California Governor Vetoes Bills Aiming to Expand Virtual Power Plants
California Governor Gavin Newsom has vetoed two bills aimed at expanding virtual power plants (VPPs) in the state. The moves, which come after the legislature and governor chose not to renew funding for a key VPP program, have raised concerns about energy costs and grid reliability.
Newsom vetoed AB 740, a bipartisan bill that would have required the California Energy Commission, utilities commission, and CAISO to collaborate on a VPP deployment plan. The bill, which passed unanimously in both the Assembly and Senate, aimed to save Californians $750 million per year in traditional power system costs and provide over 7.5 GW of capacity cost-effectively, according to a coalition of clean energy and environmental organizations.
Newsom also vetoed AB 44, which would have allowed electricity providers to reduce demand forecasts using demand-side resources. Both vetoes were due to potential costs exacerbating the California Energy Commission's ongoing structural deficit.
The vetoes may lead to the end of California's grid reliability and premier VPP program, resulting in a loss of over $200 million in energy cost savings for Californians. This could potentially extend dependence on peaker plants, which are more expensive and less efficient than VPPs.
