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AB 740

Virtual power plants: load shifting: integrated energy policy report.

2025-2026 Regular Session Introduced by Bob Archuleta and 2 co-sponsors

AB 740 mandates California to develop a plan for virtual power plants, enhancing energy management and load shifting, benefiting consumers and reducing emissions.

Consideration of Governor's veto pending.
#virtualpowerplants #integratedenergypolicyreport #loadshifting
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Bill Summary · AB 740

Summary of AB 740: Virtual Power Plants and Load Shifting

Bill Number: AB 740
Introduced: February 18, 2025
Status: Consideration of Governor's veto pending
Author: Harabedian
Classification: Bill
Subject: Virtual power plants, integrated energy policy report, load shifting

Purpose and Intent

AB 740 aims to enhance California's energy management by establishing a framework for the deployment of virtual power plants (VPPs) and improving load shifting strategies. The bill seeks to support the state's energy goals by requiring the State Energy Resources Conservation and Development Commission (Energy Commission) to develop a comprehensive plan for VPP deployment, which will be included in the biennial integrated energy policy report.

Key Provisions

  1. Virtual Power Plant Deployment Plan:

    • The Energy Commission is mandated to adopt a VPP deployment plan in the next update of the biennial integrated energy policy report after January 1, 2027, contingent on available funding.
    • The plan must identify necessary resources, policies, and timelines to meet statewide load-shift goals.

  2. Annual Reporting by Electrical Corporations:

    • Each electrical corporation must report annually to the Energy Commission on its contributions toward achieving the load-shift goals established in previous reports.

  3. Definitions:

    • Virtual Power Plant: An aggregation of distributed energy resources (DERs) that can be managed to balance electricity demand and supply, including electric vehicles, smart appliances, and battery storage systems.
    • Smart Devices: Appliances that can adjust energy use and are internet-connected, allowing remote control with customer consent.

  4. Consultation and Stakeholder Engagement:

    • The Energy Commission is required to consult with the Public Utilities Commission, the Independent System Operator, and various stakeholder groups, including disadvantaged communities, to gather input for the VPP plan.
    • At least two public workshops must be held to solicit public feedback.

  5. Assessment of Barriers and Opportunities:

    • The plan must evaluate barriers to resource adequacy for VPPs and propose solutions, including cost assessments relative to alternative energy sources.

Impact

  • Who is Affected:

    • Electrical corporations will have new reporting obligations.
    • Consumers may benefit from enhanced energy management and potential cost savings through optimized energy use.
    • Stakeholders in the energy sector, including industry representatives and consumer organizations, will have opportunities to influence the development of the VPP plan.

  • Environmental Benefits:

    • The deployment of VPPs is expected to support California's goals for reducing greenhouse gas emissions and improving grid reliability.

Procedural Aspects

  • The bill has passed through various legislative committees and was enrolled and presented to the Governor on September 23, 2025.
  • It was vetoed by the Governor on October 3, 2025, and is currently pending consideration of that veto.

Conclusion

AB 740 represents a significant step towards modernizing California's energy infrastructure by promoting the use of virtual power plants and enhancing load shifting capabilities. The bill emphasizes stakeholder engagement and aims to create a more resilient and efficient energy system for the state.

Compiled from official sources — confirm details with the bill’s official record.

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