California is taking a closer look at how much of its existing distribution grid capacity is being used and whether flexibility and energy storage could help accommodate growing electricity demand before additional infrastructure is built.
With Senate Bill 905 (SB 905) now signed into law, large investor-owned utilities face new requirements for grid utilization transparency and distribution planning.
Here's what we're watching:
California Governor Gavin Newsom signed SB 905, introducing new requirements for large electrical corporations under the oversight of the California Public Utilities Commission (CPUC).
The requirements apply to large electrical corporations in California, including Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E).
Among its broader provisions addressing utility investment and financing, SB 905 introduces new requirements focused on distribution grid utilization and transparency.
The legislation requires large electrical corporations to make information publicly available about how their distribution networks are being utilized and where additional capacity may exist.
The law identifies four key categories of information:
Average capacity utilization: How much electricity a distribution segment delivers relative to its maximum capacity over a given period.
Peak utilization: The highest load on a distribution segment relative to its maximum capacity.
Off-peak hosting capacity: How much additional demand a segment could accommodate outside its highest-load periods.
Constrained distribution areas: Locations where distributed resources could help address capacity limitations.
Importantly, the law also requires utilities to assess whether strategies such as load flexibility and distribution-connected energy storage could address identified distribution needs at a lower cost to ratepayers than traditional infrastructure upgrades, particularly where new investment may be needed to accommodate future demand growth.
The CPUC must also consider establishing targets and timelines for increasing average distribution-grid capacity utilization. Specific targets have not been established by the legislation.
SB 905 was signed into law on September 30, 2026, becoming Chapter 986 of California's 2026 statutes.
While the legislation is enacted, the CPUC must still determine key implementation details, including how utilization metrics will be approved and whether specific improvement targets and timelines will be established.
The new requirements apply to large electrical corporations in California, with implications for distribution planning, grid modernization and public grid capacity transparency.
For California utilities, the significance goes beyond making more grid data publicly available.
A distribution segment approaching its peak capacity may still have available capacity during other hours of the day. Understanding when and where constraints occur can help planners evaluate whether flexibility, storage or other alternatives could accommodate additional demand before committing to infrastructure upgrades.
That requires more than static capacity assessments. Time-series analysis, reliable grid models and the ability to compare traditional reinforcement with alternative solutions can help utilities understand where capacity exists and how it could be better utilized.
envelio's Intelligent Grid Platform (IGP) supports these workflows through a continuously updated, physics-based grid model. With time-series power flow analysis, hosting capacity assessments and scenario simulations, utilities can identify available capacity, evaluate flexibility options and compare potential investment strategies.
Establishing these capabilities now can help utilities build on their existing distribution planning processes while preparing for evolving transparency and utilization requirements, regardless of how the CPUC's implementation details develop.
We'll be watching how the CPUC translates SB 905 into implementation requirements, particularly how utilities will quantify available capacity, evaluate flexible alternatives and demonstrate improvements in grid utilization.
Source: leginfo.legislature.ca.gov