VirginiaHB3692026 Regular SessionHouseWALLET

Electric utilities; renewable portfolio standard program, zero-carbon electricity, etc.

Sponsored By: David A. Reid (Democratic)

Signed by Governor

Summary

Electric utilities; renewable energy portfolio standard; zero-carbon electricity; accelerated clean energy buyers. Revises the conditions under which accelerated clean energy buyers, defined in existing law as accelerated renewable energy buyers, may contract with Appalachian Power or Dominion Energy Virginia to obtain renewable energy certificates (RECs). The bill exempts an accelerated clean energy buyer obtaining capacity, energy, or RECs from qualifying resources or facilities from the assignment of non-bypassable costs associated with compliance with the renewable portfolio standard program based on the amount and type of renewable energy certificates obtained in proportion to such accelerated clean energy buyer's total electric energy consumption. This bill is identical to SB 598.

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Bill Overview

Analyzed Economic Effects

13 provisions identified: 2 benefits, 1 costs, 10 mixed.

Utilities expand wind and competitive solar purchases

Each Phase II utility must seek approval for 16,100 megawatts of Virginia solar or onshore wind by December 31, 2035. Milestones require 3,000 megawatts by December 31, 2024, then 3,000 more by December 31, 2027. They require another 4,000 by December 31, 2030, and 6,100 more by December 31, 2035. At least 35% of each milestone must come from facilities owned by others. The program includes 1,100 megawatts of solar projects no larger than three megawatts each, and at least 200 megawatts on previously developed sites. Each utility must also seek approval for offshore wind totaling up to 5,200 megawatts, directly connected to Virginia. Offshore projects must lie off Virginia's Atlantic shore or in federal waters; solar/onshore capacity above 16,100 megawatts needs state approval. Utilities seeking permission to build solar facilities must show they used the required competitive bidding process.

Utilities pay for missed renewable goals

Utilities must make deficiency payments when they miss annual renewable goals or required certificate costs exceed $45 per megawatt-hour. The base payment is $45 per megawatt-hour of shortfall. It is $75 for qualifying Virginia solar, wind, or anaerobic-digestion shortfalls from resources one megawatt or smaller. Payment amounts rise 1% each year after 2021. Utilities can recover these payments as compliance costs; the law sets no household bill amount.

Customers pay for clean energy costs

Phase I and Phase II utilities recover covered clean-energy costs through customer charges, subject to legal exemptions. Customers generally pay these charges even when buying electricity from another supplier. Virginia customers pay Virginia's share; recovery from outside-supplier customers had to start by January 1, 2021, with yearly adjustments. Utilities can seek recovery for new zero-carbon generation and storage through regular rates or separate rate adjustments. Eligible solar and wind costs can instead use a customer credit reinvestment offset, but the law sets no household bill amount.

Large clean energy buyers get limited exemptions

Commercial or industrial buyers qualify with prior-year aggregate load above 25 megawatts, required clean-energy arrangements, and state certification. Their sales leave utility renewable-goal calculations, and qualifying contracted capacity reduces utility procurement duties without crediting the utility with those contracts' certificates. Qualifying PJM-region renewable contracts earn proportional charge exemptions; beginning July 1, 2026, qualifying zero-carbon contracts also qualify. Virginia zero-carbon resources can support broader exemptions; out-of-state PJM zero-carbon purchases exempt only required renewable-certificate costs, in proportion to annual energy use. Qualifying storage must be in the utility's network area, with proportional exemptions and no costs passed to customers who did not volunteer to pay. Certificate-only buyers generally still pay new utility solar, onshore-wind, and storage procurement costs. A limited exception covers Phase II subscribers on the specified experimental tariff by March 1, 2020, requiring at least 2,000 renewable attributes yearly. Utility contracts with these buyers avoid the specified special-rate approval only when added contract costs are not passed to other customers.

Phase I utilities add solar and wind

Each Phase I utility must seek approval to build, buy, or contract for 600 megawatts of solar or onshore wind. Milestones require 200 megawatts in Virginia by December 31, 2023, then 200 more by December 31, 2027. Another 200 megawatts is required by December 31, 2030. At least 35% of each milestone must come from facilities owned by others; the utility builds or acquires the remaining capacity overall. Utilities can seek more than 600 megawatts, but need state approval.

Utilities add storage with purchasing limits

By December 31, 2035, each Phase I utility must seek approval for 400 megawatts of storage; each Phase II utility, 2,700. Utilities can seek more with state approval, but individual projects are capped at 500 megawatts, or 800 for Phase II. For facilities placed in service after July 1, 2020, at least 35% must be bought from outside parties or outside-owned. Outside-owned capacity must be sold to the utility; covered procurement requires competitive bids and reasonably available, competitively priced Virginia- or U.S.-made equipment and components. The state commission's January 1, 2021, rulemaking deadline covered interim targets, planning updates, competitive bids, customer-side storage incentives, alternatives to wire upgrades, and peak-demand programs.

Utilities can save credits but must buy locally

Starting with compliance year 2025, at least 75% of Phase II utilities' certificates must come from eligible Virginia resources. Phase I and Phase II utilities can use excess renewable sales or certificates in their creation year and the next five calendar years. Utilities can recover costs for certificates bought from resources they do not own. The law does not give a household bill amount.

Utilities face rising renewable energy goals

Phase I and Phase II utilities must buy and retire renewable energy certificates, which track qualifying renewable power. Annual goals use prior-year electricity sales, excluding sales to certified accelerated clean energy buyers. Phase I targets for 2021–2030 are 6%, 7%, 8%, 10%, 14%, 17%, 20%, 24%, 27%, and 30%, respectively. For 2031–2040, they are 33%, 36%, 39%, 42%, 45%, 53%, 53%, 57%, 61%, and 65%. For 2041–2050, they are 68%, 71%, 74%, 77%, 80%, 84%, 88%, 92%, 96%, and 100%. Phase II targets for 2021–2030 are 14%, 17%, 20%, 23%, 26%, 29%, 32%, 35%, 38%, and 41%. For 2031–2040, they are 45%, 49%, 52%, 55%, 59%, 63%, 67%, 71%, 75%, and 79%. For 2041–2045, they are 83%, 87%, 91%, 95%, and 100%; the goal stays at 100% afterward. Phase I also remains at 100% after 2050. Entities organized under Chapter 9.1 of Virginia's utility law are exempt from the applicable section's requirements.

Utilities get broader but limited energy choices

Beginning with compliance year 2025, utilities must use certificates from approved renewable sources. These include specified solar, wind, water, geothermal, biomass, waste-to-energy, and landfill-gas resources, with source-specific location and operating limits. Virginia water-power facilities operating before July 1, 2024, qualify; geothermal heating, cooling, and water heating also qualify. Geothermal certificates use BTUs converted to kilowatt-hours, with state verification; biomass certificate sales face 2022-generation or actual-generation limits. Virginia waste and landfill-gas resources must have operated by January 1, 2020, without fossil-fuel waste heat. The sales calculation excludes specified in-state nuclear generation operating by July 1, 2020, and qualifying Virginia zero-carbon generation added after July 1, 2030.

Utilities retire plants with reliability relief

The law set December 31, 2024, for covered utilities to retire Virginia coal units and oil units over 500 megawatts. Coal exceptions cover units jointly owned with cooperatives and qualifying Phase II coalfield units that co-fire biomass. By December 31, 2045, covered utilities must retire their remaining Virginia fuel-burning units that emit carbon. Biomass units that do not co-fire coal are exempt. Utilities can seek State Corporation Commission relief for service reliability or security threats; reviews consider in-state and regional resources case by case.

Renewable payments fund community job training

Virginia's Department of Energy directs renewable deficiency-payment proceeds to four uses. Job training in historically economically disadvantaged communities gets 50%. Energy-saving measures in public facilities get 16%, and renewable-energy programs in those communities get 30%. Administration gets the remaining 4%. Funding depends on payment revenue; the law sets no total funding or household payment.

Earlier supplier switchers avoid specified charges

Specified customers avoid certain unavoidable utility charges while buying electricity from a competitive supplier. Phase II customers must have had 2019 peak demand above 100 megawatts and switched before April 1, 2019. Phase I customers must have switched before February 1, 2019. Their electricity use also leaves utility renewable-goal calculations during that period. These protections end when the customer resumes buying electricity from the utility.

Small energy projects get a reserved share

Phase II utilities must meet 1% of their renewable requirement with Virginia solar, wind, or anaerobic-digestion projects. Projects must be one megawatt or smaller, with no more than 3,000 kilowatts at one site or adjoining affiliated sites. Available qualifying low-income projects must supply at least 25% of that set-aside. When they are unavailable, qualifying school projects fill that share to the extent available. School projects must be on or beside public elementary or secondary schools and have a contract with the school.

Sponsors & Cosponsors

Sponsor

  • David A. Reid

    Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 313 • No: 9

House vote • 3/2/2026

Senate substitute agreed to by House

Yes: 95 • No: 4

Senate vote • 2/26/2026

Passed Senate with substitute Block Vote

Yes: 40 • No: 0

Senate vote • 2/26/2026

Commerce and Labor Substitute agreed to

Yes: 0 • No: 0

Senate vote • 2/25/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 2/25/2026

Constitutional reading dispensed Block Vote (on 2nd reading)

Yes: 40 • No: 0

Senate vote • 2/23/2026

Reported from Commerce and Labor with substitute

Yes: 15 • No: 0

House vote • 2/9/2026

Read third time and passed House

Yes: 94 • No: 3

House vote • 2/3/2026

Reported from Labor and Commerce with substitute

Yes: 20 • No: 2

House vote • 1/29/2026

Subcommittee recommends reporting with substitute

Yes: 9 • No: 0

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0043)

    3/31/2026Governor
  2. Approved by Governor-Chapter 43 (effective 7/1/2026)

    3/31/2026Governor
  3. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/10/2026Governor
  4. Enrolled Bill communicated to Governor on March 10, 2026

    3/10/2026House
  5. Enrolled

    3/5/2026House
  6. Bill text as passed House and Senate (HB369ER)

    3/5/2026House
  7. Enrolled

    3/5/2026House
  8. Signed by President

    3/5/2026Senate
  9. Signed by Speaker

    3/5/2026House
  10. Fiscal Impact Statement from State Corporation Commission (HB369)

    3/2/2026House
  11. Senate substitute agreed to by House (95-Y 4-N 0-A)

    3/2/2026House
  12. Passed Senate with substitute Block Vote (40-Y 0-N 0-A)

    2/26/2026Senate
  13. Commerce and Labor Substitute agreed to

    2/26/2026Senate
  14. Engrossed by Senate - committee substitute

    2/26/2026Senate
  15. Read third time

    2/26/2026Senate
  16. Passed by for the day Block Vote (Voice Vote)

    2/25/2026Senate
  17. Constitutional reading dispensed Block Vote (on 2nd reading) (40-Y 0-N 0-A)

    2/25/2026Senate
  18. Rules suspended

    2/25/2026Senate
  19. Committee substitute printed 26108329D-S1

    2/24/2026Senate
  20. Senate committee offered

    2/23/2026Senate
  21. Reported from Commerce and Labor with substitute (15-Y 0-N)

    2/23/2026Senate
  22. Referred to Committee on Commerce and Labor

    2/10/2026Senate
  23. Constitutional reading dispensed (on 1st reading)

    2/10/2026Senate
  24. Read third time and passed House (94-Y 3-N 0-A)

    2/9/2026House
  25. Engrossed by House - committee substitute

    2/6/2026House

Bill Text

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