Businesses and community advocates are championing AB 740 to support long-term electricity affordability solutions through virtual power plants.
SACRAMENTO, CA — Today, California Assemblymember John Harabedian introduced a new bill that will allow Californians to leverage proven low-cost energy solutions to help prevent dangerous blackouts and strengthen our power grid amidst growing electricity demand.
AB 740 will begin unlocking the potential of virtual power plants (VPPs), which are networks of distributed energy resources (DERs) found in homes and businesses, like smart thermostats, home batteries, and electric vehicles. Individuals with DERs can join VPP programs, allowing households to save money and empowering their community to collectively increase grid reliability and keep the lights on during extreme weather. Together, these resources can shift, store, and deliver clean energy during times of peak demand, reducing stress on the grid. This creates savings for customers by avoiding reliance on more expensive, outdated resources to meet California’s energy demands.
A recent Brattle Group study found that VPPs could create direct-to-consumer benefits of $550 million per year, with $50 million of those annual savings flowing to all ratepayers from the avoided costs of power generation and transmission. The U.S. Department of Energy has also highlighted VPPs as “solutions that can be deployed at scale in a short timeframe to maximize the use and value of existing grid infrastructure, minimize costs to ratepayers, and ensure a resilient, reliable, and secure grid for all Americans.”
"As Californians face high energy bills, virtual power plants offer a simple solution- using clean energy already in our homes to stabilize the grid, lower costs, and strengthen our future. I'm proud to partner with Advanced Energy United and Environment California to make energy cleaner and more affordable in our state," said Assemblymember John Harabedian (D-Pasadena).
Clean energy business representatives and environmental organizations issued statements in support of AB 740 by Assemblymember John Harabedian:
“California is undergoing an electricity affordability crisis, and virtual power plants are a key tool that can drive down costs for everyone by leveraging technologies already found in people’s homes and businesses,” said Edson Perez, California lead at Advanced Energy United. “Virtual power plants will provide communities with a cleaner and more resilient energy system while helping lower costs for all Californians.”
“A growing number of Californian households have adopted appliances – from heat pumps to EV chargers to home batteries – that could share excess energy, make their communities more resilient from power outages and allow clean energy to power more of our lives,” said Laura Deehan, Environment California’s State Director. It just makes sense to support programs that allow Californians to share clean, affordable energy with their neighbors.”
"Californians stand to save over $550 million a year through VPPs, completely changing the state’s energy landscape," said Cliff Staton, Vice President of Government Affairs for Renew Home. "As we scale VPPs from successful pilot programs to statewide adoption, we're enhancing grid reliability by providing critical support during peak demand periods. By harnessing the latent power of smart thermostats, batteries, EVs, and other clean and smart home technologies, VPPs can reduce energy costs, reduce the need for expensive upgrades, and help California achieve its ambitious clean energy goals. This bill is a crucial step forward, ensuring that VPPs become a cornerstone of our state's sustainable energy future."
"Clean, local, distributed energy is the cornerstone of California's Grid for the Future," said Kurt Johnson, Community Energy Resilience Director of The Climate Center. "Virtual power plants, which can utilize assets that millions of Californians already have in their homes and driveways, can help keep the lights on during climate disasters, reduce reliance on fossil fuels, and make electricity more affordable for everyone. We look forward to working with Assemblymember Harabedian to pass this bill and ensure all Californians have clean, affordable, reliable electricity."
“California is already harnessing virtual power plants to help keep the lights on during the state’s hottest months, but there is so much more that can be done with aggregated and coordinated distributed energy resources to support the state’s energy reliability and affordability needs,” said Ani Backa, Vice President at GoodLeap, a technology company delivering best-in-class financing and software products for sustainable solutions. “We commend Assemblymember Harabedian for working to ensure California leverages cost-effective measures to continue strengthening the state’s electricity grid.”
“VPPs have significant potential to reduce costs for electricity customers, and Leap applauds this effort by the legislature to directly assess the benefits that VPPs can provide to California taxpayers," said Collin Smith, Regulatory Affairs Manager at Leap. "The development of an implementation plan is also a key step to address existing barriers for third-party VPP providers to participate in the state’s electricity market."