California Gov. Gavin Newsom signed two bills on September 30, 2026, that create new regulatory steps for virtual power plants (VPPs) and other distributed energy resources. The laws open a path for aggregated devices to be considered for grid capacity and require more attention to how California uses and pays for its grid—but they do not automatically enroll households, set a statewide customer payment, or guarantee lower electricity bills.
What Newsom’s decision changes
A virtual power plant coordinates many smaller energy devices—such as rooftop solar with batteries, electric-vehicle chargers, and smart thermostats—so they can support the grid together. When electricity demand or grid stress is high, coordinated devices may be able to shift when they use power or provide stored energy. Canary Media’s October 1, 2026, report described the goal as potentially shifting “hundreds of megawatts” of demand during grid stress, attributing that scale description to Becker. That is an explanation of the concept, not a measured result of the newly signed laws.
The legislation addresses two different parts of the problem: whether aggregated resources can count toward California’s reliability needs, and how utilities plan, finance, and use grid infrastructure. Their effects depend on follow-up work by regulators and on the terms of actual programs.
What SB 913 requires the CPUC to do
SB 913 focuses on resource adequacy: the capacity California counts on to help meet electricity needs reliably. The bill directs the California Public Utilities Commission (CPUC), working with the California Energy Commission (CEC) and the California Independent System Operator (CAISO), to enhance existing market-integrated pathways for aggregated distributed energy resources to qualify as resource adequacy capacity. The bill record sets June 30, 2028, as the deadline for that work.
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The bill also calls for conditions on how these resources are used. One specified safeguard is against duplicate compensation for customers already on net energy metering or net billing tariffs. It directs the CPUC to make recommendations to CAISO about aligning participation models as well. These are regulatory tasks; the bill record does not specify a single payment formula or a ready-to-join statewide household offer.
What SB 905 adds—and why it is broader than VPPs
SB 905 addresses utility infrastructure costs and grid use, not just virtual power plants. Its bill record directs the CPUC to evaluate alternative ways to finance electrical distribution, generation, and transmission investments. It also requires public data quantifying the potential for increased utilization of distribution grid segments.
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That information could help identify where better use of existing grid capacity—or technologies such as VPPs—might reduce the need for some traditional upgrades. Canary Media characterized this as an initial step toward identifying those opportunities, not as a finding that a particular upgrade can already be avoided.
| Bill | Main focus | What it directs | Source basis |
|---|---|---|---|
| SB 913 | Aggregated resources and resource adequacy | The CPUC, coordinating with the CEC and CAISO, must enhance existing market-integrated qualification pathways by June 30, 2028; establish conditions including protection against duplicate compensation on net energy metering and net billing tariffs; and recommend ways to align participation models. | SB 913 bill record |
| SB 905 | Grid use and utility investment financing | The CPUC must evaluate alternative financing approaches for electrical distribution, generation, and transmission investments, and make public data available on potential increased utilization of distribution grid segments. | SB 905 bill record |
Can a California household join or get paid now?
Not solely because these bills were signed. The bills describe regulatory duties and future pathways; they do not establish immediate statewide enrollment, a list of compatible devices, or a standard payment amount. Owning a battery, EV charger, solar system, or smart thermostat does not by itself mean the equipment is enrolled in a grid program or will earn a payment.
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The CPUC’s demand response overview describes participation in listed programs as voluntary and identifies utilities, community choice aggregators, aggregators, and demand response providers as program administrators. Existing offers and eligibility can vary. Check the current terms with the relevant administrator before assuming a device qualifies or that participation will lower a bill.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What will determine whether customers benefit?
The signing creates a framework for regulatory work, not a finished consumer product. In a statement quoted by Canary Media, Brad Heavner, executive director of the California Solar and Storage Association, said: “Implementation of the bill at the CPUC under the next governor will determine whether customers see lower bills.” Canary Media also reported that funding for California’s existing VPP program could become a problem in the following year. That was a reported concern as of its October 1, 2026, coverage, not confirmation that funding has since been cut or that a new program lacks funding.
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When comparing any future VPP offer with an existing demand-response program, look for the details that determine both grid value and household value:
- Eligible equipment: Which device types and models can participate?
- Dispatch and control: Who can change charging, consumption, or battery operation, and when?
- Value measurement: How does the program calculate the resource’s contribution to the grid?
- Payment and tariff interactions: What compensation is offered, and how does it interact with net metering or net billing?
- Availability and eligibility: Is the offer available in your location, and what customer or equipment requirements apply?
- Duration and funding: How long does the program run, and what happens if its funding changes?
- Evidence of savings: Is a bill benefit measured for participants, or only projected?
The bill records do not supply individual terms for the new SB 913 pathway, so those details must come from actual program rules and offers.
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Why “finally” refers to a change in direction
Newsom had previously vetoed VPP-related legislation. The official Assembly Daily File reproduces his October 3, 2025, veto message for AB 740, which would have required the CEC to prepare a VPP deployment plan and utilities to report annually on contributions toward the state’s load-shift goal. Newsom acknowledged that VPPs could help lower bills, improve reliability and resiliency, and reduce emissions, but declined to sign AB 740 because of costs to a CEC operating fund facing a structural deficit.
Canary Media reported that Newsom vetoed three VPP bills in 2025; the cited official veto record directly verifies AB 740. His signing of SB 905 and SB 913 therefore marks a shift in action, but it does not mean the state has resolved the implementation, funding, or customer-payment questions.
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