Utility Dive Trendline on Virtual Power Plants

Nevada utility regulators have cleared the way for NV Energy to develop two performance-based credit programs for distributed energy resources that provide energy or capacity services during load flexibility events.

Under the Energy Grid Services and Capacity Grid Services riders, customer-sited resources would be eligible to receive payments for dispatched energy based on hourly market pricing in NV Energy territory and for load reduction based on an avoided cost of generation and transmission calculation, the Public Utilities Commission of Nevada said in an Aug. 11 order.

But by limiting participation of third-party resource aggregators, the commission “misses an opportunity to establish a broader market that could have expanded customer choice, encouraged innovation, and helped lower energy costs,” one of the intervenors in the proceeding said in August.

The Grid Services Rider tariffs will replace a narrower demand response framework that has been on the books for 15 years and adds NV Energy to the list of U.S. utilities overseeing or participating in pay-for-performance virtual power plants, the commission said. 

Most Nevadans get their power from NV Energy’s two subsidiary electric utilities, Nevada Power Company and Sierra Pacific Power Company. NV Energy is owned by Berkshire Hathaway Energy, a subsidiary of the publicly traded industrial conglomerate founded by Warren Buffett.

The Solar Energy Industries Association, Solar United Neighbors and Advanced Energy United pushed the commission to modify the tariffs to allow customers to assign performance compensation from batteries, thermostats and other distributed resources to third-party owners, portfolio aggregators and original equipment manufacturers.

They also asked the commission to require NV Energy to implement a digital platform to facilitate secure electronic data sharing with third parties with customers’ consent; and to require the NV Energy to include a virtual power plant resource type in its next integrated resource plan that would account for VPP capacity and energy like other supply resources.

NV Energy pushed back on all three asks, the commission said in a summary of the proceedings. 

On compensation assignment, it said technological, commercial and wholesale market barriers made that impractical in the near term. On open data sharing, it argued that a digital exchange platform would not be required to successfully implement the proposed tariffs or load flexibility programs nor would be particularly relevant in a vertically integrated utility market like Nevada’s, which does not permit competition between electricity retailers. As for the VPP request, intervenors could raise that issue in an upcoming IRP proceeding, NV Energy said.

In its order, the commission largely accepted NV Energy’s arguments. It declined to allow assignment of compensation; require open data sharing; or require NV Energy to include a VPP resource type in its next IRP, citing “insufficient information to determine whether a VPP is a viable resource option for Nevada.”

In an email, commission spokesperson Peter Kostes declined to comment beyond the text of the order but noted the proceeding remains open at least until this week’s deadline for parties to file a reconsideration request.

Brian Turner, a senior director with Advanced Energy United, told Utility Dive that while his group was “very supportive of [the commission] going to this grid services tariff and transforming to a pay-for-performance grid services structure,” the order will curtail customer choice and could hinder adoption of behind-the-meter batteries in a state with relatively high residential solar penetration.

“Nevada is one of the sunniest states in the country, and it has pretty good solar deployment, but very low [battery] attachment rates … there’s huge potential to add batteries to the system to get that attachment rate up and get dispatchable capacity into neighborhoods where it’s needed,” Turner said. 

Assignability is particularly important for behind-the-meter battery adoption after the federal investment tax credit for customer-owned residential batteries expired at the end of 2025, Turner said. Third-party battery providers that own and operate customer-sited energy storage systems have stepped up to keep behind-the-meter batteries affordable, thanks in part to available revenue from utility and market programs, he said.

Third-party aggregators also tend to be more reliable program participants than individual customers because they aggregate more distributed capacity than needed to meet their obligations, creating a buffer when customers opt out, Turner added. 

He noted that Xcel Energy’s Colorado subsidiary, another vertically integrated utility in a Western market, chose to put forward an aggregator-based tariff recently for its Aggregated Virtual Power Plant program.

“They did so because it gave them more certainty and visibility into the performance of the portfolio overall,” Turner said.

In an email, NV Energy spokesperson Katie Jo Collier said the PUCN's initial guidance on the grid service tariffs "had a narrower scope than what Advanced Energy United understood."

"Very simply, it was not the forum for deciding upon the definition and role of competitive aggregators and curtailment service providers in the State of Nevada, nor the place for the PUCN to review and approve VPP programs or competition frameworks," Collier said.

Collier said stakeholders would continue to discuss the role of third party aggregators in Nevada as part of a PUCN investigatory docket related to NV Energy's future planned participation in the CAISO Extended Day Ahead Market. 

NV Energy is expected to join the EDAM in late 2028, Turner said.