Two VPP bills are awaiting California Governor Gavin Newsom’s signature, while Octopus Energy US has completed its investment in behind-the-meter (BTM) flexibility platform provider Uplight.
Two VPP bills pass California’s legislature
Two virtual power plant (VPP) bills have passed California’s legislature and now awaiting Governor Gavin Newsom’s signature.
Senate Bill 905 (SB 905) and SB 913, both authored by State Senator Josh Becker, cleared their final legislative hurdles and are expected to receive gubernatorial approval despite Newsom vetoing three VPP-related measures last year.
The bills aim to unlock value from California’s rapidly expanding fleet of customer-owned battery energy storage systems (BESS), solar installations, electric vehicles (EVs) and other flexible energy assets by enabling these resources to participate more fully in wholesale energy markets.
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SB 913 would mandate the California Public Utilities Commission (CPUC) to establish a valuation methodology for customer-sited BESS to export power onto the grid during periods of system stress.
The legislation builds upon a recent California Independent System Operator (CAISO) staff proposal that permits exports from behind-the-meter batteries to participate in the statewide energy market.
This framework would enable aggregated fleets of customer batteries to qualify for resource adequacy (RA) contracts based on the full volume of stored energy they can dispatch on demand.
Under current market rules, fleets of customer devices can only participate in the RA market to the extent those assets reduce consumption at individual customer sites.
If any customer within an aggregated fleet exports energy back to the grid, that exported power receives zero valuation—a structure that significantly constrains the volume of energy fleet operators can offer to the wholesale market.
The proposed change would allow fleet operators to bid the total energy capacity they can reliably deliver from managed devices, rather than relying on estimates of individual customer consumption patterns.
By design, these resources would only be selected when available at lower cost than competing generation sources, creating downward pressure on wholesale prices.
SB 905 would establish a grid utilisation metric measuring the load factor across each segment of California’s distribution network.
The metric would identify which circuits and substations can accommodate substantially higher energy throughput without expensive infrastructure upgrades by redistributing demand away from peak periods.
Analysis shows many distribution circuits operate well below capacity for most hours, reaching full utilisation for only a limited number of peak demand periods annually. Expanding grid equipment to serve these brief peaks represents an inefficient use of ratepayer funds, according to industry advocates.
Once the grid utilisation metric is implemented, the CPUC would gain a straightforward mechanism to mandate annual improvements in utilisation rates.
Utilities would respond by developing load flexibility programmes that incentivise customers to shift electricity consumption to off-peak hours. Beyond requiring net reductions in total utility costs, SB 905 does not prescribe specific programme designs.
The legislative action comes as California confronts what the California Solar & Storage Association (CALSSA) characterises as an energy affordability crisis, with electricity rates climbing sharply even as demand continues to grow.
Brad Heavner, executive director of CALSSA, stated, “California now has hundreds of thousands of solar-charged batteries installed on garages, campuses and farms throughout the state, with 2,000 more added every week. These and other customer devices could play a key role in mitigating energy prices if California’s energy market rules allow them to do so.”
Octopus Energy US closes investment in Uplight
In other VPP news, retail electricity provider Octopus Energy has closed its investment in US energy software company Uplight.
Announced 1 September, Uplight stated it will continue to operate as an independent company, using the investment to build on its focus in “customer-centric flexibility management.”
The company further stated that the investment supports its next phase of growth, including US$1 billion in customer savings and more than doubling flexible capacity to 20GW over the next five years.
Nick Chaset, CEO of Octopus Energy US, will also hold the role of CEO as Uplight. The two companies will introduce two of Octopus Energy’s products into Uplight’s solution suite.
Customer engagement application Octopus Shift provides a unified platform where consumers can register for and take part in utility flexibility schemes. The application streamlines the enrollment process and maintains ongoing customer participation through rewards, converting that engagement into grid capacity for utilities.
Octopus PowerStore delivers residential BESS through a turnkey model requiring no upfront customer investment, eliminating a major obstacle to home BESS adoption. This approach provides utilities with dispatchable storage capacity for peak demand management whilst extending storage access to a wider customer base than pricing barriers would typically permit.
Octopus Energy contributes substantial operational scale to the collaboration. The company manages the world’s largest VPP, noting a 2GW milestone in September 2025, and supplies its technology and customer engagement solutions to across 27 countries.
Schneider Electric, already an investor in Uplight, maintains its support alongside Octopus Energy’s newly acquired majority position, backing the company’s expansion through Schneider Electric’s portfolio of grid, software, automation and energy management solutions.
The partnership will help drive forward grid flexibility and demand-side management capabilities, enabling utilities to convert distributed energy resources into scalable, dependable and cost-efficient capacity that advances grid modernisation and the energy transition.
Uplight started through the 2019 merger of a group of separate start-up companies including Simple Energy and Tendril.
In 2021, Uplight reached a valuation of US$1.5 billion following investment from groups including Schneider Electric.
In March 2025, Uplight announced it would partner with utility San José Clean Energy to expand the California utility’s demand response programme.
San José Clean Energy claimed it would be able to enroll a total of 25MW of dispatchable energy by 2028 and 5MW by the end of that summer.
Hannah Bascom, general manager of Uplight stated of the investment from Octopus, “This is a new chapter for Uplight as we build on our critical capacity services for our utility customers.”
Battery Asset Management Summit USA 2026 will be held 15-16 September in Garden Grove, California, hosted by Energy-Storage.news publisher Solar Media (part of the Informa Group). The agenda emphasises addressing the roles of AI, cybersecurity, and second-life applications, broken down into two tracks: Technical Asset Management and Commercial Asset Management. This year, the conference is also co-located with Solar & Storage Finance Summit USA. Visit the official site for more details.
