California is the most populated state in the nation, and with the largest economy, its total energy demand is second only to Texas. Although California is a leader in many energy-intensive industries, the state has one of the lowest per capita total energy consumption levels in the country. California state policy promotes energy efficiency. The state’s extensive efforts to increase energy efficiency and the implementation of alternative technologies have restrained growth in energy demand.7 But California is also rich in energy resources. The state has an abundant supply of crude oil and is a top producer of conventional hydroelectric power. California also leads the nation in electricity generation from solar, geothermal, and biomass resources.

Residential energy use per person in California is lower than in every state except Hawaii.

Stretching two-thirds of the way up the West Coast, California is the nation’s third-largest state. Motor vehicle travel within the state contributes to energy use by California’s transportation sector, and transportation dominates California’s energy consumption profile. More motor vehicles are registered in California than in any other state, and commute times in California are among the longest in the country. In contrast, the residential sector consumes less energy than any of California’s other end-use sectors. In most of the more densely populated areas of the state, the climate is dry and relatively mild. More than two-fifths of state households report that they do not have or do not use air conditioning, and almost one-seventh do not have or do not use space heating. Residential energy use per person in California is lower than in every other state except Hawaii.

Renewable Energy

Quick Facts

  • Excluding federal offshore areas, California ranked third in the nation in crude oil production in 2015, despite an overall decline in production since the mid-1980s.
  • California ranked third in the nation in oil refining capacity as of January 2016, with a combined capacity of almost 2 million barrels per calendar day from the state’s 18 operable refineries.
  • In 2014, California’s per capita energy consumption ranked 49th in the nation; the state’s low use of energy was due in part to its mild climate and its energy efficiency programs.
  • In 2015, California ranked fourth in the nation in conventional hydroelectric generation, second in net electricity generation from all other renewable energy resources, and first as a producer of electricity from biomass, geothermal, and solar energy.
  • In 2015, California ranked 15th in net electricity generation from nuclear power after one of the state’s two nuclear plants, the San Onofre Nuclear Generating Station, permanently ceased operations in June 2013.

California is among the top states in the nation in net electricity generation from renewable resources. The state leads the nation in net electricity generation from solar, geothermal, and biomass. California is also a leading producer of electricity from conventional hydroelectric power and from wind, ranking fourth in the nation in both.

California is the first state in the nation to get more than 5% of its electricity generation from solar energy.

In 2014, California became the first state in the nation to get more than 5% of its utility-scale electricity generation from its solar resource. In 2015, utility-scale solar photovoltaic (PV) and solar thermal resources supplied 7.5% of the state’s net generation. California has considerable solar potential, especially in the state’s southeastern deserts. Several of the world’s largest solar thermal plants are located in California’s Mojave Desert. On a smaller scale, the California Solar Initiative encourages Californians to install solar power systems on the rooftops of their homes and businesses. When distributed (customer-sited, small-scale) generation is included, about one-tenth of California’s total net generation is provided by solar power. Currently, California has about 14,000 megawatts of installed solar power generating capacity.

Substantial geothermal resources are found in California’s coastal mountain ranges and in the volcanic areas of northern California, as well as along the state’s border with Nevada and near the Salton Sea. With more than 2,700 megawatts of installed capacity, California is the top producer of electricity from geothermal energy in the nation. The facility known as The Geysers, located in the Mayacamas Mountains north of San Francisco, is the largest complex of geothermal power plants in the nation and has more than 700 megawatts of installed capacity. Although California’s wind power potential is widespread, especially along the state’s eastern and southern mountain ranges, much of the state is excluded from development of this resource because it is in wilderness areas, parks, or urban areas. Even so, the state has more than 6,000 megawatts of installed capacity. California is a top generator of electricity from wind energy, producing more than 6% of the U.S. total, ranking fourth in the nation behind Texas, Iowa, and Oklahoma. California also leads the nation in utility-scale electricity generation from biomass. More than half of California’s biomass generating capacity comes from plants fueled by wood and wood waste, although those plants account for only one-sixth of the total number of biomass plants in the state.

California is the top producer of electricity from geothermal energy in the nation.

Growing concern over the environment has spurred policy initiatives to reduce greenhouse gas (GHG) emissions. California’s Low Carbon Fuel Standard, issued in January 2007, called for a reduction of at least 10% in the carbon intensity of California’s transportation fuels by 2020. The standard requires substitutes for fossil fuels that demonstrate lower lifecycle greenhouse gas emissions than the fuels they replace. The first reduction in the carbon intensity of transportation fuels was 0.25% required in 2011, with annual increases to bring the total reduction to 10% by 2020. A number of alternative pathways have been identified that reduce the levels of greenhouse gas emissions in the production of ethanol, biodiesel, and renewable diesel. California has seven ethanol production plants and eight biodiesel plants with more under construction. However, California produces only about one-eighth as much ethanol as is consumed in the state and most of the state’s ethanol supply arrives from elsewhere.

California established an emissions cap-and-trade program as part of the state’s Global Warming Solutions Act of 2006. The program’s goal is the reduction of the state’s GHG emissions to 1990 levels by 2020, to 40% of 1990 levels by 2030, and to 80% of 1990 levels by 2050, and the state is on track to meet its 2020 target. Major sources of GHG emissions, including refineries, power plants, industrial facilities, and transportation fuels, must meet a GHG cap that declines over time. To minimize the costs of pollution controls, a system for trading allowable emissions permits was created. The California Air Resources Board held its first quarterly auction of the tradable GHG emissions permits for the program in November 2012.

The California renewable portfolio standard (RPS) was created in 2002 and has since been amended several times. The RPS requires that 33% of retail sales of electricity in California come from eligible renewable resources by 2020 and 50% by 2050. Eligible resources include wind, solar, geothermal, biomass, biogas, tidal, wave, ocean thermal, anaerobic digestion, fuel cells that use renewable fuels, and small hydroelectric facilities. The state also requires retail electricity suppliers to disclose the fuel sources used to generate the power they supply. In addition to the RPS, California has an energy efficiency resource standard.California policies promote stricter appliance efficiency standards and higher energy efficiency standards for public buildings.


Natural gas-fired power plants generate about three-fifths of California’s total in-state net electricity generation. Until 2012, California’s two nuclear power plants with four reactors provided about one-sixth of the state’s total net electricity generation. However, the two reactors at the San Onofre nuclear plant, initially shut down because of equipment problems in 2012, were permanently shut down in mid-2013, cutting the amount of electricity generation from nuclear power in California in half. Almost 14% of the nation’s hydroelectric generating capacity is in California, but hydroelectric power’s share of the state’s net generation varies with annual precipitation. With adequate snowpack, hydroelectric power can account for more than one-fourth of California’s total net generation. But because of prolonged drought, in 2015 it supplied less than one-tenth. Other renewable technologies provide almost all of the rest of the state’s net generation—nearly one-fourth of the total in 2015. In-state coal-fired power plants have not been significant contributors to power generation in California, and that contribution has decreased in recent years.In 2015, only 0.2% of the total net electricity generated in California came from coal-fired sources.

Reductions in California’s hydroelectric generation and nuclear capacity and generation have been largely made up for by renewable generation. The Sunrise Powerlink Transmission project, which was put into service in June 2012, added approximately 800 megawatts of transmission capability to the Southern California electric grid, bringing electricity generated from renewable energy from Imperial County, in the southeastern corner of the state, to San Diego. Added transmission capability provided by the Sunrise Powerlink Transmission Project helped the Southern California electric grid address the capacity shortage that resulted from the decrease in nuclear generation. Additional transmission projects have come online or are in the planning and construction phase.

More than one-fourth of California’s electricity supply comes from facilities outside the state. In 2015, other than power from other unspecified sources, much of the power delivered to California from states in the Pacific Northwest was generated by wind. States in the Southwest delivered power generated at coal-fired power plants, at natural gas-fired power plants, and from nuclear generating stations. Electricity supplied from out-of-state coal-fired power plants has decreased following the enactment of a state law in late 2006 that requires California utilities to limit new long-term financial investments in base-load generation to those power plants that meet California emissions performance standards.

In 2000 and 2001, California suffered an energy crisis characterized by electricity price instability and blackouts. Following the crisis, the state government created an Energy Action Plan that was designed to eliminate outages and excessive price spikes. The plan has been updated twice since 2003. The Energy Action Plan’s goal was to ensure that adequate, reliable, and reasonably priced electric power and natural gas supplies, including prudent reserves, were provided. To reach those goals, the plan calls for optimizing energy conservation, building new generation facilities, and upgrading and expanding California’s electricity transmission and distribution infrastructure to ensure that generating facilities can quickly come online when needed. Although California has the second-highest retail electricity sales in the nation, retail sales are the second-lowest in the nation on a per capita basis. About one-fourth of California households use electricity for home heating.

Natural Gas

As with crude oil production, California’s natural gas production has experienced a gradual overall decline in the past three decades. Reserves and production are located primarily in geologic basins in the northern portion of the Central Valley. Some natural gas fields are also located in the southern portion of the Central Valley, in the coastal basins onshore in Northern California, and offshore along the Southern California coast. California accounts for less than 1% of total U.S. natural gas production and that output equals about one-tenth of state demand. Two-thirds of California households use natural gas for home heating, and about three-fifths of California’s in-state utility-scale net electricity generation is fueled by natural gas.

Several interstate pipelines bring natural gas into California from the Southwest, the Rocky Mountain region, and western Canada, by way of Arizona, Nevada, and Oregon. In 2011, natural gas supplies began arriving via the Ruby Pipeline, which runs from Wyoming to Oregon, linking natural gas produced in the Rocky Mountain region to markets in Northern California. In California, markets are served by two key natural gas trading centers—the Golden Gate Center in Northern California and the California Energy Hub in Southern California.The state has 14 natural gas storage fields that help stabilize supply; together they have a storage capacity of about 600 billion cubic feet of natural gas and a typical working natural gas capacity of about 375 billion cubic feet. California also exports natural gas to Mexico.

Source: U.S. Energy Information Administration (Oct 2016)

Energy Options

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Deregulation Suspended/Limited Deregulation/Market Cap

Electric Utilities

Pacific Gas & Electric (PG&E)

Southern California Edison (SCE)

PacifiCorp (Pacific Power & Light)

San Diego Gas & Electric Company (SDG&E)

Alameda Municipal Power

Anaheim Public Utilities

Azusa Light & Water

City of Palo Alto Utilities

Bear Valley Electric, Burbank Water & Power

Colton Public Utilities Glendale Public Service Department

Gridley Municipal Utilities

Healdsburg Municipal Electric Department

Los Angeles Department of Water and Power

Mountain Utilities, Pasadena Water & Power, Riverside Public Utilities

Sacramento Municipal Utility District

Silicon Valley Power

Sierra-Pacific Power

Southern California Public Power Authority

Surprise Valley Power

Vernon Light & Power

Valley Electric Association


California suspended deregulation on September 20th, 2001. Customers who had already switched to an alternative supplier (called an Electric Service Provider or ESP in California) retained the ability to choose even if they returned to “bundled service” with Pacific Gas & Electric, Southern California Edison, or San Diego Gas & Electric. If the customer returned to the utility for supply, they are required to give the utility six months advance notice before they can leave again for an alternative energy provider. California reintroduced limited deregulation in 2010. Participation in alternative supply was capped of less than 25,000,000 megawatt hours (MWh) with the first scheduled opening on April 16, 2010 and the second on July 16, 2010. In each case, the cap was hit within less than a minute after registration opened. Only 835,000 MWh (about 10% of the cap) are left to be implemented for delivery in 2013.

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Gas Supply


Gas Supply

Southern California Gas Corp (SOCALGAS)

Sierra Pacific Power Company

San Diego Gas & Electric Company (SDG&E)

Southwest Gas Company (SWGAS)

City of Long Beach Gas & Oil Department

Natural Gas

Customers can choose a different company to supply them with their gas supply. Customers choosing an alternate gas supplier have their gas supply delivered by the local utility. If customers do not shop for an alternate gas supplier, they receive default sales service from their utility. Sales service is structured depends on the size of the customer. California has split customers into “core customers” and “non-core customers”. Core customers include commercial customers with annual loads below 250,000 therms, and those commercial customers with annual loads above 250,000 therms who elect to receive the higher reliability associated with core service. Non-core customers include all co-generation customers, regardless of load size, and those commercial customers with annual loads above 250,000 therms. Under default sales service, customers pay a supply charge called “gas energy charge” which varies monthly.

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