California turns home batteries, EVs into grid powerhouses

What makes the new framework consequential is not just that distributed devices can be counted, but that they can be financed and orchestrated as a substitute for dirtier backup supply. Volts described emerging deals in which utilities and large power users help pay for highly subsidized home batteries, EV chargers, and smart thermostats, citing a PG&E-Rewiring America arrangement and Google’s involvement, while arguing that much of the value comes from simple shifting out of daily high-cost hours rather than exotic price signals—exactly the kind of structure that turns residential flexibility into a bankable grid resource.

That matters because the load wave is no longer hypothetical: PG&E’s CEO said, “We have about 12 gigawatts of applications… That’s over 50 projects,” and warned that without better flexibility, “if data center is going in and they’re going to build 200 megawatts of reciprocating gas engine behind the meter,” the system drifts toward new fossil dependence. His alternative is distributed storage embedded in customer devices, especially EVs: “Many of the automaker now have bi directional charging vehicles… If you have a GMC pickup truck, we’re talking about 10 Tesla Powerwalls… If you have a Chevy bolt, maybe it’s five.”

The late-2026 shift was not just more support for pilots; it was a rewrite of how California classifies and plans distributed flexibility. Latitude Media reported that SB 913 was framed as moving the state away from a standalone VPP or Demand-Side Grid Services funding pool and toward formal system treatment: “let's allow them in Senate Bill 913 to count deers towards the resource ad adequacy requirement,” while the same interview cast the package as a correction to prior CPUC decisions that had “eviscerated the value of these programs” and left participation effectively uneconomic.

SB 905 supplied the statewide valuation and forecasting layer by requiring utilities to expose where distributed flexibility is most useful on the grid. As Latitude Media summarized it, “with Senate Bill 905… the CPU is instructed to require utilities to publish data on the grid utilization,” so “if you're a deer uh company or VPP company looking… you are now enable to zero in on the most valuable point in the grid,” and that late-year legislative push followed an earlier veto and rewrite with PG&E before signing; then, on November 3, the CPUC ordered PG&E, SCE and SDG&E to draft a statewide coordinated DER management framework.

SB 913 changes the market rules by clearing practical barriers that kept virtual power plants from being paid like real grid resources. Latitude Media reported that the law bars distribution utilities from forcing a VPP operator to install a separate physical meter on each device solely to create wholesale-market data, requires utilities to interconnect DERs so they can export to the grid, and pairs that access with strict anti-double-compensation rules plus public reporting of what aggregations actually deliver, creating a basis to compensate output without counting the same service twice.

Just as important, SB 913 is aimed at moving aggregated DERs into California’s core resource adequacy structure rather than leaving them in side programs. Latitude Media said the statute directs regulators to enhance market integration pathways so aggregated DERs can qualify for resource adequacy, specifically addressing hourly capacity crediting, multiple devices behind one meter, and battery-export recognition, while authorizing multiple enrollment only if the same load reduction or export is not counted twice; that makes device-level measurement central to assigning performance and capacity value correctly when several providers operate behind a single customer meter.

The scale argument is no longer hypothetical: a GridLab, Kevala and Energy and Environmental Economics study found that if “just 10% of California's registered EVs enrolled into a vehicle-to-grid program by 2036,” the fleet could provide “up to 108 gigawatt-hours of available grid-tied storage” and instantaneously deliver up to 9 GW for as long as 12 hours. The study explicitly framed that output as planning-relevant peaking capacity, saying 9 GW is “more than a small peaker plant could provide,” while also warning that infrastructure and regulatory work will determine whether that capacity becomes real.

Other signals point in the same direction: a Brattle study highlighted by PR Newswire said residential VPPs could “Slash U.S. Household Bill Hikes by 57% and Unlock $4-7 B Annually,” while Latitude Media reported, “Sunrun, Tesla, Everyday Electric Pursue 16 GW Residential VPP” and “Google Funds 100 MW PJM Pilot.” On the operating grid, RMI said batteries supplied 13%–19% of total generation during California’s most stressed hours and ran at “64% of installed capacity – similar to gas peaker plants’ 67%,” evidence that flexible distributed capacity is already large enough to shape planning assumptions.