This is a follow up to my previous blog post on the California Supreme Court’s Opinion that remitted the Center for Biological Diversity v. CPUC (A167721; S283614) to the 1^st Appellate District. With supplemental and responsive briefing filed on November 21, 2025 and supplemental responsive briefing due on January 12, 2026, many questions remain related to net billing tariff (NBT) and how it will shape future cases involving a less deferential judicial review standard when CPUC actions are challenged under Public Utilities Code §§ 1757 and 1757.1.

This post will look at two potential inquiries the Court of Appeals may make as it reviews the supplemental briefs and responses:

• How will an appellate court apply the Yamaha framework to this case and what can be gleaned for future petitions?
• Does Public Utilities Code § 1757 or 1757.1 apply to this case and what guidance will this court provide on petitions under these code sections?

How will the court apply the Yamaha framework to this case?

In this case as well as new cases seeking independent judicial review of CPUC action are filed, the courts will look to the wider applicability of Yamaha’s independent judicial review as it has been applied by other forms of petitions for review, primarily under Civil Procedure Code 1094.5 (and to a lesser extent § 1085) that serve as the basis for Public Utilities Code §§ 1757 and 1757.1 when they were Chaptered in 1998.  A recent petition filed by CalCCAA challenging the CPUC’s October decision that changed how the public charge indifference adjustment (PCIA) or exit fee for community choice customers is calculated is the first example of this petition for independent judicial review post-Center for Biological Diversity.

Yamaha first and foremost stands for independent judicial judgment when questions of law are before the court. The 1^st Appellate District Court must give deference to the CPUC’s interpretation of Public Utilities Code § 2827.1 with the extent of deference variable and dependent on the circumstances of the case. Specifically, Yamaha states:

Where the meaning and legal effect of a statute is the issue, an agency’s interpretation is one among several tools available to the court. Depending on the context, it may be helpful, enlightening, even convincing. It may sometimes be of little worth… Considered alone and apart from the context and circumstances that produce them, agency interpretations are not binding or necessarily even authoritative. To quote the statement of the Law Revision Commission in a recent report, ‘The standard for judicial review of agency interpretation of law is the independent judgment of the court, giving deference to the determination of the agency appropriate to the circumstances of the agency action’… (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 C4th 1, 6-8).

The question becomes then, what deference, if any, should be afforded to the CPUC’s interpretation of this statute? Additionally, because Public Utilities Code §§ 1757 and 1757.1 close the evidentiary record with the proceeding and the evidentiary record shaped largely or exclusively by the CPUC’s interpretation of § 2827.1, how should independent judgment be carried out by the court?

First, it is clear that the Appellate Court will act with independent judgment and is not bound to deference to the CPUC’s statutory interpretation because the NBT Decisions and Public Utilities Code § 2827.1 are not akin to a quasi-legislative regulation adopted by a state agency where the Legislature has confided the power to “make law” and agency interpretation of the regulation binds the court as firmly as a statutes under Yamaha principles. This is partially because the CPUC is not subject to the California Administrative Procedure Act (APA) where the Legislature confides authority to make law through regulation and because when § 2827.1 (b) mandates the CPUC to “develop a standard contract or tariff, which may include net energy metering…”, the Legislature did not confide the power to make law through quasi-legislative regulation when mandating the development of a contract or tariff. Stated more generally, tariffs and contracts are not quasi-legislative regulations.

Additionally, § 2827.1 did not confide the power of quasi-legislative regulation in the one recognizable manner applicable to the CPUC. To date, the only CPUC area understood to be quasi-legislative from an administrative law judicial review perspective is individual ratemaking – i.e., setting the rates of a particular company through a general rate case that determines revenue requirements for cost recovery and a reasonable rate of return on invested capital. Individual ratemaking is a quasi-legislative function under current California and federal case law and there is significant debate about how to apply this since many CPUC proceedings include ratemaking, including this NEM proceeding. Arguably, the NEM proceeding is not an individual ratemaking because it applies to all large investor-owned utilities (IOUs). It therefore differs substantively from a general rate case that reviews the cost and revenue requirements for an individual IOU.

This area may be ripe for judicial review and will likely cause confusion in the judiciary as courts wade through how to categorize CPUC action and whether the Legislature confides this type of regulatory authority to the CPUC in this and other cases. Arguably, the only action akin to other regulatory agency quasi-legislative regulation beyond individual ratemaking may be the CPUC’s General Orders, authority for which comes from California Constitution Article XII Section 6 and in response to legislation. The California Supreme Court Opinion does not answer this directly, but it does hold that § 1757 and 1757.1 petitions should not be afforded the “unduly” deferential review standard found in the Greyhound case.

Second, the Court will likely afford significant deference to the CPUC’s interpretation of § 2827.1 because of the circumstance of the agency action. This proceeding is the third in a series of net energy metering proceedings spanning years, thousands of filings, a multitude of hearings, and written and oral evidentiary testimony by a large number of parties. It is in a complicated area of CPUC authority where many parties participate, submit evidence, adjudicate against one another, and fight all the way through to the adoption of a proposed decision. Stated another way, while the Appellate Court cannot be “unduly deferential”, it likely will not ignore the expertise, significant record, and complexity that marks this type of CPUC action. Even when exercising independent judgment, it is hard to see how great weight cannot be placed on CPUC statutory interpretation, particularly where there is conflict over the ambiguity of statutory language that defines the scope and outcome of a proceeding, what is in the record, and what ultimately becomes an adopted CPUC decision. Does this mean that the Yamaha case and the principles it applies for judicial review will result in, while not unduly deferential judicial review, significant deference? Time will tell. It is fathomable that the court will disagree with the CPUC’s interpretation of § 2827.1 ordering a remand with instructions that value cost and benefit differently and require a different alternative for disadvantaged customers. The ruling in this case from the 1^st Appellate District will provide clues about how this will play out over time.

Does Public Utilities Code § 1757 or § 1757.1 apply to this case?

One of the first inquiries in this case is which section of the Public Utilities Code applies to the CPUC’s NEM proceeding and NBT decision because both §§ 1757 (a)(2) and § 1757.1 (a)(2) have the same language with regards to challenging CPUC statutory interpretation (“..commission has not proceeded in a manner required by law). Despite the same language in both sections, the question then becomes what level of review a court will undertake with regards to how the CPUC determines the type of proceeding under its Rules of Practice and Procedure per Public Utilities Code §§ 1701 and 1701.1 (e.g., application (enforcement investigation or complaint), ratesetting, quasi-legislative, or catastrophic wildfire ), which does not align clearly with the judicial review categories under § 1757. If this is addressed, it will be a first expression of independent review to guide future petitions.

Public Utilities Code § 1757 applies to 1) a complaint or enforcement proceeding, and 2) a ratemaking or licensing decision of specific application that is addressed to particular parties. Public Utilities Code § 1757.1 is a catchall that applies to all other proceedings not covered by § 1757.  Despite being listed as ratemaking, the judicial review standard applicable will likely be § 1757.1 because of the generally applicability of the proceeding across electric corporations. 

Specifically, Public Utilities Code § 1757 applies to:

a complaint or enforcement proceeding, or in a ratemaking or licensing decision of specific application that is addressed to particular parties, the review by the court shall not extend further than to determine, on the basis of the entire record which shall be certified by the commission, whether any of the following occurred:

(1) The commission acted without, or in excess of, its powers or jurisdiction.

(2) The commission has not proceeded in the manner required by law.

(3) The decision of the commission is not supported by the findings.

(4) The findings in the decision of the commission are not supported by substantial evidence in light of the whole record.

(5) The order or decision of the commission was procured by fraud or was an abuse of discretion.

(6) The order or decision of the commission violates any right of the petitioner under the Constitution of the United States or the California Constitution.

Public Utilities Code § 1757.1 is a catch all provision that address any issue not covered by § 1757:

In any proceeding other than a proceeding subject to the standard of review under Section 1757, review by the court shall not extend further than to determine, on the basis of the entire record which shall be certified by the commission, whether any of the following occurred:

(1) The order or decision of the commission was an abuse of discretion.

(2) The commission has not proceeded in the manner required by law.

(3) The commission acted without, or in excess of, its powers or jurisdiction.

(4) The decision of the commission is not supported by the findings.

(5) The order or decision was procured by fraud.

(6) The order or decision of the commission violates any right of the petitioner under the Constitution of the United States or the California Constitution.

Specific to this case, the petitioner and respondents are contesting whether the CPUC “proceeded in the manner required by law” focusing specifically on the CPUC’s interpretation of Public Utilities Code § 2827.1 and whether the evidentiary record as determined by the CPUC statutory interpretation met or did not meet § 2827.1’s language. Because the petition is using the same language from both § 1757 and § 1757.1, the petitioning party does not focus on which of these sections is applicable. However, a court will need to decide which code section applies.

The CPUC set the NEM proceeding, see Proceeding Docket for R. 20-08-020, The Order Instituting Rulemaking (see Ordering Paragraph 9, p. 15) set forth this determination with only one party, Dimension Renewable Energy in its opening comments (see p. 7), asking that the proceeding be separated into two parallel tracks: quasi-legislative and ratesetting. The Scoping Memo (p. 8) maintained the ratesetting categorization citing to Rules of Practice and Procedure 7.1(e)(2) per PG&E’s filing that allows ratesetting when a proceeding does not clearly fit into either ratesetting or quasi-legislative. At first blush, this suggests that ratesetting requires application of § 1757. However, this proceedings seems to better fit with the general catchall language of § 1757.1(a) because it lacks the specific factual ratesetting categorization required by §1757(a).

Additionally, Public Utilities Code § 1701.1(a) and Rules of Practice and Procedure allow 10 days to file a request for rehearing to the CPUC as to the type of proceeding and only a party who requests a rehearing in that time frame retains standing for judicial review of categorization at the conclusion of the proceeding. Dimension Renewable Energy did not appeal this scoping memo proceeding categorization determination within the 10-day period, a remedy that appears to be rarely, if ever, undertaken historically.  Categorization rehearing requests may become more common if there is scrutiny by courts.

This limit on party standing does not foreclose a court from evaluating the CPUC’s determination of proceeding type using its independent review authority. In fact, petitioning and responding parties appear to invite the court to determine which code section applies hedging with arguments for both code sections and how the proceeding should be categorized. Independent judicial review of proceeding determination may become a more important practice point going forward when seeking judicial review under Public Utilities Code §§ 1757 or 1757.1 because proceeding type determination applies specific CPUC procedural rules and the Legislature created different standards of judicial review based on proceeding category.  An example of this difference is the substantial evidence requirement of §§ 1757 (a)(4) as compared to the abuse of discretion standard applicable to more general proceedings under § 1757.1(a)(1).

We will continue to track this and other cases to provide update on appellate court holdings and the development of independent judicial review of CPUC action.