A BILL to amend and reenact § 56-585.1:14 of the Code of Virginia, relating to electric utilities; recovery of development costs associated with small modular reactor.
HB74 amends Virginia law governing electric utilities to expand and clarify how a Phase II utility may recover development costs for a small modular reactor (SMR) project. The bill allows a utility to petition the State Corporation Commission at any time for a rate adjustment clause to recover SMR project development costs, including expenses for evaluation, design, engineering, federal licensing, environmental review, permitting, equipment procurement, and an authorized rate of return. It also permits recovery in separate development phases and allows costs to be collected from customers before the reactor is approved under the state’s utility construction framework or before the SMR begins commercial operation, so long as the Commission finds the costs reasonable and prudent.
The bill limits the scope of recovery to one SMR facility per utility under this section and excludes certain earlier costs from accelerated recovery. Costs incurred before July 1, 2024, and 20 percent of costs incurred after that date would not qualify for accelerated recovery under this section and instead would be recovered through standard generation and distribution rates. The utility must also show that it evaluated U.S. Department of Energy funding opportunities, and the Commission retains discretion to approve, deny, or condition recovery. The Commission may impose a deadline for the utility to place the SMR into service or sell the site and refund recovered costs if the project does not proceed, and the annual customer impact is capped so that a typical residential bill would not increase by more than $1.40 per month.
HB74 would amend § 56-585.1:14 of the Code of Virginia, which currently governs recovery of SMR development costs by electric utilities, by broadening the circumstances under which utilities can seek cost recovery and by specifying additional procedural and financial safeguards. It affects Phase II utilities, the State Corporation Commission’s ratemaking authority, and utility customers who would bear the costs through rates if approved. The bill also reinforces the role of federal funding review and preserves Commission discretion over reasonableness, prudence, and project deadlines.
Based on the bill text and the absence of recorded committee debate or votes, the measure appears to be framed as a pro-development utility financing bill with consumer protections built in. Its structure suggests support for advancing nuclear energy planning while limiting immediate customer exposure through a monthly bill cap and Commission oversight. Because the bill was left in Labor and Commerce and no vote history is provided, there is no clear recorded consensus, but the language indicates an attempt to balance utility flexibility with ratepayer safeguards.
The main points of contention are likely to be the upfront recovery of SMR development costs from customers before a plant is approved or operating, and the extent to which ratepayers should bear the risk of a project that may never reach commercial operation. Consumer advocates may focus on the possibility of paying for planning and permitting costs in advance, while utility and nuclear-energy supporters may argue that early cost recovery is necessary to make SMR projects financeable. The bill tries to address these concerns by limiting recovery to one facility, requiring Commission review of reasonableness and prudence, mandating consideration of Department of Energy funding, and capping the typical residential bill increase.