SACRAMENTO, CA – In a decisive step toward lowering energy costs and building a smarter, more resilient electric grid, the California State Senate today passed SB 541, which directs electricity suppliers to take advantage of one of the most underutilized cost-saving opportunities in the energy sector: load shifting.
“SB 541 is about saving Californians money, reducing emissions, and modernizing the way we plan our energy future,” said Senator Josh Becker (D-Menlo Park). “Rather than spending billions building a grid to serve a few dozen peak hours a year, let’s reduce those peaks. It’s more affordable, more sustainable, and more equitable.”
California’s energy system is built around the need to deliver electricity during the highest periods of demand—just a few dozen hours each year. Utilities invest massively in infrastructure to meet those peaks, passing the costs on to ratepayers. But there’s a smarter way.
If energy suppliers and consumers shift usage to off-peak times—by adjusting thermostats, using smart EV chargers, or running appliances when clean energy is abundant—we can avoid expensive infrastructure investments and slash electricity bills.
A 2024 report by the Brattle Group estimates that California could save $550 million annually by capturing 7,500 megawatts (MW) of load-shifting through demand response and market-based programs alone.
Yet despite these benefits, utilities and retail electricity suppliers have been slow to act. SB 541 will change that.
The California Energy Commission (CEC) set a goal for the state to develop 7,000 MW of load shifting capacity by 2030, but so far we've done only about half of that. SB 541 will push electricity suppliers to expand their efforts to capture cost-savings through load shifting by:
- Allocating Responsibility: The bill requires the CEC to divide the statewide load shifting goal among electricity suppliers based on the size of their customer base and its potential for load shifting so that we know how much to expect from each supplier.
- Providing transparency on progress: The bill requires the CEC to report on how much load shifting each electricity supplier has already developed and how much more is expected based on their integrated resource planning filings so that we can see how much progress each supplier is making against these targets.
- Reduce barriers to adoption: The bill also asks the CEC to identify and evaluate barriers in order to make it easier for electricity suppliers to capture these load shifting opportunities.
California is at a tipping point. Electricity prices are surging, the grid is under pressure, and the state must urgently reduce emissions. Meanwhile, customers are bearing the brunt of outdated planning approaches that ignore one of the most powerful tools we already have: load shifting.
The bill now heads to the State Assembly for its consideration.