Pacific Gas & Electric is adding an unusual virtual power plant pilot to its roster of flexibility programs — one funded not by ratepayers or a state-approved program, but by Google.
With its new Smart Home Assets for Reliability and Efficiency (or SHARE) VPP, the Northern California utility aims to unlock additional capacity on the regional electric transmission system — and put downward pressure on rising electricity rates. And to do so, the company is calling in the help of some of the biggest players in distributed energy, and a hyperscaler that has developed a reputation for backing novel models for powering its data centers.
PG&E will build and operate the program, treating it as a “proof of concept” to evaluate future deployments, according to last week’s announcement; the consultancy Demand Side Analytics will help with the orchestration. The program also includes a partnership with Tesla, Sunrun, and Renew Home, which will integrate roughly 21,000 energy devices already active in the San Jose area, including home batteries and smart thermostats, for a total of 12 megawatts. And eventually Rewiring America and Carrier will enroll hundreds of HVAC systems into the program as well.
Unlike a typical VPP, no public or customer funds are involved, a PG&E spokesperson told Latitude Media. Google will fully fund all of the costs related to the program, including customer incentives, and will also contribute subsidies of up to $10,000 for new battery-powered heat pump systems, according to reporting from Fast Company. Google did not immediately respond to questions about whether it anticipates using the capacity from the program for its data centers, either at the pilot stage or later on.
However, a report released last year by Rewiring America points to what the company could hypothetically get out of the deal. It found that installing household energy upgrades such as heat pumps, rooftop solar, and storage across the country could free up to 93 gigawatts of capacity on the existing grid, enough to meet a significant portion of data center demand growth, if not all of it. This led the non-profit to suggest that hyperscalers fund a portion of their capacity needs by backing distributed energy resources.
Google is now echoing that argument: “As demand scales, our current electricity grid can bridge the gap — if we optimize it correctly,” said Amanda Peterson Corio, Google’s global head of energy and power, in the press release. “This program unlocks the potential of local distributed energy resources to strengthen grid capacity and resiliency while delivering meaningful benefits for local communities.”
A follow-up report found that if hyperscalers paid for some of the costs of household energy upgrades, it could save households $9,400 on average, which certainly aligns with the SHARE pilot’s goal of keeping energy costs down for consumers.
Planning and enrollment for the program are expected to start this fall.
A VPP experiment backdrop
PG&E’s SHARE project is also the first time that Tesla, Sunrun, and Renew Home have executed on the framework of flexible capacity for data centers that the three companies announced in June, Sunrun confirmed to Latitude Media.
The companies said in that initial announcement they would deliver a combined 16 gigawatts of demand response and battery capacity for utilities and hyperscalers by developing small VPPs in places with grid strain — ostensibly like San Jose. The model is that data centers would pay for the VPP capacity from nearby distributed energy resources, then in moments of grid stress, the utility would be able to call upon those resources rather than asking the data center itself to curtail its load.
None of the participants confirmed that that’s the plan for the SHARE program specifically, but it certainly could be considered a proof-of-concept for whether it’s even possible in practice.
Meanwhile, Google has also experimented with how it can use distributed energy to power growing demand from its data centers. In June, the company entered into a 100-megawatt deal with Voltus for distributed energy capacity for its data centers.
The news comes amid a broader effort by PG&E to keep customers’ costs down. As of June 2026, EIA data shows that California had the highest average residential electricity prices in the lower 48, at 34.74 cents per kilowatt-hour; wildfire liability costs are one major contributor. Last week, the utility also announced a strategic review of how it’s organized and financed, which includes shaving some $2 billion in investments from its 2027 Capital Plan. To do so, it will postpone planned work such as interconnecting new renewable generation projects and technology upgrades, among other things.
Now, the utility is framing SHARE as a way to fight those rate increases. Cost savings have begun to overtake grid reliability as a VPP’s main selling point. PG&E’s headline is that the pilot could help “lower costs for all customers,” while the release itself continued that it could allow communities to “benefit from rising electric demand.”
“[The pilot] tests whether better grid utilization can help spread future infrastructure costs over more usage,” a PG&E spokesperson told Latitude Media. “The goal is downward pressure on rates, but that outcome hasn’t been determined yet.”
The pilot specifics
The program is also a test of whether transmission grid relief can be achieved through a VPP made up of a mix of existing and new distributed energy resources, owned both by customers and aggregators, PG&E’s spokesperson said.
As a “location-specific proof of concept,” SHARE is intended to “complement, not replace, other flexibility efforts,” they added.
The program adds to other VPP projects PG&E has started in recent years. Last summer, for example, the utility company launched its Seasonal Aggregation of Versatile Energy program (SAVE) to leverage behind-the-meter resources as precision instruments to meet neighborhood-level capacity constraints. The program ran on around 1,000 Sunrun storage-plus-solar systems from June to October, dispatching for more than 1,200 hours. While an earlier summer pilot faced technical problems, in February, Sunrun said SAVE had “completed a successful dispatching season.”
As for SHARE, PG&E intends to run the pilot through 2027, and will evaluate its performance at the end of the year.
“No decisions have been made on scaled funding, enrollment, or partner structure,” a utility spokesperson said. ”Those calls will depend on whether the pilot delivers the intended impact, and if it does, the lessons could inform programs in other parts of California and other utility territories.”
