An Act to amend the Code of Virginia by adding a section numbered 56-585.1:17, relating to electric cooperatives; virtual power plant program.
HB562 adds a new section to the Code of Virginia authorizing electric cooperatives, beginning January 1, 2027, to create and run virtual power plant programs without prior approval from the State Corporation Commission, so long as the cooperative’s board adopts an affirmative resolution and the program follows statutory requirements. A virtual power plant is defined as an aggregation of distributed energy resources, such as battery storage, smart thermostats, and managed electric vehicle charging, that are coordinated to provide grid services. The bill also defines key terms including aggregator, distributed energy resource, eligible technology, grid event, and grid service.
The bill requires any cooperative that adopts such a program to file the new rate schedule with the Commission for informational purposes and to have the program reviewed at the cooperative’s next general rate proceeding. It allows cooperatives to recover program costs through rates and to use existing or proposed distributed energy programs to support development of virtual power plants. Cooperatives must show they evaluated federal funding opportunities, and if they offer incentives for residential battery storage, they must use a competitive solicitation open to both cooperative-owned and non-cooperative-owned resources.
The bill creates a new statutory framework specifically for electric cooperatives to deploy tariffed virtual power plant programs and recover associated costs through rates, while limiting the need for upfront regulatory approval. It amends the Virginia Code by adding § 56-585.1:17 and affects cooperative rate-setting, customer incentive programs, distributed energy resource aggregation, and Commission oversight. The measure also directs cooperatives to consider equity-related incentives for customers in historically economically disadvantaged communities and to establish operational rules for enrollment, opt-out rights, grid events, and customer disenrollment.
Based on the bill text and the absence of recorded committee transcripts or votes in the provided materials, the overall sentiment appears supportive and implementation-oriented. The bill was enacted as Chapter 44, indicating it advanced successfully through the legislative process. Its structure suggests a policy interest in expanding grid flexibility, encouraging distributed energy adoption, and giving cooperatives more tools to manage demand and reliability.
The main potential points of contention are regulatory authority, cost recovery, and customer participation rules. The bill allows cooperatives to proceed without prior Commission approval, which may raise oversight concerns, although it preserves later review in the next general rate proceeding. Another possible issue is how costs are passed through rates and whether incentives for battery storage and other technologies are fairly structured. The requirement for competitive solicitation and the inclusion of increased incentives for historically economically disadvantaged communities suggest attention to fairness and access, but those same provisions could also prompt debate over program design and administrative burden.