SB 1040 Virginia Senate · 2025 Regular Session

Electric utilities; renewable energy portfolio standard program requirements.

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 (i) the annual percentage of program requirements to be met with behind-the meter solar, wind, or anaerobic digestion resources of three megawatts or less located in the Commonwealth and (ii) the date by which 75 percent of such requirements shall be met with 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 permits Dominion Energy Virginia to recover certain costs prior to December 31, 2032, and 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 1883.

Issues: ✓ Energy

Bill status vetoed 4 of 5 stages cleared

Introduction

Jan 2025

Committee Review

Feb 2025

Senate Passage

Mar 2025

House of Delegates Passage

Mar 2025

Vetoed

May 2025

Introduced Jan 7, 2025 Vetoed May 2, 2025

Maddy AI version diff · 3 comparisons

What changed between versions

Governor Substitute Not Adopted → Enrolled · 8 edits · Mar 10, 2025

MODERATE

The bill was finalized as an Enrolled Act, expanding its scope to include new provisions on power purchase agreements and pilot programs for solar and wind generation. Key changes include stricter renewable energy targets for Phase II utilities, updated timelines for retiring coal and oil plants, and new requirements to source more renewable energy from behind-the-meter resources and previously developed sites.

Scope change

The bill's scope expanded from solely amending the Renewable Energy Portfolio Standard (RPS) to also include a new section establishing pilot programs for third-party power purchase agreements and extending cost recovery provisions for specific utilities.

SCOPE

Added a new section (§ 56-594.02) creating a pilot program for third-party power purchase agreements, allowing solar and wind owners to sell electricity exclusively to specific customers under defined terms.

REQUIREMENT

Increased the minimum capacity threshold for behind-the-meter solar and wind resources that Phase II utilities must procure from 1 megawatt to 3 megawatts.

Added a requirement that 35 percent of solar capacity procured on previously developed project sites must come from non-utility owners.

Increased the deficiency payment penalty for small solar, wind, or anaerobic digester projects from $45 to $75 per megawatt-hour.

Added a new requirement that 65 percent of solar generation capacity procured by Phase II utilities must come from non-utility owners.

Increased the minimum amount of solar capacity that must be placed on previously developed project sites from 200 megawatts to 600 megawatts.

TIMELINE

Adjusted the start year for the 75 percent in-state renewable energy requirement for Phase II utilities from 2028 to 2027.

Extended the deadline for Phase II utilities to petition for 16,100 megawatts of solar and wind capacity from December 31, 2035, to December 31, 2030.

Commerce and Labor Substitute → Governor Substitute Not Adopted · 10 edits

MAJOR

The bill was revised from a Senate Substitute to a Governor Substitute, significantly reducing the renewable energy portfolio standard (RPS) requirements and removing several provisions related to zero-carbon generation, energy storage, and power purchase agreements. The new version focuses primarily on amending § 56-585.5 while removing the detailed RPS compliance schedule, generation capacity targets, and cost recovery mechanisms that were present in the Senate version.

Scope change

The bill's scope was substantially narrowed from the Senate version, which included comprehensive renewable energy mandates, to a more limited version that primarily addresses amendments to § 56-585.5 without the detailed implementation requirements.

REQUIREMENT

The detailed RPS compliance schedule showing percentage requirements for Phase I and Phase II Utilities from 2021 through 2045 was completely removed from the bill.

Provisions requiring utilities to petition for specific megawatt amounts of solar, wind, and energy storage capacity were deleted.

Requirements for utilities to conduct competitive procurement processes and submit annual plans for renewable generation development were eliminated.

Deficiency payment provisions that would impose penalties on utilities failing to meet RPS requirements were removed.

The pilot program for third-party power purchase agreements for solar and wind generation was deleted entirely.

Provisions regarding low-income qualifying projects and their allocation percentages were deleted.

Requirements for utilities to recover costs through rate adjustment clauses for zero-carbon generation and energy storage were eliminated.

TIMELINE

The bill header changed from Senate Substitute dated January 27, 2025 to Governor Substitute dated March 24, 2025, indicating a different legislative origin and later date.

SCOPE

The bill was reduced from amending two sections (§ 56-585.5 and § 56-594.02) to only amending § 56-585.5.

DEFINITION

The definition of 'Total electric energy' was removed from the bill text.

Floor votes · Senate Jan 29, 2025 · House of Delegates Feb 18, 2025

How they voted

38–0

Passed · 2 other

Total votes 40

Jan 29, 2025

D Democratic21

21 Yea

100% Yea

R Republican19

17 Yea 2

89% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

May 2, 2025

Vetoed

Vetoed by Governor

executive

Apr 2, 2025

Vetoed

Senate rejected Governor's recommendation (19-Y 21-N)

upper

Mar 24, 2025

Vetoed

Governor's recommendation received by Senate

executive

Mar 10, 2025

Upper · Passed

Signed by President

upper

Mar 7, 2025

Lower · Passed

Signed by Speaker

lower

Mar 7, 2025

Upper · Passed

Bill text as passed Senate and House (SB1040ER)

upper

Feb 19, 2025

Upper · Passed

House Amendment agreed to by Senate (23-Y 17-N)

upper

Feb 19, 2025

Upper · Passed

Reconsideration of House amendment agreed to by Senate (40-Y 0-N)

upper

Feb 19, 2025

Upper · Passed

House Amendment agreed to by Senate (40-Y 0-N)

upper

Feb 18, 2025

Lower · Passed

Passed House with amendment (97-Y 0-N)

lower

Feb 18, 2025

Introduced

Engrossed by House as amended

lower

Feb 18, 2025

Lower · Passed

Labor and Commerce Amendment agreed to

lower

Feb 13, 2025

Lower · Passed

Reported from Labor and Commerce with amendment(s) (21-Y 1-N)

lower

Feb 6, 2025

Committee

Referred to Committee on Labor and Commerce

lower

Jan 31, 2025

Upper · Passed

Read third time and passed Senate (26-Y 14-N)

upper

Jan 29, 2025

Upper · Passed

Passed by for the day

upper

Jan 27, 2025

Upper · Passed

Reported from Commerce and Labor with substitute (9-Y 6-N)

upper

Jan 7, 2025

Committee

Referred to Committee on Commerce and Labor

upper

1 primary · 0 co-sponsors