California Choice Energy Authority (CalChoice) is preparing to modernize its grid management by launching a Distributed Energy Resources Management System (DERMS), a move that could transform how local communities consume and pay for power.

This program seeks to turn everyday household technology like smart thermostats, electric vehicle chargers and battery storage into a virtual power plant. By coordinating these assets, CalChoice can reduce the need for expensive energy purchases during heatwaves or periods of high demand.

“We are building the foundation of the grid and the DERMS framework first,” said CalChoice Interim CEO Rob Johnson. “By finalizing our contracts and technical roles behind the scenes this spring, we ensure that when we go to market at the end of summer, the experience is seamless for our customers.”

To power the system, CalChoice is exploring a platform that will manage connected devices and coordinate incentives for participating customers, helping households play a direct role in strengthening grid reliability.

The initiative will roll out in stages, beginning with integrating existing deployed devices, such as battery storage systems, into a single, unified platform. CalChoice is first finalizing the specific participation rules and financial reward levels for each member community to ensure the program is tailored to local needs.

“A virtual power plant allows us to monitor and manage a fleet of energy assets to shift load when power is most expensive,” continued Johnson. “This system is a key tool for reducing grid stress during challenging market conditions, and we look forward to developing the program.”

The DERMS platform provides CalChoice and its member agencies with a sophisticated tool to lower greenhouse gas emissions and improve local air quality. It also creates a system that provides financial incentives for customers who help balance the power grid.

Following the CalChoice Board of Directors’ authorizations in February, CalChoice is working with Lunar Energy to finalize the program’s technical foundation. Officials expect the final contracts to be presented to the Board for approval this spring, with a full program launch targeted for the end of August 2026.