California legislators considering bills to bolster virtual power plants

The California State Assembly’s Appropriations Committee approved two bills yesterday that could build out the state’s virtual power plants (VPPs) program.

Senate Bills 905 and 913 address separate but complementary facets of using distributed energy resources — like smaller-scale solar and energy storage systems — to curb energy demands when they are most costly. SB 905 focuses on determining which circuits on the grid can handle additional electrical load. The bill would use “performance-based metrics” to see where circuits may need more energy buildout, relying on distributed energy resource buildout, according to the bill’s text.

“Expanding the size of grid equipment to serve a small number of hours of higher usage wastes ratepayer dollars,” said Brad Heavner, executive director of the California Solar and Storage Association (CALSSA). “Instead, we can get more out of the grid we already paid for by harnessing batteries and appliance controls in the hours when usage peaks.”

This could create a roadmap for expanding California’s grid with distributed energy sources.

SB 913 would establish a rate of compensation for when the grid exports a utility customer’s stored energy to the grid during when demand is higher. CALSSA noted that the state currently doesn’t compensate customers these types of energy exports.

“SB 913 is an important step because fleets of customer devices are currently only allowed to participate in the RA market to the extent those devices reduce the consumption of each individual customer,” Heavner said.

“By design, the change will ensure rate reduction because these resources would only be chosen in the market when they are available at lower cost than competing resources,” Heavner continued.

California’s Demand Side Grid Support program — the state’s VPP program — was recently extended through the end of 2026, and is currently under consideration for extension through 2027. CALSSA reported that the program drew participation from more than 1 GW of distributed batteries. Passing SB 913 would create a permanent VPP program, one that doesn’t require routine funding from the state’s budget, the organization stated.

These bills are now heading to the California State Assembly. If passed, they will then go to the desk of Gov. Gavin Newsom.