At a Glance

  • Sonoma Clean Power (SCP), a public power provider in Northern California, announced last week that it will launch a program to install smart thermostats for free, with no upfront costs, for up to 1,000 income-qualified customers.
  • The thermostat deployment is part of its broader effort to expand a multi-resource virtual power plant (VPP). In November, SCP said the VPP encompasses thousands of electric vehicle chargers, battery energy storage systems, heat pump water heaters, and smart electrical panels. The California Energy Commission (CEC) provided a $4.99 million grant for the project, and SCP will contribute $1 million of its own funds.
  • The grant and matching funds will also be used to deploy 40 smart electrical panels and battery systems in multifamily housing to increase tenant participation, and to invest $250,000 in partnerships with community organizations to support multilingual outreach and enrollment efforts. SCP said the grant funds are available through the first quarter of 2029.

Deep Dive

Felicia Smith, SCP's director of customer energy solutions, told Utility Dive that the VPP builds on a behavioral demand response program with approximately 12,500 participants. SCP serves about 500,000 customers in two counties north of San Francisco.

Smith said the behavioral program was "designed to be extremely easy to participate in, requiring no technology," which has resulted in "very high response rates." In 2025, she said, 92% of participants responded to day-ahead phone and email alerts about upcoming energy events by modifying their electricity usage.

The CEC grant and SCP matching funds will help the utility increase the number of smart devices enrolled in automated demand response, particularly among low-income or other disadvantaged customer segments where participation is currently low. Smith added that approximately 37,000 SCP customers meet the income eligibility requirements for free smart thermostat installation, though not all of them have central air conditioning.

Smith said SCP estimates the combined value of the free smart thermostat and installation labor is approximately $400 per customer.

SCP is also working to expand its "SCP Rewards" program, a voluntary bring-your-own-device (BYOD) initiative for customers who already own or plan to install smart thermostats. According to the program page, participating customers receive $200 when they enroll their thermostat and a $5 monthly bill credit for the duration of their participation.

Smith said SCP cannot know exactly how many of its customers own smart thermostats that are not yet enrolled in SCP Rewards, but because its customer base is relatively affluent and "tech-savvy," the percentage is likely higher than the national average.

But SCP still has many customers without smart thermostats, and more than 5% of customers receive electricity bill discounts through California's CARE and FERA programs. Smith said the CEC funding is a critical equity tool for SCP.

"We are very focused on low-income customers, and that is strategic because these households carry a high bill burden," Smith said. The partnerships SCP is building with community organizations will help because those organizations have greater credibility than the utility, she added.

"If our customers hear about [automated demand response] from a nonprofit they know, we think they may be more inclined to sign up... This helps us strengthen our relationship with customers in a way that feels comfortable for them," she said.

Smith said that as the VPP scales up, it has the potential to lower SCP's wholesale power costs and reduce the need for new distribution system investments.

But the near-term priority is "getting people comfortable with the idea that we may need to interact with the grid more," she said.