(Note: Original Draft was updated and edited on 3/10/26 and 3/11/26)
On March 9, 2026, the First Appellate District affirmed in full the CPUC’s D.22-12-026 decision in Center for Biological Diversity v. Public Utilities Commission (Case No. A167721). The First Appellate District original opinion affirming the CPUC decision was appealed to the California Supreme Court, which issued an opinion in August 2025 not on the questions specific to the CPUC’s action on NEM 3.0’s net billing tariff and related matters (See CPUC D. 22-12-056; See Proceeding Docket for R. 20-08-020), but on how appellate courts are to apply the judicial review standards found in Public Utilities Code §§ 1757 and 1757.1 to the CPUC. The California Supreme Court remanded the case to the First Appellate District, which again affirmed the CPUC decision for the second time but pursuant to the Yamaha standard the California Supreme Court found was the correct standard of review (you can read my analysis on this opinion here and other blogs about this case here). The following discusses this and other appellate case updates.
The First Appellate District Court agreed with the CPUC that its Decision was Quasi-Legislative rulemaking and therefore the Court would undertake only a narrow review of whether: 1) the rule in question lay within the the lawmaking authority delegated by the Legislature; and 2) that it is reasonably necessary to implement the purpose of the statute. The Court exercises independent judgement as to whether the rule lay within the CPUC’s lawmaking authority under Public Utilities Code § 2827.1. Here the Court found that the CPUC acted within its lawmaking authority and proceeded in a manner reasonably necessary to implement § 2827.1.
Where the CPUC is exercising Quasi-Legislative rulemaking authority, judicial review will be narrow with the court focusing its independent review on whether the CPUC acted within its delegated authority and the rule was reasonably necessary to implement the purpose of the statute. This is the most narrow review of CPUC decision making under the Yamaha standard. Arguably, this standard of judicial review is more directed than the “reasonable relation to the purpose and language” found in the no longer applicable Greyhound standard of review.
However, it is likely that for Quasi-Legislative rulemakings, the outcome will be similar resulting in, perhaps not high deference, but significant limits to judicial scrutiny. Yamaha was decided in 1998 and it is not clear if the Legislature intended for the variable scale of deference and judicial scrutiny found in Yamaha to be applied in Public Utility Code § 1757 and 1757.1 writs of review. It is also not clear that the Legislature intended for CPUC proceedings, which can be a combination of rulemaking, ratesetting, and adjudications, to be shielded from heightened judicial scrutiny because parts of a proceeding and decision are quasi-legislative rulemaking.
Notably, the NEM 3.0 proceeding was preliminary scoped as ratesetting (see Order Instituting Rulemaking on p. 15) by the CPUC not as quasi-legislative. This was challenged by one party (See Dimension Renewable Energy Opening Comment on p. 7-8) at the beginning of the proceeding where Dimension Renewable Energy asked for multi-tracks for quasi-legislaitve and ratesetting. The ALJ decided to follow CPUC Rule of Procedure and Practice 7.1 (e)(2), applying ratesetting procedure and practice with the Scoping Memo on p. 7-8 reflecting this determination. Rule 7.1 (e)(2) allows the CPUC to apply ratesetting rules where a proceeding does not clearly fit into either ratesetting or quasi-legislative.
Dimension Renewable did not ask for rehearing in 10 days and no other party preserved the right to challenge this categorizing going forward. The proceeding moved forward under this categorization, which was reaffirmed in a 2023 Amended Scoping Memo (see p. 7), to its completion. The final decision never once uses the word “quasi-legislative” and the CPUC only argues this categorization when it was appealed. The First Appellate District agreed that the Decision was Quasi-Legislative narrowing judicial review of a proceeding adjudicated under ratesetting rule procedure and applicable statutes.
The point is that the CPUC has procedure and practice to move proceedings that are multi-category forward to completion, including the stated discretion in its procedure and practice to use one category over another, divide the proceeding into phases, separate the categories in different proceeding, or create a hybrid of the rules. Decisions on which procedures and practice rules apply determine the evidentiary record created and the decision that is reached. Scrutiny of CPUC discretion in categorization as well as its exercise of authority under Public Utilities Code §§ 1701 and 1701.1 through its rules of Procedure and Practice appear ripe for judicial scrutiny.
For example, Public Utilities Code § 1701.1 (a) requires that “[t]he commission shall determine whether each proceeding is a quasi-legislative, an adjudication, a ratesetting, or a catastrophic wildfire proceeding.” Public Utilities Code §§ 1701 and 1701.1 are cited as authority for Procedure and Practice Rule 7.1 on categorization. However, § 1701.1 does not grant authority for hybrid proceedings nor does it contemplate separating proceedings into multiple phases under different categorizations as stated in the Procedure and Practice rules and exercised in practice before the CPUC. Is this a reasonable exercise of the CPUC’s authority under California Constitution Article XII Section 2 and the Public Utilities Code or is it an abuse of discretion unauthorized by either the Constitution or statute that has never been scrutinized by a court because many of the procedures and practices of the CPUC predate the statutory changes that increase judicial review of its actions?
Many questions remain on these issues.
Back to the case at hand, the docket’s Scheduled Action page shows that remittitur or the return of the case to the CPUC to carry out the opinion is ordered for April 11, 2025, 30 days after it filed its affirmed opinion. Center for Biological Diversity consequently has 30 days to file a writ of review petition to the California Supreme Court challenging the affirmed opinion. Such a writ would need to argue that the California Supreme Court’s August 2025 opinion was incorrectly applied with regards to how the standard of review should be applied to the CPUC in its net bill tariff decision. Stated another way, the First Appellate District did not find issue with the CPUC decision using the Yamaha standard, leaving the petitioner to again argue the appellate court made an error that needs correcting. This seems unlikely given that the California Supreme Court did not take up any issue in the first writ in this case and instead corrected the standard of review applicable to the CPUC under Public Utilities Code §§ 1757 and 1757.1.
If the California Supreme Court does not grant the writ of review, then the CPUC’s decision will continue to be implemented in full, ending the legal challenge. This create continuity for all systems interconnected under the net billing tariff since April 15, 2025. It further asks whether the Legislature wishes to address any of these issues through legislation.
Update on Remaining Energy Related Appellate Petitions:
At the California Supreme Court, this places Shell North Energy North America’s December 2025 writ of review petition to the California Court as the first case, if the petition is granted, to ask for application of the changed understanding of judicial review under the August 2025 California Supreme Court’s Center for Biological Diversity v. Public Utilities Commission opinion. The Supreme Court of California extended the deadline to accept or deny the petition to April 2, 2026.
The Shell Energy North America petitions stem from the CPUC decision on the resource adequacy (RA) program, the RA deficiency rule, and load serving entity (LSE) expansion rule. The appeal to the California Supreme asks for review of CPUC authority to regulate load serving entities like electric service providers (ESP) and community choice aggregators (CCAs). The Shell petition court record can be found here:
- Shell Energy North America (US) v. Public Utilities Commission (Supreme Court Case No. S294605; First Appellate District, Div. 2 Case No. A169967)
At the appellate level, a CalCCA petition filed on December 12, 2025 could be the next application of the California Supreme Court’s Center for Biological Diversity v. Public Utilities Commission opinion in the Third Appellate District. This petition challenges the CPUC decisions (D. 25-06-049 ; Rehearing Denied by D. 25-10-061) changes to how unbundled community choice aggregator (CCA) and Direct Access Provider/Electric Service Provider (DAP/ESP) customers pay under the public charge indifference adjustment (PCIA) exit fee calculation. It argues this change was prohibited retroactive ratemaking:
- California Community Choice Association v. Public Utilities Commission (Third Appellate District, Case No. C105174; Petition found Here).
Additionally, the following writ of reviews were denied March 3, 2026, dealing with Diablo Canyon Nuclear Power Plant:
- San Luis Obispo Mothers for Peace v. Public Utilities Commission (Second Appellate District, Case No. B348439; Petition Found Here); and
- Alliance for Nuclear Responsibility v. Public Utilities Commission (Second Appellate District, Case No. B348428).
These two petitions sought review of CPUC action (D. 24-12-033; Modification and Denial of Rehearing D.25-07-041; Proceeding A. 24-03-018) on extending the operation and cost recovery for the Diablo Canyon Nuclear Power Plant pursuant to SB 846 (2022) (D. 24-12-033; Modification and Denial of Rehearing D.25-07-041; Proceeding A. 24-03-018). This is a highly regulated area of decision making by the CPUC. It is unknown whether these denials will be appealed to the California Supreme Court.
