The new standard, which is expected to take effect Feb. 1, was adopted as part of California's strategy to fight climate change by curbing emissions of heat-trapping gases linked to global warming.
While there are almost no coal-fired plants in California, the nation's most populous state, about 20 percent of the state's electricity comes from coal plants in other western states.
The effort reflects a continued push by California officials to promote more environmentally friendly policies. Gov. Arnold Schwarzenegger last year signed a bill setting the nation's first cap on carbon emissions, targeting refineries, utilities and manufacturing plants within the state.
He also has urged the governors of western states to join California in a regional emissions-credit trading system similar to one already in place between Northeast U.S. states. An agreement he signed with British Prime Minister Tony Blair encourages cooperation to develop new technologies to combat global warming.
In the latest step, the Public Utilities Commission voted 4-0 to prohibit utilities and other energy providers from entering into long-term contracts with sources that emit more carbon dioxide than a modern natural gas plant.
The new standard is aimed at encouraging investment in cleaner energy sources such as wind and solar, while discouraging the use of coal and other high-polluting fuels.
In a statement, Schwarzenegger said Thursday's action by the PUC "sends a clear signal to developers of dirty coal throughout the West that we're not interested in their product.
"We've made a commitment in the state to clean up our environment, and that commitment extends to what we buy from other states."
Coal is cheap and plentiful but releases high levels of carbon dioxide, a gas blamed for trapping heat in the Earth's atmosphere and raising temperatures worldwide.