SB 1076: Phase I Utilities; securitized asset costs, rate increases in certain months prohibited, etc. - Virginia

Labor and Commerce Substitute → Conference Substitute · 7 edits

MODERATE

The bill was converted from a House Substitute to a Conference Substitute, incorporating Senate amendments that modify the scope of rate reviews, add new opt-out provisions for large customers regarding securitized asset costs, and establish a sunset clause requiring reenactment in 2026. The changes affect how utilities recover storm recovery costs and adjust rate review schedules.

Scope change

The bill now includes provisions for large customer opt-outs from securitized asset financing and adds a new section regarding rate increases in certain months prohibited. The rate review schedule for Phase I Utilities was modified to transition from triennial to biennial reviews.

ELIGIBILITY

Added an opt-out provision allowing large retail customers (demand exceeding five megawatts) to decline securitized asset cost financing and pay charges directly instead.

TIMELINE

Added a sunset provision requiring the act to be reenacted by the 2026 Session of the General Assembly to remain in effect.

Changed the effective date for fuel and purchased power cost reviews from 2025 to 2026, with interim rates effective March 1 of each year.

REQUIREMENT

Modified the rate review schedule for Phase I Utilities to transition from triennial reviews to biennial reviews starting in 2024.

Added a requirement for utilities to propose and the Commission to consider implementing residential seasonal rates and alternatives to budget billing during the 2026 biennial review.

SCOPE

Added a new section prohibiting rate increases in certain months for Phase I Utilities.

TECHNICAL

Reformatted the bill header and amendment information to reflect Conference Committee changes, including updated bill numbers and dates.

Conference Substitute → Chaptered · 7 edits

MODERATE

This bill transitions Virginia's Phase I Utilities from triennial to biennial rate reviews starting in 2024, while adding new provisions for securitizing storm recovery and undepreciated generation costs. The bill also prohibits rate increases during winter months (November-February) and restricts certain fees on residential customers during a specific period in 2025-2026.

Scope change

Changed from triennial to biennial rate reviews for Phase I Utilities, expanding regulatory oversight frequency

TIMELINE

Changed rate review frequency from every three years to every two years, with first review starting March 31, 2024

FISCAL

Created new mechanism allowing utilities to issue bonds to finance storm recovery costs and undepreciated generation plant balances

REQUIREMENT

Established new definitions for securitized asset costs, financing orders, and related terms to govern bond financing

Restricted utilities from charging residential customers interest/late fees between July 2025-March 2026 and reconnection fees between July 2025-March 2026

Changed effective date for rate review orders from January 15 to March 1 of the subsequent year for better customer protection

ENFORCEMENT

Prohibited rate increases for Phase I Utilities during November through February to protect customers during winter months

ELIGIBILITY

Allowed large commercial customers (over 5 megawatts) to opt out of securitized asset cost financing for bills filed before December 31, 2025

Senator Deeds, R. Creigh Substitute → Labor and Commerce Substitute · 5 edits

MODERATE

The bill was amended from a Senate Substitute to a Labor and Commerce Substitute, changing the bill's title and scope to include amendments to existing sections 56-585.1 and 56-585.8 in addition to adding new sections. The substantive policy content regarding securitized asset costs remains largely unchanged, though the amendment now explicitly addresses biennial rate reviews and recovery of certain costs alongside the original securitization provisions.

Scope change

The bill's scope expanded to include amendments to existing Code sections 56-585.1 and 56-585.8, adding provisions about biennial rate reviews and cost recovery mechanisms that were not in the original Senate Substitute version.

SCOPE

Bill title and description changed from adding two new sections to amending and reenacting existing sections 56-585.1 and 56-585.8 while adding section 56-249.8

REQUIREMENT

New provisions added to amend existing sections 56-585.1 and 56-585.8 regarding biennial rate reviews and cost recovery for Phase I Utilities

TIMELINE

Date changed from February 4, 2025 to February 13, 2025 for when the amendment was offered for consideration

SPONSORSHIP

Patron designation changed from Senator Deeds to House Committee on Labor and Commerce

DEFINITION

New language added to address rate adjustment clauses and their application timing for Phase I Utility customers

Enrolled → Senator Deeds, R. Creigh Substitute · 6 edits

MODERATE

This bill adds new provisions to Virginia law allowing electric utilities to issue securitized asset cost bonds to recover storm recovery costs and undepreciated generation plant balances. The changes establish a streamlined regulatory process for financing these costs, create new definitions for securitized asset costs and related terms, and add consumer protections including restrictions on rate increases during winter months and prohibitions on certain fees to residential customers during a specific period.

Scope change

The bill expands the regulatory framework for Phase I Utilities by adding two new code sections (56-249.8 and 56-596.5) that create a new financing mechanism for storm recovery and generation plant costs, while also adding specific consumer protections and procedural requirements.

FISCAL

New section 56-249.8 establishes a financing mechanism allowing utilities to issue securitized asset cost bonds to recover storm recovery costs and undepreciated generation plant balances, with specific definitions for these cost categories.

REQUIREMENT

Utilities must file petitions for financing orders with the State Corporation Commission, which must issue decisions within four months and establish formula-based adjustment mechanisms for annual charge adjustments.

Utilities must include public comment opportunities in rate proceedings and the Commission must collect and consider all public submissions.

TIMELINE

New section 56-596.5 prohibits rate increases for electric generation and distribution services during November through February, and bans interest/late fees and reconnection fees for residential customers between July 1, 2025 and March 1, 2026.

Biennial rate reviews for Phase I Utilities now commence on May 31 instead of March 31, with final orders due by November 15 and effective January 1 of the following year.

ELIGIBILITY

Large commercial customers (demand exceeding five megawatts) can opt out of securitized asset cost financing through securitized asset cost bonds, instead paying their pro rata obligation directly to the utility.

Introduced → Enrolled · 3 edits · Mar 24, 2025

MINOR

This bill was enacted into law and expanded its scope by adding two new sections to the Code of Virginia. The primary substantive change is the addition of a new section (56-596.5) regarding biennial rate reviews and prohibiting rate increases in certain months, which was not present in the original introduced version. The original section 56-249.8 regarding securitized asset costs remained substantially unchanged.

Scope change

The bill's scope was expanded from a single section on securitized asset costs to include two sections: the original 56-249.8 on securitized asset costs and a new 56-596.5 on biennial rate reviews and timing restrictions on rate increases.

SCOPE

Added a new section 56-596.5 relating to biennial rate reviews and prohibiting rate increases in certain months, which was not included in the introduced version of the bill.

TECHNICAL

Minor formatting changes occurred during the legislative process, including removal of committee referral information and addition of official enrolled formatting.

REQUIREMENT

The bill was amended and reenacted to include both the original securitized asset costs provision and the new rate review provision in a single legislative act.

Phase I Utilities; securitized asset costs, rate increases in certain months prohibited, etc.

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