It also will include electricity from retail energy service companies such as Constellation New Energy, a unit of Constellation Energy Group Inc, and the Strategic Energy unit of Great Plains Energy Inc, a CPUC spokeswoman said.

Power imported from other states and electricity produced within California will be treated equally under the program.

Details on the program's costs and impact on utility rates and penalties for going over the cap have yet to be worked out.

The CPUC has not decided yet on a baseline emissions cap level, but California Republican Gov. Arnold Schwarzenegger has laid out some targets.

They call for the state to cut emissions by 25 percent below 1990 levels by 2020 and by 80 percent below 1990 levels by 2050.

Power stations will have caps instituted for their atmospheric emissions of methane, carbon dioxide and other gases that most climate experts have linked to global warming.

CPUC President Michael Peevey said the plan will link California with efforts underway in the Northeast and Mid- Atlantic states to reduce pollution from electricity generation.

California, New York and other states are moving to adopt greenhouse gas controls in the absence of a federal plan to regulate emissions that most scientists believe are warming the earth.

The states aim to go beyond greenhouse targets in the 1997 Kyoto Protocol on global warming that the United States has not signed.

The Bush administration favors voluntary caps on power plant emissions instead of mandatory caps.

New York Gov. George Pataki, a Republican, organised states in the Northeast to form the nation's first mandatory program to reduce carbon dioxide emissions.

Seven states signed an agreement in December - the Regional Greenhouse Gas Initiative - that aims to cut carbon emissions from power plants by 10 percent from current levels by 2019.

"RGGI was designed to let other states to opt in at any time. We've had ongoing discussions with California and some other states as well and certainly we will continue to do so," said Peter Constantakes, a spokesman for Pataki.

California has told Pataki's office it would consider joining the Northeast group in the future, Constantakes added.