VirginiaSB1752026 Regular SessionSenateWALLET

Electric utilities; amends renewable energy portfolio standard program requirements, etc.

Sponsored By: Schuyler T. VanValkenburg (Democratic)

Became Law

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. This bill is identical to HB 628.

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 1 benefits, 1 costs, 9 mixed.

Massive energy storage build by 2035

By December 31, 2035, each Phase I utility must seek approval for 400 MW of storage, and each Phase II must seek 2,700 MW. All storage projects must follow competitive procurement. The Commission adopted rules by January 1, 2021 with interim targets, planning requirements, and tools like solicitations, behind‑the‑meter incentives, non‑wires alternatives, and peak‑reduction programs.

Utilities must add major clean energy

Phase I utilities must secure 600 MW of in‑state solar or onshore wind in three 200‑MW tranches by 2023, 2027, and 2030, with at least 35% purchased from non‑utility owners. Phase II utilities must petition for 16,100 MW of in‑state solar and onshore wind by 2035 (3,000 MW by 2024; +3,000 by 2027; +4,000 by 2030; +6,100 by 2035) and up to 5,200 MW of offshore wind, with portions bought from non‑utility owners. Utilities must run at least one public RFP each year (45‑day notice, clear bid rules) and file annual plans from 2020–2035; the Commission rules within six months. For new solar CPCNs, the project must have been competitively procured. Utilities can seek approval and cost recovery to build, buy, or contract for zero‑carbon power and storage.

New charges on bills for clean energy

The law recovers all renewable and storage compliance costs from every retail customer in a utility’s Virginia area as a non‑bypassable charge. The Commission set tariffs by January 1, 2021 to charge customers who use other suppliers, with annual true‑ups. If a utility misses RPS goals, it pays $45 per MWh of shortfall, or $75 per MWh for small in‑state solar, wind, or digesters (both rise 1% each year after 2021). Utilities can recover those payments from customers where allowed. Money from penalties funds job training (50%), public facility efficiency (16%), local renewable programs (30%), and admin costs (4%).

Pilot allows on-site solar/wind PPAs

The Commission runs pilot programs so a third party can sell on‑site solar or wind power to one host customer by PPA in each investor‑owned utility area. Capacity is first‑come, first‑served: 500 MW for Virginia‑jurisdictional customers and 500 MW for nonjurisdictional customers. Systems are generally 50 kW–3 MW; low‑income customers and 501(c) nonprofits can use smaller systems. Customers must pay reasonable interconnection costs and give 30‑days’ written notice before a PPA takes effect. PPAs outside the pilot are banned in these areas except when a licensed supplier serves 100% of the account’s load; approved 100% green tariffs cannot be combined with a PPA for the same account. The Commission posts used and remaining pilot capacity, reviews the pilot every two years, and utility affiliates may participate as sellers. Entities organized under Chapter 9.1 are not covered by this section.

100% clean power by 2045

Utilities must meet rising clean‑energy targets each year until they reach 100% by 2045. For 2021–2024, RECs can come from Virginia or PJM, with some out‑of‑state thermal and biomass RECs banned; starting in 2025, only statutorily eligible REC sources are allowed. Beginning in the 2027 compliance year, Phase II utilities must use at least 75% Virginia‑origin RECs. Phase II utilities must also meet 1% of their requirement with small (1 MW or less) in‑state projects, with at least 25% from low‑income projects (schools can fill gaps). By July 1, 2033, the Commission reviews small in‑state REC availability and can adjust that small‑project fraction by up to one percentage point. The Commission writes rules to run and verify the program.

Coal and oil plants retired

By December 31, 2024, utilities must retire oil‑fired units over 500 MW and all coal plants in Virginia, with narrow exceptions for certain cooperative‑owned units and some Phase II coal units that co‑fire with biomass. By December 31, 2045, utilities must retire all other in‑state carbon‑emitting units, excluding standalone biomass. A utility can seek an exception if retirement would harm reliability or security; the Commission reviews each case. These deadlines shift the power mix away from fossil fuel over time.

Deals for large power users buying renewables

Certified large customers (over 25 MW prior‑year load) can buy RECs or bundled zero‑carbon energy and offset their load for RPS purposes. They are exempt from non‑bypassable RPS costs in proportion to what they buy, and their load and RECs are excluded from the utility’s RPS math. Utilities must certify these buyers each year, or buyers can self‑certify; the Commission may set the rules. Contracts with these buyers are not treated as special rates if they do not shift costs to other customers. The Commission makes sure any related distribution and transmission costs are allocated fairly.

Limits on single energy storage projects

The law caps most single energy storage projects at 500 megawatts. A Phase II utility may procure one project up to 800 megawatts. These limits guide how utilities and developers size new storage.

Preference for Virginia and U.S. equipment

Utilities must favor equipment made in Virginia or the United States when it is reasonably available and competitively priced. This preference only works through competitive bidding and does not replace it. This supports local makers but can narrow vendor options and affect project prices.

Large power users skip renewable charges

A customer with peak demand over 100 megawatts in 2019 is exempt from the renewable program charge. To qualify, the customer must have chosen a competitive supplier before April 1, 2019 (Phase II) or February 1, 2019 (Phase I). While they buy from that supplier, the utility excludes their load from its renewable targets.

More sources earn renewable credits

The law defines which generators count for renewable credits, including solar, wind, certain falling‑water hydro, landfill gas (in operation by Jan 1, 2020), and some Virginia biomass with strict limits. Owners of geothermal heating and cooling can earn credits, with BTUs converted to kWh and state‑set verification. Falling‑water facilities in Virginia that began operating before July 1, 2024 now qualify. Utilities can bank extra RECs for up to five years and may recover REC purchase costs under approved rate rules. Biomass REC sales cannot exceed the plant’s 2022 output or its actual yearly generation.

Sponsors & Cosponsors

Sponsor

  • Schuyler T. VanValkenburg

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 206 • No: 46

Senate vote 3/5/2026

House amendment agreed to by Senate

Yes: 23 • No: 16

House vote 3/3/2026

Passed House with amendment

Yes: 93 • No: 5

House vote 2/26/2026

Reported from Labor and Commerce with amendment(s)

Yes: 18 • No: 3

Senate vote 2/13/2026

Read third time and passed Senate

Yes: 23 • No: 16

Senate vote 2/12/2026

Committee substitute agreed to (Voice Vote)

Yes: 0 • No: 0

Senate vote 2/11/2026

Constitutional reading dispensed Block Vote (on 1st reading)

Yes: 40 • No: 0

Senate vote 2/11/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote 2/9/2026

Reported from Commerce and Labor with substitute

Yes: 9 • No: 6

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0646)

    4/13/2026Governor
  2. Approved by Governor-Chapter 646 (effective 7/1/2026)

    4/13/2026Governor
  3. Fiscal Impact Statement from State Corporation Commission (SB175)

    3/23/2026Senate
  4. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/14/2026Governor
  5. Enrolled Bill communicated to Governor on March 14, 2026

    3/14/2026Senate
  6. Signed by Speaker

    3/12/2026House
  7. Bill text as passed Senate and House (SB175ER)

    3/11/2026Senate
  8. Enrolled

    3/11/2026Senate
  9. Signed by President

    3/11/2026Senate
  10. House amendment agreed to by Senate (23-Y 16-N 0-A)

    3/5/2026Senate
  11. Passed House with amendment (93-Y 5-N 0-A)

    3/3/2026House
  12. Engrossed by House as amended

    3/3/2026House
  13. committee amendment agreed to

    3/3/2026House
  14. Read third time

    3/3/2026House
  15. Read second time

    3/2/2026House
  16. Reported from Labor and Commerce with amendment(s) (18-Y 3-N)

    2/26/2026House
  17. Referred to Committee on Labor and Commerce

    2/18/2026House
  18. Read first time

    2/18/2026House
  19. Placed on Calendar

    2/18/2026House
  20. Read third time and passed Senate (23-Y 16-N 0-A)

    2/13/2026Senate
  21. Committee substitute agreed to (Voice Vote)

    2/12/2026Senate
  22. Fiscal Impact Statement from State Corporation Commission (SB175)

    2/12/2026Senate
  23. Engrossed by Senate - committee substitute (Voice Vote)

    2/12/2026Senate
  24. Read second time

    2/12/2026Senate
  25. Passed by for the day Block Vote (Voice Vote)

    2/11/2026Senate

Bill Text

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