Electric utilities; shared solar programs, Phase II Utility.

An Act to amend and reenact §
56-594.3
of the Code of Virginia, relating to electric utilities; shared solar programs; Phase II Utility.
Be it enacted by the General Assembly of Virginia:
1. That §
56-594.3
of the Code of Virginia is amended and reenacted as follows:
§
56-594.3
. Shared solar programs; Phase II Utility.
A. As used in this section:
"Administrative cost" means the reasonable incremental cost to the investor-owned utility to process subscribers' bills for the program.
"Applicable bill credit rate" means the dollar-per-kilowatt-hour rate used to calculate the subscriber's bill credit.
"Bill credit" means the monetary value of the electricity, in kilowatt-hours, generated by the shared solar facility allocated to a subscriber to offset that subscriber's electricity bill.
"Dual-use agricultural facility" means agricultural production and electricity production from solar photovoltaic panels occurring simultaneously on the same property.
"Gross bill" means the amount that a customer would pay to the utility based on the customer's monthly energy consumption before any bill credits are applied.
"Incremental cost" means any cost directly caused by the implementation of the shared solar program that would not have occurred absent the implementation of the shared solar program.
"Low-income customer" means any person or household whose income is no more than 80 percent of the median income of the locality in which the customer resides. The median income of the locality is determined by the U.S. Department of Housing and Urban Development.
"Low-income service organization" means a nonresidential customer of an investor-owned utility whose primary purpose is to serve low-income individuals and households.
"Low-income shared solar facility" means a shared solar facility at least 30 percent of the capacity of which is subscribed by low-income customers or low-income service organizations.
"Minimum bill" means an amount determined by the Commission under subsection D that a subscriber is required to, at a minimum, pay on the subscriber's utility bill each month after accounting for any bill credits.
"Net bill" means the resulting amount a customer must pay the utility after deducting the bill credit from the customer's monthly gross bill.
"Phase II Utility" has the same meaning as provided in subdivision A 1 of §
56-585.1
.
"Shared solar facility" means a facility that:
1. Generates electricity by means of a solar photovoltaic device with a nameplate capacity rating that does not exceed 5,000 kilowatts of alternating current;
2. Is interconnected with a Phase II Utility's distribution system within the Commonwealth;
3. Has at least three subscribers;
4. Has at least 40 percent of its capacity subscribed by customers with subscriptions of 25 kilowatts or less; and
5. Is located on a single parcel of land.
"Shared solar program" or "program" means the program created through the adoption of rules to allow for the development of shared solar facilities.
"Subscriber" means a retail customer of a utility that (i) owns one or more subscriptions of a shared solar facility that is interconnected with the utility and (ii) receives service in the service territory of the same utility in whose service territory the shared solar facility is interconnected.
"Subscriber organization" means any for-profit or nonprofit entity that owns or operates one or more shared solar facilities. A subscriber organization shall not be considered a utility solely as a result of its ownership or operation of a shared solar facility. A subscriber organization licensed with the Commission shall be eligible to own or operate shared solar facilities in more than one investor-owned utility service territory.
"Subscribed" means, in relation to a subscription, that a subscriber has made initial payments or provided a deposit to the owner of a shared solar facility for such subscription.
"Subscription" means a contract or other agreement between a subscriber and the owner of a shared solar facility. A subscription shall be sized such that the estimated bill credits do not exceed the subscriber's average annual bill for the customer account to which the subscription is attributed.
"Utility" means a Phase II Utility.
B. The Commission shall establish by regulation a program that affords customers of a Phase II Utility the opportunity to participate in shared solar projects. Under its shared solar program,
a
the
utility shall provide a bill credit for the proportional output of a shared solar facility attributable to that subscriber. The shared solar program shall be administered as follows:
1. The value of the bill credit for the subscriber shall be calculated by multiplying the subscriber's portion of the kilowatt-hour electricity production from the shared solar facility by the applicable bill credit rate for the subscriber. Any amount of the bill credit that exceeds the subscriber's monthly bill, minus the minimum bill, shall be carried over and applied to the next month's bill.
2. The utility shall provide bill credits to a shared solar facility's subscribers for not less than 25 years from the date the shared solar facility becomes commercially operational.
3. The subscriber organization shall, on a monthly basis and in a standardized electronic format, and pursuant to guidelines established by the Commission, provide to the utility a subscriber list indicating the kilowatt-hours of generation attributable to each of the subscribers participating in a shared solar facility in accordance with the subscriber's portion of the output of the shared solar facility.
4. Subscriber lists may be updated monthly to reflect canceling subscribers and to add new subscribers. The utility shall apply bill credits to subscriber bills within two billing cycles following the cycle during which the energy was generated by the shared solar facility.
5. Each utility shall, on a monthly basis and in a standardized electronic format, provide to the subscriber organization a report indicating the total value of bill credits generated by the shared solar facility in the prior month, as well as the amount of the bill credit applied to each subscriber.
6. A subscriber organization may accumulate bill credits in the event that all of the electricity generated by a shared solar facility is not allocated to subscribers in a given month.
On an annual basis and pursuant
Pursuant
to guidelines established by the Commission, the subscriber organization shall furnish to the utility allocation instructions for distributing excess bill credits to subscribers.
A subscriber organization may elect to distribute excess bill credits more frequently than once per year.
7. A subscriber organization that registers a shared solar facility in the program within the first 200 megawatts alternating current of awarded capacity shall own all environmental attributes associated with a shared solar facility, including renewable energy certificates. At such subscriber organization's direction, such environmental attributes may be distributed to subscribers, sold to load-serving entities with compliance obligations or other buyers, accumulated, or retired. For a shared solar facility registered in the program after the first 200 megawatts alternating current of awarded capacity, the registering subscriber organization shall transfer renewable energy certificates to a Phase II Utility to be retired for compliance with such Phase II Utility's renewable portfolio standard obligations pursuant to subsection C of §
56-585.5
.
8. Projects shall be entitled to receive incentives when they are located on rooftops, brownfields, or landfills, are dual-use agricultural facilities, or meet the definition of another category established by the Department of Energy pursuant to this section.
C. Each subscriber shall pay a minimum bill, established pursuant to subsection D, and shall receive an applicable bill credit based on the subscriber's customer class of residential, commercial, or industrial. Each class's applicable credit rate shall be calculated by the Commission annually by dividing revenues to the class by sales, measured in kilowatt-hours, to that class to yield a bill credit rate for the class ($/kWh).
D. The Commission shall establish a minimum bill, which shall include the costs of all utility infrastructure and services used to provide electric service and administrative costs of the shared solar program. The Commission may modify the minimum bill over time. In establishing the minimum bill, the Commission shall (i) consider further costs the Commission deems relevant to ensure subscribing customers pay a fair share of the costs of providing electric services and generation sufficient to meet customer needs at all times, (ii) minimize the costs shifted to customers not in a shared solar program, and (iii) calculate the benefits of shared solar to the electric grid and to the Commonwealth and deduct such benefits from other costs. The Commission shall explicitly set forth its findings as to each cost and benefit, or other value used to determine such minimum bill. Low-income customers shall be exempt from the minimum bill.
E. The Commission shall approve part one of a shared solar program with an aggregate capacity of 200 megawatts. Upon
the earlier of (i)
a determination that at least 90 percent of the megawatts of the aggregate capacity of such program have been subscribed and that project construction is substantially complete
or (ii) July 1, 2026
, the
Commission
Phase II Utility
shall
approve up to
release
an additional
150
525
megawatts of capacity as part two of such program,
75
450
megawatts of which shall serve no more than 51 percent low-income customers
and 75 megawatts of which may serve more than 51 percent low-income customers. On or before the substantial completion of 268 megawatts of capacity under part two of such program, the Phase II Utility shall petition the Commission to initiate a shared solar expansion proceeding to determine the capacity for part three of the shared solar program
. Subscriber organizations shall be allowed to demonstrate compliance with the low income requirement using either project capacity or project savings methodology. The Commission, in collaboration with the Department of Energy, may adopt mechanisms to ensure low-income customer participation.
For the purposes of this subsection, "substantial completion" has the same meaning as provided in Commission regulations for shared solar programs.
F. The Commission shall establish by regulation a shared solar program that complies with the provisions of subsections B, C, D, and E by March 1, 2025, and shall require each utility to file any tariffs, agreements, or forms necessary for implementation of the program by December 1, 2025. Any tariffs, agreements, and forms currently in effect at the time of enactment shall remain in effect until such revisions are approved by the Commission. Any rule or utility implementation filings approved by the Commission shall:
1. Reasonably allow for the creation of shared solar facilities;
2. Allow all customer classes to participate in the program;
3. Create a stakeholder working group including low-income community representatives and community solar providers to facilitate low-income customer and low-income service organization participation in the program;
4. Encourage public-private partnerships to further the Commonwealth's clean energy and equity goals, such as state agency and affordable housing provider participation as subscribers of a shared solar program;
5. Not remove a customer from its otherwise applicable customer class in order to participate in a shared solar facility;
6. Reasonably allow for the transferability and portability of subscriptions, including allowing a subscriber to retain a subscription to a shared solar facility if the subscriber moves within the same utility's service territory;
7. Establish standards, fees, and processes for the interconnection of shared solar facilities that allow the utility to recover reasonable interconnection costs for each shared solar facility;
8. Adopt standardized consumer disclosure forms;
9. Allow the utility the opportunity to recover reasonable costs of administering the program;
10. Ensure nondiscriminatory and efficient requirements and utility procedures for interconnecting projects;
11. Address the co-location of two or more shared solar facilities on a single parcel of land and provide guidelines for determining when two or more such facilities are co-located;
12. Include a program implementation schedule;
13. Prohibit credit checks as a means of establishing eligibility for residential customers to become subscribers;
14. Prohibit early termination fees and credit reporting for any low-income customer;
15. Require a customer's affirmative consent by written or electronic signature before providing access to customer billing and usage data to a subscriber organization;
16. Establish customer engagement rules and minimum rules for education, contract reviews, and continued engagement;
17. Require net crediting functionality. Under net crediting, the utility shall include the shared solar subscription fee on the customer's utility bill and provide the customer with a net credit equivalent to the total bill credit value for that generation period minus the shared solar subscription fee as set by the subscriber organization. The net crediting fee shall not exceed one percent of the bill credit value. Net crediting shall be optional for subscriber organizations, and any shared solar subscription fees charged via the net crediting model shall be set to ensure that subscribers do not pay more in subscription fees than they receive in bill credits; and
18. Allow the utility to recover as the cost of purchased power pursuant to §
56-249.6
any difference between the bill credit provided to the subscriber and the cost of energy injected into the grid by the subscriber organization.
G.
Within 180 days of finalization of the Commission's adoption of regulations for the shared solar program, a utility shall begin crediting subscriber accounts of each shared solar facility interconnected in its service territory, subject to the requirements of this section and regulations adopted thereto
In conducting the proceeding for part three of shared solar program capacity under subsection E, the Commission shall evaluate the costs and benefits of the shared solar program, including the aggregate impact of the shared solar program on the Phase II Utility's long-term marginal costs for generation, distribution, and transmission services; the impact of the shared solar program on compliance with renewable energy portfolio standard requirements under §
56-585.5
; the direct and indirect economic impacts of the shared solar program on the Commonwealth; and any other information deemed relevant by the Commission, including environmental, resilience, fuel price risk, and other risk minimization benefits of the shared solar program. The Commission shall consider the results of such proceeding in determining any future allocations of shared solar capacity and changes in program design
.
2. That the State Corporation Commission shall update its regulations on shared solar programs to comply with the provisions of this act by December 31, 2026, and shall require each participating utility to file any tariffs, agreements, or forms necessary for implementation of such shared solar programs by March 1, 2027.