Report - Utilities Are Blocking Virtual Power Plants, Driving Up Costs and Undermining Grid Reliability

The Open Markets Institute and Mission:data Coalition published a report, “Fair and Open Markets for Virtual Power Plants," on how investor-owned utilities are stifling the growth of virtual power plants (VPPs) and denying customers more affordable and reliable electricity. VPPs offer one of the most cost-effective ways to reduce power costs by shifting usage away from peak hours and reducing the need to build expensive new infrastructure. But monopolistic practices of utilities such as “data blocking” exclude rivals, contribute to sharply rising costs, and increase the risk of blackouts.

The report explains that numerous monopolistic practices involving electric meter data can be tamed: the government, VPP providers, and customers should pry open VPP markets across the United States using the antitrust laws.

The report describes how utilities are leveraging their exclusive control over electric meter data to block independent VPPs from operating. In many states, utilities reserve the right to terminate access to customer-authorized data “at any time, without notice, for any reason whatsoever,” creating conditions that make competitive VPPs effectively impossible to operate. Utilities also impose exclusive contracts, discriminatory technical standards, and even 30–50% commission fees on apps that rely on smart-meter platforms—all practices that tilt the playing field toward utility-owned programs.

Open Markets Legal Director Sandeep Vaheesan warned that utilities’ behavior mirrors long-recognized forms of monopolistic exclusion—tying, exclusive dealing, and refusals to deal—that courts have repeatedly found unlawful. The report concludes that many of these practices are arguably illegal under existing law.

“Utilities are using their control over essential data and infrastructure to entrench their monopoly power and block technologies that would lower bills and improve reliability,” Vaheesan said. “Regulators and antitrust enforcers must ensure these markets remain open, competitive, and fair.”

“It’s not surprising that utilities are fighting virtual power plants because they threaten utilities’ profits,” said Michael Murray, president of Mission:data Coalition. “As people across the country see their electric bills rise by 10% or more, it’s time for antitrust enforcers at the state and federal levels to take on this fight.”