As the Northeast accelerates its transition to a decarbonized, electrified grid, virtual power plants (VPPs) are emerging as a critical tool to help manage the challenges. However, despite their offer of cleaner and more affordable power through their ability to provide deeper integration of renewables and demand flexibility, VPPs will not take off over night, nor accelerate without strategic effort.
A panel held at RE+ Northeast 2025 last week entitled “VPPs: Maximizing Their Value Through Smart Regulatory Choices” discussed strategies to improve the grid through VPP development and rate design. All panelists expressed that the best way to do this is with a pragmatic approach, to “make energy fun again” with customer involvement, and to use tools that enable people to see how what their electrical bill would look like under different rate structures based on individualized electrical use.
Panelists included Thad Culley, a director of public policy at Sunrun; Rachel Bryant, a senior director of regulatory and policy business development at GridX; Kat Burnham, a senior principal at Advanced Energy United; and Tilak Subrahmanian, Eversource’s vice president of energy efficiency and electric mobility. The panel was moderated by Lakin Garth, the director of emerging technology for Smart Electric Power Alliance (SEPA).
“As we face this massive load growth from electrification, VPPs will be critical in managing the grid of the future,” Subrahmanian said. “But we have to consider the broader implications and work collaboratively to develop the right regulatory frameworks and technological capabilities.”
“VPPs have proven very successful at addressing peak demand, which is a huge part of our bills and grid stress in the Northeast,” Burnham said. “But their true potential lies in their ability to provide a range of grid services, from capacity and energy to ancillary support.”
GridX designed a pilot enrollment for a Northeast utility so it could immediately get customers involved. “By doubling your enrollment, you see a lot more peak load reduction,” Bryant said, adding that, “With proper rate design and customer education, you can see a pretty decent peak load reduction just with rate design alone.”
“The marketing of everything is really important in how we pitch VPPs,” Bryant said. While acknowledging that there can be additional expenses for electrical use at certain hours, “I view it as, yes, you have peak pricing for four hours, but then you also have discount pricing for the other 20 hours,” she said. “So, depending on your low flexibility and what you’re able to do, which is exactly what VPPs offer, we can see tremendous potential.”
Burnham emphasized the importance of regulatory environments that provide predictability and certainty for all stakeholders. Successful VPP programs, she said, are those that empower customers, make participation easy, and provide clear financial incentives.
Burnham’s point echoed across the panel when discussing Connected Solutions, a program that enables utility customers in the Northeast to participate in VPPs and demand response events.
“Connected Solutions has the most plug-and-play customer-friendly, ready-to-launch experience,” Culley said.
The connected solutions programs in Massachusetts and New York have seen strong customer participation by leveraging smart devices and automating the process, in contrast to earlier demand response programs that required manual adjustments.
According to Subrahmanian, Connected Solutions has about 70,000 residential customers and 350 commercial and industrial customers across 800 sites.
However, Burnham pointed out that while Connected Solutions has strong participation with “hundreds of thousands” of people enrolled, she noted that there are millions of customers throughout Massachusetts and New York.
Participation will grow by ensuring “customers understand the value of these programs is putting money back in their pocket,” she said. “That doesn’t usually happen with utilities, and so this is a way to shift the narrative.”
Burnham believes that another way to ensure VPP growth is successful is to leverage a range of different devices, including EVs and chargers, water heaters, and thermostats.
“I think there’s a disconnect, typically in the consumer’s mind,” about how they will be impacted by a different rate structure,” Bryant said. “What we were able to do on the software side is to allow a utility to test out prior to them being implemented, and see exactly how different customer classes will fare under those rate designs.”
Bryant emphasized the importance of making the value proposition clear. “Making energy and rate structures ‘fun again’ through intuitive tools is key to driving customer participation,” Bryant said.
Whenever Culley has a jurisdiction that is considering VPPs, he tells them to “hit the easy button,” he said, “You don’t need to figure everything out at once.” Culley said his approach is to tell regulators that getting the resources deployed has a value stream and can definitely be done. Those resources will lay the groundwork for more sophisticated use cases in the future.
Sunrun has already deployed VPP programs in multiple states, including a recent partnership with Ford that created a vehicle-to-home power plant using customer-owned bidirectional electric Ford F-150 Lightning Trucks. Sunrun networks and monitors the F-150 Lightning trucks to share stored energy during peak summer hours. The customers are paid based on how much energy they share. Culley noted one customer in particular made $1700 last summer.
Bryant pointed to the potential of dynamic pricing at the wholesale level to better reflect the value of VPP flexibility. “We’ve seen that by properly incentivizing customers, you can achieve significant load reduction through rate design alone,” she said.
Overall, the panel discussion underscored the rapidly evolving role of VPPs in the Northeast’s energy landscape. While they have proven effective at addressing system peaks, the experts agreed that the true potential of these distributed resources lies in their ability to provide a range of grid services.
Achieving this will require continued collaboration between utilities, regulators and third-party providers to develop the right policies, rate structures, and technological capabilities.
While she is optimistic, Burnham said there is still a lot of work to do.
“Policy work is a team sport, and so a lot of collaboration, working with the state agencies and working with industry directly to make sure that codes are forward thinking and proactive,” she said. “There’s a lot of human learning to be done. So it’s not just customer education,” but also with educating people about the industry,” she said, “and that’s something we’re figuring out.”
