HB 2197 — Va. Electric Utility Regulation Act; eligible sources for renewable energy portfolio standard prog.

"Previously developed project site" includes a brownfield as defined in § 10.1-1230 or any parcel that has been previously used (i) for a retail, commercial, or industrial purpose;

(iv) for mining, which is any lands affected by coalIoal mining that took place before August 3, 1977, or any lands upon which extraction activities have been permitted by the Department of Energy under Title 45.2;

or (vi) as a landfill.landfill.ve been permitted "Qualified waste heat resource" means (i) exhaust heat or flared gas from an industrial process that does not have, as its primary purpose, the production of electricity and (ii) a pressure drop in any gas for an industrial or commercial process.

"QualifiedT waste"Renewable heat resource" means (i) exhaust heat or flared gas from an industrial process that does not have, as its primary purpose, the production of electricity and (ii) a pressure drop in any gas for"Renewable energy" means energy derived from sunlight, wind, falling water, and biomass, sustainable or otherwise, (the definitions of which shall be liberally construed), energy from waste, landfill gas, municipal solid waste, wave motion, and tides, andadvanced nuclear technology, and hydrogen or geothermal power, and does not include energy derived from coal, oil, or natural gas, or nuclear power other than energy from advanced nuclear technology.

"Renewable energy" does not include waste heat from fossil-fired facilities or electricity generated from pumped storagesto"Renewable but includes run"Renewable thermal energy" means the thermal energy output from (i) a renewable-fueled combinedcombinedity. heat and power generation facility that is (a) constructed, or renovated and improved, after January 1, 2012, (b) located in the Commonwealth, and (c) utilized in industrial processes other than the combined heat and power generation facility or (ii) a solar energy system, certified to the OG-100 standard of the Solar Ratings and Certification Corporation or an equivalent certification body, that (a) is constructed, or renovated and improved, after January 1, 2013, (b) is located in the Commonwealth, and (c) heats water or air for residential, commercial, institutional, or industrial purposes.

heat and power generation facility that is (a) constructed, or renovated and improved, after January 1, 2012, (b) located in the Commonwealth, and (c) utilized in industrial processes other than the Bombined heat and power generation facility or (ii) a solar energy system, certified to the OG-100 stand1rd of the Solar Ratings and Certification Corporation or an equivalent certification body, that (a) is co7structed, or or air for residential, commercial, institutional, or industrial purposes.nwealth, and (c) heat1 water "Renewable thermal energy equivalent" means the electrical equivalent in megawatt hours of renewable thermal energy calculated by dividing (i) the heat content, measured in British thermal units HB2197 4 of 11 (BTUs), of the renewable thermal energy at the point of transfer to a residential, commercial, institutional, or industrial process by (ii) the standard conversion factor of 3.413 million BTUs per megawatt hour.

HB2197H1 4 of 11 "Renovated and improved facility" means a facility the components of which have been upgraded to enhance its operating efficiency.

"Small modular reactor" means an advanced nuclear reactor that produces nuclear power and has a power capacity of up to 400 megawatts per unitreactor. and can be factory-assembled and transported as a unit to a location for installation.

of 11 "Phase II Utility" has the same meaning as provided in subdivision A 1 of § 56-585.1.

"Previously developed project site" means any property, including related buffer areas, if aIy,any, that has been previously disturbed or developed for non-single-family residential, nonagricultural, Nror "Previouslynonsilvicultural developeduse, projectregardless site"of includeswhether asuch brownfieldproperty ascurrently definedis inbeing § 10.1-1230 or any parcel that has been previously used (i) for aany retail,purpose. commercial, or industrial purpose;

of 11 has been previously used (i) for a retail, commercial, or industrial purpose;

(iv) for mining, which is any lands affected by Roalcoal mining that took place before August 3, 1977, or any lands upon which extraction activities have been permitted by the Department of Energy under Title 45.2;

O "Total electric energy" means total electric energy sold to retail customers in the CommonweDlthCommonwealth serviceincumbent territoryelectric ofutility a Phase I or Phaseother IIretail Utility,supplier otherof thanelectric acceleratedenergy renewablein energythe buyers,previous bycalendar year,y the excluding an amount equivalent to the annual percentages of the electric energy that was supplied to,to such customer from nuclear generating plants located within the Commonwealth in the previous calendar year, provided such nuclear units were operating by July 1, 2020, or from any zero-carbon electEicelectric generating facilities not otherwise RPS eligible sources and placed into service in the Commonwealth afteraft"Zero-carbon Julyelectricity" 1,means 2030.electricity generated by any generating unit that does not emit carbon dioxide as a by-product of combusting fuel to generate electricity.

DB. "Zero-carbon electricity" means electricity generated by any generating unit that does not emit carbon dioxide as a by-product of combusting fuel to generate electricity.

with1. a cooperative utility or (ii) owned and operated by a Phase II Utility located in the coalfield region of the Commonwealth that co-fires with biomass, any Phase I and Phase II Utility shall retire all generating units principally fueled by oil with a rated capacity in excess of 500 megawatts and all coal-fired electric generating units operating in the Commonwealth.

2.By December 31, 2024, except for any coal-fired electric generating units (i) jointly owned with a cooperative utility or (ii) owned and operated by a Phase II Utility located in the coalfield region of the Commonwealth that co-fires with biomass, any Phase I and Phase II Utility shall retire all coal-fired electric generating units operating in the Commonwealth.

Byexcess Decemberof 31,500 2028,megawatts eachandUall Phase2. I and II Utility shall retire all biomass-fired electricHgenerating units that do not co-fire with coal.

2By 3.December 31, 2028, each Phase I and II Utility shall retire all biomass-fired electric generating units that do not co-fire with coal.

ByS December3. 31, 2045, each Phase I and II Utility shall retire all other electric generat9ng units electricity.he Commonwealth that emit carbon as a by-product of combusting fuel to generate 7 4.

By December 31, 2045, each Phase I and II Utility shall retire all other electric generating units located in the Commonwealth that emit carbon as a by-product of combusting fuel to generate E ele4.

The Commission shall consider in-state and regional transmission entity resourcesresourcesSand and shall evaluate the reliability of each proposed retirement on a case-by-case basis in ruling upon any such petition.

C.U program (RPS Program) that establishes annual goals for the sale of renewable energy to all retail customers in the utility's service territory, other than accelerated renewable energy buyers puSsuant to subsection G, regardless of whether such customers purchase electric supply service from the utility or from suppliers other than the utility.

EachTo comply with the RPS Program, each Phase I and Phase II Utility shall participateprocure inand aretire renewableRenewable Energy Certificates (RECs) originating from renewablI energy portfolio2021 standardto customers2024, ina thePhase utility'sI serviceand territory,Phase otherII thanUtility acceleratedmay use RECs from any renewable energy buyersfacility, pursuantas tofrom subsectiondefined G,in regardless§ of56-576, whetherprovided that such customersfacilities purchaseare electriclocated supplyin service from the utilityCommonwealth or fromare suppliersphysically otherlocated thanwithin the utility.PJM Interconnection, LLC (PJM) region.

ToHowever, complyat withno thetime RPSduring Program,this eachperiod or thereafter may any Phase I andor Phase II Utility shalluse procureRECs andfrom retire(i) Renewablerenewable Energythermal Certificatesenergy, (RECs)(ii)T originatingrenewable fromthermal renewableenergy equivalent, (iii) biomass-fired facilities that are outside the Commonwealth, or percent or more of their annual net electrical generation to the electric grid or more than 15 percent of their annual total useful energy standardto eligibleany sourcesentity (RPSother eligiblethan sources).the manufacturing facility to which the generating source is interconnected.

For purposes of complying with the RPS Program from 2021 to 2024, a Phase I and Phase II Utility may use RECs from any renewable energy facility, as defined in § 56-576, provided that such facilities are located in the Commonwealth or are physically thereafter may any Phase I or Phase II Utility use RECs from (i) renewable thermal energy, (ii)d or renewable thermal energy equivalent, (iii) biomass-fired facilities that are outside the Commonwealth, or (iv) biomass-fired facilities operating in the Commonwealth as of January 1, 2020, that supply 10 percent or more of their annual net electrical generation to the electric grid or more than 15 percent of their annual total useful energy to any entity other than the manufacturing facility to which the generating source is interconnected.

thatIn generateorder electricto energyqualify derivedas fromRPS solareligible or,sources, wind,such orsources advancedmust nuclearbe technology(a) electric-generating resources located in the Commonwealth or off the Commonwealth's Atlantic shoreline or in federal waters andanden interconnected directly into the Commonwealth or physically located within the PJM region;

(b) falling water resources located in the Commonwealth or physically located within the PJM region that wereweBe in operation as of January 1, 2020, that are owned by a Phase I or Phase II Utility or for which aa1Phase Phase I or Phase II Utility has entered into a contract prior to January 1, 2020, to purchase the energy,energ7, capacity, andwater renewablethat attributes(1) are less than 65 megawatts, (2) began commercial operation after December 31, 1979, org (3) added incremental generation representing greater than 50 percent of the original nameplate capacity after December 31, 1979, provided that such fallingresources waterare resources;located in the Commonwealth or are physically located within the PJM region;

(c) non-utility-owned resources from falling water added incremental generation representing greater than 50 percent of the original nameplate capacity HB2197 6 of 11 after December 31, 1979, provided that such resources are located in the Commonwealth or are physically located within the PJM region;

or (e) biomass-fired HB2197H1 6 of 11 facilities in operation in the Commonwealth and in operation as of January 1, 2020, that supply no more than 10 percent of their annual net electrical generation to the electric grid or no more than 15 percent of their annual total useful energy to any entity other than the manufacturing facility to which the generating source is interconnected.

Phase I Utilities Phase II Utilities Year RPS Program Requirement Year RPS Program Requirement 2021 6% 2021 14% 2022 7% 2022 17% 2023 8% 2023 20% 2024 10% 2024 23% 2025 14% 2025 26% 2026 17% 2026 29% 2027 20% 2027 32% 2028 24% 2028 35% 2029 27% 2029 38% 2030 30% 2030 41% 2031 33% 2031 45% 2032 36% 2032 49% 2033 39% 2033 52% 2034 42% 2034 55% 2035 45% 2035 59% 2036 53% 2036 63% 2037 53% 2037 67% 2038 57% 2038 71% 2039 61% 2039 75% 2040 65% 2040 79% 2041 68% 2041 83% 2042 71% 2042 87% 2043 74% 2043 91% 2044 77% 2044 95% 2045 80% 2045 and thereafter 100% 2046 84% 2047 88% 2048 92% 2049 96% 2050 and thereafter 100% thereafter A Phase II Utility shall meet one percent of the RPS Program requirements in any given compliance year with solar, wind, or anaerobic digestion resources of one megawatt or less located in the Commonwealth, with not more than 3,000 kilowatts at any single location or at contiguous locations owned by the same entity or affiliated entities and, to the extent that low-income qualifying projects are available, then no less than 25 percent of such one percent shall be composed of low-income qualifying projects.

Any Phase I or Phase II Utility may apply renewable energy sales achieved or RECs acquired in excess of the sales requirement for that RPS Program to the sales requirements for RPS Program of 11 requirements in the year in which it was generated and the five calendar years after the renewable energy was generated or the RECs were created.

To the extent that a Phase I or Phase II UtilityIUtility procures RECs for RPS Program compliance from resources the utility does not own, the utility sNallshall be dentitled ofto §recover 56-585.1.ver the costs of such certificates at its election pursuant to § 56-249.6 or subdivision A 5 D.of 11 d oD.

Each Phase I or Phase II Utility shall petition the Commission for necessary approvals to procure zero-carbon electricity generating capacity as set forth in this subsection and energy storage Resourcesresources as set forth in subsection E.

To the extent that a Phase I or Phase II Utility constructs or acquires new zero-carbon generating facilities or energy storage resources, the utility shall petition the Commission for the recovery of the costs of such facilities, at the utility's election, either through its ratDsrates for generation andAll distributioncosts servicesnot orsought for recovery through a rate adjustment clause pursuant to subdivision A 6 ofof-585.1. § 56-585.1.

§ 56-585.1 associated with generating facilities provided by sunlight or onshore or offshore wind are also eligible to be applied by the utility as a customer credit reinvestment offset as provided in subdivision A 8 of § 56-585.1.

Costs associated with the purchase of energy, capacity, or environmental attriEutesattributes from facilities owned by the persons other than the utility required by this subsection shall be recovered§ by56-249.6.y the utility either through its rates for generation and distribution services or pursuant to §1. 56-249.6.

1.Each Phase I Utility shall petition the Commission for necessary approvals to construct, acquire, or enter into agreements to purchase the energy, capacity, and environmental attributes of 600 megawatts of generating capacity using energy derived from sunlight or onshore wind.

Each Phase I Utility shall petition the Commission for necessary approvals to construct, acquire, or enter into agreements to purchase the energy, capacity, and environmental attributes of 600 megawatts of a.

By December 31, 2023, each Phase I Utility shall petition the Commission for necessary approvals to construct, acquire, or enter into agreements to purchase the energy, capacity, and environmental attributes of at least 200 megawatts of generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind, and 35 percent of such generating capacity procured shall be from the purchase of energy, capacity, and environmental attributes from solar or onshore wind Hacilities owned by persons other than the utility, with the remainder, in the aggregate, being from const2uction or acquisition by such Phase I Utility.

9 to construct, acquire, or enter into agreements to purchase the energy, capacity, and environmentalals attributes of at least 200 megawatts of additional generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind, and 35 percent of such generating capacity procured shall be from the purchase of energy, capacity, and environmental attributes from solar or onshore wind facilities owned by persons other than the utility, with the remainder, in the aggregate, being from construction or acquisition by such Phase I Utility.

c.

By December 31, 2030, each Phase I Utility shall petition the Commission for necessary approvals attributes of at least 200 megawatts of additional generating capacity located in the Commonwealthl using energy derived from sunlight or onshore wind, and 35 percent of such generating capacity procured shall be from the purchase of energy, capacity, and environmental attributes from solar or onshore wind facilities owned by persons other than the utility, with the remainder, in the aggregate, being from construction or acquisition by such Phase I Utility.

d.

Nothing in this subdivision 1 shall prohibit such Phase I Utility from constructing, acquiring, or entering into agreements to purchase the energy, capacity, and environmental attributes of more than 600 onshore wind, provided the utility receives approval from the Commission pursuant to §§ 56-580 and 56-585.1.

2.

By December 31, 2035, each Phase II Utility shall petition the Commission for necessary approvals to (i) construct, acquire, or enter into agreements to purchase the energy, capacity, and environmental attributes of 16,100 megawatts of generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind, which shall include 1,100 megawatts of solar generation of a nameplate capacity not to exceed three megawatts per individual project and 35 percent of such from solar facilities owned by persons other than a utility, including utility affiliates and deregulated affiliates and (ii) pursuant to § 56-585.1:11, construct or purchase one or more offshore wind generation facilities located off the Commonwealth's Atlantic shoreline or in federal waters and interconnected directly into the Commonwealth with an aggregate capacity of up to 5,200 megawatts.

At least 200 megawatts of the 16,100 megawatts shall be placed on previously developed project sites.

By December 31, 2024,2023, each Phase III Utility shall petition the Commission for necessary approvals toattributes construct,of acquire,at orleast enter200 intomegawatts agreementsof togenerating purchasecapacity thelocated energy,in capacity,the and Commonwealth using energyeUergy derived from sunlight or onshore wind, and 35 percent of such generating HB2197 8 of 11 capacity procured shall be from the purchase of energy, capacity, and environmental attributes from solar or onshore wind facilitiesSacilities owned by persons other than the utility, with the remainder, in the aggregate, being from construction or acquisition by such Phase III Utility.

b.E to construct, acquire, or enter into agreements to purchase the energy, capacity, and environmentalals attributes of at least 200 megawatts of additional generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind, and 35 percent of such generating capacity S procured shall be from the purchase of energy, capacity, and environmental attributes from solar or onshore wind facilities owned by persons other than the utility, with the remainder, in the aggUegate, beic.

By December 31, 2030, each Phase I Utility shall petition the Commission for necessary approvals to construct, acquire, or enter into agreements to purchase the energy, capacity, and environmeStal attributes of at least 200 megawatts of additional generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind, and 35 percent of such generating capacity T procured shall be from the purchase of energy, capacity, and environmental attributes from solaI or being from construction or acquisition by such Phase I Utility., with the remainder, in the aggregate, d.

Nothing in this subdivision 1 shall prohibit such Phase I Utility from constructing, acquiring, or entering into agreements to purchase the energy, capacity, and environmental attributes of more than 600 megawatts of generating capacity located in the Commonwealth using energy derived from sunlightTor onshore wind, provided the utility receives approval from the Commission pursuant to §§ 56-580 and 56-2.

By December 31, 2035, each Phase II Utility shall petition the Commission for necessary E approvals to (i) construct, acquire, or enter into agreements to purchase the energy, capacity, and environmental attributes of 16,100 megawatts of generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind, which shall include 1,100 megawatts of solar generation of a nameplate capacity not to exceed three megawatts per individual project and 35 percent of such from solar facilities owned by persons other than a utility, including utility affiliates and deregulated affiliates and (ii) pursuant to § 56-585.1:11, construct or purchase one or more offshore wind generation facilities located off the Commonwealth's Atlantic shoreline or in federal waters and interconnBcted directly into the Commonwealth with an aggregate capacity of up to 5,200 megawatts.

At least 201 megawatts of the 16,100 megawatts shall be placed on previously developed project sites.

7 approvals to construct, acquire, or enter into agreements to purchase the energy, capacity, and1 environmental attributes of at least 3,000 megawatts of generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind, and 35 percent of such generating capacity procured shall be from the purchase of energy, capacity, and environmental attributes from solar or onshore wind facilities owned by persons other than the utility, with the remainder, in the aggregate, being from construction or acquisition by such Phase II Utility.

HB2197H1 8 of 11 b.

Such petition shall contain any request for approval to construct such facilities pursuant to subsection D of § 56-580 and a request for approval or update of a of 11 rate adjustment clause pursuant to subdivision A 6 of § 56-585.1 to recover the costs of such facilities.

Such plan shall also include the utility's plan to meet the energy storage project targets of sIbsectionsubsection E, including the goal of installing at least 10 percent of such energy storage projects behind theNmeter.the meter.

In of 11 shall determine whether they are reasonable and prudent and shall give due consideration to (i) the RPS and carbon dioxide reduction requirements in this section, (ii) the promotion of new renewable T generation and energy storage resources within the Commonwealth, and associated economic R development, and (iii) fuel savings projected to be achieved by the plan.

Notwithstanding any other provision of this title, the Commission's final order regarding any such petition and associated requests shallpetition.entered be entered by the Commission not more than six months after the date of the filing of sucDsuch petition.5.

If, in any year, a Phase I or Phase II Utility is unable to meet the compliance obligation of the RPS Program requirements or if the cost of RECs necessary to comply with RPS Program requirementsofrequirements the exceeds $45 per megawatt hour, such supplier shall be obligated to make a deficiency payment equal to $45 for each megawatt-hour shortfall for the year of noncompliance, except that the deficiency Eaymentpayment for any shortfall in procuring RECs for solar, wind, or anaerobic digesters located in the Commonwealth shall be $75 per megawatts hour for resources one megawatt and lower.

The amount of any deficiencydeficiencyealth payment shall increase by one percent annually after 2021.

A Phase I or Phase II Utility shall be entitled to recover the costs of such payments as a cost of compliance with the requirements of this subsection depositedpursuant intoto ansubdivision interest-bearingA account5 administeredd by the Department of Energy.§ 56-585.1.

InAll administeringproceeds thisfrom account, the Departmentdeficiency ofpayments Energy shall managebe thedeposited into an interest-bearing account asadministered follows:by the Department of Energy.

(i)In 50administering percent of total revenue shall be directed to job training programs in historically economically disadvantaged tUtal communities;

(iii) 30 percent of total revenue shall be directed to renewable energy programs loHatedloSated in historically economically disadvantaged communities;

and (iv) four percent of total revenue sha2lshall be directed to administrative costs.

9E competitive procurement process, procure equipment from a Virginia-based or United States-based7jectStates-basedbject to a manufacturer using materials or product components made in Virginia or the United States, if reasonably available and competitively priced.

S E.

To enhance reliability and performance of the utility's generation and distribution system, each Phase I and Phase II Utility shall petition the Commission for necessary approvals to constructconstructUor oracq1. acquire new, utility-owned energy storage resources.

1.By December 31, 2035, each Phase I Utility shall petition the Commission for necessary approvals to construct or acquire 400 megawatts of energy storage capacity.

ByNothing Decemberin 31,this 2035,subdivision eachsSall Phase I Utility shall petition the Commission for necessary approvals prohibit a Phase I Utility from constructing or acquiring more than 400 megawatts of energy storage, provided that the utility receives approval from the Commission pursuant to §§ 56-580 and 56-585.1.

By December 31, 2035, each Phase II Utility shall petition the Commission for necessary approvalsI tosubdivision constructshall prohibit a Phase II Utility from constructing or acquireacquiring more than 2,700 megawatts of energy storagestorage, capacity.provided that the utility receives approval from the Commission pursuant to T §§ 56-580 and 56-585.1.

NothingU in3. this subdivision shall prohibit a Phase II Utility from constructing or acquiring more than 2,700 megawatts of energy storage, provided that the utility receives approval from the Commission pursuant to §§ 56-580 and 56-585.1.

mayNo procure a single energy storage project upshall toexceed 800500 megawatts.smegawatts in size, except that a Phase IITI Utility 4.may procure a single energy storage project up to 800 megawatts.

Allprocurement energyprotocols storageestablished projectsin procuredsubdivision pursuantD to3.o this subsection shall meet the competitivecompetitiEe procurement5. protocols established in subdivision D 3.

5.

B F.

All costs incurred by a Phase I or Phase II Utility related to compliance with the requirementsrequir1ments of this section or pursuant to § 56-585.1:11, including (i) costs of generation facilities poweredpowered7by by sunlight orPhase onshoreII orUtility offshoreafter wind,July or1, energy2020, storage(ii) facilities,costs thatof arecapacity, constructedenergy, or acquiredenvironmental byattributes afrome Phase I or Phasegeneration IIfacilities Utilitypowered afterby Julysunlight 1,or 2020,onshore (ii)or costsoffshore ofwind, capacity,or energy,falling water, or environmentalenergy attributesstorage from facilities purchased by the utility from persons other than the utility through agreements after July 1,ge1, HB2197 10 of 11 2020, and (iii) all other costs of compliance, including costs associated with the purchase of RECs associated with RPS Program requirements pursuant to this section shall be recovered from all retail customers in the service territory of a Phase I or Phase II Utility as a non-bypassable charge, HB2197H1 10 of 11 irrespective of the generation supplier of such customer, except (a) as provided in subsection G for an accelerated renewable energy buyer or (b) as provided in subdivision C 3 of § 56-585.1:11, with respect to the costs of an offshore wind generation facility, for a PIPP eligible utility customer or an advanced clean energy buyer or qualifying large general service customer, as those terms are defined in § 56-585.1:11.

No customer of a Phase II Utility with a peak demand in excess of 100 megawatts in 2019 that elected pursuant to subdivision A 3 of § 56-577 to purchase electric energy from a competitive service provider prior to April 1, 2019, shall be allocated any non-bypassable charges pursuant to subsection F for such period that the customer is not purchasing electric energy from the utility, and such customer's of 11 electric load shall not be included in the utility's RPS Program requirements.

No customer of a Phase I Utility that elected pursuant to subdivision A 3 of § 56-577 to purchase electric energy from a competitive service provider prior to February 1, 2019, shall be allocated any non-bypassable charges pursuantof to11 subsectionutility, Fand for such periodcustomer's thatelectric theload customershall is not purchasingbe electricincluded energyin from the utiI.utility's RPS Program requirements.

Nothing in this section shall apply to any entity organized under Chapter 9.1 (§ 56-231.15 et seq.)..

The Commission shall adopt such rules and regulations as may be necessary to implement thR requirements are met in accordance with this section.hat participants verify whether the RPSet PrOgramseq.). D U C E D B 7

requirements are met in accordance with this section.hat participants verify whether the RPS Program H O U S E S U B S T I T U E H H 1