Budderfly activates multi-region virtual power plant

Budderfly, an energy-as-a-service company enabling businesses and facilities to decarbonize and manage energy costs, announced it has activated real-time demand response programs across four of the largest independent system operator (ISO) grid regions in the United States.

The initial virtual power plant (VPP) program operates a demand-response system using commercial buildings’ thermostats, controlling HVAC systems in response to electricity market signals. The program will later expand to include refrigeration, battery storage, lighting, and solar.

The company is now actively running virtual power plant services for commercial customers in California Independent System Operator (CAISO), Independent System Operator (ISO) New England, Pennsylvania-New Jersey-Maryland (PJM) Interconnection, and Southwest Power Pool (SPP) service territories.

Budderfly has more than 7,500 customer locations under management. The company said it is scaling flexible load capacity that “mirrors and rivals traditional supply-side infrastructure.”

The company activated its VPP sites on June 1, 2025 in collaboration with utility and platform partners, including Evergy and Leap, enabling fully-automated demand response and grid dispatch across a multi-state footprint.

“Our model gives the grid what it needs, when it needs it, without disrupting customer operations,” said Thomas Flynn, chief administrative officer and general counsel, Budderfly.

The activations mark a step into active grid participation for Budderfly, which now operates behind-the-meter commercial sites through real-time energy market program participation.

Budderfly primarily operates as an energy-as-a-service provider, which means it identifies opportunities for energy use reduction, handles billing, and monitors operations of any installed equipment.

(Read: “Solar and efficiency to cut Connecticut manufacturer electricity costs by 30%“)

Unlike traditional VPP aggregators that rely on customer-owned assets and require end users to actively manage participation, Budderfly owns and operates the behind-the-meter distributed energy resources it enrolls in the program. This ownership model “eliminates friction for commercial customers, enabling seamless participation in grid programs while delivering measurable operational and cost-saving benefits,” said Budderfly.

“Utilities try really hard to get small commercial businesses to engage in their programs, but they’re unable to connect effectively,” explained Beth Crouchet, Budderfly’s director of energy markets and resource planning. She told pv magazine USA that despite the outreach, it’s often an uphill battle because small businesses are very busy running day-to-day operations.

“When you’re a restaurant focused on making margin and making sure your food doesn’t spoil, figuring out how to save energy most effectively and manage your electricity bill can be a lot to have to engage with on top of their daily life,” she added.

That’s where Budderfly comes in, Crochet explained. The company “knows the matrix” and can take away the questions around energy savings, as they own, operate and maintain the equipment.

She noted that this helps eliminate the capex component, which can often hold smaller companies back upgrading appliances or investing in cleaner energy if they’re already struggling to make ends meet.

“If their HVAC dies in the summer, it’s a big deal,” Crouchet said, adding that companies “may or may not have the money” to fund system upgrades or replacement. By retaining ownership of the assets, Budderfly can take care of it and take the pressure off.

The model is set to be particularly impactful for the smaller commercial space. Crouchet explained that major C&I players have been operating demand response programs since the 1970s.

“Until now, the small commercial space hasn’t been effectively automated and prepared for VPP participation,” Crouchet said. She described it as the “missing middle” in the grid participation conversation; it can be scattered and difficult to coordinate.

What Budderfly hopes the VPP program will do is give smaller companies a louder voice and a seat at the table.

“We’re able to bring the smaller companies together with the utilities,” she said, adding that allowing someone else (like Budderfly) to take care of that first step can cut down the complexity of the process. “It gives them the benefits without the headache.”

“Business ownership is already hard enough,” she said, “so being able to offload some of the difficulty on the energy side of things is ideal for most of our customers.”

VPPs offer a decentralized, flexible approach to energy buildout and management that promise cost savings for system operators and ratepayers alike. A report from the Brattle Group estimated that VPPs can save the state of California alone $750 million per year on electricity costs while advancing distributed clean energy adoption. Of the $750 million in savings, just under $200 million would be needed for implementation of distributed energy resource management systems to operate the VPP, as well as marketing and administrative costs to launch the program and reach customers. The remaining roughly $550 million in savings would be passed on to customers, said Brattle Group.

Over the last decade, the U.S. has spent more than $120 billion on 100 GW of new generation capacity, mainly for resource adequacy. Brattle Group estimates nationwide utilities could save $35 billion by 2033 by focusing on VPPs for serving peak demand on the grid.

Budderfly said it expects to expand into additional markets in the second half of 2025, including Texas and New York.

Small and mid-sized businesses account for an estimated $55 billion in annual U.S. electricity spending.

“We’re proving that the [small and mid-sized business] segment will be a cornerstone of tomorrow’s responsive, decentralized grid,” said Flynn.

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