{"id":680,"date":"2026-05-14T10:30:18","date_gmt":"2026-05-14T10:30:18","guid":{"rendered":"https:\/\/california-relocation-journal.com\/?p=680"},"modified":"2026-05-14T10:30:18","modified_gmt":"2026-05-14T10:30:18","slug":"200000-californians-help-the-grid-out-in-tough-times-and-get-paid-for-it-now-thats-up-in-the-air","status":"publish","type":"post","link":"https:\/\/california-relocation-journal.com\/?p=680","title":{"rendered":"200,000 Californians help the grid out in tough times and get paid for it. Now that\u2019s up in the air"},"content":{"rendered":"
\n

Nancy Lipps and her son John Lipps, in Dinuba, are one of more than 200,000 households in California signed up for a statewide program that pays them to help the grid when it\u2019s very hot outside and electricity is at peak demand. They have a battery hooked up to their solar panels, and they share power from it in times of need. It was an easy choice. <\/p>\n

Read more 3 ads that explain California politics<\/a><\/p>\n

\u201cIt gives back to our neighbors and helps make sure the grid is sustainable,\u201d said John, 52, who works in the lawn care business launched by his parents. It also provides the Lipps with a $300 credit at the end of the year for helping out. <\/p>\n

But those benefits could be coming to an end soon, due to budget cuts. Letters signed by dozens of , legislators from , environmental groups and have flooded in to try to save the program. <\/p>\n

The state\u2019s Demand-Side Grid Management program works by tapping into an army of smart thermostats, EV chargers, and solar-powered batteries that are registered to share power or ramp down electricity use when the grid is strained.<\/p>\n

According to clean energy advocates, the program, launched in 2022, has been a resounding success, with the enrolled households creating more than an entire gigawatt of power when state needs it. That\u2019s about as much as a nuclear power plant provides, or enough to power San Francisco at peak demand. <\/p>\n

One health benefit of \u201cdemand response\u201d programs like this is that they keep older, dirtier gas fired power plants from turning on. \u201cAt the exact moment when the grid is dirtiest and most expensive to run, this program surges in with the cheapest and cleanest power,\u201d said Leah Stokes, an energy expert and professor at UC Santa Barbara. <\/p>\n

Yet that\u2019s in jeopardy as the program faces budget cuts for the third consecutive year. A proposal <\/u>from Gov. Gavin Newsom would stop funding it after 2026, and transfer its customers to a program at the California Public Utilities Commission. <\/p>\n

Advocates say that would crush the momentum, and could spell the end of the world\u2019s largest \u201cvirtual power plant.\u201d <\/p>\n

\u201cIt would not be a smooth process,\u201d said Caleb Weis, an energy campaign associate at Environment California, which, along with other environmental groups, is asking the legislature to continue funding the program in its current form. \u201cThere\u2019s a lot of concern about that proposal.\u201d<\/p>\n

Newsom\u2019s office said his proposal \u201cbuilds on the foundation\u201d of the current successful program and streamlines the state\u2019s demand response strategy. <\/p>\n

It makes it more efficient, \u201cslashing administrative overhead costs and simplifying options for customers who currently have to navigate a fragmented and often confusing landscape of competing programs, and ultimately lowering costs for ratepayers,\u201d spokesperson Anthony Martinez said.<\/p>\n

Currently, the California Energy Commission handles the highly subscribed, state-funded program, which serves Californians in every legislative district. The lowest-income counties have the highest per capita participation rates, according to a recent report from Stokes.<\/p>\n

Newsom has proposed boosting the program for just this year with $27 million in unspent funds from another energy reliability program. With that, and the program\u2019s remaining budget of $26.5 million, it should be able to run through the end of the 2026, . After that, the program\u2019s out of money. <\/p>\n

Read more Vance says $1.3 billion in Medicaid payments to California will be deferred over fraud concerns<\/a><\/p>\n

In hearings this year, the California\u2019s Department of Finance said the program was meant to run for a limited time and expressed concern about funding it in perpetuity from the state budget.<\/p>\n

\u201cThe current budget climate cannot sustain additional appropriations,\u201d David Evans, a Department of Finance budget analyst said at an April 29 Assembly budget committee hearing. \u201cThe proposal is to utilize the existing resources that we have, and then transition towards a more sustainable funding source.\u201d<\/p>\n

The governor\u2019s proposal involves transferring $70 million in interest from unspent school air conditioning program funds to the Public Utilities Commission. The money would help cover costs as the Commission shifts customers onto its existing ratepayer-funded program that\u2019s similar to the energy commission-run program and explores setting up a new one. <\/p>\n

But the Public Utilities Commission program, which has been run by investor-owned utilities since 2021, has been notably less effective, spending far more on administrative costs, according to the recent hearing, and generating a small fraction of the energy capacity. <\/p>\n

\u201cThat program is just a utility handout of administrative fees,\u201d said Stokes. <\/p>\n

And setting up a new one could be even more difficult and unwieldy.<\/p>\n

\u201cEven if the CPUC is able to put something together, it seems really unlikely that it would be ready in time to really make a difference or be as effective as the Demand-Side Grid Management program has been,\u201d said Weis. <\/p>\n

The CPUC did not respond to a request for comment and its Public Advocate\u2019s Office declined to weigh in. In the hearing, commission executive director Leuwan Tesfai said the two programs are difficult to compare and that the plan was to have a proposed decision on a new program before the end of the year. <\/p>\n

Advocates are pushing to keep the soon-to-sunset school AC program running, and give its interest to the CEC-administered demand response program instead, which could keep it going through 2028. At that point they\u2019re hoping that the virtual power plant can sell power directly into the California energy market. <\/p>\n

commissioned by Sunrun and Tesla, which enrolls customers in the energy commission program, showed that extending it through 2028 could save the grid system $206 million, even after accounting for the cost of paying participant households.<\/p>\n

Lawmakers at a recent hearing backed up clean energy advocates\u2019 proposal, and questioned why the state would end a successful program in favor of one that has produced less energy capacity or has yet to be created. <\/p>\n

\u201cAt least a significant percentage of Assemblymembers are leaning towards option one which is … have the funding stay with CEC,\u201d said Assemblymember Steve Bennett, chair of the budget subcommittee on climate and energy. <\/p>\n

Newsom will release a revised budget on Thursday. But the fate of the program is likely to remain a live negotiation until the budget is finalized in July.<\/p>\n

Read more Newsom to propose fund to help California wildfire victims rebuild<\/a><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

California has one of the most successful “virtual power plants” in the world, but it’s on the chopping block.<\/p>\n","protected":false},"author":1,"featured_media":679,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-680","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-climate"],"yoast_head":"\n200,000 Californians help the grid out in tough times and get paid for it. 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