Governor Newsom Vetoes Energy Bills Impacting Virtual Power Plants and Load Management

What's Happening?

California Governor Gavin Newsom has vetoed several energy-related bills, including AB 740, which aimed to implement a virtual power plant (VPP) deployment plan. The bill had garnered bipartisan support and was projected to save Californians $750 million annually while providing over 7,500 MW of capacity. Despite supporting the concept of distributed energy resources, Newsom cited potential costs to the California Energy Commission's primary fund, which is already facing a structural deficit, as a reason for his veto. Other vetoed bills include SB 541, which would have required analysis of load-shifting strategies, and AB 1408, which focused on integrating surplus interconnection into planning. Newsom argued that these bills were either redundant or could increase costs and undermine grid reliability.

Why It's Important?

The vetoes represent a significant setback for clean energy advocates in California, who viewed these bills as crucial for advancing the state's energy efficiency and cost-saving measures. The decision could impact California's ability to leverage existing solutions to address affordability and energy capacity issues. By rejecting these bills, Newsom has been criticized for potentially walking away from billions in savings for ratepayers. The vetoes also highlight the ongoing challenges in balancing fiscal responsibility with the state's ambitious clean energy goals, particularly as California continues to grapple with energy reliability and cost concerns.

What's Next?

The vetoes may prompt further discussions and negotiations among lawmakers, energy advocates, and industry stakeholders to find alternative solutions that align with fiscal constraints while advancing clean energy initiatives. There could be renewed efforts to address the structural deficit in the California Energy Commission's fund to support future energy projects. Additionally, stakeholders may explore other legislative or regulatory pathways to achieve the objectives outlined in the vetoed bills, potentially leading to revised proposals in the next legislative session.