The proposals would prohibit utility ownership of participating distributed energy resources and require reasonable access for third-party aggregators.
What’s happening: Michigan and New York are considering legislation that would establish Virtual Power Plant (VPP) programs — essentially networks that aggregate distributed energy resources (like home batteries, solar panels, EVs, and smart appliances) into a collectively managed power source.
Key benefits for businesses and consumers:
You can get paid for your existing equipment. Both bills envision VPP programs that pay distributed energy resource owners for alleviating stress on the electric grid during peak demand periods — meaning if you own a home battery, solar setup, EV, or smart thermostat, you could earn money simply by participating.
More devices qualify than you might expect. Resources eligible to be aggregated include solar paired with battery storage, smart thermostats, smart appliances, cogeneration or waste heat recovery systems, and electric vehicles. Businesses with on-site renewable generation are specifically called out as having untapped potential.
Lower bills for everyone — even non-participants. Paying customers to lower their power use or share electrons they’re generating or storing could reduce the need to build and run expensive peaker power plants, helping curb rate increases for all customers, not just those being reimbursed. As one advocate put it, “if we can collectively aggregate all the sources of power from homes and businesses, everybody gets the benefits of building out a more affordable grid.”
Third-party aggregators keep it competitive. A key twist in both the Michigan and New York bills is that utility-owned resources would be excluded, and the programs would require reasonable access to third-party aggregators — meaning independent companies, not just the big utilities, can participate, which tends to drive better deals for customers.
It defers costly infrastructure upgrades. VPPs can target strained or aging circuits and transformers, maintaining safe operating parameters and thereby deferring replacement or allowing for less costly upgrades — costs that would otherwise eventually be passed on to ratepayers through higher bills.
The bigger picture: The U.S. Department of Energy estimates the country could achieve 80 to 160 gigawatts of VPP capacity by 2030, which could save utility customers about $10 billion in annual grid costs. For Michigan and New York residents and small business owners, these bills represent an early opportunity to get in on that value.
Read the full article in Utility Dive.
Deep dive into this topic. Watch this one-hour webinar from the Colorado Renewable Energy Society (CRES).
Do you think this legislation would be good for Ohio? Leave us a comment.
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