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California Gov. Gavin Newsom signed two bills on September 30, 2026, that create new regulatory work aimed at expanding how aggregated energy resources can support the grid. The laws do not automatically enroll households, set a statewide payment, or guarantee lower electricity bills; their practical effect depends on how regulators and program administrators put them into operation.
What Newsom signed—and what each bill does
Newsom signed SB 905 and SB 913 as part of an energy-affordability package, according to Canary Media’s October 1, 2026, report. Both affect the policy environment for virtual power plants (VPPs), but they address different parts of the problem.
| Bill | What it directs | What that could mean for VPPs |
|---|---|---|
| SB 913 | By June 30, 2028, the California Public Utilities Commission (CPUC), coordinating with the California Energy Commission (CEC) and the California Independent System Operator (CAISO), must enhance existing market-integrated pathways for aggregated distributed energy resources to qualify as resource-adequacy capacity. The CPUC must also set conditions for their use, including a safeguard against duplicate compensation for customers on net energy metering and net billing tariffs, and make recommendations to CAISO about aligning participation models. (SB 913 bill record.) | It sets regulatory work for recognizing and coordinating aggregated resources as grid capacity. It does not, by itself, define a household offer or payment. |
| SB 905 | The CPUC must evaluate alternative ways to finance electrical distribution, generation, and transmission investments, and make public data available quantifying the potential for increased use of distribution-grid segments. (SB 905 bill record.) | Better visibility into grid use could help identify where VPPs or other technologies might reduce the need for some conventional upgrades. The bill’s scope is broader than VPPs. |
How a virtual power plant works
A VPP coordinates many smaller energy devices so they can respond together when the electricity grid is under stress. Examples include rooftop solar paired with batteries, electric-vehicle chargers, smart thermostats, and other controllable equipment. Rather than being one large generating station, a VPP aggregates resources distributed among homes and businesses.
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What the decision means for California customers now
The bills establish regulatory duties and future steps, not an immediately available statewide enrollment offer. They do not set a standard household payment, publish a compatibility list for devices, or promise savings on an individual bill. Owning a battery, EV charger, or smart thermostat does not alone mean that it is enrolled in a VPP or eligible for compensation.
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. Availability and terms therefore need to be checked with the relevant local program. The new SB 913 pathway’s individual enrollment terms are not specified by the bill record.
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Questions to ask about an actual offer
- Which device types and models are accepted, and what technical or account requirements apply?
- Who controls dispatch—the utility, an aggregator, or another program administrator—and what can the program ask the device to do?
- How is the resource’s contribution to grid needs measured, and how is the customer compensated?
- How does compensation interact with any existing net energy metering or net billing arrangement?
- Is the offer available in your location, how long is its funding secured, and are claimed bill benefits measured or projected?
These distinctions matter because the laws do not make a single statewide VPP product out of the different devices and programs. Check current eligibility and terms directly with the administrator before assuming that a device qualifies or that participation will lower your bill.
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Why the bills do not guarantee lower bills
SB 913 asks regulators to develop pathways and conditions; SB 905 asks for analysis and data related to grid use and infrastructure financing. Neither bill specifies a universal payment to participating households or quantifies household savings. The CPUC’s eventual rules and program designs, as well as local availability and funding, will shape what customers can actually access.
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Canary Media quoted Brad Heavner, executive director of the California Solar and Storage Association, saying: “Implementation of the bill at the CPUC under the next governor will determine whether customers see lower bills.” The same report noted concern that funding for the state’s existing VPP program could become a problem in the next year. That is a reported funding concern, not proof that the program has ended or that a future customer offer will be unavailable.
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The signing marks a change from Newsom’s earlier record on VPP-related proposals. Canary Media reported that he vetoed three such bills in 2025. The official Assembly Daily File reviewed here directly documents his October 3, 2025, veto of AB 740; it would have required a CEC VPP deployment plan and annual utility reporting on contributions toward the state’s load-shift goal.
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In the veto message reproduced in the Assembly Daily File, Newsom wrote: “Virtual power plants represent one of the latest advances in coupling the output and controllability of solar photovoltaic and battery energy storage systems to deliver on these outcomes.” He nevertheless declined to sign AB 740, citing costs to a CEC operating fund facing a structural deficit. The 2026 signatures show support for a different set of measures, not that the earlier proposal became law.
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