Sacramento should save the program that is saving the grid

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Ideas expressed in the piece

• The article argues that California’s Demand Side Grid Support (DSGS) program is a historic innovation that uses a “virtual power plant” of customer-owned batteries and other distributed resources to prevent blackouts and price spikes during extreme events such as heat waves, by paying participants to reduce load or discharge stored energy when the grid is stressed^{[1][2][3][10][12]}.
• It contends that DSGS has already delivered substantial scale and reliability benefits, noting that more than 200,000 or so home batteries have been able to provide around 1 gigawatt of dispatchable capacity — comparable to a nuclear power plant — and that the program now coordinates hundreds of megawatts of resources such as batteries, smart thermostats, and grid-responsive EV chargers to support the grid during peak demand^{[3][9][10][12]}.
• The column emphasizes that DSGS operates as a clean alternative to fossil-fueled peaker plants by prioritizing distributed solar and storage, thus reducing pollution and improving energy affordability while helping to avoid rolling blackouts during heat waves and wildfires^{[1][2][3][9][12]}.
• It highlights that the program is not just a technical success but also a financial one, citing analysis that DSGS delivers roughly two dollars in system value for every dollar invested and could yield up to about $206 million in net savings for California ratepayers if funded through 2028^[9][12].
• The piece stresses that DSGS is relatively inexpensive to run and strongly asserts that its costs are justified because the program provides performance-based payments directly to participants, delivering both system-wide savings and household-level bill reductions without being funded through higher utility rates^{[2][5][8][9][12]}.
• It underscores the program’s reach and equity dimensions by noting participation across nearly all California counties, including many lower- and middle-income communities, and argues that working-class households are increasingly able to play a direct role in keeping the lights on while managing their own bills^[2][3][9].
• The article notes that California’s largest utilities, including PG&E, have praised the performance of customer-sited storage and the broader DSGS framework, describing it as evidence that ordinary Californians are now integral to grid reliability and that the state has successfully built one of the world’s largest storage-based virtual power plants^{[3][9][10][12]}.
• It links DSGS to a broader clean-energy vision that includes school electrification and ventilation upgrades through programs like CalSHAPE, arguing that modern HVAC systems and cleaner indoor air protect students, keep classrooms cool during heat waves, and improve school budgets by lowering energy costs.
• The column criticizes the decision not to continue funding DSGS and associated school programs in the latest state budget, warning that allowing the program to lapse would deactivate roughly a gigawatt of flexible capacity, strand unspent school-upgrade funds, and leave communities more vulnerable to outages and extreme heat^[9][11].
• It ultimately urges Gov. Gavin Newsom and state lawmakers to restore and extend funding for DSGS and CalSHAPE, framing this as both fiscally responsible and essential to maintaining California’s national leadership on clean energy and distributed, customer-sited resources, especially as other states like New Jersey, Illinois, Massachusetts, and Virginia ramp up similar efforts^[9][10][12].

Different views on the topic

• In contrast to the article’s call for expansion, recent state budget planning has proposed ending funding for DSGS in 2027 and shifting enrolled customers into the Emergency Load Reduction Program (ELRP), reflecting a view among budget writers and the governor’s office that grid-support incentives should be consolidated under utility-run demand response programs rather than maintained as a standalone, state-administered virtual power plant^[11].
• Coverage of the budget debates notes that under this proposal DSGS would cease to exist in its current form, with ELRP — overseen by the major investor-owned utilities — continuing to pay customers for incremental load reduction, suggesting a belief among some policymakers that existing programs can deliver necessary reliability without continuing a separate DSGS funding stream^[11].
• The same discussions indicate that the state’s move to zero out future DSGS appropriations stems from broader fiscal pressures and competing priorities, illustrating an opposing perspective that even popular clean-energy reliability programs must be pared back when budgets tighten, rather than guaranteed multi-year funding^[11].
• Some regulators and utility-side voices favor reliance on established emergency demand-response tools such as ELRP, which pay residential and nonresidential customers per kilowatt-hour of verified load reduction, and question whether duplicative or overlapping frameworks like DSGS are the most efficient way to manage peak events compared with streamlined, utility-administered programs^{[4][6][7][11]}.
• Budget debates around grid reliability also highlight concerns that program portfolios are becoming increasingly complex, with multiple overlapping pilots and incentives for batteries, smart devices, and backup generation, and critics argue that this proliferation can increase administrative costs and confusion for participants relative to a smaller number of standardized programs^{[4][6][7][11]}.
• In the context of school infrastructure, some lawmakers and budget analysts point to large amounts of unspent money in programs like CalSHAPE as evidence of implementation bottlenecks and argue that extending or expanding these funds without addressing delays may not be the best use of scarce capital, especially when other immediate budget needs are pressing.
• More broadly, skeptics of large-scale virtual power plants contend that while distributed resources can play an important role, the state should not lean too heavily on voluntary, event-based programs in place of firm generation, transmission upgrades, and other long-term investments, warning that overreliance on customer behavior during extreme heat could pose risks if participation or performance falls short.
• Some ratepayer and taxpayer advocates raise questions about whether incentives for customer-sited batteries and other devices disproportionately benefit those who can afford upfront investments, and argue that funds might be better directed toward broad-based bill relief, targeted assistance for vulnerable customers, or direct public investment in infrastructure rather than ongoing performance payments to individual participants.