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This is the California Public Utilities Commission’s (“Commission”) first annual report to the Governor and the Legislature, pursuant to Public Utilities (PU) Code Section 8367 (SB 17, Authored by Senator Padilla), on the Commission's recommendations for a smart grid, the plans and deployment of smart grid technologies by the state's electrical corporations, and the costs and benefits to ratepayers.

The Commission initiated an Order Instituting Rulemaking (“Rulemaking”) in December 2008 to consider whether and how to set policies to guide and encourage the investor owned utilities to modernize the electric grid. Subsequent to commencing this proceeding, new legislation at both the federal and state level has affected policies concerning a Smart Grid system and the management of the proceeding.

California continues to be one of the leading States driving Smart Grid policies. As discussed in greater detail in the following sections, legislation from both the federal and state levels has brought not only needed leadership but has also shed a brighter light on the reasons behind building a Smart Grid. Consequently, significant sectors inside California, such as venture capital, technology companies, and other business and customer interest groups are becoming increasingly aware that improving the operation of the grid is as important as building the interstate highway system or the development of the internet. As technology advances, innovation and new products will allow customers to take greater control over their usage and lower their bills. This will also allow for greater and more efficient use of resources, reducing the electricity lost due to transmission over long distances, increasing the localized use of new types of generation and electricity storage, and allowing for a smooth transition to electric vehicles.


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