legislative process, ranked from the lowest level of involvement to highest: 

• Track important bills on the legislative information website.
• Contact your local officials about your views on a bill.
• Meet with your local legislators to introduce yourself.
• Join a trade association in your industry (such as California Solar & Storage Association).
• Testify in a bill committee hearing.
• Hire a lobbyist. 

“As a business or technology innovator, it might not be immediately apparent why you need to engage on policy,” Fernandez said. “There’s a lot in the policy realm that can impact the effectiveness of the solutions you’re trying to bring to the market. You have to get involved, whether you like it or not.” 

With Regulatory Agencies 

Once a bill has been approved and signed into law, it moves to one or more regulatory bodies for implementation. There are many types of regulatory bodies, ranging from federal agencies like the Department of Energy to local agencies like city and county governments.  

The three key California energy regulatory agencies are the California Air Resources Board (CARB), the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC). CARB is primarily responsible for overseeing efforts to reduce air pollution and address climate change. The CPUC regulates IOUs and authorizes IOU programs and rate changes. The CEC funds efforts to research and deploy clean energy, efficiency and alternative transportation programs. 

Entrepreneurs can engage with these regulatory agencies through the following activities: 

• Attend public meetings, workshops and events.
• Participate in agency efforts to consult industry and in agency scientific efforts.
• Sign up for email notifications of proceeding/docket activity and workshops/meetings.
• Make public testimony or submit public comments to a docket. 

It can be easy to get started and have your voice heard. 

“Regulatory agency events generally include a public comment period where interested members of the public can provide verbal comments at the event, and many of these can be attended remotely via a webcast or by phone,” Ninow said. “In addition, the California Legislature and energy agencies have made it even easier to submit written comments on issues of interest, with added e-comment options on bill and docket webpages.

Resources 

Sign-up for energy policy newsletters: 

• Politico
• Canary Media
• Utility Dive
• Clean Energy States Alliance 

Follow active proceedings: 

• CARB
• CPUC
• CEC 

Attend public hearings: 

• CARB
• CPUC
• CEC 

This article is part of a series written by the Center for Sustainable Energy (CSE) in partnership with New Energy Nexus (NEX) California as part of the CalSEED program for early-stage clean tech entrepreneurs. This series is designed to share key knowledge, actionable tools and best practices to support clean energy innovators in driving sustainable solutions forward.

CalSEED

Administered by New Energy Nexus, CalSEED is one of several initiatives funded by the California Energy Commission EPIC program to advance energy innovation. CalSEED grants of up to $700,000 are awarded to early-stage clean energy entrepreneurs to accelerate California’s clean energy goals.

New Energy Nexus California

New Energy Nexus California supports entrepreneurs building equitable climate and clean energy solutions across the state since its founding in 2004. The team works across the full innovation journey, from early-stage funding and technical validation to market access, policy engagement and ecosystem building. Programs include CalSEED, CalTestBed, Bay Area High Road Manufacturing Initiative (BAHRMI) and industry convenings that strengthen California’s leadership in battery innovation and domestic supply chains.  
Since 2016, NEX California has supported 200+ entrepreneurs and startups and deployed $58.6 million in funding, technical assistance and ecosystem initiatives statewide.

Center for Sustainable Energy

Center for Sustainable Energy® (CSE) is a national nonprofit that accelerates adoption of clean transportation and distributed energy through effective and equitable program design and administration. Governments, utilities and the private sector trust CSE for its data-driven and software-enabled approach, deep domain expertise and customer-focused team. CSE’s fee-for-service business model frees it from the influence of shareholders, members and donors, and ensures its independence.