Fair competition is good for consumers. It delivers innovation, efficiency, lower prices and better services.

We see this in every market. But, due to historical circumstances and their enormous political influence, monopoly utilities have managed to dodge fair competition. Our energy system and consumers are losing out as a result, and with power bills going up around the country, we literally can’t afford to keep up the status quo. Without competition, the promise of virtual power plants could meet the same fate.

As they have with other technologies like electric vehicle charging, energy efficiency, community solar and rooftop solar, utilities are now trying to exclude fair competition in the emerging market for VPPs. Allowing monopoly utilities to own VPPs and their constituent components would mean missing out on a once-in-a-generation opportunity to create a more affordable and resilient energy system.

VPP programs with customer-owned resources have demonstrated that competition is delivering impressive results. Puerto Rico’s third-party owned VPP, the Customer Battery Energy Sharing Program, has helped the island maintain service in the face of a demand-stressed grid. It is a model for how VPPs should operate to lower costs and increase reliability.

The island’s program has scaled quickly — increasing from just under 40 MW in 2024 to over 500 MW in 2025. More than 80,000 households now participate. Our organization found that the customer-owned batteries program avoided or mitigated at least 10 separate blackouts between June and December of last year.

In California, the Demand Side Grid Support program had more than 1,100 MW at the end of last year. The state has a suite of programs to alleviate limited energy supplies on the grid caused by heatwaves and wildfires. Participants earn credit when they provide backup generation to help balance energy demands and support the state’s electrical grid during extreme events from May to October. This lowers the risk of rotating power outages.

The VPP potential is tremendous. A Brattle Group study found that deploying VPPs nationwide could save ratepayers up to $35 billion.

Speed matters, as does capacity. As utilities across the country are racing to meet data center demand and fix aging distribution and transmission infrastructure, VPPs show that when customers are allowed to bring their own devices in an open-access environment, we get resources quickly that don’t require utility capital spend with a rate of return.

Predictably, from Minnesota and Colorado to Maryland and Virginia, utilities are telling legislators and regulators that they should be able to own all of the resources that make up VPP programs. There is no convincing evidence for this power move.

When utilities design customer aggregation programs, they limit customer choice and independence in managing their own energy production. After all, VPPs are made up of distributed energy resources typically owned by families and small businesses. If utilities are allowed to own behind-the-meter resources that are the building blocks of a VPP, they will slow adoption of clean energy. Utilities will prioritize infrastructure they own and control over rapid expansion of rooftop solar and other decentralized energy sources. At a time when we need all of the clean energy we can get on the grid as fast as we can get it, we should be enabling private-sector participation, not putting up roadblocks.

That’s why utility regulators in Maryland recently denied a utility’s proposal to own behind-the-meter storage. They instead opted to foster a strong, competitive market from third-party manufacturers and installers. Likewise in Colorado, Public Service Commission staff and other stakeholders opposed a utility’s proposal to participate as an aggregator of distributed energy resources, and because of the opposition, the utility has opted to let third-party providers be the sole aggregators in its program. 

Unfortunately, regulators in Minnesota took a different approach. They granted Xcel a program where the utility is able to deploy their own battery systems over the next two years. In doing so, they rejected proposals from stakeholders in the proceeding to allow third-party participation and competition in the program. Regulators also denied a proposal to create a VPP program with behind-the-meter customer-owned resources. It will be interesting to see how much clean energy Xcel can actually deploy compared to what customers would do on their own with the right incentive structure.

Decision-makers would be wise to deny utility proposals to own and aggregate behind-the-meter storage. Effective VPP programs in the country rely on free market competition by using third-party businesses to aggregate power between customers and utility systems. 

Utilities exist to serve customers, not the other way around. While utility ownership of the solar and battery resources that make up a VPP is not in consumers’ interest, utilities do have an important coordinating role. They can help determine the timing and location of storage resources in their service territory to incentivize siting of distributed energy resources where the grid needs them the most. Meanwhile, the private market and utility customers provide the actual resources. 

Utilities alone can’t build the future we need. But millions of energy-producing Americans can — if policymakers let them.