Persistence Pays Off with Clean Energy Wins in California

Many said it couldn’t be done. After all, the Governor vetoed every virtual power plant (VPP) bill last year, so why bother trying again? In our view, the issue was too important to punt down the road. Electricity demand is growing, energy prices are outpacing inflation, and transmission development is not keeping pace with our grid needs. We are at a critical juncture, and California needs large amounts of clean energy quickly and affordably.

This year’s legislative session was tumultuous from start to finish. Bills that seemed destined to pass ended up stalling, while others that appeared dead, or worse than dead, found a path forward after months of negotiations, amendments, and, at times, hair-splitting interpretations. This legislative session reminded us that progress in Sacramento takes sustained engagement, strong relationships, and a lot of doggedness.

Advanced Energy United came into California’s 2026 legislative session focused on modernizing the grid, expanding opportunities for technologies like batteries, smart thermostats, and EVs, and making sure Californians get more value from the energy resources already available to them.

On a nail-biting final day for Governor Newsom to sign or veto bills, the advanced energy industry came away with several major policy wins. United helped lead the charge on common-sense legislation and secured major wins, including Senate Bill (SB) 913.

Significant progress for virtual power plants

After more than two years of hard work, persistence, and advocacy across the state, Advanced Energy United was successful in securing Governor Newsom’s signature on SB 913. United, along with a broader coalition, worked closely with Senator Becker on the bill’s language and helped negotiate amendments that got it across the finish line as a strong final package that we were proud to support.

The law marks a major step forward for DERs and a momentous shift in how California will value these resources. In past years, bills that sought to strengthen the role DERs can play have struggled to make it through the Legislature and have routinely been vetoed.

SB 913 requires the California Public Utilities Commission (CPUC) to establish a market-integrated pathway for aggregated DERs to qualify as resource adequacy (RA) capacity. Today, California’s rules prevent these customer-owned resources from fully participating in the RA program or in related resource planning processes. SB 913 changes that by allowing eligible distributed resources to receive credit for their RA contributions. That opens the door for potentially hundreds of megawatts of abundant, clean, and local energy to contribute to California’s energy supply in a broader way, increasing competition, supporting grid reliability, modernizing our energy system, and helping control costs.

Energy affordability wins

United was also closely engaged, alongside coalition partners, on other bills to expand access to DERs, enable home electrification, and help the state accelerate large-scale clean energy and transmission development. The Governor’s signature on these bills signals strong progress toward addressing the energy affordability crisis and delivering clean power across the state. These bills include:

• SB 905 (Becker): Implements reforms for how IOUs are assigned return on equity and finance infrastructure. It also requires disclosure of how much the grid is being utilized by requiring IOUs to provide that information to the CPUC.
• SB 868 (Wiener): Streamlines approvals and establishes safety standards for portable solar energy devices.
• AB 2493 (Petrie-Norris): Requires the CPUC to establish a transmission development monitor to track transmission and interconnection project progress and delays, and to direct remedial actions to address material deficiencies within a large electrical corporation’s or a transmission owner’s reasonable control.
• AB 2313 (Berman): Requires the CPUC to establish a program in which gas corporations must offer residential customers whose service lines are scheduled for planned replacement the option to receive a monetary incentive to permanently discontinue gas service and electrify their home.
• AB 1738 (Carrillo): Expands the use of remote inspections for home hardening and clean energy upgrades for residential customers.

Missed opportunities

The fight for securing continued funding for the Demand-Side Grid Support (DSGS) program included a mix of wins and setbacks. On a positive note, SB 168 delivered a $27 million DEBA transfer allocation in June, keeping the program alive through the end of 2026, and advocates successfully killed the Administration’s ELRP trailer bill, which would have gutted DSGS entirely by diverting California Schools Healthy Air, Plumbing, and Efficiency Program (CalSHAPE) interest dollars to transfer its participants over to the CPUC’s Emergency Load Reduction Program instead. But the fight isn’t over. An unresolved Senate trailer bill ultimately left the CalSHAPE interest dollar allocation out of the final budget, meaning DSGS has no secured funding for next year. The silver lining is that those interest dollars are expected to remain unallocated rather than redirected elsewhere, leaving the door open for a future Governor and Legislature to fund the program again in 2027.

Unfortunately, AB 1787 (Schultz), which would have required utilities to disclose energy usage data when installing advanced metering infrastructure, did not succeed after being held in the Senate Appropriations Committee. Given that electricity demand is only expected to keep climbing, allowing customers to have access to their own energy data so they can adjust their behavior and shift demand more effectively would help drive down costs. We know legislators will want to use every tool in the toolbox to lower costs for all ratepayers, and this issue needs to get addressed to maximize the value these resources provide.

Additionally, more work needs to be done to support the development of community solar. Governor Newsom vetoed AB 1813 (Ward), which would have enabled community solar programs in California by requiring the CPUC to adopt or modify a customer renewable energy subscription program by which a program participant is credited for electricity generated from a renewable generation facility. Expanding access to community solar will ensure that renters and low-income householders who cannot install on-site solar and storage for technical or cost-related reasons can still benefit from utility bill savings and access to clean energy.

What’s next

The 2025-26 legislative session also ended with major wildfire issues unresolved. In the final weeks of the legislative session, Governor Newsom put forward an extensive proposal to address utility wildfire liability. The proposal included several items, but the most controversial, at the heart of his proposal, was ending subrogation, which allows insurance companies to sue utilities to recoup their costs for wildfire claims. This was met with significant backlash from the insurance industry, wildfire victims’ groups, and consumer advocates. The Legislature signaled openness to take up part of the Governor’s package, but ultimately the negotiated deal did not move forward when the Assembly decided not to take up SB 492 (Becker).

Wildfire liability policy will be the first major issue for the next Governor and will have major implications for energy affordability. Balancing the need to drive down costs while also ensuring risk reduction and accountability should be the north star for California leaders next year. A dedicated and public process needs to be at the center of this proposal, taking all stakeholders’ input into account. An upcoming report from the CPUC, requested by Governor Newsom to assess the impact of the current utility liability framework on financial markets, will also inform how leaders approach the issue next year. Addressing this issue will not be easy and will require compromise from all parties to be truly successful.

In addition to continuing to fund the DSGS program in the short term, the state should also ensure that batteries, solar, and other flexible technologies can continue providing value to the grid long-term. SB 913 provides a long-term pathway for these resources to be integrated into the state’s resource adequacy program and be valued for the reliability they provide, but the work doesn’t end with Governor Newsom’s signature. Turning that pathway into market opportunity will require clear rules, a thoughtful regulatory process, and continued engagement to make sure the law works as intended. CAISO’s Demand and Distributed Energy Market Integration (DDEMI) initiative can also build on SB 913 by allowing these resources to participate more directly in wholesale markets. The state must work to remove barriers to market-based participation so these resources can help bolster the grid long-term.

United remains committed to implementation and making sure California follows through on the progress made this year, as well as revisiting missed opportunities to continue bolstering market access for advanced energy resources in the 2027 legislative session.