VirginiaSB1752026 Regular SessionSenateWALLET

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

Sponsored By: Schuyler T. VanValkenburg (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. This bill is identical to HB 628.

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 5 benefits, 2 costs, 4 mixed.

Utilities build storage with ownership limits

By December 31, 2035, Phase I utilities must seek approval for 400 megawatts of storage, and Phase II utilities for 2,700 megawatts. The Commission can approve more capacity. Competitive purchasing is required, with projects capped at 500 megawatts except one Phase II project of up to 800 megawatts. At least 35% of storage placed in service after July 1, 2020, must be bought from or owned by non-utility parties selling capacity to the utility. Plans must include a goal of at least 10% storage on customer premises; implementing rules were due January 1, 2021, and include incentives and peak-demand programs.

Utilities expand Virginia solar and wind

By December 31, 2035, each Phase II utility must seek approval for 16,100 megawatts of Virginia solar or onshore wind. At least 1,000 megawatts must use previously developed sites. Within the 1,100-megawatt small-solar portion, projects cannot exceed 3 megawatts, and 65% must come from owners other than utilities or their affiliates. Utilities must use competitive purchasing, and solar construction applications must show the required bidding process took place. For covered renewable and storage construction, utilities must buy Virginia- or U.S.-made equipment and parts when reasonably available and competitively priced.

Utilities pay for renewable energy shortfalls

Utilities must make shortfall payments when they cannot meet renewable requirements or needed certificate costs exceed $45 per megawatt-hour. The base payment is $45 per megawatt-hour of shortfall. It is $75 for shortfalls involving qualifying Virginia solar, wind, or anaerobic digestion resources of 1 megawatt or less. Both payment rates increase by 1% each year after 2021. Utilities can recover these payments as compliance costs, but the law specifies no resulting household bill increase.

Utilities face revised Virginia certificate rules

Starting in compliance year 2027, at least 75% of certificates used by Phase II utilities must come from eligible Virginia resources. The law delays this in-state requirement from 2025 to 2027. Virginia falling-water facilities that began commercial operation before July 1, 2024, qualify as renewable sources. These rules change eligible supplies and sourcing duties, but set no household bill adjustment.

Utilities reserve demand for small renewables

Phase II utilities must meet 4.5% of renewable requirements with qualifying small Virginia projects in 2026–2030, rising to 5% in 2031–2045. Eligible solar, wind, and anaerobic digestion projects cannot exceed 1 megawatt, or 3,000 kilowatts across one site or adjoining sites under the same or affiliated owners. At least 25% of this required amount must come from qualifying low-income projects when available. If those projects are unavailable, public-school projects with school contracts must fill the remaining share when available. By July 1, 2033, the Commission must begin a supply review and can adjust the small-project share by up to 1 percentage point for future years.

Customers gain smaller renewable contract options

The pilot lets eligible customers buy solar or wind power through third-party agreements without the former 50-kilowatt minimum. Each facility can be no larger than 3 megawatts, must sit on premises the customer owns or leases, and serve only that customer. Each pilot utility has separate 500-megawatt caps for Virginia jurisdictional and nonjurisdictional customers. Parties can choose whether to use net metering, and reasonable interconnection costs apply. The Commission reviews the pilot every two years and posts capacity status; the law sets no power price or guaranteed savings.

Legacy renewable subscribers avoid some costs

Some accelerated renewable buyers on a Phase II utility's specified experimental tariff avoid new solar, onshore-wind, and storage costs. They must have been subscribed on March 1, 2020. Their tariff must have required a renewable facilities agreement and purchases of at least 2,000 renewable attributes each year. The exemption is proportional to their tariff-linked certificates and annual electricity use; no dollar savings are specified.

Shortfall payments fund training and energy

The Department of Energy holds renewable shortfall payments in an interest-bearing account and directs them to specified uses. Historically economically disadvantaged communities receive 50% for job training and 30% for renewable energy programs. Another 16% funds energy-efficiency work at public facilities, and 4% covers administration. Available dollars depend on payments collected; the law sets no guaranteed funding total.

Early supplier switchers avoid renewable charges

Certain early competitive-supply customers avoid specified renewable charges while they do not buy electric energy from their utility. Phase II customers must have had peak demand above 100 megawatts in 2019 and elected competitive supply before April 1, 2019. Phase I customers must have elected competitive supply before February 1, 2019. During those periods, their electricity loads also stay outside the utility's renewable requirements.

Renewable buyers get targeted charge exemptions

Certified accelerated renewable buyers get proportional exemptions from renewable compliance charges based on their contracts and annual electricity use. Offshore-wind charges remain, and buying certificates alone generally does not exempt buyers from new solar, wind, or storage costs. Eligible generation must be in the PJM grid region and have started operating after January 1, 2015. Contracted storage must be within the utility's network service area, and its costs cannot be shifted to customers who did not agree to pay. Qualifying contracts reduce utility procurement duties, and their certificates cannot also count toward utility compliance. Commercial or industrial buyers with prior-year aggregate load over 25 megawatts also have their sales excluded from utility renewable goals after Commission certification; annual certification or reporting requirements apply.

Electric customers pay renewable compliance costs

Virginia customers of Phase I and Phase II utilities pay covered renewable compliance costs through a charge they cannot avoid by switching suppliers. These costs include covered generation, energy purchases, and renewable energy certificates. Specific exemptions apply to qualifying renewable buyers and early competitive-supply customers. For utilities serving several jurisdictions, Virginia customers pay Virginia costs, with safeguards against double recovery. The Commission had to begin its competitive-supplier tariff proceeding by September 1, 2020, and start recovery by January 1, 2021; those tariffs receive annual adjustments. The law sets no household charge amount.

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

Passed by for the day Block Vote (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 • 2/9/2026

Reported from Commerce and Labor with substitute

Yes: 9 • No: 6

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0646)

    4/13/2026Governor
  2. Acts of Assembly Chapter text (CHAP0646)

    4/13/2026Governor
  3. Acts of Assembly Chapter text (CHAP0646)

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

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

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

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

    3/14/2026Senate
  8. Signed by Speaker

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

    3/11/2026Senate
  10. Enrolled

    3/11/2026Senate
  11. Signed by President

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

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

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

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

    3/3/2026House
  16. Read third time

    3/3/2026House
  17. Read second time

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

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

    2/18/2026House
  20. Read first time

    2/18/2026House
  21. Placed on Calendar

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

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

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

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

    2/12/2026Senate

Bill Text

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