California Gov. Gavin Newsom signed a package of energy-affordability bills on Wednesday, including two that advance virtual power plants (VPPs) — networks of rooftop solar batteries, EV chargers, and smart thermostats that can shift demand away from the grid during peak hours. The move surprised observers, as Newsom had vetoed three similar VPP bills last year and had pushed for cuts to the state's flagship VPP program.
Senate Bill 913 instructs the California Public Utilities Commission and the grid operator to better measure and reward the value that customer-owned devices provide during peak periods, potentially reducing reliance on aging gas-fired "peaker" plants. Senate Bill 905 requires utilities to report how efficiently they use existing grid infrastructure, a first step toward identifying where VPPs could avoid costly upgrades. Consumer advocates and clean energy groups praised the bills, though some noted that the details of implementation will be decided under the next governor.
The legislation responds to California's electricity rates, which have risen to roughly twice the U.S. average over the past decade. Newsom also vetoed a separate bill to revive community solar-battery projects, a technology that has seen limited growth in the state. The signed bills do not guarantee immediate savings, but they signal a policy shift toward paying customers for grid flexibility rather than only funding utility capital projects.