Virtual power plant pilot program; each Phase II Utility shall petition SCC for approval to conduct.
SB1100 requires each Phase II electric utility in Virginia to petition the State Corporation Commission by December 1, 2025 for approval to run a virtual power plant pilot program. The pilot is intended to test ways to better manage electricity demand using distributed energy resources such as battery storage, smart thermostats, managed electric vehicle charging, and other non-emitting technologies. The bill caps the pilot at up to 450 megawatts for a Phase II utility and requires participation across multiple geographic regions of the Commonwealth.
The bill also directs utilities to design the pilot to evaluate grid services during peak demand, including peak shaving, voltage support, emergency services, and other capacity or ancillary services. It requires stakeholder input, customer incentives, performance-based compensation, and special consideration for battery storage incentives in historically economically disadvantaged communities. Utilities must also propose at least a 15-megawatt residential battery incentive program and, by December 31, 2027, propose a broader electric school bus program as part of a grid transformation filing, with the utility barred from owning the buses themselves but allowed to own related storage batteries. The Commission must review the pilot by July 1, 2028 and begin a proceeding to establish a permanent program with procurement targets and performance metrics.
The bill changes Virginia law by creating a new framework for virtual power plants and related utility tariffs, while defining key terms such as aggregator, distributed energy resource, grid event, grid service, and eligible technology. It also requires utilities to seek a tariff structure allowing residential, commercial, and industrial customers to enroll directly or through aggregators, and it gives aggregators nondiscriminatory access to necessary customer and grid data. The measure is tied to implementation of FERC Order No. 2222 in PJM and is designed to integrate distributed resources into the retail electricity market.
Overall, the bill appears to have broad but not unanimous support, passing several stages with substantial majorities but also notable opposition in both chambers. The votes suggest general interest in expanding grid flexibility and distributed energy participation, while the narrower Senate margin indicates some concern about the scope or regulatory implications of the program. The final recorded Senate vote rejecting the Governor's recommendation also suggests continued disagreement over at least some aspects of the enacted framework.
The main points of contention appear to be the extent of utility obligations, the role of aggregators, data access, and the requirement to move toward a permanent program with procurement targets after the pilot. The electric school bus provision may also have been controversial because it limits utility ownership of buses while allowing ownership of batteries and potentially requires competitive solicitation. More broadly, the bill balances clean energy and grid modernization goals against concerns about utility control, market participation, and implementation costs.
SB1100 adds a new statutory mandate for Phase II utilities to seek SCC approval for virtual power plant pilots and establishes detailed requirements for pilot design, customer participation, compensation, and reporting. It affects utility planning, distributed energy resource aggregation, tariff development, and future Commission proceedings, while also intersecting with existing grid transformation and electric school bus provisions in the Code of Virginia. The bill is likely to affect utilities, residential and commercial customers, aggregators, school systems, and owners of battery storage, smart thermostats, and managed EV charging equipment.
The bill’s legislative history suggests generally favorable sentiment toward modernizing the electric grid and expanding distributed energy resources, as reflected in its passage through committee and both chambers. However, the recorded votes also show meaningful opposition, especially in the Senate, indicating that the bill was not universally embraced. The final rejection of the Governor’s recommendation points to continued disagreement over the bill’s details even after enactment.
The most notable areas of contention are the breadth of the utility mandate, the requirement to create a permanent program after the pilot, and the extent to which aggregators should have access to customer and grid data. Some lawmakers likely objected to the regulatory and cost implications of requiring utilities to develop tariffs, incentives, and procurement targets, while others may have been concerned about the electric school bus provisions and the limits on utility ownership. Supporters appear to have emphasized grid reliability, peak demand management, and the integration of clean distributed resources, while opponents focused on implementation complexity and the shifting of market and operational responsibilities.