VirginiaHB6282026 Regular SessionHouseWALLET

Renewable energy portfolio standard program; requirements, power purchase agreements.

Sponsored By: Katrina Callsen (Democratic)

Signed by Governor

Summary

Electric utilities; renewable energy portfolio standard program requirements; power purchase agreements. Amends certain renewable energy portfolio standard program requirements for Dominion Energy Virginia, including the annual percentage of program requirements to be met with solar, wind, or anaerobic digestion resources of one megawatt or less located in the Commonwealth. The bill changes from 2025 to 2027 the compliance year beginning in which at least 75 percent of renewable energy certificates used by Dominion Energy Virginia shall come from eligible resources located in the Commonwealth. The bill also removes the requirement for a solar-powered or wind-powered generation facility to have a capacity of no less than 50 kilowatts to qualify for a third party power purchase agreement under a pilot program. The bill directs the State Corporation Commission, by July 1, 2033, to initiate a proceeding to evaluate the future availability of renewable energy certificates from certain resources and permits the Commission to increase or decrease by up to one percentage point the percentage of program requirements to be met by such resources in future compliance years. The bill provides that it is the policy of the Commonwealth to encourage development on previously developed project sites, as defined in existing law, to reduce the land use impacts of solar development. As introduced, this bill was a recommendation of the Commission on Electric Utility Regulation. This bill is identical to SB 175.

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Bill Overview

Analyzed Economic Effects

16 provisions identified: 4 benefits, 3 costs, 9 mixed.

Utilities face rising renewable-energy targets

Utilities must buy and retire renewable energy certificates, which track qualifying energy, based on the prior year's electricity sales. Targets rise from 6% for Phase I utilities in 2021 to 100% in 2050. Phase II targets rise from 14% in 2021 to 100% in 2045, excluding sales to certified accelerated renewable buyers. The rules cover retail supply from utilities and competing suppliers; excess certificates can be saved for the next five years. Specified Virginia or PJM regional certificates qualify for 2021–2024; stricter source rules apply from 2025, and Phase II utilities must source at least 75% from Virginia beginning in 2027.

Phase II utilities expand renewable power

Each Phase II utility must seek approval for 16,100 MW of Virginia solar or onshore wind by December 31, 2035. Required additions are 3,000 MW by 2024, another 3,000 by 2027, 4,000 by 2030, and 6,100 by 2035. At least 35% must come from non-utility-owned solar facilities; the total includes 1,100 MW of solar projects no larger than 3 MW, with 65% procured from third parties. At least 1,000 MW must be on previously developed sites, and capacity above 16,100 MW requires Commission approval. Utilities may also build or buy up to 5,200 MW of offshore wind off Virginia or in federal waters, connected directly into Virginia.

Utilities must retire carbon-emitting power plants

Phase I and Phase II utilities had to retire specified Virginia coal plants and oil units above 500 MW by December 31, 2024. Exceptions cover specified jointly owned units and certain coal-and-biomass units in the coalfield region. Other in-state plants emitting carbon through fuel burning must retire by December 31, 2045, except biomass plants not co-firing coal. Utilities can seek Commission relief when retirement threatens reliable or secure electric service. The Commission evaluates both Virginia and regional reliability and available resources.

Renewable buyers avoid some utility charges

Certified accelerated renewable buyers can contract for eligible certificates, bundled renewable power, or qualifying storage arrangements and receive proportional charge exemptions. Renewable generation must be in the PJM region and begin commercial operation after January 1, 2015. Contracts cannot shift costs to customers who did not voluntarily agree to pay them, and exemptions do not cover offshore wind. Phase II customers subscribed on March 1, 2020, to the specified voluntary tariff also receive proportional procurement exemptions; that tariff requires a renewable facilities agreement and at least 2,000 renewable attributes yearly. Covered buyer load and certificates are excluded from utility compliance calculations, and contracted capacity offsets utility procurement requirements.

Earlier competitive customers avoid utility charges

Qualifying customers who previously chose competitive supply avoid specified charges while not buying electricity from their utility. Phase II customers need 2019 peak demand above 100 MW and a competitive-supply election before April 1, 2019. Phase I customers need an election before February 1, 2019. Their load is also excluded from utility renewable requirements during that period. The exemption ends when they buy electricity from the utility.

Utilities can seek extra zero-carbon power

Utilities can seek permission to build, buy, or contract for zero-carbon electricity resources beyond required amounts. Contracts can cover energy, capacity, and environmental attributes. The Commission reviews each request separately, considering customer demand, likely fuel-cost savings, and Virginia economic development. It also considers whether energy-saving measures or storage can meet the need more cheaply. Approval is not automatic.

Electric customers pay clean-energy compliance costs

Virginia retail customers pay renewable-energy and storage compliance costs through charges they generally cannot avoid by switching suppliers. Utilities serving several states must allocate only Virginia's share to Virginia customers. The Commission had to start cost-allocation proceedings by September 1, 2020, and other-supplier charges by January 1, 2021. Charges receive annual reviews and true-ups, with exemptions for qualifying renewable buyers and specified offshore-wind costs. Utilities can also seek approved rate recovery for zero-carbon projects and purchased power; some solar and wind costs can offset customer credits.

Utilities pay for renewable-energy shortfalls

Utilities must pay $45 per megawatt-hour of shortfall when they miss renewable requirements or face certificate costs above $45 per megawatt-hour. Shortfalls involving Virginia solar, wind, or anaerobic-digestion resources of 1 MW or less carry a $75 rate. Both payment amounts rise 1% each year after 2021. Utilities may recover these payments as compliance costs charged to customers.

Customers face renewable supply contract limits

Third-party power purchase agreements outside the pilot are prohibited in a Pilot Utility's territory. The prohibition excludes licensed suppliers responsible for serving 100% of a customer's electricity needs. Accounts already served by third-party agreements cannot enroll in a Commission-approved green tariff covering all their load with renewable power. Approval of that tariff does not end existing agreements.

Customers gain on-site renewable power contracts

The Commission runs a pilot in each investor-owned utility territory allowing eligible customers to buy on-site solar or wind power from third parties. Facilities must serve only the customer at owned or leased premises and generally cannot exceed 3 MW; low-income and tax-exempt customers can receive size waivers. The pilot caps capacity at 500 MW each for Virginia jurisdictional and nonjurisdictional customers, within the existing 6% customer-generation limit. Customers must meet connection rules, pay specified reasonable costs, and notify the Commission and utility at least 30 days before the proposed agreement. Participants can choose whether to use net metering.

Phase I utilities add renewable power

Each Phase I utility must seek approval to build, buy, or contract for 600 MW of Virginia solar or onshore wind. The law requires three 200-MW blocks in service by December 31 of 2023, 2027, and 2030. At least 35% of each block must come from facilities owned by someone other than the utility. The remaining capacity comes through utility construction or purchase. Capacity above 600 MW requires Commission approval.

Renewable power sources qualify with limits

Qualifying solar, wind, water, waste-to-energy, landfill-gas, geothermal, and biomass power can count toward utility renewable targets. Eligibility depends on source-specific location, operating date, ownership, capacity, and fuel rules, including required sustainable biomass harvesting practices. Virginia falling-water facilities qualify if they began commercial operations before July 1, 2024. Biomass certificate sales cannot exceed the lower of a facility's 2022 electricity output or its actual annual output. Geothermal heating and cooling certificates require energy conversion from BTUs to kilowatt-hours and Commission verification.

Small renewable projects get reserved demand

Phase II utilities must meet 4.5% of renewable requirements with Virginia solar, wind, or anaerobic-digestion projects in 2026–2030, rising to 5% in 2031–2045. Each resource must be 1 MW or less, with no more than 3,000 kW at one site or adjoining sites under related ownership. When available, at least 25% of this share must come from projects sending at least half their power to low-income customers. If those projects are unavailable, public K–12 school projects get priority; remaining small projects can fill unmet requirements. By July 1, 2033, the Commission must begin reviewing availability and may adjust future small-resource requirements by up to one percentage point in either direction.

Utilities add storage with private participation

By December 31, 2035, Phase I utilities must seek approval for 400 MW of storage, and Phase II utilities for 2,700 MW. Extra capacity requires approval; plans must aim to place at least 10% of storage projects behind customers' meters. At least 35% of storage deployed after July 1, 2020, must be bought from non-utility owners or remain privately owned with capacity sold to utilities. Projects generally cannot exceed 500 MW, though a Phase II utility may procure one project up to 800 MW. Commission rules were due January 1, 2021, covering interim targets, competitive bids, customer-site incentives, alternatives to grid wires, and peak-demand reduction.

Utilities seek bids and domestic equipment

Phase I and Phase II utilities must seek solar and wind bids yearly, posting requests at least 45 days before bids close. Requests must explain resource needs, bid instructions, assumptions, location preferences, and selection factors. Reviews consider project readiness, existing plant age, finances, developer experience, grid effects, Virginia benefits, and environmental impacts. Utilities must submit annual capacity plans and approval requests from 2020 through 2035, and prove required competition when seeking solar construction approval. Covered renewable and storage projects must use Virginia or U.S. manufacturers and domestic materials or components when reasonably available and competitively priced.

Shortfall payments fund training and energy

The Department of Energy administers collected renewable shortfall payments in an interest-bearing account. It directs 50% to job training and 30% to renewable-energy programs in historically economically disadvantaged communities. Another 16% supports energy efficiency in public facilities, and 4% pays administrative costs. Available funding depends on payments collected; the law sets no total appropriation.

Sponsors & Cosponsors

Sponsor

  • Katrina Callsen

    Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 392 • No: 26

House vote • 3/2/2026

Senate substitute agreed to by House

Yes: 97 • No: 1

Senate vote • 2/26/2026

Commerce and Labor Substitute agreed to

Yes: 0 • No: 0

Senate vote • 2/26/2026

Passed Senate with substitute

Yes: 22 • No: 18

Senate vote • 2/25/2026

Constitutional reading dispensed Block Vote (on 2nd reading)

Yes: 40 • No: 0

Senate vote • 2/25/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 2/23/2026

Reported from Commerce and Labor with substitute

Yes: 9 • No: 6

House vote • 2/4/2026

Read third time and passed House Block Vote

Yes: 97 • No: 1

House vote • 2/4/2026

Passed House Block Vote

Yes: 98 • No: 0

House vote • 1/29/2026

Reported from Labor and Commerce with amendment(s)

Yes: 22 • No: 0

House vote • 1/27/2026

Subcommittee recommends reporting with amendment(s)

Yes: 7 • No: 0

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0645)

    4/13/2026Governor
  2. Approved by Governor-Chapter 645 (effective 7/1/2026)

    4/13/2026Governor
  3. Fiscal Impact Statement from State Corporation Commission (HB628)

    3/12/2026House
  4. Governor's Action Deadline 11:59 p.m., April 13, 2026

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

    3/10/2026House
  6. Bill text as passed House and Senate (HB628ER)

    3/6/2026House
  7. Enrolled

    3/6/2026House
  8. Signed by President

    3/6/2026Senate
  9. Signed by Speaker

    3/6/2026House
  10. Senate substitute agreed to by House (97-Y 1-N 0-A)

    3/2/2026House
  11. Passed Senate with substitute (22-Y 18-N 0-A)

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

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

    2/26/2026Senate
  14. Read third time

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

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

    2/25/2026Senate
  17. Rules suspended

    2/25/2026Senate
  18. Committee substitute printed 26108349D-S1

    2/24/2026Senate
  19. Senate committee offered

    2/23/2026Senate
  20. Fiscal Impact Statement from State Corporation Commission (HB628)

    2/23/2026House
  21. Reported from Commerce and Labor with substitute (9-Y 6-N)

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

    2/5/2026Senate
  23. Constitutional reading dispensed (on 1st reading)

    2/5/2026Senate
  24. Passed House Block Vote (98-Y 0-N 0-A)

    2/4/2026House
  25. Reconsideration of passage agreed to by House

    2/4/2026House

Bill Text

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