Funding cuts risk driving away innovation and private investment from the state, exacerbating affordability & reliability problems
SACRAMENTO, CA—As the California legislative session comes to a close, the legislature and Governor have failed to fund the state’s flagship clean grid reliability program, the Demand Side Grid Support (DSGS) program. This decision risks ending the program altogether, which would mean losing out on more than $200 million in energy cost savings for Californians and extending the state’s dependence on costly peaker plants to meet emergency power needs.
Since its launch in 2022, DSGS has become the largest virtual power plant in the country and is now over 1,000 MW, equivalent to a large gas peaker plant. Unlike traditional power plants, DSGS delivers the same reliability during heatwaves and other grid emergencies by coordinating distributed clean energy resources like batteries, solar, and smart thermostats. This saves money by taking advantage of resources we already have, rather than building new expensive infrastructure.
“Cutting DSGS is a huge missed opportunity and a major step backwards on enabling a more flexible, resilient, and affordable energy future,” said Leah Rubin Shen, Managing Director at Advanced Energy United. “This program is a proven success in keeping the lights on while saving ratepayers money. Allowing it to disappear undermines progress on affordability and discourages further clean energy investments in California.”
Since policymakers failed to act on this key program this year, the pressure is now on for the next session to produce meaningful results and close the policy gaps necessary to keep energy affordable and flexible enough to meet future needs.
“Policymakers must act quickly in 2026 to keep DSGS alive and ensure affordable, reliable power for years to come,” added Rubin Shen.