VirginiaSB5982026 Regular SessionSenateWALLET

Electric utilities; renewable portfolio standard program, zero-carbon electricity, etc.

Sponsored By: R. Creigh Deeds (Democratic)

Became Law

Summary

Electric utilities; renewable energy portfolio standard; zero-carbon electricity; accelerated clean energy buyers. Revises the conditions under which accelerated clean energy buyers, defined in existing law as accelerated renewable energy buyers, may contract with Appalachian Power or Dominion Energy Virginia to obtain renewable energy certificates (RECs). The bill exempts an accelerated clean energy buyer obtaining capacity, energy, or RECs from qualifying resources or facilities from the assignment of non-bypassable costs associated with compliance with the renewable portfolio standard program based on the amount and type of renewable energy certificates obtained in proportion to such accelerated clean energy buyer's total electric energy consumption. This bill incorporates SB 470. This bill is identical to HB 369.

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Bill Overview

Analyzed Economic Effects

7 provisions identified: 2 benefits, 1 costs, 4 mixed.

Utilities can recover clean-energy compliance costs

The law lets utilities recover all costs to meet these clean‑energy rules. This covers building or buying solar, wind, or storage placed in service after 7/1/2020 and buying power or RECs. If a utility falls short or RECs cost over $45/MWh, it must pay $45 per MWh of shortfall ($75/MWh for in‑state solar, wind, or digester projects ≤1 MW), with the rate rising 1% each year after 2021. The money funds job training, public‑facility efficiency, local renewable programs, and administration. Utilities may recover these payments through rates, so customer bills may rise.

Big buildout of clean energy and storage

Utilities must seek approval to add clean energy and storage under set targets and timelines. Phase I adds 600 MW by 2030 (200 MW by 2023, 2027, and 2030), with at least 35% from non‑utility owners. Phase II adds 16,100 MW by 2035 (3,000 by 2024; +3,000 by 2027; +4,000 by 2030; +6,100 by 2035), includes 1,100 MW of small (≤3 MW) projects, at least 200 MW on developed sites, and may add up to 5,200 MW offshore wind. Storage targets are 400 MW (Phase I) and 2,700 MW (Phase II) by 12/31/2035; no single storage project may exceed 500 MW, except one Phase II project up to 800 MW. Utilities must run annual, public RFPs with at least 45 days’ notice, show competitive selection for solar permits, prefer U.S.‑made gear when it is available and competitively priced, and the Commission rules within six months while weighing need, fuel‑cost savings, jobs, and cheaper options.

Coal and oil plants retire by 2024

By 12/31/2024, Phase I and Phase II utilities must retire all Virginia coal plants and oil units over 500 MW. Units jointly owned with a cooperative and some coalfield units that co‑fire with biomass are excluded. By 12/31/2045, utilities must retire all other carbon‑emitting units in Virginia, except biomass plants that do not co‑fire with coal. A utility may ask to delay a retirement if service reliability or security would be threatened.

State renewable standard and yearly targets

The law creates a renewable portfolio standard for Phase I and Phase II utilities. Utilities must buy and retire renewable energy certificates (RECs) each year, rising to 100% by 2045 (Phase I) and 2050 (Phase II). For 2021–2024, RECs may come from Virginia or the PJM region; from 2025 on, only RPS‑eligible sources count. Eligible sources include solar and wind in VA or PJM, certain hydropower, landfill gas and waste‑to‑energy in service by 1/1/2020, geothermal, and in‑state biomass that meets strict rules and caps tied to 2022 output and actual generation. Utilities may bank extra RECs for five years, and the Commission sets verification rules; entities organized under Chapter 9.1 are excluded.

Large power users can self-supply clean energy

Large power users with more than 25 MW of load can be certified as accelerated clean‑energy buyers. They can buy RECs or, starting 7/1/2026, zero‑carbon electricity in PJM, and are exempt from some assigned RPS costs in proportion to what they buy. Their RECs do not count toward the utility’s RPS, and their load is excluded from the utility’s RPS math. Customers with over 100 MW peak in 2019 who left for a competitive supplier before the 2019 cutoff dates are not charged non‑bypassable fees while off the utility, and their load is excluded.

More energy sources qualify for REC credit

Geothermal heating and cooling systems in Virginia can earn RECs based on energy use converted to kWh; the Commission sets verification. Small hydropower in Virginia that began operations before 7/1/2024 also counts as eligible. These changes help owners sell RECs from more types of projects.

More in-state and small projects for Phase II

Starting with the 2025 compliance year, Phase II utilities must use at least 75% Virginia‑based RECs. They must also meet 1% of their RPS with projects of 1 MW or less in Virginia, with no single site over 3,000 kW. At least 25% of that 1% comes from low‑income qualifying projects when available; if not, projects on or next to public K‑12 schools may be used.

Sponsors & Cosponsors

Sponsor

  • R. Creigh Deeds

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 267 • No: 20

Senate vote 3/10/2026

House substitute agreed to by Senate

Yes: 40 • No: 0

House vote 3/6/2026

Passed House with substitute Block Vote

Yes: 97 • No: 0

House vote 3/3/2026

Reported from Labor and Commerce with substitute

Yes: 22 • No: 0

Senate vote 2/17/2026

Read third time and passed Senate

Yes: 40 • No: 0

Senate vote 2/16/2026

Senator McDougle Amendment rejected

Yes: 19 • No: 20

Senate vote 2/16/2026

Committee substitute agreed to (Voice Vote)

Yes: 0 • No: 0

Senate vote 2/13/2026

Constitutional reading dispensed Block Vote (on 1st reading)

Yes: 35 • No: 0

Senate vote 2/12/2026

Reported from Commerce and Labor with substitute

Yes: 14 • No: 0 • Other: 1

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0512)

    4/8/2026Governor
  2. Approved by Governor-Chapter 512 (effective 7/1/2026)

    4/8/2026Governor
  3. Fiscal Impact Statement from State Corporation Commission (SB598)

    4/6/2026Senate
  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

    3/31/2026Senate
  6. Signed by Speaker

    3/31/2026House
  7. Bill text as passed Senate and House (SB598ER)

    3/30/2026Senate
  8. Enrolled

    3/30/2026Senate
  9. Signed by President

    3/30/2026Senate
  10. Fiscal Impact Statement from State Corporation Commission (SB598)

    3/24/2026Senate
  11. House substitute agreed to by Senate (40-Y 0-N 0-A)

    3/10/2026Senate
  12. Passed House with substitute Block Vote (97-Y 0-N 0-A)

    3/6/2026House
  13. Engrossed by House - committee substitute

    3/6/2026House
  14. committee substitute agreed to

    3/6/2026House
  15. Read third time

    3/6/2026House
  16. Read second time

    3/5/2026House
  17. Committee substitute printed 26109089D-H1

    3/3/2026House
  18. House committee offered

    3/3/2026House
  19. House committee offered

    3/3/2026House
  20. Reported from Labor and Commerce with substitute (22-Y 0-N)

    3/3/2026House
  21. Referred to Committee on Labor and Commerce

    2/24/2026House
  22. Read first time

    2/24/2026House
  23. Placed on Calendar

    2/24/2026House
  24. Fiscal Impact Statement from State Corporation Commission (SB598)

    2/23/2026Senate
  25. Read third time and passed Senate (40-Y 0-N 0-A)

    2/17/2026Senate

Bill Text

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