California’s Demand-Side Grid Support (DSGS) program guidelines were updated on April 11th, 2025. The last update to the DSGS guidelines was in March 2024, and many were interested to see what direction the California Energy Commission (CEC) would take the program with its next update. These updated guidelines offer new rules, options, and incentive structures that signal a successful program and a thriving future for opportunities.
We released our DSGS program option for ETB Developer back in March 2024 and have followed the program closely since then. We specifically offer Incentive Option 3: Market-Aware Storage Virtual Power Plant for our ETB Developer users, and we make it incredibly easy to model and enroll into the program.
Because we exclusively offer Incentive Option 3, we’re going to focus on the updates to this option in these new guidelines. Let’s go through and highlight the main points from the 2025 DSGS guidelines for Incentive Option 3:
- Update: Monthly performance submissions
Monthly performance reports are now required by the CEC to complete the compensation settlement process at the end of each month during the program season. Energy Toolbase, as the DSGS Provider, will submit these reports on behalf of the participant, so there’s nothing new to worry about here.
- Update: Increased performance cap from 1MW to 2MW
Participating sites used to have a performance cap of 1,000 kW (1MW) discharge during any hour of a program event; however, this 2025 update raised the cap size to 2,000 kW (2MW). This greater cap size opens more opportunities for sites with larger batteries to participate in Option 3 program events.
- Update: Approved the 30% performance bonus for 2025 and 2026
The 30% performance bonus for 2025 and 2026 enrollment is a nice incentive to further adoption of the program. This bonus was originally for participants who enroll in 2023 and 2024, but the CEC extended it an additional two years. Here are the incentives with the 30% bonus included:
$107.64/kW for 4-hour resources
$96.88/kW for 3-hour resources
$80.73/kW for 2-hour resources
- Update: Established a Day-Ahead emergency trigger so that resources can respond similarly to events that are triggered by the LMP trigger
- Update: Established a day-of Event structure that does not impact performance for participation in day-ahead events, and compensates dispatch at a rate of $1/kWh
There are now two incentive structures for Option 3, one is for day-ahead event hours and the other is day-of event hours. Day-ahead event hours are paid out based on a participant’s $/kW demonstrated capacity, and they are paid the $/kW incentive rates seen above.
Participation in day-of events is paid at a rate of $1/kWh of net discharge. DSGS participants enrolled in the program through ETB can rest easy knowing that our ETB Controller with Acumen AI™ software knows exactly when to discharge your storage asset(s) during these event triggers to maximize participation and payment.
- Update: Maintained the current baseline methodology and established a future cadence to update baseline values for future years starting in 2026.
The CEC’s decision to keep the current baseline values for now is good news since the current factors are more favorable for calculating a participant’s compensation than the originally proposed values. This new update cadence does mean that these factors could change in the future, and that’ll be something to keep an eye out for.
In addition to the DSGS program, we also recently expanded our demand response program offerings to include two programs for users located in the Northeast market: ConnectedSolutions and Clean Peak Standard. Our ETB Developer users can easily model, enroll, and participate in these programs through our platform and unlock new revenue opportunities for their projects by doing so.
Demand response and grid services programs are alive and well across the country, and we’re excited to continue to add to the list of programs we can offer our ETB Developer users. Sign up for a 14-Day Free Trial to start modeling your projects with these programs today!
