Federal ruling hands virtual power plants a win in PJM

Federal regulators just made it easier for homes to get paid for cutting energy use during high-demand periods, at least in the 13 states served by PJM, the country's largest power grid operator. These "demand response" programs pay households to lower power use when the grid is strained, and companies that run them, sometimes bundled with home batteries and solar as "virtual power plants," have long complained that PJM's data rules kept most homes shut out.

The problem was proof: PJM wanted smart-meter data showing that participating homes actually cut power when asked. But most utilities in PJM's territory don't readily share that data, even though it comes from meters already installed at people's houses. The Federal Energy Regulatory Commission ruled this was unfair, since PJM already accepts statistical sampling as a backup method for homes without smart meters. The commission ordered PJM to allow this same method more broadly, saying it can be just as accurate when applied across large numbers of homes.

The change isn't immediate. PJM has 45 days to start working out the details with companies and regulators. If you live in a PJM state and have a smart meter, this ruling doesn't sign you up for anything automatically, but it clears a major obstacle that had kept many demand-response and virtual-power-plant programs from operating in your area. Over the next few years, this could mean more options for homeowners to earn money by letting a program temporarily adjust things like air conditioning or a home battery during peak demand.