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"Michael, I have no clue what a virtual power plant is."
That's how this one started. Eighteen months later it's in every energy conversation we're having — and utilities across the West are already running programs that pay their own customers for it.
In this episode of the Rural E Podcast, co-host Michael Kluz walks us through the research behind his master's thesis on virtual power plants (VPPs) and what they could actually mean for rural communities. Not theory — real programs, real payments, real numbers.
The short version: a VPP is software that ties thousands of small energy resources together — home batteries, rooftop solar, smart thermostats, EVs — so they act like one power plant. Think of the software as the conductor of an orchestra. Utilities get capacity when the grid is stressed. You get a rebate, a per-event payment, and a battery in your garage that keeps the lights on when the line goes down.
In this episode:
▸ What a virtual power plant actually is — and why "distributed power plant" is the better name
▸ The Department of Energy's definition, and why every utility uses a different one
▸ How VPPs flip the grid from one-way to bi-directional — and pay ratepayers for it
▸ The three VPP models: turnkey third-party, utility-managed, and utility-orchestrated
▸ VPPs vs. microgrids — the difference nobody explains clearly ▸ Real programs in the West: Portland General Electric, Pacific Power, Puget Sound Energy
▸ Why small co-ops probably can't do this alone — and the regional approach that fixes it
▸ Vehicle-to-grid and V2X: using your EV as a house battery ▸ The cost comparison that changes the math: $99/kW-year for a gas peaker vs. $68 for utility-scale storage vs. $42 for a VPP
▸ Google's deal with Voltus for 100 MW in PJM — data centers are now funding VPPs
▸ The trust question: who controls your thermostat, and the 20% battery floor that protects you
▸ Why resiliency — not savings — is the #1 benefit ratepayers actually care about
One thing to take away: this isn't a silver bullet, and it isn't one-size-fits-all. Every rural-serving utility is different. The programs that are working are the ones designed around the community they serve — with opt-outs, advance notice, and customer-set limits built in from day one.
ABOUT THE RURAL-E PODCAST
Real stories from real people working in rural energy. We talk to the farmers, ranchers, engineers, and program folks doing the actual work — no politics, just what works and what doesn't.
IN THIS EPISODE Host: Robert Wallace Co-host: Michael Kluz
RESOURCES MENTIONED 2023 U.S. Department of Energy Pathways to Commercial Liftoff: Virtual Power Plants Report
https://climateprogramportal.org/wp-content/uploads/2025/06/LIFTOFF_DOE_VPP_2023.pdf
2025 U.S. Department of Energy Pathways to Commercial Liftoff: Virtual Power Plants 2025 Update
https://www.smartenergydecisions.com/wp-content/uploads/2025/04/liftoff_doe_virtualpowerplants2025update.pdf
2024 RMI Virtual Power Plant Flipbook
https://rmi.org/app/uploads/dlm_uploads/2024/06/VP3_flipbook_v1.1.pdf
2023 Brattle Real Reliability: The Value of Virtual Power
https://www.brattle.com/real-reliability/
2025 Rockcress Consulting and Lawrence Berkeley National Laboratory Virtual Power Plants: Insights, Profiles and Inventory
https://energyanalysis.lbl.gov/publications/virtual-power-plants-insights
QUESTION FOR YOU: Would you let your utility use your battery or thermostat if they paid you for it — and where's your line? Drop it in the comments.
