If you want to watch a masterclass in bureaucratic self-sabotage, look no further than how California handles its power grid. State leaders spend millions preaching about renewable futures and emergency preparedness. Yet, when they have a functional, real-world system that actually works, they starve it of cash.
The Demand Side Grid Support program—known as DSGS—is basically a massive virtual power plant. It pays everyday people and businesses to shave their electricity use or send stored battery power back into the grid during extreme heat waves and wildfire threats. During recent test events, these aggregated batteries dispatched over 539 megawatts of average output in a couple of hours. That is real power, generated locally, keeping lights on without firing up dirty peaking plants. In similar news, read about: Why Sweetcorn Ice Cream And Swavoury Pastries Are Taking Over Your Feed.
So why are politicians and utility giants trying to break it?
The Funding Game Nobody Wants to Talk About
State budget negotiations treat this program like a political bargaining chip instead of vital infrastructure. Lawmakers and the governor have repeatedly cycled through plans to slash money, shift oversight to traditional utilities, or sunset the initiative entirely. Glamour has analyzed this critical issue in great detail.
Traditional utilities don’t love virtual power plants because they bypass old-school infrastructure spending. When you build massive transmission lines or fossil-fuel plants, utilities make guaranteed returns on capital investments. When regular people feed solar-charged battery power from their garages back onto the local grid, utilities lose that monopoly control.
Rates in California are already some of the highest in the country. Ratepayers are drowning in bills driven by wildfire mitigation and legacy infrastructure costs. A Brattle Group study showed that every dollar put into the DSGS program yields up to two dollars in system savings. It prevents expensive emergency power purchases and lowers overall capacity costs.
Yet, leaders keep pulling the rug out from under it.
Why Decentralized Power Terrifies the Old Guard
For decades, the electrical grid operated on a top-down model. A few massive centralized power plants generated electricity, and transmission lines pushed it miles down the road to passive consumers.
That model is dying. Climate change, extreme weather, and soaring energy demands mean we need flexible, localized solutions. When a heat wave hits, centralized grids buckle under sudden spikes in air conditioning use.
Virtual power plants flip the script. Thousands of residential batteries and smart thermostats act as a coordinated sponge, absorbing excess solar generation during the day and discharging it when the sun goes down. It is efficient. It is clean. And it puts money back into the pockets of regular folks who bought solar panels and storage systems—often after being told by the state that they needed to help fight climate change.
Then, the goalposts move. You invest thousands in home batteries, only to watch regulators tinker with net metering rules and threaten the funding programs that make those investments pencil out.
What Actually Needs to Happen Now
If we are serious about grid reliability and energy affordability, stop treating consumer-backed energy programs as experimental toys.
- Secure multi-year funding: Stop making program administrators beg for crumbs in annual budget revies. Give them five-year certainty so they can scale operations.
- Protect consumer incentives: Honor the commitments made to households using battery storage to support local reliability.
- Push back on utility lobbying: Recognize that traditional investor-owned utilities have an inherent conflict of interest when it comes to decentralized energy.
The solutions to our grid crises are sitting right in residential garages across the state. Stop fighting the people who are trying to keep the lights on.
