California has set a target of shifting 7 gigawatts of electricity load by 2030 as part of its push toward a fully dynamic, price-responsive grid. New research presented at the 2026 ACEEE Summer Study on Energy Efficiency in Buildings, based on 95 interviews with utilities, technology developers, large commercial customers, and environmental groups, finds that the biggest risk to that vision isn’t the technology itself. It’s whether California’s policy and regulatory system can keep up with it.
Researchers from UC Davis conducted two rounds of interviews in 2022 and 2023 with representatives from four stakeholder groups: developers of load flexible technology, utilities and other energy service providers, large commercial customers, and energy and environmental advocacy groups. Across the board, participants said the devices and systems needed to shift electricity use in response to grid conditions already exist or are close to ready. What’s missing is clarity on how rates will be structured, what technical standards devices must meet, and whether state agencies have the political will and staffing to enforce any of it.
One recurring theme was what stakeholders called a chicken and egg problem. Manufacturers don’t want to build load-flexible features into products until they know what dynamic pricing structure those products need to respond to. Utilities don’t want to roll out pricing programs until enough compatible devices are already in customers’ homes and businesses. One stakeholder described it as a three-way standoff, where device makers, utilities, and customers are each waiting on the other two to move first. Because the bill savings from load flexibility are often just “pennies to nickels” a day, few companies see enough upside to break the stalemate on their own.
Utility billing systems add another delay. Several utility representatives told researchers their legacy billing infrastructure would need three to five years and tens of millions of dollars to support real time or sub hourly pricing. Meanwhile, stakeholders were split on whether that level of pricing granularity is even necessary. Some argued that hourly pricing could capture 80 to 90 percent of the grid value that five-minute pricing would offer, at a fraction of the cost and complexity.
The most politically sensitive question in the paper is how customers get enrolled in dynamic rates in the first place. Nearly every stakeholder agreed that requiring customers to opt in would produce enrollment too low to matter at grid scale. But defaulting everyone into dynamic pricing, meaning customers would need to opt out if they don’t want it, raises equity concerns. Stakeholders warned that lower income households and renters without access to smart devices could end up paying rates designed around customers who can shift their usage, effectively penalizing people who have no way to participate.
Real world pilot experience described in the interviews was mixed. One higher education campus said it saved $60,000 on its electricity bill and earned $270,000 in incentives during a 2022 heatwave by using thermal storage. Other institutions had rockier experiences. Some school districts reported being financially penalized for overriding automated controls when students or staff complained about comfort, and one district said a demand response program curtailed air conditioning during state testing.
Stakeholders also pointed to overlapping jurisdiction among the California Energy Commission, the California Public Utilities Commission, and the California Independent System Operator as a source of confusion, along with existing rules that exist on paper but go unenforced. One stakeholder noted that automated demand response requirements have been part of the state’s Title 24 building code for years, but “no one implements it.”
The researchers argue that resolving these tensions will take more than better technology. They call for binding timelines and standards tied to incentive programs, stronger staffing and coordination across state agencies, and more transparency from regulators about how and when key decisions on rate design and enrollment will get made. Without that clarity, the researchers conclude, California risks building a grid capable of dynamic, minute by minute flexibility that nobody has the rules in place to run.