Why is electricity consumption increasing and where is it going? This paper considers California's electricity demand characteristics in terms of patterns of use in three major sectors — residential, industrial, commercial. Present methods of projecting demand in the state are compared with RAND's methods, which use projections of population, economy, types and sizes of industry, appliance ownership, energy prices, and other factors to address the question of future demand under various conditions that might exist. California's electricity supply characteristics are discussed in terms of the rate of growth experienced and the anticipated increase. Although the question of the precise state role in electricity supply R&D is far from obvious, it is clear that the state should encourage, and possibly sponsor, R&D in problem areas of special interest to California: seismic ground motion; underground electric generating and transmission facilities; offshore siting; power plant cooling systems; and geothermal energy resources.