In the fall of 2024, it became clear to Nathalie Jordi that New Orleans needed a virtual power plant program.
Jordi led community solar efforts for the nonprofit Together New Orleans, which had been working to create resiliency hubs in New Orleans since 2021, installing solar panels and batteries at churches and community centers across the city. And when Hurricane Francine made landfall in mid-September, leaving nearly 50,000 residents without electricity, those first resiliency hubs, known as “community lighthouses,” had successfully sheltered and provided backup power to hundreds of people.
At around the same time, the city of New Orleans was deciding what to do with $30 million it had recently received as part of a larger $250 million settlement that Entergy New Orleans had paid over the mismanagement of one of its nuclear power plants, among other issues.
“The city council asked Together New Orleans to come and give a report on how the Community Lighthouse project had performed during the hurricane,” Jordi told Latitude Media. “And we realized there was an opportunity to ask for an expansion… because we had just outperformed expectation.”
The only problem was, no one at Together New Orleans — which is part of Together Louisiana, a network of over 250 religious and civic groups — really knew how to develop, much less sell, a plan for a city-wide VPP. So, on a Friday afternoon in September 2024, just a few days after Hurricane Francine, Jordi called for reinforcements.
“We are hoping to tackle VPPs next. It’s a natural fit for an org that advocates for low- and moderate-income people, believes in local energy — and owns 1.7 megawatt-hours of battery storage that currently mostly just sits around,” Jordi wrote via email to Arushi Sharma Frank, an energy consultant whom she had heard speak about distributed energy resources and VPPs on a two-hour DER Task Force podcast.
The following week, the city council wanted Together New Orleans to present some ideas for what a VPP program in New Orleans might look like, the email continued: Would Sharma Frank be available for some coaching on how to best go about it?
By the next morning, the two were on the phone.
“[Jordi] said, ‘If we want the money, we need to convince city council in 72 hours,’” recounted Sharma Frank, who is the founder of energy consultancy Luminary Strategies. “So I actually dropped everything I was doing, stayed an extra couple of days in my chair, and wrote their 50-page document in 48 hours.”
The work paid off. That document became the foundation for the Neighborhood Power Plan, a settlement-funded VPP program officially approved by the City Council just before Christmas 2025. The initiative aims to install batteries at 1,500 homes and up to 250 community institutions across the city. It offers up to $10,000 for battery costs, which homeowners can stack with a 30% federal tax credit, plus an extra 10% “energy community” bonus. Once installed, these batteries are expected to plug into Entergy’s broader demand response program; Entergy New Orleans is expected to file an official implementation plan as soon as today.
It was an unusual process and will be an unusual program: the largest per capita city-wide VPP program in the U.S., and certainly the most significant one born from a grassroots community initiative. It’s a unique example of a municipality taking resiliency into its own hands and working with utilities to both protect its communities from blackouts and support a strained grid.
Trenton Allen, CEO of Sustainable Capital Advisors, which specializes in financing resiliency initiatives, thinks this city-led work is especially important now that recent federal funding cuts have exacerbated what were already perceived as gaps in federal or state support when it comes to resiliency.
“Municipalities don’t have the luxury of grabbing their ball and going home when the political winds change,” he said. “They need to meet the needs of their communities and are looking for creative ways to deal with the climate risk… So the question becomes: How can we move forward and execute on solar and storage projects, with the small window left for some tax credits, in a way that allows us to establish resiliency hubs and meet our overall climate goals?”
A legacy of blackouts
In August 2021, Hurricane Ida knocked out all eight transmission lines bringing power into the city, leaving it in the dark for almost two weeks.
As Broderick Bagert, lead organizer at Together New Orleans, described it, the storm never hit the city directly, but it still caused over 30 deaths because of the post-storm power outage that left people trapped in their apartments, without air conditioning.
“Elderly, vulnerable people… were dying in their homes, 80 miles away from the storm, a week after it passed through, because we did not have any of the systems… to protect ourselves from things that absolutely will happen,” Bagert said. “There’s no statistical question of whether a big storm will hit within 80 miles of the city of New Orleans. That is a guaranteed certainty.”
Instead of relying on the government, Together New Orleans, which had just publicly launched that July, came up with the idea to install distributed energy resources at religious institutions and community centers across the city. The centers, which they called community lighthouses, would provide power and air conditioning to residents in a blackout. As of February 2026, the organization has financed and installed 24 sites, with $12 million raised through a combination of philanthropic capital, local and federal funding, and bridge loans.
From a technical point of view, Bagert says, the idea is about as innovative as “ham sandwiches.” But the fact that the project was initiated and executed by a group of community organizations is remarkable. “It shows that it is doable even by a ragtag group of nonprofits that are not typically thought of as savvy in these respects,” Bagert said.
Sonya Norsworthy, who is the head “lighthouse keeper” at Household of Faith Church, told Latitude Media that the resiliency hub has evolved from merely providing electricity, and it now has food distribution, showers, and a partnership with the nearby hospital, among other things.
In Norsworthy’s eyes, both the community lighthouses and the resulting VPP can be traced back to the sense that residents felt a lack of agency during Hurricane Katrina. The catastrophic tropical cyclone, which hit the city in 2005, killed over 1,300 people and caused $125 billion in damages.
“The idea that nobody is going to come and save us, we have to save ourselves, is a pervasive sentiment within the city and around power as well,” she said. “It’s great if the federal government works with us, the state supports it, and the city is a part of it — it makes bringing all those resources together so much easier. But then, administrations change, trends change.”
The feeling is echoed by Jesse George, New Orleans policy director for the Alliance for Affordable Energy, a nonprofit that has been directly involved in setting up the VPP program.
“New Orleans has been on the front lines of the changed climate… We’ve been experiencing reliability issues for years and years, and it got to a point where people were just fed up and started demanding real measures to help people,” George said, noting that the fact that a network or religious and community organization had to set the whole thing up is “symptomatic of the erosion of our social safety net.”
The idea that nobody is going to come and save us, we have to save ourselves, is a pervasive sentiment within the city and around power as well.
The heavy involvement of religious institutions, which constitute the majority of Together New Orleans’ member organizations, is also illustrative of the new role that reliable, clean electricity has come to play in our lives. Religious institutions, which have long been known to provide food, clothes, and shelter when needed, in the last decade have branched into community solar as well, Allen said. It helps that churches often have access to rooftops and parking lots, which makes it easy to install panels and big batteries.
Regulatory VPP champion
The Community Lighthouses project gave Together New Orleans the basic technical chops and cohesion it needed to pursue the VPP. But there were also two specific circumstances that enabled the program to come together. First, there was settlement money available to be used. And second New Orleans exists in a unique regulatory environment where the city council has full, direct regulatory authority over Entergy New Orleans, the private local utility.
In this case, that means that the city council could order Entergy to go ahead and use part of the settlement money for the new VPP, even if the utility didn’t want to.
“Entergy wanted a smaller program because they wanted it to be paid for with rate increases, so that they could keep this pot of settlement funds to disguise and offset future rate increases, or to fund their own stuff. We disagreed on that,” Bagert said; Together New Orleans wanted to use the settlement money for the VPP, specifically in order to avoid increasing rates for customers. (Entergy New Orleans did not respond to a request for an interview.)
On the one hand, the stand-off demonstrates that regulators in certain contexts can really drive change. According to Ryan Hledik, who specializes in DERs regulatory and planning matters at the Brattle Group, “VPPs are not at the top of every regulator’s list of priorities, but this shows that when there is a champion who’s pushing for this at the regulatory level, things can happen.”
But it also highlights a broader challenge for scaling VPPs everywhere: Utilities don’t have much of a financial incentive to pursue them. As John Farrell, co-director of the Institute for Local Self-Reliance, put it, VPPs are resources that a utility neither owns nor can collect a rate of return on, which makes them a potential competitive threat to its operations. “Most utilities, when they are intervening in a regulatory space or a legislative space to talk about these programs, are making a very clear financial calculation and saying, ‘Well, this stuff’s nice, but it’s going to eat into what we can earn,’” Farrell said.
Hledik concurred, adding that “we still need some innovation to align the investor-owned utilities business model with this opportunity.”
Non-ratepayer sources of funding
It took just 15 months from Jordi writing that email for the New Orleans VPP program to be approved. And that speed, in no small part, was thanks to the fact that it could be funded via the settlement money, instead of rate increases.
“The idea that you can use the settlement structure to move something quickly is pretty exciting, just because sometimes the regulatory or policy process to get this kind of program launched just takes a very long time,” Farrell noted.
Since big pots of settlement funds are not an everyday occurrence, the structure is unlikely to become a widespread solution to scaling VPPs. But, as Hledik notes, it shows that “having access to non-ratepayer sources of funding definitely helps, especially given the current environment of concerns around affordability and rising rates.”
One potential source of non-ratepayer funding could be the hyperscalers, which are rich and hungry for the capacity VPP programs have the potential to create. “There are emerging models where the hyperscalers would come in and pay for demand flexibility from residential households and businesses — if they can make that capacity happen through a program like that, they would be willing to pay for it,” Hledik said.
To that point, last week Google announced it would pay $50 million to support Xcel’s first-of-a-kind distributed capacity procurement program, as part of a deal to power its Pine Island data center in Minnesota. The program, which is not a traditional VPP, was proposed in October and would place 200 MW worth of utility-owned and -operated batteries at strategic locations, like local businesses or commercial and industrial sites, where the grid needs capacity. It is still moving through the regulatory approval process.
Implementation plans
While the circumstances of New Orleans are singular, if it’s successful it could serve as a blueprint for municipalities in the rest of the U.S. looking to put together programs of their own.
Ultimately, whether Entergy New Orleans was fully on board or not, the fact that Together New Orleans and its partners were able to go to the utility and the regulator with a clear plan of what they wanted and how they wanted to pay for it was a boon for the VPP’s eventual approval. And it is as a testament to the lengths community initiatives can go to when operating in a setting like New Orleans, where they know they have some sway with regulators.
Now that the structure of the program has been set and approved, of course, it still needs to be built, and ironing out the implementation plan is the most immediate hurdle.
“If the past is any indicator, there’ll be another fight or two [with Entergy] about that implementation plan,” Bagert said. The organizations, however, are optimistic that everything will be fully designed and adopted by the fall of 2026.
And, as Sharma Frank says, regardless of how long it ultimately takes for the program to become reality, the fact that it got approved on such a tight timeline makes it a promising example for VPPs and resiliency initiatives across the country.
“Designing an implementation method will take time, but… the bones of the thing are there, and that’s what a lot of the country struggles with right — building the bones designed to help the whole utility system walk,” she said.
