SB 913 could make it more lucrative for households with these “behind-the-meter batteries” to commit their spare power to the grid. That could encourage more participation in VPP programs, said Brandon García, California policy director at trade group Advanced Energy United.
It’s particularly important to create new incentives for households with batteries to participate in VPPs given that California’s largest such program faces the threat of being defunded and disbanded, he said.
Many of the groups supporting SB 913 are also calling on Newsom and lawmakers to extend DSGS for a few more years, to avoid stranding the companies that have invested and the households that have enrolled in it.
“If there’s not a program to keep these resources online with some level of compensation until a resource adequacy pathway is created, those resources will go somewhere else,” García said.
In an echo of debates over rooftop solar in California, the state’s Public Utilities Commission and utilities have argued that it’s unfair to pay households for VPP participation, because it shifts the costs of running the grid onto utility customers who don’t have batteries, EV chargers, or other eligible devices.
García said that allowing VPPs to compete with gas plants, utility-scale batteries, and other providers of resource adequacy could help resolve these concerns. That’s because VPPs competing in those markets “only get enrolled if they’re lowest-cost resources — and we are confident that they will be the lowest-cost resources.”
SB 905, meanwhile, targets an even bigger cost driver in California: utility grid investments.
Among the bill’s wide array of utility affordability measures is a provision that would require the Public Utilities Commission to establish “grid utilization” metrics for the state’s three big utilities. That data could reveal where utilities are using their existing grids more or less efficiently, and potentially encourage them to employ batteries, flexible-load controls, and other VPP-style approaches to smooth out the peaks in electricity demand that drive much of the need for new grid infrastructure.
California’s utilities are planning tens of billions of dollars of investments on their sprawling distribution grids to keep up with growing power demand and mitigate wildfire risks. Using VPPs to reduce peak loads on those circuits and substations could allow them to defer billions of dollars of those investments, reducing upward pressure on rates, Becker said.
“We’re not saying we’re not going to build anything new,” Becker told Canary Media in a Monday interview. “But let’s make the best use of the existing resources that are already out there, that we’ve already paid for, before we go off spending a lot of money on new resources.”
It’s unclear whether Newsom will respond to this year’s VPP policies differently than he did last year’s. The three bills he vetoed in 2025 were passed by large majorities and proposed relatively minor changes in state VPP policy. Newsom’s veto statements cited the risk that they could disrupt existing grid reliability and planning methods.
Those arguments haven’t sat well with lawmakers pushing for VPP reforms. “We should be leaning in a lot more to innovation, especially on clean energy,” state Assemblymember John Harabedian, a Democrat who authored one of the VPP bills vetoed last year, said at an event in Sacramento earlier this month. “How do we utilize the grid in a more efficient way? I think technological innovation will help us do that.”
Becker declined to predict if Newsom would sign his VPP bills. “We’re focused on getting it passed,” he told Canary Media. “Then we’ll focus on the governor’s team and the governor’s reply.”
