From Concept to Capability
Kerri Carnes is Director, Customer Technology at Arizona Public Service, an AEIC member company.
Virtual power plants (VPPs) have long occupied a curious space in the utility industry — widely discussed, often theorized, but historically difficult to operationalize at scale. For AEIC member company, Arizona Public Service (APS), that narrative is changing.
What began as a forward-looking demand-management strategy is evolving into a targeted, locationally precise grid support tool — one that is delivering measurable reliability, affordability, and customer engagement benefits.
At its core, APS’s VPP journey reflects a broader industry shift: from conceptual exploration to operational integration. And the lesson is clear — VPPs are no longer just an idea. They are an essential component of the modern grid.
The Imperative: Managing Peak Demand in a Changing Grid
APS’s VPP initiative traces back to the mid-2010s, when the utility began confronting a familiar but intensifying challenge: extreme summer peak demand. In Arizona, summer load can double compared to winter or shoulder months, placing significant strain on infrastructure and increasing costs for both utilities and customers.
At the same time, the growth of distributed energy resources (DERs) — including smart thermostats, rooftop solar, energy storage, and electric vehicles — introduced new opportunities. The question became not just how to meet demand, but how to shape it.