Stem Enhances Energy Storage Operations for Southern California Water Utility Through New Partnership
Stem, Inc. (NYSE: STEM), a recognized global leader in smart energy storage and AI-driven energy optimization, has announced a new strategic partnership with a major clean energy asset owner dedicated to the development and management of distributed solar and storage infrastructure. This collaboration centers on the operation and optimization of a portfolio of battery energy storage systems (BESS) that support a prominent water utility company in Southern California. The project portfolio includes four distinct sites, one of which combines both solar generation and storage capabilities to create a hybrid clean energy solution.
As one of the most essential service providers in the region, the local water utility relies on stable and resilient energy systems to maintain critical functions such as treatment and distribution. By leveraging BESS technology, the utility can reduce its exposure to high utility rates, improve operational resilience, and actively participate in California’s Demand Response programs—initiatives designed to maintain grid stability during periods of peak electricity demand. Stem’s role in this partnership is to ensure that these benefits continue to grow through improved system performance, greater reliability, and enhanced financial returns across the energy storage assets.
This program marks a significant transition, as Stem is taking over management responsibilities from a previous service provider. The change reflects the asset owner’s and utility’s need for a partner with deeper operational expertise, a proven track record in distributed energy resource (DER) optimization, and advanced software-driven intelligence. Stem’s PowerTrack™ platform—an industry-leading technology solution for energy asset optimization—will serve as the backbone of operational oversight for the four-site storage portfolio.
Mike Carlson, President of Managed Services & OEM Hardware at Stem, emphasized the importance of the partnership not only for the company but for the broader regional energy transition. “Our team is proud to see that these critical energy assets continue to perform and deliver value for Southern California,” he said. “This collaboration underscores Stem’s leadership in optimizing behind-the-meter energy storage assets, helping asset owners and operators support customers across California in achieving improved financial, operational, and sustainability outcomes.”
Through this agreement, Stem will provide end-to-end lifecycle management services aimed at unlocking the highest possible value from the customer’s distributed energy resources. These services include:
- Transition Support and Stakeholder Coordination
Stem will oversee a coordinated handover from the previous service provider, ensuring that all operational and procedural requirements are effectively maintained during the changeover. This includes data migration, communication system updates, and alignment with stakeholder expectations. - Real-Time Remote Monitoring and Operational Oversight
Using PowerTrack’s advanced analytics and monitoring tools, Stem will track asset performance continuously. The software’s data-driven intelligence helps detect anomalies early, enabling faster resolution and minimizing performance losses. - Warranty and Field Service Management
Stem will handle ongoing maintenance coordination, warranty claims, and field repairs to ensure systems remain in optimal condition. This approach reduces downtime and accelerates issue resolution. - Automated Participation in Demand Response Programs
The company will manage all enrollment and dispatch operations for California Demand Response markets, allowing the water utility to maximize revenue while supporting statewide grid reliability initiatives that are becoming increasingly critical in light of climate-driven energy challenges. - Performance Reporting and Guarantees
Detailed reporting and analytics-based optimization allow Stem to align operational strategies with contractual performance guarantees, ensuring that the systems continue to meet or exceed expectations for cost savings and grid services participation.
By combining these capabilities, Stem offers customers and asset owners a reliable and future-focused operations model. The company’s experience in working with behind-the-meter assets helps organizations that depend on mission-critical infrastructure—like water treatment facilities—access energy savings without compromising operational security.
The need for innovative energy management in the water sector has never been greater. California’s water utilities face multiple external pressures including rising electricity costs, increasing grid volatility, regulatory requirements for sustainability, and growing water demand due to population and climate shifts. Energy storage helps address these challenges by enabling greater energy independence and efficiency at water treatment and pumping sites, which are traditionally high energy consumers.
Stem’s integrated model of software intelligence and operational excellence allows hybrid solar-plus-storage sites to extract maximum economic and environmental value from their energy resources. PowerTrack’s automated decision-making is designed to react to changing energy conditions in real time—such as fluctuating electricity prices, weather patterns, and battery state-of-charge—to produce the best operational outcomes. Over time, this contributes to long-term financial benefits and demonstrates measurable sustainability improvements through reduced reliance on carbon-intensive grid power.
Additionally, seamless operational transitions are vital to ensuring that existing energy projects maintain strong performance trajectories. Stem’s ability to absorb previously developed systems into its service portfolio highlights the company’s capability to support legacy projects—from newly commissioned installations to multi-year operating assets—without disrupting expected business performance.
With this new agreement, Stem continues to advance its role as a critical partner in California’s ongoing clean energy evolution. By supporting essential infrastructure sectors like the water industry, the company contributes to the broader mission of deploying energy storage technology where it can deliver major societal benefits: enhanced resilience, lower operating costs, reliable access to clean power, and more sustainable service delivery.
As California and other regions accelerate toward decarbonization goals, distributed clean energy solutions—particularly those integrating software intelligence with physical assets—will play a key role in maintaining the reliability of critical infrastructure. Stem’s partnership with the clean energy asset owner and Southern California water utility underscores the value of collaborative innovation in achieving these goals.
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