Center for Biological Diversity, Inc. v. Public Utilities Com.

CourtCalifornia Supreme Court
DecidedAugust 7, 2025
DocketS283614
StatusPublished

This text of Center for Biological Diversity, Inc. v. Public Utilities Com. (Center for Biological Diversity, Inc. v. Public Utilities Com.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Center for Biological Diversity, Inc. v. Public Utilities Com., (Cal. 2025).

Opinion

IN THE SUPREME COURT OF CALIFORNIA

CENTER FOR BIOLOGICAL DIVERSITY, INC., et al., Petitioners, v. PUBLIC UTILITIES COMMISSION, Respondent; PACIFIC GAS AND ELECTRIC COMPANY et al., Real Parties in Interest.

S283614

First Appellate District, Division Three A167721

Cal.P.U.C. Decision No. 22-12-056

August 7, 2025

Justice Kruger authored the opinion of the Court, in which Chief Justice Guerrero and Justices Corrigan, Liu, Groban, Jenkins and Evans concurred. CENTER FOR BIOLOGICAL DIVERSITY, INC. v. PUBLIC UTILITIES COMMISSION S283614

Opinion of the Court by Kruger, J.

This case concerns the degree of deference that courts should afford to the Public Utilities Commission’s interpretation of the Public Utilities Code. For nearly a century, statutory law directed courts to uphold the Commission’s decisions so long as the Commission had “regularly pursued its authority.” (Stats. 1911, 1st Ex. Sess. 1911, ch. 14, § 67, pp. 55, 56; Stats. 1951, ch. 764, p. 2090.) During this era, we instructed that “the [C]ommission’s interpretation of the Public Utilities Code should not be disturbed unless it fails to bear a reasonable relation to statutory purposes and language.” (Greyhound Lines, Inc. v. Public Utilities Com. (1968) 68 Cal.2d 406, 410–411 (Greyhound).) But as the century drew to a close, the Legislature revised the law to expand judicial review of most Commission decisions. (See Stats. 1996, ch. 855, § 7, p. 4554; see id., § 8, pp. 4554–4555; Stats. 1998, ch. 886, §§ 11–14.5, pp. 5808–5811; Stats. 2000, ch. 953, §§ 3–6, pp. 7021–7023.) The question before us is whether the highly deferential approach of Greyhound continues to apply in cases affected by this significant legislative change. We conclude it does not. We reverse the judgment of the Court of Appeal in this matter, which relied on Greyhound, and remand for the court to conduct the appropriate inquiry under current law.

1 CENTER FOR BIOLOGICAL DIVERSITY, INC. v. PUBLIC UTILITIES COMMISSION Opinion of the Court by Kruger, J.

I. Broadly speaking, the underlying dispute in this case concerns rooftop solar panels and other means by which utility customers can generate their own power. (See Pub. Util. Code, § 2802.) Solar panels may generate less — or more — electricity than their owners need at a particular time. At night or on a cloudy day, for example, a utility customer with solar panels may need to draw additional electricity from the power grid. On a sunny morning, by contrast, the panels may generate more electricity than the customer needs, allowing the customer to export excess energy to the grid. Since 1995, the Legislature has required utilities to compensate “customer-generators” for the energy those customers export. (Stats. 1995, ch. 369, § 1, pp. 1917–1919.) Initially, customers could use the electricity they supplied to a utility to offset the amount of electricity they received from that utility. (Id., § 1, pp. 1918–1919.) “By offsetting exported power against imported power,” this approach “functionally required utilities to purchase excess power generated by residential solar power systems at the price paid by their customers for electricity.” (Center for Biological Diversity, Inc. v. Public Utilities Com. (2023) 98 Cal.App.5th 20, 25 (Center for Biological Diversity).) Critics argued that the approach overcompensated customer-generators, because it treated energy exported by customers as equivalent in value to energy generated and delivered on demand by utility companies — effectively shifting more of the burden of paying for utility services onto customers who lacked expensive solar power systems. (Id. at pp. 25–26.) In 2013, the Legislature instructed the Commission to revisit the appropriate amount of compensation for customer-

2 CENTER FOR BIOLOGICAL DIVERSITY, INC. v. PUBLIC UTILITIES COMMISSION Opinion of the Court by Kruger, J.

generators. (See Stats. 2013, ch. 611, § 11, pp. 5030–5031.) The resulting measure, Public Utilities Code section 2827.1 (section 2827.1), directs the Commission to set an applicable “standard contract or tariff . . . for eligible customer-generators” and specifies several factors that the Commission is required to consider, including “[e]nsur[ing] that the standard contract or tariff made available to eligible customer-generators is based on the costs and benefits of the renewable electrical generation facility” and “[e]nsur[ing] that the total benefits of the standard contract or tariff to all customers and the electrical system are approximately equal to the total costs.” (Id., subd. (b)(3), (4).) In response, following an interim measure, the Commission in 2022 adopted a tariff that “significantly reduces the price utilities pay for customer-generated power.” (Center for Biological Diversity, supra, 98 Cal.App.5th at p. 24.) Petitioners Center for Biological Diversity, Inc., Environmental Working Group, and the Protect Our Communities Foundation maintain that the Commission’s tariff is inconsistent with section 2827.1. They petitioned for a writ of review in the Court of Appeal. (See Pub. Util. Code, § 1756, subd. (a); Center for Biological Diversity, supra, 98 Cal.App.5th at p. 24.) Among other things, they argued that the Commission did not “[e]nsure that the standard contract or tariff . . . is based on the costs and benefits of the renewable electrical generation facility,” as section 2827.1, subdivision (b)(3) requires, because the Commission “fail[ed] to take account of all the benefits of renewable energy, particularly those conferred on society generally” (Center for Biological Diversity, at p. 30). They also argued that the Commission failed to “[e]nsure that the standard contract or tariff . . . ensures that customer-sited

3 CENTER FOR BIOLOGICAL DIVERSITY, INC. v. PUBLIC UTILITIES COMMISSION Opinion of the Court by Kruger, J.

renewable distributed generation continues to grow sustainably” and to “include specific alternatives designed for growth among residential customers in disadvantaged communities,” as section 2827.1, subdivision (b)(1) instructs. (Center for Biological Diversity, at pp. 37–41.) The Court of Appeal granted the petition for a writ of review and affirmed the decision of the Commission. (Center for Biological Diversity, supra, 98 Cal.App.5th at pp. 29, 43.) In reviewing that decision, the court asked the question set forth in Greyhound: namely, whether “the Commission’s interpretation” of section 2827.1 “ ‘ “fails to bear a reasonable relation to statutory purposes and language.” ’ ” (Center for Biological Diversity, at p. 29.) The court upheld the Commission’s decision under this “uniquely deferential standard of review.” (Id. at p. 31.) The court focused its inquiry on whether statutory language “compel[led]” (ibid.) or “indisputably require[d]” (id. at p. 32) adoption of petitioners’ position. The court stated: “To the extent petitioners are arguing . . . that the Commission erred in basing the successor tariff on the costs and benefits of renewable power to generators and ratepayers, rather than the costs and benefits to society at large, we find the Commission’s approach to bear a reasonable relation to its statutory mandate. Our standard of review allows for no further inquiry.” (Id. at p. 34.) Similarly, in addressing petitioners’ contention that the Commission could not rely on pretariff initiatives to satisfy its obligation to “include specific alternatives designed for growth among residential customers in disadvantaged communities” (§ 2827.1, subd. (b)(1)), the court upheld the Commission’s approach on the ground that it “bear[s]

4 CENTER FOR BIOLOGICAL DIVERSITY, INC. v. PUBLIC UTILITIES COMMISSION Opinion of the Court by Kruger, J.

a reasonable relation to the statutory purposes and language” (Center for Biological Diversity, at p. 40). Petitioners sought our review.

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