By Erie365NewsWriter 
California legislators have sent Governor Gavin Newsom a sweeping California energy reform package that touches nearly every corner of the state’s complex energy system. Passed in the final days of the legislative session, the package includes measures to boost oil drilling, modernize the electric grid, curb wildfire expenses, and extend California’s cap-and-trade climate program through 2045.
Governor Newsom, who endorsed the package earlier this year, has until October 13 to sign the bills into law. He praised the agreement as a historic step toward affordability, safety, and sustainability in California’s energy future.
Cap-and-Trade Program Extended to 2045
A centerpiece of the California energy reform package is AB 1207, which extends the state’s cap-and-trade program for greenhouse gas emissions through mid-century. Alongside it, SB 840 outlines how the program’s billions in annual revenue will be spent, funding projects from high-speed rail to clean water and wildfire prevention.
The cap-and-trade program allows polluters to buy and trade emissions permits under a gradually shrinking emissions cap. The bill passed with only Democratic support, unlike in 2017 when some Republicans voted for a similar extension.
Some lawmakers, including Republican Assemblymember Heath Flora, opposed the bill due to the removal of agricultural funding. Still, others, like Senator Anna Caballero, vowed to revisit funding for farming communities next year.
Expanding the Western Electricity Grid
The legislature showed rare bipartisan unity in passing AB 825, which lays the groundwork for a regional Western electricity grid. The bill aims to create a shared energy trading system with neighboring states, potentially lowering costs and improving energy reliability.
Backed by both Democrats and Republicans, the proposal gained momentum after a rival market launched in Arkansas began attracting utilities from Western states. Newsom revised the bill in July to make it more appealing for other states to join.
Supporters say the bill could make electricity more affordable for Californians, while improving cooperation with other energy markets in the West.
Wildfire Fund Replenishment and Utility Reform
SB 254, another major part of the California energy reform package, takes aim at California’s wildfire crisis. The bill replenishes the state’s wildfire insurance fund with $18 billion over ten years, shared equally between utility customers and shareholders. The fund had been at risk after the Eaton Fire earlier this year.
The bill also contains measures to lower monthly electric bills. Investor-owned utilities would no longer be allowed to earn profits on the first $6 billion they spend on wildfire prevention. New low-interest loans will help finance transmission line projects, while stricter cost-efficiency rules will guide future wildfire spending.
Senate President Pro Tem Mike McGuire called the bill one of the most comprehensive energy reforms in state history.
Oil Drilling Boost for Central Valley
The California energy reform package also includes SB 237, a controversial bill allowing Kern County to streamline its environmental permitting process for new oil wells. This measure, backed by both Democrats and Republicans, aims to stabilize crude production in the Central Valley after lawsuits stalled drilling activity.
The bill has drawn criticism from progressive lawmakers concerned about climate change and the long-term cleanup of oil sites. But proponents, including Sen. Shannon Grove of Bakersfield, say the bill will preserve jobs and prevent price shocks, especially as refineries like Valero’s Bay Area facility prepare to shut down.
The legislation would also increase state oversight of idle offshore oil pipelines and begin examining alternatives to California’s cleaner, custom gasoline blend.
New Air Pollution Protections
In a surprise move, lawmakers added SB 352 to the final package, strengthening laws on air quality monitoring in pollution-heavy neighborhoods. It builds on last year’s law that created a 300-foot buffer between industrial sites and sensitive areas like homes and schools.
Though opposed by business groups, the bill passed with strong Democratic support. Lawmakers say it’s a critical step in protecting vulnerable communities from the harmful effects of industrial pollution.
Next Steps for Newsom
The California energy reform package represents one of the most ambitious energy overhauls in state history. While many of the bills received bipartisan backing, some still reflect deep divides over fossil fuels, climate policy, and affordability.
Governor Newsom is expected to sign the package in the coming weeks, setting the course for how California will handle its energy needs, climate goals, and wildfire threats in the years to come.