VirginiaSB2522026 Regular SessionSenateWALLET

Renewable energy portfolio standard program; energy from geothermal heating/cooling systems, report.

Sponsored By: Scott A. Surovell (Democratic)

Signed by Governor

Summary

Renewable energy portfolio standard program; geothermal heating and cooling systems; report. Requires, for purposes of the renewable energy portfolio standard program, Dominion Energy Virginia and American Electric Power to annually procure and retire certain percentages of renewable energy certificates from geothermal heating and cooling systems, as defined in the bill. The bill directs the State Corporation Commission to prepare and deliver a report evaluating the procurement and retirement of renewable energy certificates from geothermal heating and cooling systems in the Commonwealth on or before November 1, 2028. The bill also directs the Real Estate Appraiser Board to promulgate regulations requiring the development of a continuing education curriculum and required training for all licensees that includes how to properly determine the increase in value of real estate created by reductions in building energy costs associated with solar, geothermal, and solar water heating investments. As introduced, this bill was a recommendation of the Commission on Electric Utility Regulation and is identical to HB 1102.

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Bill Overview

Analyzed Economic Effects

16 provisions identified: 4 benefits, 2 costs, 10 mixed.

Phase II utilities expand renewable power

Each Phase II utility must seek approval for 16,100 megawatts of Virginia solar or onshore wind by December 31, 2035. Required additions are 3,000 megawatts by 2024, 3,000 by 2027, 4,000 by 2030, and 6,100 by 2035. At least 35% of each part must come from owners outside the utility and its affiliates; exceeding 16,100 megawatts needs commission approval. The total includes 1,100 megawatts of solar projects no larger than 3 megawatts each, plus at least 200 megawatts on previously developed sites. Separately, utilities can build or buy up to 5,200 megawatts of offshore wind off Virginia or in federal waters, connected directly to Virginia.

Utilities face long-term renewable energy targets

Utilities must meet yearly renewable energy targets based on electricity sold in the previous calendar year. The required share reaches 100% for Phase I utilities in 2045 and Phase II utilities in 2050, continuing afterward. The calculation uses retail sales in each utility's Virginia service area. It excludes accelerated renewable buyers and specified energy from qualifying nuclear and zero-carbon facilities placed in service after July 1, 2030. These are utility compliance targets, not a household bill formula.

Phase I utilities add renewable capacity

Each Phase I utility must seek approval to build, acquire, or contract for 600 megawatts of Virginia solar or onshore wind. The schedule requires 200 megawatts by December 31, 2023, another 200 by December 31, 2027, and another 200 by December 31, 2030. At least 35% of each part must come from facilities owned by someone other than the utility. Capacity above 600 megawatts needs State Corporation Commission approval. The law does not state the resulting household bill change.

Utilities buy from small Virginia projects

Phase II utilities must meet 1% of each year's renewable requirement with Virginia solar, wind, or anaerobic-digestion projects. Each project must be 1 megawatt or smaller. A single site, or adjoining sites owned by the same or affiliated entities, can contribute no more than 3,000 kilowatts. At least 25% of this share must come from qualifying low-income projects when available. If unavailable, projects on or next to public schools can supply that share through a contract with the school.

Utilities must buy geothermal energy credits

Utilities must buy and retire geothermal heating and cooling credits equal to at least 0.5% of total credits in 2027. The minimum rises to 0.75% in 2028 and 1% in 2029 and later years. Phase II systems must be in Virginia; Phase I systems must also be within that utility's service area. Credit amounts use system energy converted from BTUs to kilowatt-hours, with State Corporation Commission verification. The commission must report on geothermal credit purchases and retirement by November 1, 2028.

Utilities must expand energy storage capacity

By December 31, 2035, each Phase I utility must seek approval for 400 megawatts of storage; Phase II utilities need 2,700. Projects generally cannot exceed 500 megawatts, but one Phase II project can reach 800 megawatts. At least 35% of facilities placed in service after July 1, 2020, must be purchased from or owned by non-utility parties. Plans must aim to put at least 10% of projects behind customer meters. Competitive purchase rules apply, exceeding capacity targets needs commission approval, and commission regulations must set interim targets and deployment methods.

Utilities must retire covered fossil-fuel plants

Phase I and Phase II utilities must retire covered Virginia coal units and oil units above 500 megawatts by December 31, 2024. Exceptions cover coal units jointly owned with cooperatives and certain Phase II coalfield units that also burn biomass. Other Virginia units that emit carbon from fuel combustion must retire by December 31, 2045. Biomass units that do not also burn coal are exempt from that later deadline. Utilities can seek commission relief when retirement threatens reliable or secure electricity service.

Virginia renewable credits face sourcing limits

For 2021–2024, utilities could use qualifying Virginia or PJM-region credits, with exclusions for thermal energy and out-of-state biomass. Beginning in 2025, only eligible sources count, and at least 75% of Phase II credits must come from Virginia. Virginia falling-water facilities qualify if commercial operations began before July 1, 2024; other sources face technology, location, and date rules. Biomass sources cannot sell more credits yearly than their actual 2022 electricity output, and credits also track actual yearly generation. Utilities can apply excess renewable sales or credits to the year created and the next five calendar years.

Shortfall payments fund community energy jobs

Virginia's Department of Energy must put 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-saving measures in public facilities, and 4% pays administrative costs. Available funding depends on payments collected; the law sets no individual benefit amount.

Certified renewable buyers get charge exemptions

Certified accelerated renewable buyers can contract for eligible credits or bundled power and offset their load for renewable compliance. Charge exemptions track qualifying credits and contracted storage capacity; annual certification is required, and some offshore-wind costs remain chargeable. Bundled power must be solar, wind, or zero-carbon generation in PJM, first operating after January 1, 2015. Phase II customers subscribed to the specified experimental tariff as of March 1, 2020, also qualify for proportional solar, onshore-wind, and storage exemptions if their agreements require at least 2,000 renewable attributes yearly. Contracted-resource costs cannot be charged to customers who did not voluntarily agree to pay them.

Early outside-supplier customers avoid renewable charges

Certain customers who chose another electricity supplier early are exempt from specified renewable charges while not buying utility power. Phase II customers must have had peak demand above 100 megawatts in 2019 and chosen competitive supply before April 1, 2019. Phase I customers must have chosen competitive supply before February 1, 2019. Their electricity use is also excluded from the utility's renewable requirements during that period.

Geothermal systems qualify for renewable credits

Qualifying geothermal heating and cooling systems can earn credits that count toward utility renewable energy requirements. Systems must use electric heat pumps that exchange heat with groundwater or a shallow ground source. They must meet current Energy Star standards, replace less efficient heating, water-heating, or cooling equipment, and not send electricity to the grid. Closed-loop systems must keep fluid inside pipes; open-loop systems must safely return water to the same aquifer or surface-water source. The law sets no direct household payment.

Appraisers must train on energy savings

Virginia's Real Estate Appraiser Board must require continuing education for all licensed appraisers on valuing building energy savings. Training covers property value increases tied to lower energy costs from solar, geothermal, and solar water-heating investments. The board must report on implementation and training by November 1, 2026. The law does not guarantee a property value increase or provide a household payment or tax break.

Customers pay renewable energy compliance costs

Virginia utilities recover covered renewable compliance costs through customer charges, generally even when customers use another electricity supplier. Covered costs include qualifying new renewable energy and storage placed in service after July 1, 2020. Certain renewable buyers and offshore-wind customers are exempt; Virginia customers pay their share of multistate utility costs. Charges for customers using another supplier began by January 1, 2021, with commission review, benefit offsets, and annual adjustments. Utilities can also recover covered generation, storage, and purchased-energy costs through rates; eligible solar and wind costs can use a customer credit reinvestment offset instead.

Utilities must seek competitive renewable bids

Phase I and Phase II utilities must seek bids for new solar and wind resources at least once each year. Requests must state energy, capacity, or credit needs and be posted publicly at least 45 days before bids close. Utilities must weigh project, developer, grid, Virginia economic, and environmental factors. Utilities seeking solar construction approval must show they used the required competitive process. Covered renewable and storage projects must seek Virginia- or U.S.-made equipment and components when reasonably available and competitively priced.

Utilities pay for renewable credit shortfalls

Utilities generally pay $45 per megawatt-hour when they cannot meet renewable requirements or necessary credits cost more than $45. Base shortfall rates are $75 for qualifying small Virginia projects and $100 for required geothermal credits, rising 1% annually after 2021. Utilities must seek geothermal credits quarterly. Required geothermal credits unavailable at or below $100 are exempt from the geothermal payment, but replacement eligible credits are required, subject to the $45 shortfall payment. Utilities can recover these payments as compliance costs; no household charge amount is set.

Sponsors & Cosponsors

Sponsor

  • Scott A. Surovell

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 157 • No: 53

House vote • 2/27/2026

Passed House

Yes: 67 • No: 29

House vote • 2/24/2026

Reported from Labor and Commerce

Yes: 16 • No: 5

Senate vote • 2/13/2026

Read third time and passed Senate

Yes: 25 • No: 14

Senate vote • 2/12/2026

Commerce and Labor Amendments agreed to

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 amendments

Yes: 9 • No: 5

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0734)

    4/13/2026Governor
  2. Approved by Governor-Chapter 734 (effective 7/1/2026)

    4/13/2026Governor
  3. Fiscal Impact Statement from State Corporation Commission (SB252)

    3/12/2026Senate
  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

    3/10/2026Senate
  6. Bill text as passed Senate and House (SB252ER)

    3/4/2026Senate
  7. Enrolled

    3/4/2026Senate
  8. Signed by President

    3/4/2026Senate
  9. Signed by Speaker

    3/4/2026House
  10. Passed House (67-Y 29-N 0-A)

    2/27/2026House
  11. Read third time

    2/27/2026House
  12. Read second time

    2/26/2026House
  13. Reported from Labor and Commerce (16-Y 5-N)

    2/24/2026House
  14. Referred to Committee on Labor and Commerce

    2/18/2026House
  15. Read first time

    2/18/2026House
  16. Placed on Calendar

    2/18/2026House
  17. Fiscal Impact Statement from State Corporation Commission (SB252)

    2/16/2026Senate
  18. Read third time and passed Senate (25-Y 14-N 0-A)

    2/13/2026Senate
  19. Commerce and Labor Amendments agreed to

    2/12/2026Senate
  20. Engrossed by Senate as amended (Voice Vote)

    2/12/2026Senate
  21. Read second time

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

    2/11/2026Senate
  23. Constitutional reading dispensed Block Vote (on 1st reading) (40-Y 0-N 0-A)

    2/11/2026Senate
  24. Rules suspended

    2/11/2026Senate
  25. Senate committee amendments offered

    2/9/2026Senate

Bill Text

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