The Arizona Corporation Commission Approves a New Virtual Power Plant Pilot

FOR IMMEDIATE RELEASE

Contact:
Autumn Johnson
(520) 240-4757
[email protected]

Phoenix, AZ - Today, the Arizona Corporation Commission (ACC) voted 4-1 to approve Arizona Public Service's (APS) Virtual Power Plant (VPP) pilot program.  AriSEIA proposed that APS adopt a VPP in its 2022 rate case. The ACC voted on February 22, 2024 to proceed with a VPP as a pilot program and ordered APS to file a plan of administration to implement that program. That implementation plan was voted on today and passed 4-1 with only Vice Chairman Myers voting no.

A virtual power plant allows a utility to aggregate customer owned devices, like batteries, to provide capacity back to the grid. APS' proposal is a pay-for-performance model in which customers are paid only when they provide capacity to the grid and they are paid a rate less than that of comparable wholesale purchases, saving all rate payers money.

"Virtual power plants are a win win for customers and the grid. These batteries are paid for with private capital and are already interconnected and ready for use today. This program will help APS meet the growing demand for electricity in Arizona," said Autumn Johnson, Executive Director of AriSEIA. "Trico already has a VPP and Salt River Project (SRP) just voted to implement one this year. Tucson Electric Power (TEP) plans to propose one in its next rate case. Arizona is moving in the right direction."

VPPs are deployed all over the country. There are more than 500 in the US and their capacity is expected to top 60 GW by 2030. According to the US Department of Energy, “VPPs are among the critical solutions to meet the pressing challenges the grid faces today and in the near term to keep electricity rates affordable while maintaining grid reliability and resilience.”[1] According to Brattle, VPPs could save US utilities $15-35 billion in capacity investment over ten years.[2]

The full docket can be found here.

About AriSEIA

AriSEIA is the leading voice of the solar industry in Arizona, dedicated to advancing solar energy through advocacy, education, and collaboration. With a commitment to promoting sustainable energy solutions, AriSEIA serves as a catalyst for the growth and development of Arizona's solar industry.

[1] US DOE, Pathways to Commercial Liftoff: Virtual Power Plants 2025 Update, January 2025, available here https://liftoff.energy.gov/wp-content/uploads/2025/01/LIFTOFF_DOE_VirtualPowerPlants2025Update.pdf. 

[2] Brattle, Real Reliability: The Value of Virtual Power, May 2023, available here https://www.brattle.com/wp-content/uploads/2023/04/Real-Reliability-The-Value-of-Virtual-Power_5.3.2023.pdf.