"This will reduce greenhouse emissions throughout the Western states," said Claudia Chandler, a spokeswoman for the energy commission.
"People have long been critical of California exporting its pollution.... Now we are holding ourselves accountable."
California has largely phased out coal-fired generators within its borders. But the state still buys about 20 percent of its electricity from plants in other states.
Many of those contracts will expire over the next two decades.
David Nahai, president of the Los Angeles Department of Water and Power board, said the agency supported the legislation. Under a mandate from Mayor Antonio Villaraigosa, the board has increased the agency's renewable energy supply from wind farms and other sources from 3 percent to 8 percent since October 2005, he said.
"The utility is turning itself around," Nahai said.
The new rules may not prevent the construction of dozens of new Western coal-fired plants that are in the planning stages, but those plants would have to lower their emissions to sell power to California.
Environmental groups cheered the new restrictions.
"California is telling Wall Street and Main Street that it is time to switch sides and invest in clean energy exclusively," said Bernadette del Chiaro, director of clean energy issues for Environment California.