VirginiaHB8952026 Regular SessionHouseWALLET

Electric utilities; energy storage requirements, Department of Energy to develop model ordinance.

Sponsored By: Jen Kiggans - to resign 12/31 (Republican)

Became Law

Summary

Electric utilities; energy storage resources; Department of Energy to develop model ordinances; State Corporation Commission to conduct technology demonstration program. Increases the targets for energy storage capacity that Appalachian Power and Dominion Energy Virginia are required to petition the State Corporation Commission (the Commission) for approval to construct, acquire, or procure and extends the time frame by which such capacity must be met. Under the bill, (i) Appalachian Power shall petition the Commission for approval to construct, acquire, or procure at least 780 megawatts of short-duration energy storage capacity by 2040 and 520 megawatts of long-duration energy storage capacity by 2045 and (ii) Dominion Energy Virginia shall petition the Commission for approval to construct, acquire, or procure at least 16,000 megawatts of short-duration energy storage capacity by 2045 and 4,000 megawatts of long-duration energy storage capacity by 2045. "Long-duration energy storage" and "short-duration energy storage" are defined in the bill. Under the bill, the Commission shall approve an independent auditor to help develop criteria for and to help review requests for proposals for new energy storage resources. The bill requires the Commission to conduct a technology demonstration program for long-duration energy storage resources and initiate a proceeding to determine if such technology is viable and that the targets in the bill are reasonably achievable, for which a final order shall be entered no later than March 1, 2031. Certain provisions of the bill are only effective upon such determination by the Commission. The bill requires the Department of Energy, in consultation with the Department of Environmental Quality and the Department of Fire Programs, to develop model ordinances suggested for use by localities in their regulation of energy storage projects by December 1, 2026. The bill directs the Commission to initiate a technical conference by September 1, 2026, to evaluate safety standards and practices for energy storage development. The bill also includes a provision authorizing the Commission to evaluate energy storage project proposals during annual petitions filed for the development of new renewable generation capacity. This bill is identical to SB 448.

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 4 benefits, 1 costs, 3 mixed.

New clean energy charge on bills

All costs to meet the renewable and storage rules are recovered from all retail customers as a non‑bypassable charge, no matter who supplies your power. Utilities can also recover costs for building or buying zero‑carbon power and storage through base rates or a rate adjustment clause, and recover costs for purchased energy, capacity, and environmental credits. This changes, and may raise, charges on your electric bill. Some exemptions for certain large buyers exist elsewhere in the law.

100% clean power targets and credits

The law sets rising renewable goals: Phase I utilities reach 100% by 2045 and Phase II by 2050. Starting in 2025, utilities can use only renewable energy credits (RECs) from the law’s eligible sources. Utilities can bank extra RECs for up to five years after the year generated. Each Phase II utility must meet 1% of its RPS with in‑state projects of 1 MW or less; at least 25% of that 1% must be low‑income projects if available, or projects on or next to public schools. If a utility misses its RPS, it pays $45 per MWh shortfall ($75 per MWh for ≤1 MW shortfalls), rising 1% yearly after 2021; funds support job training, public facility efficiency, and renewable programs in historically disadvantaged communities (with 4% for administration).

Utilities must add wind and solar

Phase II utilities must seek 16,100 MW of solar or onshore wind by 2035‑12‑31, with milestones: 3,000 MW by 2024‑12‑31, +3,000 MW by 2027‑12‑31, +4,000 MW by 2030‑12‑31, and +6,100 MW by 2035‑12‑31. This includes 1,100 MW of small solar (each ≤3 MW), at least 200 MW on previously developed sites, and at least 35% owned by non‑utility parties. They may also petition for up to 5,200 MW of offshore wind. Phase I utilities must seek 600 MW (200 MW by 2023‑12‑31, 200 MW by 2027‑12‑31, and 200 MW by 2030‑12‑31), with at least 35% from non‑utility owners. These build‑outs can affect what utilities invest in and, over time, customer bills.

Breaks for very large energy buyers

A customer with at least 25 MW of total load can contract for renewable energy credits (RECs) or bundled capacity, energy, and RECs. The customer can offset its RPS load and avoid some non‑bypassable RPS charges based on its energy use. It may also avoid some storage charges based on contracted capacity. Commission certification and verification are required. RECs bought by these buyers do not count toward the utility’s compliance and reduce the load used to set the utility’s RPS.

Some legacy big users avoid charges

A Phase II customer with 2019 peak demand over 100 MW who chose a competitive supplier before 2019‑04‑01 (Phase I: before 2019‑02‑01) is not assigned non‑bypassable charges while buying from that supplier. The customer’s load is also excluded from the utility’s RPS while it remains with the competitive supplier.

Rules for battery projects and bids

At least 35% of storage put in service after July 1, 2020 must be owned by or bought from non‑utility parties. Each utility runs at least one public RFP a year for solar, wind, and storage, posted at least 45 days before closing, with clear price and non‑price criteria. An independent auditor, approved by the Commission, helps set storage RFP rules, reviews results, and files a public report on cost, safety, and best practices. Utilities file yearly plans that include storage targets and aim for at least 10% behind‑the‑meter; the Commission rules within six months. Single storage projects are capped at 500 MW (a Phase II utility may procure one up to 800 MW). New or expanded in‑state pumped storage capacity counts toward targets. For these projects, utilities prefer Virginia or U.S. manufacturers when items are available and competitively priced.

Safer local rules for batteries

All proposed energy storage projects must meet the latest NFPA 855 safety standard. Beginning December 1, 2026, the Virginia Department of Energy develops model local ordinances and updates them every three years. The model includes minimum safety rules and covers different storage technologies. The Department forms a stakeholder work group, posts studies online, and keeps public education resources for localities, builders, residents, and others.

Faster, simpler permits for clean energy

If a valid federal, state, or local permit already covers an issue, the Commission does not add extra conditions on that issue. The Commission may permit new generation and storage that do not harm reliability, meet public convenience and necessity, and are not against the public interest. For small renewable projects, the Commission completes permit proceedings within nine months after a complete application.

Sponsors & Cosponsors

Sponsor

  • Jen Kiggans - to resign 12/31

    Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 258 • No: 103

House vote 3/11/2026

Senate substitute agreed to by House

Yes: 68 • No: 30

Senate vote 3/10/2026

Passed Senate with substitute

Yes: 21 • No: 19

Senate vote 3/10/2026

Commerce and Labor Substitute agreed to

Yes: 0 • No: 0

Senate vote 3/9/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote 3/9/2026

Constitutional reading dispensed Block Vote (on 2nd reading)

Yes: 40 • No: 0

Senate vote 3/6/2026

Reported from Finance and Appropriations

Yes: 10 • No: 4

Senate vote 3/2/2026

Reported from Commerce and Labor with substitute and rereferred to Finance and Appropriations

Yes: 8 • No: 5

House vote 2/17/2026

Read third time and passed House

Yes: 65 • No: 32

House vote 2/11/2026

Subcommittee recommends reporting

Yes: 6 • No: 1 • Other: 1

House vote 2/11/2026

Reported from Appropriations

Yes: 17 • No: 5

House vote 2/10/2026

Reported from Labor and Commerce with substitute and referred to Appropriations

Yes: 17 • No: 5

House vote 2/5/2026

Subcommittee recommends reporting with substitute and referring to Appropriations

Yes: 6 • No: 2 • Other: 1

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0694)

    4/13/2026Governor
  2. Approved by Governor-Chapter 694 (effective 7/1/2026)

    4/13/2026Governor
  3. Fiscal Impact Statement from Department of Planning and Budget (HB895)

    4/2/2026House
  4. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/31/2026Governor
  5. Enrolled Bill communicated to Governor on March 31, 2026

    3/31/2026House
  6. Signed by Speaker

    3/31/2026House
  7. Bill text as passed House and Senate (HB895ER)

    3/30/2026House
  8. Enrolled

    3/30/2026House
  9. Signed by President

    3/30/2026Senate
  10. Fiscal Impact Statement from Department of Planning and Budget (HB895)

    3/11/2026House
  11. Senate substitute agreed to by House (68-Y 30-N 0-A)

    3/11/2026House
  12. Passed Senate with substitute (21-Y 19-N 0-A)

    3/10/2026Senate
  13. Commerce and Labor Substitute agreed to

    3/10/2026Senate
  14. Engrossed by Senate - committee substitute

    3/10/2026Senate
  15. Read third time

    3/10/2026Senate
  16. Passed by for the day Block Vote (Voice Vote)

    3/9/2026Senate
  17. Constitutional reading dispensed Block Vote (on 2nd reading) (40-Y 0-N 0-A)

    3/9/2026Senate
  18. Rules suspended

    3/9/2026Senate
  19. Reported from Finance and Appropriations (10-Y 4-N)

    3/6/2026Senate
  20. Committee substitute printed 26108942D-S1

    3/3/2026Senate
  21. Senate committee offered

    3/2/2026Senate
  22. Reported from Commerce and Labor with substitute and rereferred to Finance and Appropriations (8-Y 5-N)

    3/2/2026Senate
  23. Referred to Committee on Commerce and Labor

    2/18/2026Senate
  24. Constitutional reading dispensed (on 1st reading)

    2/18/2026Senate
  25. Read third time and passed House (65-Y 32-N 0-A)

    2/17/2026House

Bill Text

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