• Flexible demand resources such as virtual power plants (VPPs) and demand response (DR) offer the fastest and lowest-cost option to meet load growth from data centers and preserve affordability for households and ratepayers. Yet many current VPP and DR programs focus on generation capacity, and frequently do not address the value of flexible demand for the electric grid distribution system. This results in lower compensation for distributed energy resources (DERs) and flexible demand, and leaves ratepayers on the hook for more expensive utility infrastructure upgrades that could have been deferred or avoided by flexible resources.
• These benefits vary significantly based on where they occur on the distribution system — a DER at one location could provide thousands of dollars in grid value, while the same upgrade at another location may currently offer limited distribution relief. These locational differences make distribution avoided costs harder to quantify — which too often leads utilities and policymakers to skip over these benefits in designing programs simply because they are more complex to calculate.
• The Flex Coalition's new whitepaper (and associated decision support tool) identifies best practices for quantifying the value of avoided infrastructure spending at specific locations on the distribution system. We offer these concepts to help policymakers and stakeholders better understand how DERs can benefit the distribution system through avoided and deferred costs, looking individually at specific circuits with the greatest load and load growth.

To advance technology-neutral, flexible demand programs that fully incentivize all elements of grid flexibility, the Flex Coalition is introducing a flexible demand program framework, affectionately termed the “Flexible Reduction in Electric Energy and Power” (FREE Power). Stay tuned for more updates – coming September 2026!