The California Independent System Operator (CAISO) currently operates an electricity grid that is largely limited to the state of California. This geographic limitation has led to concerns over the state’s access to low-cost imports, ability to import affordable clean electricity when demand is high, ability to export rather than curtail in-state, renewable production when supply exceeds demand, and the resulting impact on energy prices. AB 825, which the governor signed on Sept. 19, 2025, is intended to address these issues by allowing the CAISO and participating utilities to establish a western regional energy market. The new law is part of the Legislature’s climate and energy package.
California’s New Western Regional Electricity Market and Expanded Renewable Market