Gov. Gavin Newsom vetoed AB 740, a bipartisan bill that would have required California to adopt a virtual power plant (VPP) deployment plan.
Newsom said he vetoed the bill because it resulted in costs to the California Energy Commission’s primary operating fund, which “is currently facing an ongoing structural deficit, thereby exacerbating the fund’s structural imbalance.”
Introduced by Assemblymember John Harabedian (D), AB 740 would have required the California Energy Commission to collaborate with the state’s utilities commission and the California Independent System Operator (CAISO) to develop a comprehensive virtual power plant deployment plan, which would enable distributed energy resources, such as smart thermostats, rooftop solar and home batteries, to coordinate together into a flexible power source.
In September, a coalition of clean energy and environmental organizations, including Advanced Energy United, Solar Energy Industries Association, Rewiring America and the Environmental Defense Fund, sent a letter to the governor urging him to sign AB 740 into law. The letter said VPPs could save Californians $750 million per year in traditional power system costs and provide more than 7.5 GW of capacity cost-effectively.
“VPPs are not yet being deployed at scale because California’s regulatory processes have not kept pace with technological progress,” the letter said. “The state’s lack of a coordinated strategy on VPPs risks leaving significant savings, reliability gains and emissions reductions on the table.”
The veto followed Newsom’s decision to veto AB 44, which would have required the California Energy Commission to adopt a set of rules for enabling electricity providers to reduce their demand forecast by using demand-side resources.
The bills previously sailed through the state’s Assembly and Senate, with AB 740 passing unanimously and AB 44 receiving just one vote against it.
Up until the vetoes, the bills offered a ray of hope for distributed energy resource proponents, as they passed the same month California’s legislature and Newsom chose not to renew funding for its grid reliability and premier virtual power plant program.
The decision to not renew the program risks ending the program altogether, according to Advanced Energy United, and may mean losing more than $200 million in energy cost savings for Californians and extending the state’s dependence on peaker plants to meet emergency power needs.
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Smells like corruption