California's DSGS Program at Risk as Funding Expires, Threatening $200M in Energy Savings
California's legislature and Gov. Gavin Newsom have decided not to renew funding for the Demand-Side, Grid-Support (DSGS) program, risking its end and potential loss of over $200 million in energy cost savings for residents. The program, established in response to 2020 and 2022 grid emergencies, provides incentives for reducing electricity usage and supports the grid during high demand.
The DSGS program, which includes one of the world's largest virtual power plants (VPPs) with over 200 MW capacity, has enrolled 720 MW of customer battery capacity since its launch. It helps maintain grid reliability, particularly during heatwaves and other high-demand periods. Despite California passing two VPP bills earlier this month to streamline DER usage, the program's funding will run out by the end of the year without renewed support from Gov. Gavin Newsom. A coalition led by Advanced Energy United and supported by the California Solar & Storage Association has urged Gov. Gavin Newsom to continue funding, requesting at least $75 million to keep the program operational in 2026. The Brattle Group estimated the program could provide up to $206 million in net cost savings to all Californians.
The decision to not renew funding for the DSGS program is seen as a setback by Advanced Energy United, who argue that it hinders efforts towards a more flexible, resilient, and affordable energy future. With the program's funding set to expire, stakeholders await Gov. Gavin Newsom's response to the coalition's plea for continued support.
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