On July 15, 2025, the California Senate Energy, Utilities, and Communications Committee voted to advance AB 740 (Harabedian), a bill to scale up the use of virtual power plants (VPPs) in California. VPPs are networks of clean, distributed energy resources like smart thermostats, home batteries, smart plugs, electric water heaters, and electric vehicles. When aggregated, these resources can deliver energy during peak demand hours, creating savings for the VPP participants and for all electricity customers by avoiding reliance on the strained electrical grid.
The following expert testimony was provided to the committee by The Climate Center’s Community Energy Resilience Director Kurt Johnson:
Good morning, Chair Becker and committee members. I am Kurt Johnson, Community Energy Resilience Director for The Climate Center.
AB 740 charts a course forward for California to lead globally in building the grid for the future, which is cheaper and cleaner.
In recent decades, California taxpayers and ratepayers have invested billions in clean, distributed energy resources like electric vehicles — batteries on wheels — as well as stationary batteries and other smart devices.
If we are smart, we will plan to fully utilize these assets, via virtual power plants, to lower electricity costs for Californians. As has been noted by multiple studies from the Department of Energy, Brattle Group, the Electric Power Research Institute, and others, there are hundreds of millions of dollars of savings available annually through using these existing, currently-untapped assets. When they are combined virtually, they can provide grid services that are more cost-effective than conventional, utility-scale energy assets.
The grid for the future, as envisioned by AB 740, is also cleaner.
Currently, particularly during the evening, we rely on polluting, methane-fueled power plants to keep the lights on. Instead, we should build the grid for the future so that our 2 million-plus electric vehicles in California are working in collaboration with our 2 million-plus solar roofs so that we no longer need all those fossil-fueled power plants, which are typically located in low-income communities.
California has long been a leader in clean energy innovation. We risk falling behind if we do not prioritize the expansion of VPPs beyond current programs that have been operating successfully.
AB 740 will help unlock the full affordability and decarbonization benefits of load flexibility and ensure that all ratepayers see the financial benefits of the clean energy transition.
I respectfully ask for your “aye” vote. Thank you.
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