Several layers of policy and regulation made Illinois the right entry point for Base Power in PJM. The state allows retail competition, so Base Power can sell power directly to customers. However, it still has to get permission from a wires utility to hook up the batteries to the distribution grid, and ComEd stood out as a partner.
“ComEd, they’re an innovative utility,” said Travis Kavulla, Base Power’s head of policy, who on Monday was tapped to run the Bonneville Power Authority, a New Deal–era federal power agency. “They’ve done things that other utilities have not done.”
In particular, ComEd has rules that compensate homes at market rates for discharging power to offset high capacity prices in PJM. These rules emerged from a recent revision to the long-standing net-metering policy, which originally paid homes for shipping excess rooftop solar to the grid; now, the policy also allows stand-alone batteries to export power and participate in the market.
Base Power will also tap into a new Illinois policy to encourage virtual power plants that was created by the Clean and Reliable Grid Affordability Act, which became law in January. Starting this summer, battery customers can receive a rebate if they install a battery and agree to discharge it to the grid for multiple hours during the evening peak on a certain number of summer nights. It’s a simple way to ensure that the batteries make themselves useful, and Base Power will apply that rebate to support its very low pricing.
All this means that Base Power will not rely on specific PJM programs to make money in Illinois. The grid operator is working on a new mechanism for distributed energy resources to play a broader role in capacity markets, in response to the Federal Energy Regulatory Commission’s Order 2222. That process will have its first auction next month, to pay for capacity in 2028 and 2029, Kavulla noted.
“Our approach is not something that has to wait on that. It’s more ready to go to market if you’re configuring it on the retail side through a competitive retailer, in the way we’re doing it,” he said.
Down the road, the startup could tap another source of revenue by selling aggregated capacity to hyperscalers that need power for new data centers. Google signed a bilateral deal with demand-response provider Voltus to do just that in PJM. Sunrun, Tesla, and Renew Home just announced a national strategy to tap existing home batteries and smart thermostats to sell capacity to data center customers. Dell confirmed that Base Power is in talks with data center clients, but said his Illinois strategy does not depend on that kind of deal.
Whether or not Base Power deals directly with data centers, the households in Illinois are feeling upward pressure on their energy bills as the region struggles to supply the AI arms race. Some governors have threatened to exit PJM if the capacity costs keep rising, though that would take years of thorny wrangling to execute. If other PJM states want to do something to help customers short of the nuclear option, they could look to the ComEd policy that rewards households for peak exports.
“One of our takeaways here is that if you’re a state in PJM, this is something that you can kind of cause your utilities to do,” Kavulla said.
