From Greyhound to Yamaha: California Supreme Court Ends “Uniquely Deferential” Review of CPUC Statutory Interpretations Under Public Utilities Code §§ 1757 and 1757.1

From Greyhound to Yamaha: California Supreme Court Ends “Uniquely Deferential” Review of CPUC Statutory Interpretations Under Public Utilities Code §§ 1757 and 1757.1

Introduction

In Center for Biological Diversity, Inc. v. Public Utilities Commission, S283614 (Aug. 7, 2025), as modified Sept. 3, 2025, the California Supreme Court resolved a long-simmering question about how courts should review the California Public Utilities Commission’s (CPUC) interpretations of statutes such as the Public Utilities Code in proceedings outside the water-utility context. The Court held that the highly deferential standard derived from Greyhound Lines, Inc. v. Public Utilities Commission (1968) 68 Cal.2d 406 no longer applies under the modern review statutes, Public Utilities Code sections 1757 and 1757.1, except in cases “pertaining solely to water corporations.”

The dispute arose against the backdrop of the CPUC’s 2022 adoption of a successor tariff addressing compensation for “customer-generators” who export electricity to the grid (often rooftop solar users). Petitioners—the Center for Biological Diversity, Environmental Working Group, and Protect Our Communities Foundation—challenged the tariff as inconsistent with Public Utilities Code section 2827.1, arguing, among other things, that the Commission failed to account for all benefits of renewable generation and did not include alternatives designed to promote growth in disadvantaged communities.

The Court of Appeal affirmed the CPUC by applying Greyhound’s “uniquely deferential” lens, asking whether the Commission’s interpretation “bears a reasonable relation to statutory purposes and language,” and upholding the CPUC so long as the statute did not “indisputably require” petitioners’ reading. The Supreme Court granted review to address whether that deferential approach survives the Legislature’s 1996–2000 overhaul of judicial review of CPUC decisions. It does not.

Summary of the Opinion

The Supreme Court reverses the Court of Appeal and remands, holding that for CPUC decisions governed by Public Utilities Code sections 1757 and 1757.1 (i.e., all sectors except water corporations), courts must apply the framework used for reviewing other state agencies’ decisions, paralleling Code of Civil Procedure section 1094.5 and the approach articulated in Yamaha Corp. of America v. State Board of Equalization (1998) 19 Cal.4th 1. Under Yamaha, courts independently interpret statutes, affording agencies contextual and persuasive weight—but not control—over statutory meaning. The Greyhound rule of broad deference is confined to the narrow statutory enclave that still uses the old “regularly pursued its authority” formulation (water-utility decisions).

The Court does not decide whether the CPUC’s tariff actually complies with section 2827.1. Instead, it instructs the Court of Appeal to reconsider the merits under the proper Yamaha/§§ 1757 and 1757.1 standard. To the extent other cases applied Greyhound’s deference in non-water cases post-amendment, the Court disapproves them.

Post-opinion modification (Sept. 3, 2025): The Court clarified citations and a subdivision reference. The opinion now expressly references Public Utilities Code sections 1757.1(a) and 1757(a), and confirms that the correct inquiry is under “section 1757, subdivision (a)” or “section 1757.1, subdivision (a)” (not subdivision (b)). The modification does not affect the judgment.

Analysis

1) Precedents and Authorities Cited

The opinion situates CPUC review within a century-long arc:

  • Early regime—“regularly pursued its authority” standard: Beginning with the Public Utilities Act of 1911 and carried into the 1951 codification, judicial review of CPUC decisions was tightly cabined. Courts (exclusively the Supreme Court at first) examined only whether the CPUC “regularly pursued its authority” and did not violate constitutional rights. Cases include Sexton v. Atchison etc. Ry. Co. (1916) 173 Cal. 760 and Southern Pac. Co. v. Public Utilities Com. (1953) 41 Cal.2d 354.
  • Greyhound Lines (1968): Construing that old framework, Greyhound instructed that the CPUC’s construction of the Public Utilities Code should be sustained unless it fails to bear a reasonable relation to statutory purposes and language. That became shorthand for exceptional deference to CPUC statutory interpretations.
  • Legislative overhaul in the late 1990s: Responding to industry deregulation and competition (especially in energy, telecommunications, and transportation), the Legislature reworked judicial review:
    • Adopted Public Utilities Code sections 1757 and 1757.1 (1996–2000), expanding grounds for review and expressly aligning the review of modern CPUC decisions with review of other state agencies. See Stats. 1998, ch. 886, § 1.5(a)–(b): expanded access to courts and intent to “conform judicial review” of CPUC decisions in competitive sectors to that of other agencies.
    • Retained the “regularly pursued its authority” standard only for water corporations (sections 1757(c) and 1757.1(b); see Golden State Water Co. v. Public Utilities Com. (2024) 16 Cal.5th 380).
    • Overruled Camp Meeker Water System, Inc. v. PUC (1990) 51 Cal.3d 845’s narrow evidentiary review for certain decisions.
  • Yamaha (1998): The Court’s touchstone for agency statutory interpretation statewide. Yamaha distinguishes:
    • Quasi-legislative rules (formally adopted regulations within delegated lawmaking authority): if authorized and reasonably necessary to implement the statute, they receive substantial judicial respect, yet courts independently assess whether the rule is within statutory bounds.
    • Agency interpretations of statutes (interpretive guidance, adjudicative reasoning, etc.): entitled to “consideration and respect” but not binding; courts independently construe statutes and grant deference only where warranted by factors such as expertise, consistency, and care.
  • Christensen v. Lightbourne (2019) 7 Cal.5th 761: Confirms Code Civ. Proc. § 1094.5’s framework for administrative mandamus—an anchor the Legislature intentionally echoed for CPUC decisions in competitive sectors.
  • Other citations: Gantner v. PG&E Corp. (2023) 15 Cal.5th 396 (CPUC’s constitutional status and Legislature’s plenary power to define review); Independent Energy Producers Assn. v. McPherson (2006) 38 Cal.4th 1020; City of Santa Cruz v. PG&E (2000) 82 Cal.App.4th 1167.

The Court also notes that post-1998 decisions occasionally continued to cite Greyhound without closely parsing the new statutory framework. To the extent those cases extended Greyhound deference to non-water decisions after the statutory overhaul, they are now disapproved:

  • Southern Cal. Edison Co. v. PUC (2004) 117 Cal.App.4th 1039
  • The Utility Reform Network v. PUC (2008) 166 Cal.App.4th 522
  • Ames v. PUC (2011) 197 Cal.App.4th 1411

2) The Court’s Legal Reasoning

The Court’s reasoning proceeds in three primary steps:

  • Statutory text controls: Sections 1757 and 1757.1 now expressly enumerate broad grounds for review—abuse of discretion, failure to proceed in the manner required by law, excess of powers, findings not supporting the decision, fraud, and constitutional violations. Section 1757 adds substantial evidence review “in light of the whole record” for covered proceedings. The Legislature retained the historic “regularly pursued its authority” standard only for decisions “pertaining solely to water corporations.” This textual shift is decisive: Greyhound’s rule sprang from, and speaks to, the pre-1998 “regularly pursued” regime. With that regime largely displaced, Greyhound’s “uniquely deferential” gloss cannot govern in non-water cases.
  • Legislative purpose confirms the shift: The uncodified findings to the 1998 act say the quiet part out loud—judicial review of CPUC decisions in competitive sectors should be “consistent with judicial review of the other state agencies,” and access to courts must be expanded. The legislative record acknowledged a “widespread consensus that judicial review of [CPUC] decisions is virtually nonexistent,” and the reform was designed to remedy that. Aligning the CPUC with the Yamaha/§ 1094.5 approach effectuates that purpose.
  • Yamaha supplies the correct frame for statutory questions: Where, as here, the key issue is the CPUC’s interpretation of a statute it administers (e.g., section 2827.1), Yamaha requires courts to independently interpret the statute while giving the agency’s view respect commensurate with its expertise, consistency, and reasoning. The Court emphasizes that even for quasi-legislative policy choices, courts independently decide whether the agency has stayed within its delegated statutory bounds. The Court of Appeal’s “no further inquiry” approach—asking only if the CPUC’s reading is reasonably related to statutory purposes—abdicated the judicial role Yamaha preserves.

3) Rejection of Contrary Arguments

  • CPUC’s constitutional status does not immunize it from Yamaha-style review: Although the Constitution establishes the CPUC and equips it with certain adjudicatory tools, it also grants the Legislature plenary power to set the “manner and scope” of judicial review. The Legislature exercised that power in 1998; courts must apply the modern statutes.
  • Silence about Greyhound in 1998’s text is immaterial: The Legislature expressly confined the “regularly pursued” standard to water-corporation decisions and announced its intent to harmonize review with other agencies. Greyhound cannot “outlive the language Greyhound was interpreting.”
  • Later Supreme Court references to Greyhound (e.g., Peevey, 2003; T‑Mobile West, 2019) do not control: Those cases did not arise under the amended §§ 1757/1757.1 review scheme and did not consider the effect of the 1998 reforms on Greyhound’s vitality.

4) The Proceeding on Remand

The Supreme Court leaves it to the Court of Appeal to decide, under Yamaha and the applicable review statute (likely section 1757.1, because the successor tariff appears to be of general applicability), whether the CPUC properly interpreted and applied section 2827.1, including:

  • Whether the tariff is “based on the costs and benefits of the renewable electrical generation facility” (section 2827.1(b)(3)).
  • Whether the CPUC ensured “that the total benefits of the standard contract or tariff to all customers and the electrical system are approximately equal to the total costs” (section 2827.1(b)(4)).
  • Whether the CPUC ensured “customer-sited renewable distributed generation continues to grow sustainably” and included “specific alternatives designed for growth among residential customers in disadvantaged communities” (section 2827.1(b)(1)).

Critically, the appellate court must independently construe the statute’s text and structure and then assess whether the CPUC’s policy choices lawfully implement that statute. The “reasonable relation” shorthand from Greyhound may no longer truncate that analysis.

Impact

1) Doctrinal Reset on CPUC Deference

This decision realigns review of CPUC decisions in energy, telecommunications, and transportation with the review of other state agencies:

  • Courts independently interpret governing statutes. The CPUC’s views may warrant respect but are not controlling. Briefs must therefore squarely analyze statutory text, context, and purpose, and not rely on CPUC’s authority as a substitute for legal analysis.
  • For proceedings governed by section 1757, substantial evidence review in light of the whole record applies to factual findings. For proceedings governed by section 1757.1, the statute enumerates broad legal-review grounds but omits a general “substantial evidence” clause; litigants should frame challenges within the enumerated categories (e.g., failure to proceed as required by law, lack of support by findings, abuse of discretion).
  • The legacy “regularly pursued its authority” regime persists only for water-corporation decisions; Greyhound retains relevance there.

2) Practical Consequences for Future CPUC Litigation

  • Increased judicial scrutiny of statutory boundaries: Expect closer appellate attention to whether CPUC ratemaking and tariff design faithfully implement statutory directives and constraints, rather than simply bearing a “reasonable relation” to high-level aims.
  • Sharper briefing on Yamaha factors: Parties will emphasize CPUC expertise, consistency, contemporaneity, and care when seeking persuasive weight for the Commission’s readings—and highlight gaps or inconsistencies when resisting deference.
  • Record-building around statutory factors: The CPUC will likely bolster decisions with explicit statutory parsing and clear linkages between statutory mandates (e.g., section 2827.1(b)(1), (3), (4)) and the adopted policy design, especially where tradeoffs affect disadvantaged communities or system-wide cost-benefit balancing.
  • Potential rebalancing in net metering and clean-energy cases: While policy choices remain primarily with the CPUC, the legal contours—what benefits and costs must be counted, what “growth” and “sustainably” mean, how to structure “specific alternatives” for disadvantaged communities—will receive de novo judicial parsing. Some outcomes may shift.

3) Beyond Energy: Telecommunications and Transportation

Because sections 1757 and 1757.1 apply across CPUC-regulated competitive sectors, the same Yamaha-centered review now clearly governs statutory interpretation disputes in telecom and transportation cases as well. The CPUC’s constitutional status does not alter that result; the Legislature’s review scheme controls.

Complex Concepts Simplified

  • What was “Greyhound deference”? A very forgiving review standard tailored to the pre-1998 statute. Courts upheld CPUC interpretations unless they were not reasonably related to statutory language and purposes—often meaning the CPUC’s reading would stand unless plainly wrong.
  • What is Yamaha deference? Not a fixed level of deference. It treats an agency’s statutory interpretation as persuasive but not binding. Courts independently interpret the law and then decide how much weight to give the agency’s view based on factors like expertise and consistency.
  • What is “quasi-legislative” versus “interpretive” action?
    • Quasi-legislative: Formal rules or broad policies adopted under delegated lawmaking power (e.g., regulations, system-wide tariffs). Courts largely defer to the policy choice if it stays within statutory bounds and is reasonably necessary to implement the statute—though the court independently decides whether the agency exceeded its legal authority.
    • Interpretive: The agency’s reading of what a statute means. Courts decide the meaning independently but consider the agency’s view as an aid.
  • What is “abuse of discretion” in this context? Under section 1094.5 and the CPUC review statutes, it often includes legal errors such as failing to follow required procedures, acting beyond statutory power, or issuing a decision unsupported by findings. In section 1757 proceedings, it also includes lack of substantial evidence in light of the whole record.
  • What remains of Greyhound? It still informs review of CPUC decisions “pertaining solely to water corporations,” where the Legislature retained the historic “regularly pursued its authority” standard.

Additional Notes on the Opinion’s Modification

On September 3, 2025, the Court issued an order modifying its August 7 opinion:

  • It clarified that the relevant review provisions are sections 1757.1(a) and 1757(a), and referenced Code of Civil Procedure section 1094.5.
  • It corrected a subdivision citation to make clear that the court’s Yamaha-guided inquiry is under section 1757, subdivision (a), or section 1757.1, subdivision (a). The modification does not change the judgment.

Conclusion

Center for Biological Diversity v. Public Utilities Commission establishes a clear and consequential rule: In non-water cases, courts no longer apply Greyhound’s “uniquely deferential” standard to CPUC statutory interpretations. Instead, they must employ the Yamaha/§ 1094.5 paradigm—independent judicial interpretation of statutes, tempered with contextual respect for the Commission’s expertise and policy role, and with substantial evidence review where section 1757 so provides.

The decision realigns CPUC review with the Legislature’s late‑1990s reforms and resolves decades of doctrinal drift. Going forward, CPUC decisions in energy, telecommunications, and transportation will receive no more and no less deference on legal questions than the decisions of other state agencies. That recalibration is likely to sharpen statutory analysis in CPUC proceedings, strengthen the evidentiary and analytical underpinnings of major policies like net metering, and reinforce the judiciary’s core function in saying what the law is—while leaving the Commission’s policy choices within statutory bounds to stand.

Case Details

Year: 2025
Court: Supreme Court of California

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