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Energy Commission defends demand‑side grid support and distributed backup programs as lawmakers weigh funding and contracting rules
Summary
The California Energy Commission presented program results for demand‑side grid support and distributed electricity backup assets and requested narrow contracting and procedural exemptions; members pressed for transparency and oversight while industry speakers urged additional funding.
The California Energy Commission told the Assembly Budget Subcommittee No. 4 that its demand‑side grid support (DSGS) program and distributed electricity backup assets (DIVA) program have scaled rapidly and played a measurable role in grid reliability, and asked the Legislature for statutory trailer‑bill language to preserve contracting flexibility.
Drew Bowen, executive director of the California Energy Commission, described DSGS as an "insurance policy" for extreme heat events that provides incentives to customers to reduce load. Bowen said the program signed up residential batteries and other aggregations and grew to more than 269,000 participants and about 500 megawatts enrolled by the end of 2024; he also said the program supported one of the country’s largest virtual power plants.
On the DIVA program Bowen said the commission awarded nine projects in April 2024 worth about $123,000,000 that are expected to add about 300 megawatts of capacity by 2027 and that a next solicitation is being developed.
Commission witnesses and budget staff asked the Legislature to retain narrow contract and public‑procurement flexibilities in the DSGS trailer bill so the commission can secure third‑party administrators and amend contracts promptly as the program evolves. Damian Mimna, Director of Administration at the CEC, said those flexibilities are intended to allow a rapid response if an emergency develops; committee members and some lawmakers countered that exemptions from the Administrative Procedure Act and public contracting rules merit close scrutiny.
Industry witnesses at public comment supported additional funding. Stakeholders urged that new bond or GGRF dollars be additive to earlier commitments rather than replacing previously allocated funds.
Why it matters: DSGS and DIVA are central to California’s near‑term strategy to replace fossil peaker capacity and to expand storage and flexible demand resources. The committee’s decision on trailer‑bill contracting flexibilities and on whether to shift funding into Prop. 4 or preserve existing funding sources will affect program stability and private‑sector investment decisions.
What’s next: The CEC will present program guideline changes and contract provisions at upcoming meetings; the committee asked the administration and staff to provide transparent cost and procurement metrics for the program and sought assurances about safeguards for competitive procurement.
