California Advances Two Bills to Value Behind-the-Meter Batteries as Grid Capacity
- Policy & Markets Regulatory State & Local Regulation
Marin Holt
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- 8 minutes read
- Balcony solar cap: 1,200 W
- Community solar modeled: 5.4 GW over 20 years
- Modeled savings: $6.5 billion
- VPP bills advanced: SB 913 and SB 905
California’s Assembly Appropriations Committee advanced two virtual power plant bills written by Senator Josh Becker, Energy Storage News reported on August 18, 2026. Senate Bill 913 directs the California Public Utilities Commission to build a valuation framework for behind-the-meter batteries. It covers batteries that export power to the grid during peak stress. Senate Bill 905 creates a grid utilization metric that measures the load factor on distribution circuits. Both now head to the Assembly floor. Neither bill carries a capacity target or a cost estimate, and the pressure behind them is a rate trend: California electricity rates doubled over the past decade, a figure both ESS News and pv magazine USA cite as the driver for distributed generation and virtual power plants.
SB 913 targets a narrow accounting limit with wide consequences. Today a fleet of customer-sited batteries earns Resource Adequacy credit only for the load each battery cuts at its own meter. Export the same electron to a neighbor and it counts for nothing. A pending CAISO proposal would let those batteries qualify on their full export potential. SB 913 would push the CPUC to price that capability.
“SB 913 is an important step because fleets of customer devices are currently only allowed to participate in the RA market to the extent those devices reduce the consumption of each individual customer,” said Brad Heavner, executive director of the California Solar and Storage Association. He said the market would pick these resources only when they cost less than competing supply.
SB 905 attacks a different waste. Planners size distribution circuits for a few hundred peak hours a year, and the copper sits underused for the rest. A published load factor would show which circuits already hold spare capacity, and which ones are genuinely full.
“Expanding the size of grid equipment to serve a small number of hours of higher usage wastes ratepayer dollars,” Heavner said.
Two other bills moved the same week. Senate Bill 868, from Senator Scott Wiener, clears permitting and interconnection hurdles for plug-in balcony solar rated up to 1,200 W. Assembly Bill 1813, from Assemblymember Christopher Ward, directs regulators to value community solar and paired storage through the CPUC Avoided Cost Calculator. Grid modeling by Aurora Energy Research puts 5.4 GW of community solar and storage over 20 years at $6.5 billion in systemwide cost savings. A data access bill stalled in the Senate.
Why It Matters
Resource Adequacy rules decide whether distributed batteries count as capacity or remain a load-reduction footnote. That distinction sets what an aggregator earns. California electricity rates doubled over the past decade. The batteries already sit on the distribution system, bought and paid for by customers, while the state keeps procuring peaking capacity on top of them.
Storage developers should track the CAISO proposal alongside the bill. SB 913 orders the CPUC to write a framework, and the framework sets the revenue. A statute that starts a proceeding is not a tariff, and the numbers arrive later.
SB 905 deserves equal attention from anyone stuck in an interconnection queue. Published load factors showing real headroom become an argument against a costly upgrade. That is exactly why utilities will fight over how the metric gets defined.
Sources
- ESS News
- California Legislature, SB 913
- California Legislature, SB 905
- California Legislature, SB 868
Critical Perspective
The Aurora Energy Research modeling behind AB 1813 puts 5.4 GW of community solar and storage at $6.5 billion in systemwide savings, and SB 913 now asks the CPUC to find a comparable number for exported battery capacity. The commission has run this exercise before under NEM 3.0, applying the same Avoided Cost Calculator to rooftop solar and cutting residential export credits sharply. Green Mountain Power in Vermont skipped the valuation docket and paid customers directly for shared Powerwall capacity, and it built a working fleet without one. If California prices exports below the installed cost of a battery, who buys the next one?
Sources
- ESS News
- California Legislature, SB 913
- California Legislature, SB 905
- California Legislature, SB 868
