In an ongoing search for methods to prevent more rolling blackouts like those experienced by state energy users in 2001, the California Public Utilities Commission (CPUC) recently adopted a plan to encourage the use of distributed generation for commercial and residential customers. Reducing demand on the existing grid has been a top priority since power shortages caused by deregulation in 2000 and 2001 threatened the reliability of the state’s power supply.

The CPUC's policies cover ownership and operation of distributed generation and integrating plants into utility plans and grid operations.

The Federal Energy Regulatory Commission (FERC) has backed the plan, with Chairman Pat Wood endorsing distributed generation as part of the agency’s proposed standard market design rules to connect and streamline the nation’s regional power grids.

The CPUC also approved $55.4 million in upgrades to San Diego Gas & Electric Co.’s electric transmission system to reduce congestion on the Southern California grid and improve access for future power supplies from new generating stations in Mexico.