VirginiaSB5982026 Regular SessionSenateWALLET

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

Sponsored By: R. Creigh Deeds (Democratic)

Signed by Governor

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

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

Utilities face fossil plant retirement deadlines

Covered utilities must retire oil-fired units above 500 megawatts and coal-fired units by December 31, 2024. Exceptions cover coal units jointly owned with cooperatives and qualifying Phase II coalfield units that also burn biomass. Other in-state units emitting carbon from burning fuel must retire by December 31, 2045. Biomass units that do not also burn coal are exempt from the 2045 deadline. Utilities can ask the State Corporation Commission for relief when retirement threatens reliable or secure electricity service.

Utilities get stricter renewable sourcing rules

Annual renewable targets use prior-year electricity sales and reach 100 percent in 2045 for Phase I utilities and 2050 for Phase II. Specified nuclear electricity, qualifying new zero-carbon electricity, and certified large-buyer purchases are excluded from the calculation. During 2021–2024, certificates must come from qualifying Virginia or PJM-region facilities, excluding thermal resources and out-of-state biomass. Starting in 2025, only statutory renewable sources qualify, and 75 percent of Phase II certificates must come from Virginia. Eligible sources include specified solar, wind, hydropower, waste-to-energy, landfill gas, geothermal, and biomass; Virginia falling-water plants operating before July 1, 2024, qualify. Biomass eligibility requires operation as of January 1, 2023, feedstock limits, sustainable-harvesting checks, and facility output caps tied to 2022 generation. Biomass certificates must use PJM-EIS GATS tracking and cannot exceed actual generation in the sale year. Utilities can bank excess renewable sales or certificates for their creation year and the next five calendar years.

Utilities must seek more renewable power

Phase I utilities must seek approval for 600 megawatts of Virginia solar or onshore wind. That includes 200 megawatts by December 31, 2023, another 200 by December 31, 2027, and another 200 by December 31, 2030. Phase II utilities must seek approval for 16,100 megawatts by December 31, 2035. Their stages are 3,000 by December 31, 2024, plus 3,000 by 2027, 4,000 by 2030, and 6,100 by 2035. For the stated stages, 35 percent must come from nonutility-owned facilities. Phase II plans include 1,100 megawatts of solar projects capped at 3 megawatts each and 200 megawatts on previously developed sites. Offshore wind is capped at 5,200 megawatts, located off Virginia's coast or in federal waters and connected directly to Virginia. Both classes must file annual development plans and approval petitions from 2020 through 2035; higher solar and onshore-wind totals require Commission approval.

Large clean energy buyers pay less

Certified commercial and industrial buyers with prior-year aggregate load above 25 megawatts can contract for qualifying certificates, solar or wind bundles, and storage. Starting July 1, 2026, they can also buy zero-carbon electricity from eligible PJM-region resources. Contracts must satisfy location and operating rules; older facilities need qualifying investments or agreements supporting new output or preventing announced early retirement. Qualifying purchases offset renewable obligations and reduce the buyer's proportional compliance charges, but not specified offshore-wind costs. Buyer certificates cannot also count toward utility compliance, and contract costs cannot be charged to others without their consent.

Customers pay renewable energy compliance costs

Starting no later than January 1, 2021, Virginia customers pay renewable compliance charges, even when using another electricity supplier. Legal exemptions apply, and charges are updated and corrected each year. Utilities must seek approval to recover new zero-carbon power and storage costs through rates or separate rate charges. Certain solar and wind costs can instead count toward customer credit reinvestment offsets. The State Corporation Commission must ensure fair sharing of related power-line costs; Virginia customers pay Virginia's allocated compliance costs.

Utilities expand storage within project limits

By December 31, 2035, Phase I utilities must seek approval for 400 megawatts of storage; Phase II must seek 2,700. Additional capacity also needs Commission approval. For facilities entering service after July 1, 2020, at least 35 percent must be bought from others or use third-party capacity sales. Single projects are capped at 500 megawatts, except Phase II utilities can procure a project up to 800 megawatts. Commission rules due January 1, 2021, must include interim targets, competitive bids, customer-side storage incentives, alternatives to new wires, and peak-demand programs.

Shortfall payments fund community energy jobs

The Virginia Department of Energy must divide revenue from utility renewable shortfall payments. Job training in historically economically disadvantaged communities receives 50 percent. Renewable-energy programs in those communities receive 30 percent, and energy-saving measures at public facilities receive 16 percent. Administration receives the remaining 4 percent. Available funding depends on the payments collected; the law sets no total amount.

Small renewable projects support low-income customers

Phase II utilities must meet 1 percent of each annual renewable target through Virginia solar, wind, or anaerobic-digestion resources. Each resource is limited to 1 megawatt, with a 3-megawatt cap across single or contiguous sites under related ownership. At least 25 percent of this set-aside must use available low-income projects supplying half their electricity to low-income utility customers. When those projects are unavailable, available projects on or beside public K–12 schools can fill the remaining share. School projects need a contract with the school; the law does not promise a customer bill discount.

Some existing customers avoid renewable charges

Qualifying Phase II customers subscribed to the specified tariff as of March 1, 2020, avoid some new solar, wind, and storage costs. They need a renewable facilities agreement and a commitment to buy at least 2,000 renewable attributes yearly. Their exemption is proportional to qualifying agreements and annual electricity use. Phase II competitive-supply customers qualify with 2019 peak demand above 100 megawatts and a supply election before April 1, 2019. Phase I customers qualify with an election before February 1, 2019; these supply exemptions and load exclusions last only while buying no electricity from the utility.

Utility renewable shortfalls carry rising payments

Utilities must pay for renewable shortfalls when they miss annual targets or needed certificates cost more than $45 per megawatt-hour. The base payment is $45 per megawatt-hour of shortfall. Shortfalls involving Virginia solar, wind, or anaerobic-digester projects of 1 megawatt or less carry a $75 base payment. Both amounts rise 1 percent annually after 2021. Utilities can recover these payments as compliance costs, so customers can bear the expense.

Utilities must compete and favor domestic equipment

Both utility classes must seek bids for new solar and wind resources at least once each year. Bid requests must explain the need and be public at least 45 days before closing. Utilities must consider price, developer qualifications, grid effects, Virginia economic benefits, and environmental factors. Utilities seeking approval to build solar plants must show that the required competitive process occurred. Covered power and storage projects must buy Virginia or U.S. equipment with domestic parts when reasonably available and competitively priced.

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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