Virtual power plants: load shifting: integrated energy policy report.

Assembly Member Harabedian weaves a dual-pronged approach to California’s energy policy that links an annual reporting obligation for electrical corporations to a formal, state-led planning framework for behind-the-meter virtual power plants. The measure directs the Energy Commission to incorporate a VPP deployment plan into the next biennial energy policy update after January 1, 2027, contingent on available funding, and requires utilities to report their yearly contributions toward the statewide load-shift goal.

The bill defines “smart” devices and “virtual power plants” and then establishes a planning process to evaluate and deploy VPPs. A VPP is described as an actively coordinated aggregation of behind-the-meter distributed energy resources, including electric vehicles and chargers, water heaters, smart thermostats, plugs, buildings and their controls, battery storage, and flexible commercial and industrial loads, that can be dispatched to balance demand and supply. The plan must identify resources, policies, and timelines needed to meet the load-shift goal, assess barriers to qualifying VPP resources for resource adequacy, and include cost comparisons relative to other RA-qualifying capacity. It must also evaluate barriers to using VPPs as load-modifying resources, identify data needs for valuation by state agencies and the Independent System Operator, and consider barriers to customer energy data access. The plan is to address operational optimization to maximize cost savings for participating and nonparticipating ratepayers while seeking grid benefits such as emissions reductions and congestion relief, ensuring that any incentive structures do not increase costs for nonparticipating ratepayers. Public engagement requirements include consultation with the PUC, ISO, and a disadvantaged community advisory group, at least two public workshops, and stakeholder sessions with industry, workforce, ratepayer, consumer organizations, load-serving entities, and locally owned electric utilities.

Implementation is structured around the Energy Commission’s IEPR process, with the plan’s development relying on interagency collaboration and broad stakeholder input. The provisions cross-reference existing law on the load-shift goal and resource adequacy, situating the VPP plan within the current RA framework while explicitly requiring analysis of eligibility, data valuation, and cost considerations. The bill does not mandate procurement or deployment commitments, nor does it specify enforcement mechanisms for compliance beyond the standard regulatory process; funding for the plan is expressly described as contingent on available funding, and no new appropriation is created in the text. The overall framework emphasizes transparency, data-informed analysis, and ratepayer protections as the plan assesses VPP potential and aligns with existing regulatory roles.