Newsom finally says yes to virtual power plants

California Gov. Gavin Newsom signed a group of bills meant to slow the rise in electricity bills, including two that open the door for homeowners to get paid for letting their batteries, EVs, and smart thermostats help the power grid. These setups, called virtual power plants, link up devices people already own so utilities can draw on them during periods of heavy demand, usually hot summer evenings, instead of building more power plants or grid equipment.

One bill, SB913, pushes the state to better measure and pay for the value these home devices provide, rather than relying mainly on paying customers to simply turn off air conditioners during peak hours. The other, SB905, requires utilities to start measuring how well they're using their existing grid equipment, a step toward figuring out where batteries, EVs, and similar devices could reduce the need for expensive upgrades. Newsom had vetoed similar virtual-power-plant bills in past years, so supporters called this a surprising shift.

The same legislation also limits how much profit utilities can earn on wildfire-prevention spending and requires them to borrow more for grid projects instead of passing all the cost to ratepayers through rates. Other new laws require tracking of utility transmission projects to keep them on schedule and limit certain cost pass-throughs utilities have used to bill customers. None of this creates an immediate program for homeowners to sign up for yet. How much these changes end up lowering bills, or what a device owner might eventually be paid, depends on how state regulators carry out the new rules under California's next governor.