An Act to amend the Code of Virginia by adding a section numbered 56-594.01:2, relating to electric substation construction agreements; electric cooperatives.
HB1191 creates a new section of Virginia law governing agreements between electric cooperatives and certain large members to build dedicated electric substations. The bill allows a cooperative to enter into a substation construction agreement with a member that received at least 20 megawatts of electric demand in the prior calendar year and needs a 230-kilovolt or higher transmission interconnection. The substation must be built for the member’s exclusive use, at the member’s sole expense, and the agreement must be filed with the State Corporation Commission for informational purposes, with confidentiality available if requested.
The bill also sets out a process for construction, inspection, transfer, and dispute resolution. After substantial completion, the member must notify the cooperative, which then has 60 days to inspect and 30 days after inspection to issue final change orders. Once complete, ownership and control must be transferred to the cooperative, either by donation or for mutually agreed consideration, and the cooperative then operates and maintains the substation at the member’s sole expense under its rates, terms, and conditions. If the cooperative does not negotiate in good faith or fails to provide a draft agreement within 120 days of a written request, the member may petition the Commission to compel negotiation, and disputes may be handled through the Commission’s informal and formal processes.
HB1191 adds a new statutory framework to Title 56 for large-load, cooperative-served substation projects and limits how those projects are treated under utility regulation. It directs the State Corporation Commission to exclude the acquisition, operation, and maintenance costs of these substations from a cooperative’s general and base rates, and to ensure that no other ratepayers subsidize the project. It also removes these agreements and acquisitions from the application of specified chapters governing utility-related procedures and facilities, while authorizing the Commission to establish a fee schedule for petitions brought by members seeking to compel negotiations.
The available record shows no committee transcript or recorded vote breakdown, so there is no detailed public debate captured here. The enacted bill’s structure suggests a generally practical, pro-development approach aimed at facilitating large industrial or commercial electric service projects while protecting other cooperative members from cost shifting. The absence of recorded opposition or amendments in the provided materials limits the ability to assess broader sentiment beyond the fact that the measure was approved and enacted.
The main points of potential contention are the allocation of costs, the scope of cooperative obligations, and the role of the State Corporation Commission. Supporters would likely favor the bill because it creates a clear path for large customers to secure dedicated substation service and a mechanism to force negotiations if a cooperative stalls. Opponents or concerned parties may focus on the mandatory transfer of the substation to the cooperative, the requirement that the member bear all costs, the Commission’s authority to compel negotiation and set fees, and the exclusion of these projects from other utility statutes. Another possible issue is whether the bill gives large-load members preferential treatment compared with smaller cooperative customers.