Historically high and long-lasting temperatures are expected in California this summer, accompanied by increased risks of extreme heat events and wildfires. Experts say residents can expect hotter nights and longer heat waves as well. As electric customers turn up the AC for more extended periods, electricity demand will surge, putting pressure on the aging power grid that not only makes it less effective at delivering energy but also increases the risk of costly outages, slow recovery, and long-term affordability concerns.
The North American Energy Reliability Council (NERC) highlights how battery energy storage systems (BESS) paired with renewable energy like solar can bolster power grids against extreme weather, citing California as an example of progress.
To avoid blackouts, California’s energy sector has advanced some of the nation’s most innovative and effective energy backup systems—programs that helped the state weather heat emergencies without relying on fossil gas plants. For the past three years, these two programs have kept the lights on for millions of Californians and helped prevent major outages in the face of extreme weather and quickly increasing demand.
But now, California Governor Gavin Newsom is proposing over $250 million in cuts to those very programs, potentially destabilizing the state’s ability to meet demand when it matters most.
Two critical programs at risk are:
If these proposed cuts move forward, both programs could run out of funding by the end of 2025.
For the last three summers, programs like DSGS and DEBA have played a critical role in preventing major outages across California. DSGS is a key reason the state has avoided falling back on its oldest and least reliable gas plants for the past two years, but the Governor’s proposal would slash vital clean energy reserves, forcing California to rely on less reliable, polluting coastal gas plants during heat waves or other grid emergencies.
Californians know the consequences of relying on unreliable energy. In 2022, California’s emergency response gas plants failed when they were needed most. Amid the extreme heat, the gas-fired power plants broke down, resulting in a loss of $280 million in curtailed energy, enough to power 28 percent of California households.
Nimble grid backup programs, such as DSGS, have protected Californians from similar crises, and have consistently proven to be reliable and cost-effective. Additionally, these programs save Californian consumers money. California’s fossil fuel grid backups cost $1.2 billion to maintain 2,865 megawatt (MW) of capacity available for dispatch, which puts taxpayers on the hook for an additional $140,000 per MW per year, even if that backup is never used. On the other hand, DSGS pays customers for performance when emergency power is called upon and has paid approximately $26,000 per MW per year over the last three years.
Not only are these programs succeeding, they’re growing and strengthening every year. Since 2022, DSGS capacity has more than doubled, and at its current growth rate, it could provide over half of all grid backup capacity by 2026. If California—a state with some of the most extreme weather conditions in the U.S.—can mitigate weather outages using demand response and renewables paired with battery storage, abandoning those tools would be a disservice to both the state and the nation.
The California Legislature is expected to finalize the state budget in June 2025. Stakeholders are watching the outcome closely as summer readiness preparations continue.
