SB 508 — Renewable energy portfolio standard; geothermal heating and cooling systems.

"Total electric energy" means total electric energy sold to retail customers in the Commonwealth service territory of a Phase I or Phase II Utility, other than accelerated renewable energy buyers, by the incumbent electric utility or other retail supplier of electric energy in the previous calendar year, excluding an amount equivalent to the annual percentages of the electric energy that was supplied to such customer from nuclear generating plants located within the Commonwealth in the previous caSendarcalendar year, provided such nuclear units were operating by July 1, 2020, or from any zero-carbon elect5icelectric generating facilities not otherwise RPS eligible sources and placed into service in the Commonw8althCommonwealth after July 1, 2030.

R "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.

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 alleldall region 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.

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

C.

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 located within the PJM Interconnection, LLC (PJM) region.

However, at no time during this period oryor thereafter may any Phase I or Phase II Utility use RECs from (i) renewable thermal energy, (ii) renewable thermal energy equivalent, or (iii) biomass-fired facilities that are outside the Commonwealth.

(b) falling water resources located in the Commonwealth or physically located within the PJM region that were in operation as of January 1, 2020, that are owned by a Phase I or Phase II Utility or for which a Phase I or Phase II Utility has entered into a contract prior to January 1, 2020, to purchase the energy, capacity, and renewablehasrenewable attributes of such falling water resources;

(c) non-utility-owned resources from falling water that (1) are of 11 less than 65 megawatts, (2) began commercial operation after December 31, 1979, or (3) added incremental generation representing greater than 50 percent of the original nameplate capacity after December 31, 1979, provided that such resources are located in the Commonwealth or are physically located within the PJM region;

or (f) biomass-fired facilities in operation in the Commonwealth and in operation as of January 1, 2023, that (1) 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 and are fueled by forest-product manufacturing residuals, including pulping liquor, bark, paper recycling residuals, biowastes, or biomass, as described in subdivisions A 1, 2, and 4 of § 10.1-1308.1, provided that biomass as described in subdivision A 1 of § 10.1-1308.1 results from harvesting in accordance with best management practices for the sustainable harvesting of biomass developed and enforced by the State Forester pursuant to of 11 § 10.1-1105, or (2) are owned by a Phase I or phase II Utility, have less than 52 megawatts capacity, and are fueled by forest-product manufacturing residuals, biowastes, or biomass, as described in subdivisions A 1, 2, and 4 of § 10.1-1308.1, provided that biomass as described in subdivision A 1 of § 10.1-1308.1 results from harvesting in accordance with best management practices for the sustainable harvesting of biomass developed and enforced by the State Forester pursuant to § 10.1-1105.

Phase I Utilities Phase II Utilities Year RPS Program RequiremeYearRequirement 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% of 11 2050 and thereafter 100% 2.

A Phase II Utility shall meet one percent of the RPS Program requirements in any given E 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 pRojectsprojects are projects.,available, then no less than 25 percent of such one percent shall be composed of low-income qualifying 3.projects.

Beginning3. with the 2025 compliance year and thereafter, at least 75 percent of all RECs used by a Phase II Utility in a compliance period shall come from RPS eligible resources located in the L Commonwealth.

Beginning with the 2025 compliance year and thereafter, at least 75 percent of all RECs used by a Phase II Utility in a compliance period shall come from RPS eligible resources located in the Commonwealth.

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 E 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 UtilityDUtility procures RECs for RPS Program compliance from resources the utility does not own, the utility shall be entitled to recover the costs of such certificates at its election pursuant to § 56-249.6 or subdivision A 5 d o5.of § 56-585.1.

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The CommiSsionCommission shall determine the form and manner in which such RECs are verified.

5 D.

Each Phase I or Phase II Utility shall petition the Commission for necessary approvals to8procureto 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 andthe distributionrecovery servicesof orthe throughcosts aof ratesuch adjustmentfacilities, clauseat pursuantthe toutility's subdivisionelection, Aeither 6through ofits §rates 56-585.1.nerationfor Allgeneration costsand notdistribution soughtservices foror recovery through a rate adjustment clause pursuant to subdivision A 6 of § 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.

All costs not sought for recovery through a rate adjustment clause pursuant to subdivision A 6 of § 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.

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.alwind. attributes of 600 megawatts a.

a.

By December 31, 2027, 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 additional generating capacity located in the CommonwealthlCommonwealth 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.

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 environmental 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 beingonshore fromwind constructionfacilities orowned acquisition by suchpersons Phaseother Ithan Utility.,the utility, with the remainder, in the aggregate, d.being from construction or acquisition by such Phase I Utility.

Nothingd. 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 of 11 megawatts of generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind, provided the utility receives approval from the Commission pursuant to §§ 56-580 and 56-585.1.

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 sunlight or onshore wind, provided the utility receives approval from the Commission pursuant to §§ 56-580 and 56-585.1.

By December 31, 2024, each Phase II 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 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 of 11 aggregate, being from construction or acquisition by such Phase II Utility.

(b) any minimum of 11 thresholds that must be met by respondents;

(d) detailed instructions for pEeparingpreparing bids so that bids can be evaluated on a consistent basis;

A utility may evaluate responses to requestRrequests for proposals based on any criteria that it deems reasonable but shall at a minimum consider the following generationin facilities;its selection process:

(1) the status of a particular project's development;

(2) the age of existing generation facilities;

(4) anga developer's prior experience in the field;

and (7) the environmental impacts of particular resources, including impacts on air quality witEinwithin the Commonwealth and the carbon intensity of the utility's generation portfolio.

Such plan shall reflect, in the aggregate and over its duration, the requirements of subsection D concerning the allocation percentages for construction or purchase of such capacity.

Such petition shall contain any request for approval tosto construct such facilities pursuant to subsection D of § 56-580 and a request for approval or update of a 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 sSbsectionsubsection E, including the goal of installing at least 10 percent of such energy storage projects behind the5meter.the meter.

In determining whether to approve the utility's plan and any associated petition requests, the Com8issionCommission of 11 shall determine whether they are reasonable and prudent and shall give due consideration to (i)Rthe(i) the RPS and carbon dioxide reduction requirements in this section,;

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

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 pursuant to subdivision A 5 d of § 56-585.1.

All proceeds from the deficiency payments shall besectionbe deposited into an interest-bearing account administered by the Department of Energy.

For any project constructed pursuant to this subsection or subsection E, a utility shall, subject to a competitive procurement process, procure equipment from a Virginia-based or United States-based manufacturer using materials or product components made in Virginia or the United States, if reasonably available and competitively priced.

By December 31, 2035, each Phase II Utility shall petition the Commission for necessary subdivisionapprovals shallto prohibitconstruct a Phase II Utility from constructing or acquiringacquire more than 2,700 megawatts of energy storage,storage providedcapacity. that the utility receives approval from the Commission pursuant to of 11 §§ 56-580 and 56-585.1.

Nothing in 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.

All costs incurred by a Phase I or Phase II Utility related to compliance with the requirements of this section or pursuant to § 56-585.1:11, including (i) costs of generation facilities powered by sunlight or onshore or offshore wind, or energy storage facilities, that are constructed or acquired by a Phase I or Phase II Utility after July 1, 2020, (ii) costs of capacity, energy, or environmental attributes from generation facilities powered by sunlight or onshore or offshore wind, or falling water, or energy storage facilities purchased by the utility from persons other than the utility through agreements after July 1, 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, 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 of 11 § 56-585.1:11.

To the extent that an accelerated renewable energy buyer contracts for the capacity of new solar or wind generation resources pursuant to of 11 this subsection, the aggregate amount of such nameplate capacity shall be offset from the utility's procurement requirements pursuant to subsection D.

All RECs associated with contracts entered iEtointo by an accelerated renewable energy buyer with the utility, or a person other than the utility, forNanfor an RPS Program shall not be credited to the utility's compliance with its RPS requirements, and the calculation of the utility's RPS Program requirements shall not include the electric load covered by customerslationcustomers certified as accelerated renewable energy buyers.

R 2.

Each Phase I or Phase II Utility shall certify, and verify as necessary, to the CommissioOCommission that the accelerated renewable energy buyer has satisfied the exemption requirements of this subsection for each year, or an accelerated renewable energy buyer may choose to certify satisfaction of this exemption by reporting to the Commission individually.

The Commission may promulgate such rules and regulatiLnsregulations as may be necessary to implement the provisions of this subsection.

Utility3. and an accelerated renewable energy buyer is allocated to or recovered from any other customer of the utility, any such contract with an accelerated renewable energy buyer that is a jurisdictional customer of the utility shall not be deemed a special rate or contract requiring Commission approval pursuant to § 56-235.2.

Provided that no incremental costs associated with any contract between a Phase I or Phase II Utility and an accelerated renewable energy buyer is allocated to or recovered from any other customer of the utility, any such contract with an accelerated renewable energy buyer that is a jurisdictional customer of the utility shall not be deemed a special rate or contract requiring Commission approval pursuant to § 56-235.2.

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 electric load shall not be included in the utility's RPS Program requirements.

No customer of aSPhasea I'sPhase I Utility that elected pursuant to subdivision A 3 of § 56-577 to purchase electric energy from aBa competitive service provider prior to February 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 electric load shall not be included in the utility's RPS Program requirements.

In any petition by a Phase I or Phase II Utility for a certificate of public convenience and necessity to construct and operate an electrical generating facility that generates electric energy derived from sunlight submitted pursuant to § 56-580, such utility shall demonstrate that the proposed facility was subject to competitive procurement or solicitation as set forth in subdivision D 3.roposed3. facility J.

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That the State Corporation Commission (the Commission) shall convene a stakeholder work group to examine the feasibility of establishing renewable energy portfolio standard program (RPS program) requirements under § 56-585.5 of the Code of Virginia, as amended by this act, that require each Phase I and Phase II Utility, as defined in subdivision A 1 of § 56-585.1 of the Code of Virginia, to procure and retire renewable energy certificates (RECs) from geothermal heating and cooling systems, as defined in § 56-576 of the Code of Virginia, as amended by this act, placed in service after August 16, 2022, as a percentage of the number of RECs used for RPS program compliance.

The Commission shall report the findings and recommendations of the work group to the Chairmen of the Senate Committee on Commerce and Labor, the House Committee on Labor and Commerce,rmenCommerce, of and the Commission on Electric Utility Regulation no later than December 1, 2024.