{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/56-594.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/56-594.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/56-594.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/56-594.html"}],"law_id":76060,"edition_id":1,"section_id":76060,"structure_id":13084,"section_number":"56-594","catch_line":"Net energy metering provisions","history":"1999, c. 411; 2004, c. 827; 2006, c. 470; 2007, cc. 877, 888, 933; 2009, c. 804; 2011, c. 239; 2013, c. 268; 2015, cc. 431, 432; 2017, cc. 565, 581; 2019, cc. 742, 763; 2020, cc. 1187, 1188, 1189, 1193, 1194, 1239; 2024, cc. 783, 827.","full_text":"A\n\nThe Commission shall establish by regulation a program that affords eligible customer-generators the opportunity to participate in net energy metering, and a program, to begin no later than July 1, 2014, for customers of investor-owned utilities and to begin no later than July 1, 2015, and to end July 1, 2019, for customers of electric cooperatives as provided in subsection G, to afford eligible agricultural customer-generators the opportunity to participate in net energy metering. The regulations may include, but need not be limited to, requirements for (i) retail sellers; (ii) owners or operators of distribution or transmission facilities; (iii) providers of default service; (iv) eligible customer-generators; (v) eligible agricultural customer-generators; or (vi) any combination of the foregoing, as the Commission determines will facilitate the provision of net energy metering, provided that the Commission determines that such requirements do not adversely affect the public interest. On and after July 1, 2017, small agricultural generators or eligible agricultural customer-generators may elect to interconnect pursuant to the provisions of this section or as small agricultural generators pursuant to § 56-594.2, but not both. Existing eligible agricultural customer-generators may elect to become small agricultural generators, but may not revert to being eligible agricultural customer-generators after such election. On and after July 1, 2019, interconnection of eligible agricultural customer-generators shall cease for electric cooperatives only, and such facilities shall interconnect solely as small agricultural generators. For electric cooperatives, eligible agricultural customer-generators whose renewable energy generating facilities were interconnected before July 1, 2019, may continue to participate in net energy metering pursuant to this section for a period not to exceed 25 years from the date of their renewable energy generating facility’s original interconnection.B\n\nFor the purpose of this section:\n\t\t\t“Eligible agricultural customer-generator” means a customer that operates a renewable energy generating facility as part of an agricultural business, which generating facility (i) uses as its sole energy source solar power, wind power, or aerobic or anaerobic digester gas, (ii) does not have an aggregate generation capacity of more than 500 kilowatts, (iii) is located on land owned or controlled by the agricultural business, (iv) is connected to the customer’s wiring on the customer’s side of its interconnection with the distributor; (v) is interconnected and operated in parallel with an electric company’s transmission and distribution facilities, and (vi) is used primarily to provide energy to metered accounts of the agricultural business. An eligible agricultural customer-generator may be served by multiple meters serving the eligible agricultural customer-generator that are located at the same or adjacent sites, such that the eligible agricultural customer-generator may aggregate in a single account the electricity consumption and generation measured by the meters, provided that the same utility serves all such meters. The aggregated load shall be served under the appropriate tariff.\n\t\t\t“Eligible customer-generator” means a customer that owns and operates, or contracts with other persons to own, operate, or both, an electrical generating facility, including any additions or enhancements such as battery storage or a smart inverter, that (i) has a capacity of not more than 25 kilowatts for residential customers and not more than three megawatts for nonresidential customers; (ii) uses as its total source of fuel renewable energy, as defined in § 56-576; (iii) is located on land owned or leased by the customer and is connected to the customer’s wiring on the customer’s side of its interconnection with the distributor; (iv) is interconnected and operated in parallel with an electric company’s transmission and distribution facilities; and (v) is intended primarily to offset all or part of the customer’s own electricity requirements. No contract, lease, or arrangement by which a third party owns, maintains, or operates an electrical generating facility on an eligible customer-generator’s property shall constitute the sale of electricity or cause the customer-generator or the third party to be considered an electric utility by virtue of participating in net energy metering. In addition to the electrical generating facility size limitations in clause (i), the capacity of any generating facility installed under this section between July 1, 2015, and July 1, 2020, shall not exceed the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available. In addition to the electrical generating facility size limitation in clause (i), in the certificated service territory of a Phase I Utility, the capacity of any generating facility installed under this section after July 1, 2020, shall not exceed 100 percent of the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available, and in the certificated service territory of a Phase II Utility, the capacity of any generating facility installed under this section after July 1, 2020, shall not exceed 150 percent of the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available.\n\t\t\t“Net energy metering” means measuring the difference, over the net metering period, between (i) electricity supplied to an eligible customer-generator or eligible agricultural customer-generator from the electric grid and (ii) the electricity generated and fed back to the electric grid by the eligible customer-generator or eligible agricultural customer-generator.\n\t\t\t“Net metering period” means the 12-month period following the date of final interconnection of the eligible customer-generator’s or eligible agricultural customer-generator’s system with an electric service provider, and each 12-month period thereafter.\n\t\t\t“Small agricultural generator” has the same meaning that is ascribed to that term in § 56-594.2.C\n\nThe Commission’s regulations shall ensure that (i) the metering equipment installed for net metering shall be capable of measuring the flow of electricity in two directions and (ii) any eligible customer-generator seeking to participate in net energy metering shall notify its supplier and receive approval to interconnect prior to installation of an electrical generating facility. The electric distribution company shall have 30 days from the date of notification for residential facilities, and 60 days from the date of notification for nonresidential facilities, to determine whether the interconnection requirements have been met. Such regulations shall allocate fairly the cost of such equipment and any necessary interconnection. An eligible customer-generator’s electrical generating system, and each electrical generating system of an eligible agricultural customer-generator, shall meet all applicable safety and performance standards established by the National Electrical Code, the Institute of Electrical and Electronics Engineers, and accredited testing laboratories such as Underwriters Laboratories. Beyond the requirements set forth in this section and to ensure public safety, power quality, and reliability of the supplier’s electric distribution system, an eligible customer-generator or eligible agricultural customer-generator whose electrical generating system meets those standards and rules shall bear all reasonable costs of equipment required for the interconnection to the supplier’s electric distribution system, including costs, if any, to (a) install additional controls and (b) perform or pay for additional tests. No eligible customer-generator or eligible agricultural customer-generator shall be required to provide proof of liability insurance or to purchase additional liability insurance as a condition of interconnection.D\n\nThe Commission shall establish minimum requirements for contracts to be entered into by the parties to net metering arrangements. Such requirements shall protect the eligible customer-generator or eligible agricultural customer-generator against discrimination by virtue of its status as an eligible customer-generator or eligible agricultural customer-generator, and permit customers that are served on time-of-use tariffs that have electricity supply demand charges contained within the electricity supply portion of the time-of-use tariffs to participate as an eligible customer-generator or eligible agricultural customer-generator. Notwithstanding the cost allocation provisions of subsection C, eligible customer-generators or eligible agricultural customer-generators served on demand charge-based time-of-use tariffs shall bear the incremental metering costs required to net meter such customers.E\n\nIf electricity generated by an eligible customer-generator or eligible agricultural customer-generator over the net metering period exceeds the electricity consumed by the eligible customer-generator or eligible agricultural customer-generator, the customer-generator or eligible agricultural customer-generator shall be compensated for the excess electricity if the entity contracting to receive such electric energy and the eligible customer-generator or eligible agricultural customer-generator enter into a power purchase agreement for such excess electricity. Upon the written request of the eligible customer-generator or eligible agricultural customer-generator, the supplier that serves the eligible customer-generator or eligible agricultural customer-generator shall enter into a power purchase agreement with the requesting eligible customer-generator or eligible agricultural customer-generator that is consistent with the minimum requirements for contracts established by the Commission pursuant to subsection D. The power purchase agreement shall obligate the supplier to purchase such excess electricity at the rate that is provided for such purchases in a net metering standard contract or tariff approved by the Commission, unless the parties agree to a higher rate. The eligible customer-generator or eligible agricultural customer-generator owns any renewable energy certificates associated with its electrical generating facility; however, at the time that the eligible customer-generator or eligible agricultural customer-generator enters into a power purchase agreement with its supplier, the eligible customer-generator or eligible agricultural customer-generator shall have a one-time option to sell the renewable energy certificates associated with such electrical generating facility to its supplier and be compensated at an amount that is established by the Commission to reflect the value of such renewable energy certificates. Nothing in this section shall prevent the eligible customer-generator or eligible agricultural customer-generator and the supplier from voluntarily entering into an agreement for the sale and purchase of excess electricity or renewable energy certificates at mutually-agreed upon prices if the eligible customer-generator or eligible agricultural customer-generator does not exercise its option to sell its renewable energy certificates to its supplier at Commission-approved prices at the time that the eligible customer-generator or eligible agricultural customer-generator enters into a power purchase agreement with its supplier. All costs incurred by the supplier to purchase excess electricity and renewable energy certificates from eligible customer-generators or eligible agricultural customer-generators shall be recoverable through its Renewable Energy Portfolio Standard (RPS) rate adjustment clause, if the supplier has a Commission-approved RPS plan. If not, then all costs shall be recoverable through the supplier’s fuel adjustment clause. For purposes of this section, “all costs” shall be defined as the rates paid to the eligible customer-generator or eligible agricultural customer-generator for the purchase of excess electricity and renewable energy certificates and any administrative costs incurred to manage the eligible customer-generator’s or eligible agricultural customer-generator’s power purchase arrangements. The net metering standard contract or tariff shall be available to eligible customer-generators or eligible agricultural customer-generators on a first-come, first-served basis in each electric distribution company’s Virginia service area until the rated generating capacity owned and operated by eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators in the Commonwealth reaches six percent, in the aggregate, five percent of which is available to all customers and one percent of which is available only to low-income utility customers of each electric distribution company’s adjusted Virginia peak-load forecast for the previous year, and shall require the supplier to pay the eligible customer-generator or eligible agricultural customer-generator for such excess electricity in a timely manner at a rate to be established by the Commission.\n\t\t\tOn and after the earlier of (i) 2024 for a Phase I Utility or 2025 for a Phase II Utility or (ii) when the aggregate rated generating capacity owned and operated by eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators in the Commonwealth reaches three percent of a Phase I or Phase II Utility’s adjusted Virginia peak-load forecast for the previous year, the Commission shall conduct a net energy metering proceeding.\n\t\t\tIn any net energy metering proceeding, the Commission shall, after notice and opportunity for hearing, evaluate and establish (a) an amount customers shall pay on their utility bills each month for the costs of using the utility’s infrastructure; (b) an amount the utility shall pay to appropriately compensate the customer, as determined by the Commission, for the total benefits such facilities provide; (c) the direct and indirect economic impact of net metering to the Commonwealth; and (d) any other information the Commission deems relevant. The Commission shall establish an appropriate rate structure related thereto, which shall govern compensation related to all eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators, except low-income utility customers, that interconnect after the effective date established in the Commission’s final order. Nothing in the Commission’s final order shall affect any eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators who interconnect before the effective date of such final order. As part of the net energy metering proceeding, the Commission shall evaluate the six percent aggregate net metering cap and may, if appropriate, raise or remove such cap. The Commission shall enter its final order in such a proceeding no later than 12 months after it commences such proceeding, and such final order shall establish a date by which the new terms and conditions shall apply for interconnection and shall also provide that, if the terms and conditions of compensation in the final order differ from the terms and conditions available to customers before the proceeding, low-income utility customers may interconnect under whichever terms are most favorable to them.F\n\nAny residential eligible customer-generator or eligible agricultural customer-generator, in the service territory of a Phase II Utility who owns and operates, or contracts with other persons to own, operate, or both, an electrical generating facility with a capacity that exceeds 15 kilowatts shall pay to its supplier, in addition to any other charges authorized by law, a monthly standby charge. The amount of the standby charge and the terms and conditions under which it is assessed shall be in accordance with a methodology developed by the supplier and approved by the Commission. The Commission shall approve a supplier’s proposed standby charge methodology if it finds that the standby charges collected from all such eligible customer-generators and eligible agricultural customer-generators allow the supplier to recover only the portion of the supplier’s infrastructure costs that are properly associated with serving such eligible customer-generators or eligible agricultural customer-generators. Such an eligible customer-generator or eligible agricultural customer-generator shall not be liable for a standby charge until the date specified in an order of the Commission approving its supplier’s methodology. For customers of all other investor-owned utilities, on and after July 1, 2020, standby charges are prohibited for any residential eligible customer-generator or agricultural customer-generator.G\n\nOn and after the later of July 1, 2019, or the effective date of regulations that the Commission is required to adopt pursuant to § 56-594.01, (i) net energy metering in the service territory of each electric cooperative shall be conducted as provided in a program implemented pursuant to § 56-594.01 and (ii) the provisions of this section shall not apply to net energy metering in the service territory of an electric cooperative except as provided in § 56-594.01.H\n\nThe Commission may adopt such rules or establish such guidelines as may be necessary for its general administration of this section.I\n\nWhen the Commission conducts a net energy metering proceeding, it shall:1\n\nInvestigate and determine the costs and benefits of the current net energy metering program;2\n\nEstablish an appropriate netting measurement interval for a successor tariff that is just and reasonable in light of the costs and benefits of the net metering program in aggregate, and applicable to new requests for net energy metering service;3\n\nDetermine a specific avoided cost for customer-generators, the different type of customer-generator technologies where the Commission deems it appropriate, and establish the methodology for determining the compensation rate for any net excess generation determined according to the applicable net measurement interval for any new tariff; and4\n\nMake all reasonable efforts to ensure that the net energy metering program does not result in unreasonable cost-shifting to nonparticipating electric utility customers.J\n\nIn evaluating the costs and benefits of the net energy metering program, the Commission shall consider:1\n\nThe aggregate impact of customer-generators on the electric utility’s long-run marginal costs of generation, distribution, and transmission;2\n\nThe cost of service implications of customer-generators on other customers within the same class, including an evaluation of whether customer-generators provide an adequate rate of return to the electrical utility compared to the otherwise applicable rate class when, for analytical purposes only, examined as a separate class within a cost of service study;3\n\nThe direct and indirect economic impact of the net energy metering program to the Commonwealth; and4\n\nAny other information it deems relevant, including environmental and resilience benefits of customer-generator facilities.K\n\nNotwithstanding the provisions of this section, § 56-585.1:8, or any other provision of law to the contrary, any locality that is a nonjurisdictional customer of a Phase II Utility, as defined in § 56-585.1:3, and is in Planning District Eight with a population greater than 1 million may (i) install solar-powered or wind-powered electric generation facilities with a rated capacity not exceeding five megawatts, whether the facilities are owned by the locality or owned and operated by a third party pursuant to a contract with the locality, on any locality-owned site within the locality and (ii) credit the electricity generated at any such facility as directed by the governing body of the locality to any one or more of the metered accounts of buildings or other facilities of the locality or the locality’s public school division that are located within the locality, without regard to whether the buildings and facilities are located at the same site where the electric generation facility is located or at a site contiguous thereto. The amount of the credit for such electricity to the metered accounts of the locality or its public school division shall be identical, with respect to the rate structure, all retail rate components, and monthly charges, to the amount the locality or public school division would otherwise be charged for such amount of electricity under its contract with the public utility, without the assessment by the public utility of any distribution charges, service charges, or fees in connection with or arising out of such crediting.L\n\nAny eligible customer-generator or eligible agricultural customer-generator may participate in demand response, energy efficiency, or peak reduction from dispatch of onsite battery service, provided that the compensation received is in exchange for a distinct service that is not already compensated by net metering credits for electricity exported to the electric distribution system or compensated by any other utility program or tariff. The Commission shall review and evaluate the continuing need for the imposition of standby or other charges on eligible customer-generators or eligible agricultural customer-generators in any net energy metering proceeding conducted pursuant to subsection E.","order_by":null,"text":{"0":{"id":272983,"text":"The Commission shall establish by regulation a program that affords eligible customer-generators the opportunity to participate in net energy metering, and a program, to begin no later than July 1, 2014, for customers of investor-owned utilities and to begin no later than July 1, 2015, and to end July 1, 2019, for customers of electric cooperatives as provided in subsection G, to afford eligible agricultural customer-generators the opportunity to participate in net energy metering. The regulations may include, but need not be limited to, requirements for (i) retail sellers; (ii) owners or operators of distribution or transmission facilities; (iii) providers of default service; (iv) eligible customer-generators; (v) eligible agricultural customer-generators; or (vi) any combination of the foregoing, as the Commission determines will facilitate the provision of net energy metering, provided that the Commission determines that such requirements do not adversely affect the public interest. On and after July 1, 2017, small agricultural generators or eligible agricultural customer-generators may elect to interconnect pursuant to the provisions of this section or as small agricultural generators pursuant to § 56-594.2, but not both. Existing eligible agricultural customer-generators may elect to become small agricultural generators, but may not revert to being eligible agricultural customer-generators after such election. On and after July 1, 2019, interconnection of eligible agricultural customer-generators shall cease for electric cooperatives only, and such facilities shall interconnect solely as small agricultural generators. For electric cooperatives, eligible agricultural customer-generators whose renewable energy generating facilities were interconnected before July 1, 2019, may continue to participate in net energy metering pursuant to this section for a period not to exceed 25 years from the date of their renewable energy generating facility’s original interconnection.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":272984,"text":"For the purpose of this section:\n\t\t\t“Eligible agricultural customer-generator” means a customer that operates a renewable energy generating facility as part of an agricultural business, which generating facility (i) uses as its sole energy source solar power, wind power, or aerobic or anaerobic digester gas, (ii) does not have an aggregate generation capacity of more than 500 kilowatts, (iii) is located on land owned or controlled by the agricultural business, (iv) is connected to the customer’s wiring on the customer’s side of its interconnection with the distributor; (v) is interconnected and operated in parallel with an electric company’s transmission and distribution facilities, and (vi) is used primarily to provide energy to metered accounts of the agricultural business. An eligible agricultural customer-generator may be served by multiple meters serving the eligible agricultural customer-generator that are located at the same or adjacent sites, such that the eligible agricultural customer-generator may aggregate in a single account the electricity consumption and generation measured by the meters, provided that the same utility serves all such meters. The aggregated load shall be served under the appropriate tariff.\n\t\t\t“Eligible customer-generator” means a customer that owns and operates, or contracts with other persons to own, operate, or both, an electrical generating facility, including any additions or enhancements such as battery storage or a smart inverter, that (i) has a capacity of not more than 25 kilowatts for residential customers and not more than three megawatts for nonresidential customers; (ii) uses as its total source of fuel renewable energy, as defined in § 56-576; (iii) is located on land owned or leased by the customer and is connected to the customer’s wiring on the customer’s side of its interconnection with the distributor; (iv) is interconnected and operated in parallel with an electric company’s transmission and distribution facilities; and (v) is intended primarily to offset all or part of the customer’s own electricity requirements. No contract, lease, or arrangement by which a third party owns, maintains, or operates an electrical generating facility on an eligible customer-generator’s property shall constitute the sale of electricity or cause the customer-generator or the third party to be considered an electric utility by virtue of participating in net energy metering. In addition to the electrical generating facility size limitations in clause (i), the capacity of any generating facility installed under this section between July 1, 2015, and July 1, 2020, shall not exceed the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available. In addition to the electrical generating facility size limitation in clause (i), in the certificated service territory of a Phase I Utility, the capacity of any generating facility installed under this section after July 1, 2020, shall not exceed 100 percent of the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available, and in the certificated service territory of a Phase II Utility, the capacity of any generating facility installed under this section after July 1, 2020, shall not exceed 150 percent of the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available.\n\t\t\t“Net energy metering” means measuring the difference, over the net metering period, between (i) electricity supplied to an eligible customer-generator or eligible agricultural customer-generator from the electric grid and (ii) the electricity generated and fed back to the electric grid by the eligible customer-generator or eligible agricultural customer-generator.\n\t\t\t“Net metering period” means the 12-month period following the date of final interconnection of the eligible customer-generator’s or eligible agricultural customer-generator’s system with an electric service provider, and each 12-month period thereafter.\n\t\t\t“Small agricultural generator” has the same meaning that is ascribed to that term in § 56-594.2.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":272985,"text":"The Commission’s regulations shall ensure that (i) the metering equipment installed for net metering shall be capable of measuring the flow of electricity in two directions and (ii) any eligible customer-generator seeking to participate in net energy metering shall notify its supplier and receive approval to interconnect prior to installation of an electrical generating facility. The electric distribution company shall have 30 days from the date of notification for residential facilities, and 60 days from the date of notification for nonresidential facilities, to determine whether the interconnection requirements have been met. Such regulations shall allocate fairly the cost of such equipment and any necessary interconnection. An eligible customer-generator’s electrical generating system, and each electrical generating system of an eligible agricultural customer-generator, shall meet all applicable safety and performance standards established by the National Electrical Code, the Institute of Electrical and Electronics Engineers, and accredited testing laboratories such as Underwriters Laboratories. Beyond the requirements set forth in this section and to ensure public safety, power quality, and reliability of the supplier’s electric distribution system, an eligible customer-generator or eligible agricultural customer-generator whose electrical generating system meets those standards and rules shall bear all reasonable costs of equipment required for the interconnection to the supplier’s electric distribution system, including costs, if any, to (a) install additional controls and (b) perform or pay for additional tests. No eligible customer-generator or eligible agricultural customer-generator shall be required to provide proof of liability insurance or to purchase additional liability insurance as a condition of interconnection.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":272986,"text":"The Commission shall establish minimum requirements for contracts to be entered into by the parties to net metering arrangements. Such requirements shall protect the eligible customer-generator or eligible agricultural customer-generator against discrimination by virtue of its status as an eligible customer-generator or eligible agricultural customer-generator, and permit customers that are served on time-of-use tariffs that have electricity supply demand charges contained within the electricity supply portion of the time-of-use tariffs to participate as an eligible customer-generator or eligible agricultural customer-generator. Notwithstanding the cost allocation provisions of subsection C, eligible customer-generators or eligible agricultural customer-generators served on demand charge-based time-of-use tariffs shall bear the incremental metering costs required to net meter such customers.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"4":{"id":272987,"text":"If electricity generated by an eligible customer-generator or eligible agricultural customer-generator over the net metering period exceeds the electricity consumed by the eligible customer-generator or eligible agricultural customer-generator, the customer-generator or eligible agricultural customer-generator shall be compensated for the excess electricity if the entity contracting to receive such electric energy and the eligible customer-generator or eligible agricultural customer-generator enter into a power purchase agreement for such excess electricity. Upon the written request of the eligible customer-generator or eligible agricultural customer-generator, the supplier that serves the eligible customer-generator or eligible agricultural customer-generator shall enter into a power purchase agreement with the requesting eligible customer-generator or eligible agricultural customer-generator that is consistent with the minimum requirements for contracts established by the Commission pursuant to subsection D. The power purchase agreement shall obligate the supplier to purchase such excess electricity at the rate that is provided for such purchases in a net metering standard contract or tariff approved by the Commission, unless the parties agree to a higher rate. The eligible customer-generator or eligible agricultural customer-generator owns any renewable energy certificates associated with its electrical generating facility; however, at the time that the eligible customer-generator or eligible agricultural customer-generator enters into a power purchase agreement with its supplier, the eligible customer-generator or eligible agricultural customer-generator shall have a one-time option to sell the renewable energy certificates associated with such electrical generating facility to its supplier and be compensated at an amount that is established by the Commission to reflect the value of such renewable energy certificates. Nothing in this section shall prevent the eligible customer-generator or eligible agricultural customer-generator and the supplier from voluntarily entering into an agreement for the sale and purchase of excess electricity or renewable energy certificates at mutually-agreed upon prices if the eligible customer-generator or eligible agricultural customer-generator does not exercise its option to sell its renewable energy certificates to its supplier at Commission-approved prices at the time that the eligible customer-generator or eligible agricultural customer-generator enters into a power purchase agreement with its supplier. All costs incurred by the supplier to purchase excess electricity and renewable energy certificates from eligible customer-generators or eligible agricultural customer-generators shall be recoverable through its Renewable Energy Portfolio Standard (RPS) rate adjustment clause, if the supplier has a Commission-approved RPS plan. If not, then all costs shall be recoverable through the supplier’s fuel adjustment clause. For purposes of this section, “all costs” shall be defined as the rates paid to the eligible customer-generator or eligible agricultural customer-generator for the purchase of excess electricity and renewable energy certificates and any administrative costs incurred to manage the eligible customer-generator’s or eligible agricultural customer-generator’s power purchase arrangements. The net metering standard contract or tariff shall be available to eligible customer-generators or eligible agricultural customer-generators on a first-come, first-served basis in each electric distribution company’s Virginia service area until the rated generating capacity owned and operated by eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators in the Commonwealth reaches six percent, in the aggregate, five percent of which is available to all customers and one percent of which is available only to low-income utility customers of each electric distribution company’s adjusted Virginia peak-load forecast for the previous year, and shall require the supplier to pay the eligible customer-generator or eligible agricultural customer-generator for such excess electricity in a timely manner at a rate to be established by the Commission.\n\t\t\tOn and after the earlier of (i) 2024 for a Phase I Utility or 2025 for a Phase II Utility or (ii) when the aggregate rated generating capacity owned and operated by eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators in the Commonwealth reaches three percent of a Phase I or Phase II Utility’s adjusted Virginia peak-load forecast for the previous year, the Commission shall conduct a net energy metering proceeding.\n\t\t\tIn any net energy metering proceeding, the Commission shall, after notice and opportunity for hearing, evaluate and establish (a) an amount customers shall pay on their utility bills each month for the costs of using the utility’s infrastructure; (b) an amount the utility shall pay to appropriately compensate the customer, as determined by the Commission, for the total benefits such facilities provide; (c) the direct and indirect economic impact of net metering to the Commonwealth; and (d) any other information the Commission deems relevant. The Commission shall establish an appropriate rate structure related thereto, which shall govern compensation related to all eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators, except low-income utility customers, that interconnect after the effective date established in the Commission’s final order. Nothing in the Commission’s final order shall affect any eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators who interconnect before the effective date of such final order. As part of the net energy metering proceeding, the Commission shall evaluate the six percent aggregate net metering cap and may, if appropriate, raise or remove such cap. The Commission shall enter its final order in such a proceeding no later than 12 months after it commences such proceeding, and such final order shall establish a date by which the new terms and conditions shall apply for interconnection and shall also provide that, if the terms and conditions of compensation in the final order differ from the terms and conditions available to customers before the proceeding, low-income utility customers may interconnect under whichever terms are most favorable to them.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"5":{"id":272988,"text":"Any residential eligible customer-generator or eligible agricultural customer-generator, in the service territory of a Phase II Utility who owns and operates, or contracts with other persons to own, operate, or both, an electrical generating facility with a capacity that exceeds 15 kilowatts shall pay to its supplier, in addition to any other charges authorized by law, a monthly standby charge. The amount of the standby charge and the terms and conditions under which it is assessed shall be in accordance with a methodology developed by the supplier and approved by the Commission. The Commission shall approve a supplier’s proposed standby charge methodology if it finds that the standby charges collected from all such eligible customer-generators and eligible agricultural customer-generators allow the supplier to recover only the portion of the supplier’s infrastructure costs that are properly associated with serving such eligible customer-generators or eligible agricultural customer-generators. Such an eligible customer-generator or eligible agricultural customer-generator shall not be liable for a standby charge until the date specified in an order of the Commission approving its supplier’s methodology. For customers of all other investor-owned utilities, on and after July 1, 2020, standby charges are prohibited for any residential eligible customer-generator or agricultural customer-generator.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"6":{"id":272989,"text":"On and after the later of July 1, 2019, or the effective date of regulations that the Commission is required to adopt pursuant to § 56-594.01, (i) net energy metering in the service territory of each electric cooperative shall be conducted as provided in a program implemented pursuant to § 56-594.01 and (ii) the provisions of this section shall not apply to net energy metering in the service territory of an electric cooperative except as provided in § 56-594.01.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"7":{"id":272990,"text":"The Commission may adopt such rules or establish such guidelines as may be necessary for its general administration of this section.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G","next_prefix":"I"},"8":{"id":272991,"text":"When the Commission conducts a net energy metering proceeding, it shall:","type":"section","prefixes":["I"],"prefix":"I","entire_prefix":"I","prefix_anchor":"I","level":1,"prior_prefix":"H","next_prefix":"I1"},"9":{"id":272992,"text":"Investigate and determine the costs and benefits of the current net energy metering program;","type":"section","prefixes":["I","1"],"prefix":"1","entire_prefix":"I1","prefix_anchor":"I1","level":2,"prior_prefix":"I","next_prefix":"I2"},"10":{"id":272993,"text":"Establish an appropriate netting measurement interval for a successor tariff that is just and reasonable in light of the costs and benefits of the net metering program in aggregate, and applicable to new requests for net energy metering service;","type":"section","prefixes":["I","2"],"prefix":"2","entire_prefix":"I2","prefix_anchor":"I2","level":2,"prior_prefix":"I1","next_prefix":"I3"},"11":{"id":272994,"text":"Determine a specific avoided cost for customer-generators, the different type of customer-generator technologies where the Commission deems it appropriate, and establish the methodology for determining the compensation rate for any net excess generation determined according to the applicable net measurement interval for any new tariff; and","type":"section","prefixes":["I","3"],"prefix":"3","entire_prefix":"I3","prefix_anchor":"I3","level":2,"prior_prefix":"I2","next_prefix":"I4"},"12":{"id":272995,"text":"Make all reasonable efforts to ensure that the net energy metering program does not result in unreasonable cost-shifting to nonparticipating electric utility customers.","type":"section","prefixes":["I","4"],"prefix":"4","entire_prefix":"I4","prefix_anchor":"I4","level":2,"prior_prefix":"I3","next_prefix":"J"},"13":{"id":272996,"text":"In evaluating the costs and benefits of the net energy metering program, the Commission shall consider:","type":"section","prefixes":["J"],"prefix":"J","entire_prefix":"J","prefix_anchor":"J","level":1,"prior_prefix":"I4","next_prefix":"J1"},"14":{"id":272997,"text":"The aggregate impact of customer-generators on the electric utility’s long-run marginal costs of generation, distribution, and transmission;","type":"section","prefixes":["J","1"],"prefix":"1","entire_prefix":"J1","prefix_anchor":"J1","level":2,"prior_prefix":"J","next_prefix":"J2"},"15":{"id":272998,"text":"The cost of service implications of customer-generators on other customers within the same class, including an evaluation of whether customer-generators provide an adequate rate of return to the electrical utility compared to the otherwise applicable rate class when, for analytical purposes only, examined as a separate class within a cost of service study;","type":"section","prefixes":["J","2"],"prefix":"2","entire_prefix":"J2","prefix_anchor":"J2","level":2,"prior_prefix":"J1","next_prefix":"J3"},"16":{"id":272999,"text":"The direct and indirect economic impact of the net energy metering program to the Commonwealth; and","type":"section","prefixes":["J","3"],"prefix":"3","entire_prefix":"J3","prefix_anchor":"J3","level":2,"prior_prefix":"J2","next_prefix":"J4"},"17":{"id":273000,"text":"Any other information it deems relevant, including environmental and resilience benefits of customer-generator facilities.","type":"section","prefixes":["J","4"],"prefix":"4","entire_prefix":"J4","prefix_anchor":"J4","level":2,"prior_prefix":"J3","next_prefix":"K"},"18":{"id":273001,"text":"Notwithstanding the provisions of this section, § 56-585.1:8, or any other provision of law to the contrary, any locality that is a nonjurisdictional customer of a Phase II Utility, as defined in § 56-585.1:3, and is in Planning District Eight with a population greater than 1 million may (i) install solar-powered or wind-powered electric generation facilities with a rated capacity not exceeding five megawatts, whether the facilities are owned by the locality or owned and operated by a third party pursuant to a contract with the locality, on any locality-owned site within the locality and (ii) credit the electricity generated at any such facility as directed by the governing body of the locality to any one or more of the metered accounts of buildings or other facilities of the locality or the locality’s public school division that are located within the locality, without regard to whether the buildings and facilities are located at the same site where the electric generation facility is located or at a site contiguous thereto. The amount of the credit for such electricity to the metered accounts of the locality or its public school division shall be identical, with respect to the rate structure, all retail rate components, and monthly charges, to the amount the locality or public school division would otherwise be charged for such amount of electricity under its contract with the public utility, without the assessment by the public utility of any distribution charges, service charges, or fees in connection with or arising out of such crediting.","type":"section","prefixes":["K"],"prefix":"K","entire_prefix":"K","prefix_anchor":"K","level":1,"prior_prefix":"J4","next_prefix":"L"},"19":{"id":273002,"text":"Any eligible customer-generator or eligible agricultural customer-generator may participate in demand response, energy efficiency, or peak reduction from dispatch of onsite battery service, provided that the compensation received is in exchange for a distinct service that is not already compensated by net metering credits for electricity exported to the electric distribution system or compensated by any other utility program or tariff. The Commission shall review and evaluate the continuing need for the imposition of standby or other charges on eligible customer-generators or eligible agricultural customer-generators in any net energy metering proceeding conducted pursuant to subsection E.","type":"section","prefixes":["L"],"prefix":"L","entire_prefix":"L","prefix_anchor":"L","level":1,"prior_prefix":"K"}},"ancestry":[{"id":13084,"edition_id":1,"name":"Virginia Electric Utility Regulation Act","identifier":"23","label":"chapter","depth":2,"order_by":1,"parent_id":12881,"metadata":{},"date_created":"2026-06-26 03:44:15","date_modified":"2026-06-26 03:44:15","permalink":{"id":250597,"object_type":"structure","relational_id":13084,"identifier":"23","token":"56\/23","url":"\/56\/23\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12881,"edition_id":1,"name":"Public Service Companies","identifier":"56","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:58","date_modified":"2026-06-26 03:43:58","permalink":{"id":248473,"object_type":"structure","relational_id":12881,"identifier":"56","token":"56","url":"\/56\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":62210,"structure_id":13084,"section_number":"56-576","catch_line":"Definitions","url":"\/56-576\/","token":"56\/23\/56-576","metadata":false},{"id":79838,"structure_id":13084,"section_number":"56-577","catch_line":"Schedule for transition to retail competition; Commission authority; exemptions; pilot programs","url":"\/56-577\/","token":"56\/23\/56-577","metadata":false},{"id":69790,"structure_id":13084,"section_number":"56-577.1","catch_line":"Electric utilities; retail competition; pilot program","url":"\/56-577.1\/","token":"56\/23\/56-577.1","metadata":false},{"id":66769,"structure_id":13084,"section_number":"56-578","catch_line":"Nondiscriminatory access to transmission and distribution system","url":"\/56-578\/","token":"56\/23\/56-578","metadata":false},{"id":76158,"structure_id":13084,"section_number":"56-579","catch_line":"Regional transmission entities","url":"\/56-579\/","token":"56\/23\/56-579","metadata":false},{"id":77551,"structure_id":13084,"section_number":"56-580","catch_line":"Transmission and distribution of electric energy","url":"\/56-580\/","token":"56\/23\/56-580","metadata":false},{"id":76009,"structure_id":13084,"section_number":"56-581","catch_line":"Regulation of rates subject to Commission's jurisdiction","url":"\/56-581\/","token":"56\/23\/56-581","metadata":false},{"id":70038,"structure_id":13084,"section_number":"56-581.1","catch_line":"Repealed","url":"\/56-581.1\/","token":"56\/23\/56-581.1","metadata":false},{"id":75586,"structure_id":13084,"section_number":"56-582","catch_line":"Rate caps","url":"\/56-582\/","token":"56\/23\/56-582","metadata":false},{"id":60164,"structure_id":13084,"section_number":"56-583","catch_line":"Repealed","url":"\/56-583\/","token":"56\/23\/56-583","metadata":false},{"id":60319,"structure_id":13084,"section_number":"56-584","catch_line":"Stranded costs","url":"\/56-584\/","token":"56\/23\/56-584","metadata":false},{"id":66252,"structure_id":13084,"section_number":"56-585","catch_line":"Default service","url":"\/56-585\/","token":"56\/23\/56-585","metadata":false},{"id":67687,"structure_id":13084,"section_number":"56-585.1","catch_line":"Generation, distribution, and transmission rates after capped rates terminate or expire","url":"\/56-585.1\/","token":"56\/23\/56-585.1","metadata":false},{"id":75688,"structure_id":13084,"section_number":"56-585.1:1","catch_line":"Transitional Rate Period: review of rates, terms and conditions for utility generation facilities","url":"\/56-585.1_1\/","token":"56\/23\/56-585.1_1","metadata":false},{"id":86211,"structure_id":13084,"section_number":"56-585.1:10","catch_line":"Program for electric infrastructure serving business parks","url":"\/56-585.1_10\/","token":"56\/23\/56-585.1_10","metadata":false},{"id":82389,"structure_id":13084,"section_number":"56-585.1:11","catch_line":"Development of offshore wind capacity","url":"\/56-585.1_11\/","token":"56\/23\/56-585.1_11","metadata":false},{"id":82816,"structure_id":13084,"section_number":"56-585.1:12","catch_line":"Multi-family shared solar program","url":"\/56-585.1_12\/","token":"56\/23\/56-585.1_12","metadata":false},{"id":84410,"structure_id":13084,"section_number":"56-585.1:13","catch_line":"Recovery of costs associated with investment in transportation electrification","url":"\/56-585.1_13\/","token":"56\/23\/56-585.1_13","metadata":false},{"id":68074,"structure_id":13084,"section_number":"56-585.1:14","catch_line":"(Effective until December 31, 2029) Recovery of development costs associated with small modular reactor","url":"\/56-585.1_14\/","token":"56\/23\/56-585.1_14","metadata":false},{"id":86919,"structure_id":13084,"section_number":"56-585.1:15","catch_line":"(Effective until July 1, 2034) Recovery of development costs associated with small modular nuclear facility","url":"\/56-585.1_15\/","token":"56\/23\/56-585.1_15","metadata":false},{"id":54669,"structure_id":13084,"section_number":"56-585.1:16","catch_line":"Virtual power plant pilot program","url":"\/56-585.1_16\/","token":"56\/23\/56-585.1_16","metadata":false},{"id":68837,"structure_id":13084,"section_number":"56-585.1:2","catch_line":"Pilot program for energy assistance and weatherization","url":"\/56-585.1_2\/","token":"56\/23\/56-585.1_2","metadata":false},{"id":78934,"structure_id":13084,"section_number":"56-585.1:3","catch_line":"Pilot programs for community solar development","url":"\/56-585.1_3\/","token":"56\/23\/56-585.1_3","metadata":false},{"id":86978,"structure_id":13084,"section_number":"56-585.1:4","catch_line":"Development of solar and wind generation and energy storage capacity in the Commonwealth","url":"\/56-585.1_4\/","token":"56\/23\/56-585.1_4","metadata":false},{"id":75808,"structure_id":13084,"section_number":"56-585.1:5","catch_line":"Pilot program for underground transmission lines","url":"\/56-585.1_5\/","token":"56\/23\/56-585.1_5","metadata":false},{"id":73594,"structure_id":13084,"section_number":"56-585.1:6","catch_line":"Pilot Programs to deploy electric power storage batteries","url":"\/56-585.1_6\/","token":"56\/23\/56-585.1_6","metadata":false},{"id":73105,"structure_id":13084,"section_number":"56-585.1:7","catch_line":"Pilot program for electric generation by public schools","url":"\/56-585.1_7\/","token":"56\/23\/56-585.1_7","metadata":false},{"id":83744,"structure_id":13084,"section_number":"56-585.1:8","catch_line":"Pilot program for municipal net energy metering","url":"\/56-585.1_8\/","token":"56\/23\/56-585.1_8","metadata":false},{"id":78790,"structure_id":13084,"section_number":"56-585.1:9","catch_line":"Provision of broadband capacity to unserved areas of the Commonwealth","url":"\/56-585.1_9\/","token":"56\/23\/56-585.1_9","metadata":false},{"id":56958,"structure_id":13084,"section_number":"56-585.2","catch_line":"Repealed","url":"\/56-585.2\/","token":"56\/23\/56-585.2","metadata":false},{"id":87343,"structure_id":13084,"section_number":"56-585.3","catch_line":"Regulation of cooperative rates after rate caps","url":"\/56-585.3\/","token":"56\/23\/56-585.3","metadata":false},{"id":80324,"structure_id":13084,"section_number":"56-585.4","catch_line":"Net energy metering transition provisions for electric cooperatives","url":"\/56-585.4\/","token":"56\/23\/56-585.4","metadata":false},{"id":81665,"structure_id":13084,"section_number":"56-585.5","catch_line":"Generation of electricity from renewable and zero carbon sources","url":"\/56-585.5\/","token":"56\/23\/56-585.5","metadata":false},{"id":57139,"structure_id":13084,"section_number":"56-585.6","catch_line":"Universal service fee; Percentage of Income Payment Program and Fund","url":"\/56-585.6\/","token":"56\/23\/56-585.6","metadata":false},{"id":63065,"structure_id":13084,"section_number":"56-585.7","catch_line":"On-bill tariff program; electric cooperatives","url":"\/56-585.7\/","token":"56\/23\/56-585.7","metadata":false},{"id":84206,"structure_id":13084,"section_number":"56-585.8","catch_line":"Biennial rate reviews","url":"\/56-585.8\/","token":"56\/23\/56-585.8","metadata":false},{"id":78391,"structure_id":13084,"section_number":"56-586","catch_line":"Emergency service provider","url":"\/56-586\/","token":"56\/23\/56-586","metadata":false},{"id":60930,"structure_id":13084,"section_number":"56-586.1","catch_line":"Electric energy emergencies","url":"\/56-586.1\/","token":"56\/23\/56-586.1","metadata":false},{"id":63919,"structure_id":13084,"section_number":"56-587","catch_line":"Licensure of retail electric energy suppliers and persons providing other competitive services","url":"\/56-587\/","token":"56\/23\/56-587","metadata":false},{"id":69085,"structure_id":13084,"section_number":"56-588","catch_line":"Licensing of aggregators","url":"\/56-588\/","token":"56\/23\/56-588","metadata":false},{"id":57502,"structure_id":13084,"section_number":"56-589","catch_line":"Municipal and state aggregation","url":"\/56-589\/","token":"56\/23\/56-589","metadata":false},{"id":59256,"structure_id":13084,"section_number":"56-589.1","catch_line":"Energy generation by public school buildings and facilities","url":"\/56-589.1\/","token":"56\/23\/56-589.1","metadata":false},{"id":86105,"structure_id":13084,"section_number":"56-590","catch_line":"Divestiture, functional separation and other corporate relationships","url":"\/56-590\/","token":"56\/23\/56-590","metadata":false},{"id":67461,"structure_id":13084,"section_number":"56-591","catch_line":"Application of antitrust laws","url":"\/56-591\/","token":"56\/23\/56-591","metadata":false},{"id":85339,"structure_id":13084,"section_number":"56-592","catch_line":"Consumer education and marketing practices","url":"\/56-592\/","token":"56\/23\/56-592","metadata":false},{"id":75703,"structure_id":13084,"section_number":"56-592.1","catch_line":"Consumer education program; scope and funding","url":"\/56-592.1\/","token":"56\/23\/56-592.1","metadata":false},{"id":77066,"structure_id":13084,"section_number":"56-593","catch_line":"Retail customers' private right of action; marketing practices","url":"\/56-593\/","token":"56\/23\/56-593","metadata":false},{"id":76060,"structure_id":13084,"section_number":"56-594","catch_line":"Net energy metering provisions","url":"\/56-594\/","token":"56\/23\/56-594","metadata":false},{"id":74615,"structure_id":13084,"section_number":"56-594.01","catch_line":"Net energy metering provisions for electric cooperative service territories","url":"\/56-594.01\/","token":"56\/23\/56-594.01","metadata":false},{"id":56626,"structure_id":13084,"section_number":"56-594.01:1","catch_line":"Local facilities usage charges; electric cooperatives","url":"\/56-594.01_1\/","token":"56\/23\/56-594.01_1","metadata":false},{"id":66346,"structure_id":13084,"section_number":"56-594.02","catch_line":"Solar-powered or wind-powered electricity generation; power purchase agreements; pilot programs","url":"\/56-594.02\/","token":"56\/23\/56-594.02","metadata":false},{"id":82596,"structure_id":13084,"section_number":"56-594.1","catch_line":"Interconnection by farms","url":"\/56-594.1\/","token":"56\/23\/56-594.1","metadata":false},{"id":78424,"structure_id":13084,"section_number":"56-594.2","catch_line":"Small agricultural generators","url":"\/56-594.2\/","token":"56\/23\/56-594.2","metadata":false},{"id":54132,"structure_id":13084,"section_number":"56-594.3","catch_line":"Shared solar programs; Phase II Utility","url":"\/56-594.3\/","token":"56\/23\/56-594.3","metadata":false},{"id":80234,"structure_id":13084,"section_number":"56-594.4","catch_line":"Shared solar programs; Phase I Utility","url":"\/56-594.4\/","token":"56\/23\/56-594.4","metadata":false},{"id":77419,"structure_id":13084,"section_number":"56-595","catch_line":"Repealed","url":"\/56-595\/","token":"56\/23\/56-595","metadata":false},{"id":69517,"structure_id":13084,"section_number":"56-596","catch_line":"Consideration of economic development; report","url":"\/56-596\/","token":"56\/23\/56-596","metadata":false},{"id":82462,"structure_id":13084,"section_number":"56-596.1","catch_line":"New generating facilities utilizing energy derived from sunlight and from wind; report","url":"\/56-596.1\/","token":"56\/23\/56-596.1","metadata":false},{"id":57383,"structure_id":13084,"section_number":"56-596.2","catch_line":"Energy efficiency policy and programs; financial assistance for low-income customers","url":"\/56-596.2\/","token":"56\/23\/56-596.2","metadata":false},{"id":80361,"structure_id":13084,"section_number":"56-596.2:1","catch_line":"Incentives for energy conservation measures and solar energy equipment","url":"\/56-596.2_1\/","token":"56\/23\/56-596.2_1","metadata":false},{"id":70146,"structure_id":13084,"section_number":"56-596.2:2","catch_line":"(Expires January 1, 2031) Energy efficiency savings targets for certain customers","url":"\/56-596.2_2\/","token":"56\/23\/56-596.2_2","metadata":false},{"id":71672,"structure_id":13084,"section_number":"56-596.3","catch_line":"Electric generation, transmission, and distribution; report","url":"\/56-596.3\/","token":"56\/23\/56-596.3","metadata":false},{"id":54473,"structure_id":13084,"section_number":"56-596.4","catch_line":"Electric utilities; local reliability data","url":"\/56-596.4\/","token":"56\/23\/56-596.4","metadata":false},{"id":75595,"structure_id":13084,"section_number":"56-596.5","catch_line":"Rate increases in certain months prohibited; Phase I Utility","url":"\/56-596.5\/","token":"56\/23\/56-596.5","metadata":false},{"id":80765,"structure_id":13084,"section_number":"56-596.6","catch_line":"Distribution cost sharing program","url":"\/56-596.6\/","token":"56\/23\/56-596.6","metadata":false}],"previous_section":{"id":77066,"structure_id":13084,"section_number":"56-593","catch_line":"Retail customers' private right of action; marketing practices","url":"\/56-593\/","token":"56\/23\/56-593","metadata":false},"next_section":{"id":74615,"structure_id":13084,"section_number":"56-594.01","catch_line":"Net energy metering provisions for electric cooperative service territories","url":"\/56-594.01\/","token":"56\/23\/56-594.01","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/56-594\/","history_text":"

This law was first created in 1999. The record of its establishment is cataloged in chapter 411<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 11 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 2004, chapter 827<\/a>; in 2006, chapter 470<\/a>; in 2007, chapters 877<\/a>, 888<\/a>, and 933<\/a>; in 2009, chapter 804<\/a>; in 2011, chapter 239<\/a>; in 2013, chapter 268<\/a>; in 2015, chapters 431<\/a> and 432<\/a>; in 2017, chapters 565<\/a> and 581<\/a>; in 2019, chapters 742<\/a> and 763<\/a>; in 2020, chapters 1187<\/a>, 1188<\/a>, 1189<\/a>, 1193<\/a>, 1194<\/a>, and 1239<\/a>; in 2024, chapters 783<\/a> and 827<\/a>.<\/p>","references":[{"id":74569,"section_number":"15.2-2232","catch_line":"Legal status of plan","order_by":null,"url":"\/15.2-2232\/"},{"id":63216,"section_number":"15.2-2288.7","catch_line":"Local regulation of solar facilities","order_by":null,"url":"\/15.2-2288.7\/"},{"id":78550,"section_number":"15.2-2316.6","catch_line":"Definitions","order_by":null,"url":"\/15.2-2316.6\/"},{"id":58804,"section_number":"2.2-2279","catch_line":"Short title; definitions","order_by":null,"url":"\/2.2-2279\/"},{"id":66890,"section_number":"45.2-1917","catch_line":" Low-to-Moderate Income Solar Loan and Rebate Pilot Program","order_by":null,"url":"\/45.2-1917\/"},{"id":77551,"section_number":"56-580","catch_line":"Transmission and distribution of electric energy","order_by":null,"url":"\/56-580\/"},{"id":83744,"section_number":"56-585.1:8","catch_line":"Pilot program for municipal net energy metering","order_by":null,"url":"\/56-585.1_8\/"},{"id":80324,"section_number":"56-585.4","catch_line":"Net energy metering transition provisions for electric cooperatives","order_by":null,"url":"\/56-585.4\/"},{"id":59256,"section_number":"56-589.1","catch_line":"Energy generation by public school buildings and facilities","order_by":null,"url":"\/56-589.1\/"},{"id":74615,"section_number":"56-594.01","catch_line":"Net energy metering provisions for electric cooperative service territories","order_by":null,"url":"\/56-594.01\/"},{"id":66346,"section_number":"56-594.02","catch_line":"Solar-powered or wind-powered electricity generation; power purchase agreements; pilot programs","order_by":null,"url":"\/56-594.02\/"},{"id":78424,"section_number":"56-594.2","catch_line":"Small agricultural generators","order_by":null,"url":"\/56-594.2\/"},{"id":80765,"section_number":"56-596.6","catch_line":"Distribution cost sharing program","order_by":null,"url":"\/56-596.6\/"},{"id":81349,"section_number":"58.1-2636","catch_line":"Revenue share for solar energy projects and energy storage systems","order_by":null,"url":"\/58.1-2636\/"},{"id":85671,"section_number":"58.1-2900","catch_line":"Imposition of tax","order_by":null,"url":"\/58.1-2900\/"},{"id":60760,"section_number":"58.1-3814","catch_line":"Water or heat, light and power companies","order_by":null,"url":"\/58.1-3814\/"}],"refers_to":[{"id":62210,"section_number":"56-576","catch_line":"Definitions","order_by":null,"url":"\/56-576\/"},{"id":78934,"section_number":"56-585.1:3","catch_line":"Pilot programs for community solar development","order_by":null,"url":"\/56-585.1_3\/"},{"id":83744,"section_number":"56-585.1:8","catch_line":"Pilot program for municipal net energy metering","order_by":null,"url":"\/56-585.1_8\/"},{"id":74615,"section_number":"56-594.01","catch_line":"Net energy metering provisions for electric cooperative service territories","order_by":null,"url":"\/56-594.01\/"},{"id":78424,"section_number":"56-594.2","catch_line":"Small agricultural generators","order_by":null,"url":"\/56-594.2\/"}],"permalink":{"id":250787,"object_type":"law","relational_id":76060,"identifier":"56-594","token":"56\/23\/56-594","url":"\/56-594\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/56-594\/","token":"56\/23\/56-594","dublin_core":{"Title":"Net energy metering provisions","Type":"Text","Format":"text\/html","Identifier":"\u00a7 56-594","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> The Commission<\/span> shall establish by regulation a program that affords eligible customer-generators<\/span><\/span> the opportunity to participate in net energy metering<\/span>, and a program, to begin no later than July 1, 2014, for customers of investor-owned utilities and to begin no later than July 1, 2015, and to end July 1, 2019, for customers of electric cooperatives<\/span> as provided in subsection G, to afford eligible agricultural customer-generators<\/span><\/span> the opportunity to participate in net energy metering<\/span>. The regulations may include, but need not be limited to, requirements for (i) retail sellers; (ii) owners or operators of distribution or transmission facilities; (iii) providers of default<\/span> service; (iv) eligible customer-generators<\/span><\/span>; (v) eligible agricultural customer-generators<\/span><\/span>; or (vi) any combination of the foregoing, as the Commission<\/span> determines will facilitate the provision of net energy metering<\/span>, provided that the Commission<\/span> determines that such requirements do not adversely affect the public interest. On and after July 1, 2017, small agricultural generators<\/span> or eligible agricultural customer-generators<\/span><\/span> may elect to interconnect pursuant to the provisions of this section or as small agricultural generators<\/span> pursuant to § 56-594.2<\/a>, but not both. Existing eligible agricultural customer-generators<\/span><\/span> may elect to become small agricultural generators<\/span>, but may not revert to being eligible agricultural customer-generators<\/span><\/span> after such election. On and after July 1, 2019, interconnection of eligible agricultural customer-generators<\/span><\/span> shall cease for electric cooperatives<\/span> only, and such facilities shall interconnect solely as small agricultural generators<\/span>. For electric cooperatives<\/span>, eligible agricultural customer-generators<\/span><\/span> whose renewable energy<\/span> generating facilities were interconnected before July 1, 2019, may continue to participate in net energy metering<\/span> pursuant to this section for a period not to exceed 25 years from the date of their renewable energy<\/span> generating facility’s original interconnection. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> For the purpose of this section:\n\t\t\t“Eligible agricultural customer-generator<\/span><\/span>” means a customer that operates a renewable energy<\/span> generating facility as part of an agricultural business, which generating facility (i) uses as its sole energy source solar power, wind power, or aerobic or anaerobic digester gas, (ii) does not have an aggregate generation capacity of more than 500 kilowatts, (iii) is located on land owned or controlled by the agricultural business, (iv) is connected to the customer’s wiring on the customer’s side of its interconnection with the distributor<\/span>; (v) is interconnected and operated in parallel with an electric company<\/span>’s transmission and distribution facilities, and (vi) is used primarily to provide energy to metered accounts of the agricultural business. An eligible agricultural customer-generator<\/span><\/span> may be served by multiple meters serving the eligible agricultural customer-generator<\/span><\/span> that are located at the same or adjacent sites, such that the eligible agricultural customer-generator<\/span><\/span> may aggregate in a single account the electricity consumption and generation measured by the meters, provided that the same utility serves all such meters. The aggregated load shall be served under the appropriate tariff.\n\t\t\t“Eligible customer-generator<\/span><\/span>” means a customer that owns and operates, or contracts<\/span> with other persons<\/span> to own, operate, or both, an electrical generating facility, including any additions or enhancements such as battery<\/span> storage or a smart inverter, that (i) has a capacity of not more than 25 kilowatts for residential customers and not more than three megawatts for nonresidential customers; (ii) uses as its total source of fuel renewable energy<\/span>, as defined in § 56-576<\/a>; (iii) is located on land owned or leased by the customer and is connected to the customer’s wiring on the customer’s side of its interconnection with the distributor<\/span>; (iv) is interconnected and operated in parallel with an electric company<\/span>’s transmission and distribution facilities; and (v) is intended primarily to offset all or part of the customer’s own electricity requirements. No contract<\/span>, lease, or arrangement by which a third party<\/span> owns, maintains, or operates an electrical generating facility on an eligible customer-generator<\/span><\/span>’s property shall constitute the sale of electricity or cause the customer-generator<\/span> or the third party<\/span> to be considered an electric utility<\/span> by virtue of participating in net energy metering<\/span>. In addition to the electrical generating facility size limitations in clause (i), the capacity of any generating facility installed under this section between July 1, 2015, and July 1, 2020, shall not exceed the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available. In addition to the electrical generating facility size limitation in clause (i), in the certificated service territory of a Phase I Utility, the capacity of any generating facility installed under this section after July 1, 2020, shall not exceed 100 percent of the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available, and in the certificated service territory of a Phase II Utility, the capacity of any generating facility installed under this section after July 1, 2020, shall not exceed 150 percent of the expected annual energy consumption based on the previous 12 months of billing history or an annualized calculation of billing history if 12 months of billing history is not available.\n\t\t\t“Net energy metering<\/span>” means measuring the difference, over the net metering period<\/span>, between (i) electricity supplied to an eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> from the electric grid and (ii) the electricity generated and fed back to the electric grid by the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span>.\n\t\t\t“Net metering period<\/span>” means the 12-month period following the date of final interconnection of the eligible customer-generator<\/span><\/span>’s or eligible agricultural customer-generator<\/span><\/span>’s system with an electric service provider, and each 12-month period thereafter.\n\t\t\t“Small agricultural generator<\/span>” has the same meaning that is ascribed to that term in § 56-594.2<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The Commission<\/span>’s regulations shall ensure that (i) the metering equipment installed for net metering shall be capable of measuring the flow of electricity in two directions and (ii) any eligible customer-generator<\/span><\/span> seeking to participate in net energy metering<\/span> shall notify its supplier<\/span> and receive approval to interconnect prior to installation of an electrical generating facility. The electric distribution company<\/span> shall have 30 days from the date of notification for residential facilities, and 60 days from the date of notification for nonresidential facilities, to determine whether the interconnection requirements have been met. Such regulations shall allocate fairly the cost of such equipment and any necessary interconnection. An eligible customer-generator<\/span><\/span>’s electrical generating system, and each electrical generating system of an eligible agricultural customer-generator<\/span><\/span>, shall meet all applicable safety and performance standards established by the National Electrical Code, the Institute of Electrical and Electronics Engineers, and accredited testing laboratories such as Underwriters Laboratories. Beyond the requirements set forth in this section and to ensure public safety, power quality, and reliability of the supplier<\/span>’s electric distribution system, an eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> whose electrical generating system meets those standards and rules shall bear all reasonable costs of equipment required for the interconnection to the supplier<\/span>’s electric distribution system, including costs, if any, to (a) install additional controls and (b) perform or pay for additional tests. No eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> shall be required to provide proof of liability insurance or to purchase additional liability insurance as a condition of interconnection. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The Commission<\/span> shall establish minimum requirements for contracts<\/span> to be entered into by the parties to net metering arrangements. Such requirements shall protect the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> against discrimination by virtue of its status as an eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span>, and permit customers that are served on time-of-use tariffs that have electricity supply<\/span> demand charges contained within the electricity supply<\/span> portion of the time-of-use tariffs to participate as an eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span>. Notwithstanding the cost allocation provisions of subsection C, eligible customer-generators<\/span><\/span> or eligible agricultural customer-generators<\/span><\/span> served on demand charge-based time-of-use tariffs shall bear the incremental metering costs required to net meter such customers. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> If electricity generated by an eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> over the net metering period<\/span> exceeds the electricity consumed by the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span>, the customer-generator<\/span> or eligible agricultural customer-generator<\/span><\/span> shall be compensated for the excess electricity if the entity contracting to receive such electric energy and the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> enter into a power purchase agreement for such excess electricity. Upon the written request of the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span>, the supplier<\/span> that serves the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> shall enter into a power purchase agreement with the requesting eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> that is consistent with the minimum requirements for contracts<\/span> established by the Commission<\/span> pursuant to subsection D. The power purchase agreement shall obligate the supplier<\/span> to purchase such excess electricity at the rate<\/span> that is provided for such purchases in a net metering standard contract<\/span> or tariff approved by the Commission<\/span>, unless the parties agree to a higher rate<\/span>. The eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> owns any renewable energy<\/span> certificates associated with its electrical generating facility; however, at the time that the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> enters into a power purchase agreement with its supplier<\/span>, the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> shall have a one-time option to sell the renewable energy<\/span> certificates associated with such electrical generating facility to its supplier<\/span> and be compensated at an amount that is established by the Commission<\/span> to reflect the value of such renewable energy<\/span> certificates. Nothing in this section shall prevent the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> and the supplier<\/span> from voluntarily entering into an agreement for the sale and purchase of excess electricity or renewable energy<\/span> certificates at mutually-agreed upon prices if the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> does not exercise its option to sell its renewable energy<\/span> certificates to its supplier<\/span> at Commission<\/span>-approved prices at the time that the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> enters into a power purchase agreement with its supplier<\/span>. All costs incurred by the supplier<\/span> to purchase excess electricity and renewable energy<\/span> certificates from eligible customer-generators<\/span><\/span> or eligible agricultural customer-generators<\/span><\/span> shall be recoverable through its Renewable Energy<\/span> Portfolio Standard (RPS) rate<\/span> adjustment clause, if the supplier<\/span> has a Commission<\/span>-approved RPS plan. If not, then all costs shall be recoverable through the supplier<\/span>’s fuel adjustment clause. For purposes of this section, “all costs” shall be defined as the rates<\/span> paid to the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> for the purchase of excess electricity and renewable energy<\/span> certificates and any administrative costs incurred to manage the eligible customer-generator<\/span><\/span>’s or eligible agricultural customer-generator<\/span><\/span>’s power purchase arrangements. The net metering standard contract<\/span> or tariff shall be available to eligible customer-generators<\/span><\/span> or eligible agricultural customer-generators<\/span><\/span> on a first-come, first-served basis in each electric distribution company<\/span>’s Virginia service area until the rated generating capacity owned and operated by eligible customer-generators<\/span><\/span>, eligible agricultural customer-generators<\/span><\/span>, and small agricultural generators<\/span> in the Commonwealth reaches six percent, in the aggregate, five percent of which is available to all customers and one percent of which is available only to low-income utility customers<\/span> of each electric distribution company<\/span>’s adjusted Virginia peak-load forecast for the previous year, and shall require the supplier<\/span> to pay the eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> for such excess electricity in a timely manner at a rate<\/span> to be established by the Commission<\/span>.\n\t\t\tOn and after the earlier of (i) 2024 for a Phase I Utility or 2025 for a Phase II Utility or (ii) when the aggregate rated generating capacity owned and operated by eligible customer-generators<\/span><\/span>, eligible agricultural customer-generators<\/span><\/span>, and small agricultural generators<\/span> in the Commonwealth reaches three percent of a Phase I or Phase II Utility’s adjusted Virginia peak-load forecast for the previous year, the Commission<\/span> shall conduct a net energy metering<\/span> proceeding.\n\t\t\tIn any net energy metering<\/span> proceeding, the Commission<\/span> shall, after notice and opportunity for hearing<\/span>, evaluate and establish (a) an amount customers shall pay on their utility bills each month for the costs of using the utility’s infrastructure; (b) an amount the utility shall pay to appropriately compensate the customer, as determined by the Commission<\/span>, for the total benefits such facilities provide; (c) the direct and indirect economic impact of net metering to the Commonwealth; and (d) any other information the Commission<\/span> deems relevant. The Commission<\/span> shall establish an appropriate rate<\/span> structure related thereto, which shall govern compensation related to all eligible customer-generators<\/span><\/span>, eligible agricultural customer-generators<\/span><\/span>, and small agricultural generators<\/span>, except low-income utility customers<\/span>, that interconnect after the effective date established in the Commission<\/span>’s final order<\/span>. Nothing in the Commission<\/span>’s final order<\/span> shall affect any eligible customer-generators<\/span><\/span>, eligible agricultural customer-generators<\/span><\/span>, and small agricultural generators<\/span> who interconnect before the effective date of such final order<\/span>. As part of the net energy metering<\/span> proceeding, the Commission<\/span> shall evaluate the six percent aggregate net metering cap and may, if appropriate, raise or remove such cap. The Commission<\/span> shall enter its final order<\/span> in such a proceeding no later than 12 months after it commences such proceeding, and such final order<\/span> shall establish a date by which the new terms and conditions shall apply for interconnection and shall also provide that, if the terms and conditions of compensation in the final order<\/span> differ from the terms and conditions available to customers before the proceeding, low-income utility customers<\/span> may interconnect under whichever terms are most favorable to them. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> Any residential eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span>, in the service territory of a Phase II Utility who owns and operates, or contracts<\/span> with other persons<\/span> to own, operate, or both, an electrical generating facility with a capacity that exceeds 15 kilowatts shall pay to its supplier<\/span>, in addition to any other charges authorized by law<\/span>, a monthly standby charge. The amount of the standby charge and the terms and conditions under which it is assessed shall be in accordance with a methodology developed by the supplier<\/span> and approved by the Commission<\/span>. The Commission<\/span> shall approve a supplier<\/span>’s proposed standby charge methodology if it finds that the standby charges collected from all such eligible customer-generators<\/span><\/span> and eligible agricultural customer-generators<\/span><\/span> allow the supplier<\/span> to recover only the portion of the supplier<\/span>’s infrastructure costs that are properly associated with serving such eligible customer-generators<\/span><\/span> or eligible agricultural customer-generators<\/span><\/span>. Such an eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> shall not be liable for a standby charge until the date specified in an order of the Commission<\/span> approving its supplier<\/span>’s methodology. For customers of all other investor-owned utilities, on and after July 1, 2020, standby charges are prohibited for any residential eligible customer-generator<\/span><\/span> or agricultural customer-generator<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> On and after the later of July 1, 2019, or the effective date of regulations that the Commission<\/span> is required to adopt pursuant to § 56-594.01<\/a>, (i) net energy metering<\/span> in the service territory of each electric cooperative<\/span> shall be conducted as provided in a program implemented pursuant to § 56-594.01<\/a> and (ii) the provisions of this section shall not apply to net energy metering<\/span> in the service territory of an electric cooperative<\/span> except as provided in § 56-594.01<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> The Commission<\/span> may adopt such rules or establish such guidelines as may be necessary for its general administration of this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

I.<\/span> When the Commission<\/span> conducts a net energy metering<\/span> proceeding, it shall: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Investigate and determine the costs and benefits of the current net energy metering<\/span> program; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Establish an appropriate netting measurement interval for a successor tariff that is just and reasonable in light of the costs and benefits of the net metering program in aggregate, and applicable to new requests for net energy metering<\/span> service; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Determine a specific avoided cost for customer-generators<\/span>, the different type of customer-generator<\/span> technologies where the Commission<\/span> deems it appropriate, and establish the methodology for determining the compensation rate<\/span> for any net excess generation determined according to the applicable net measurement interval for any new tariff; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Make all reasonable efforts to ensure that the net energy metering<\/span> program does not result in unreasonable cost-shifting to nonparticipating electric utility<\/span> customers. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

J.<\/span> In evaluating the costs and benefits of the net energy metering<\/span> program, the Commission<\/span> shall consider: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> The aggregate impact of customer-generators<\/span> on the electric utility<\/span>’s long-run marginal costs of generation, distribution, and transmission; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The cost of service implications of customer-generators<\/span> on other customers within the same class, including an evaluation of whether customer-generators<\/span> provide an adequate rate<\/span> of return to the electrical utility compared to the otherwise applicable rate<\/span> class when, for analytical purposes only, examined as a separate class within a cost of service study; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The direct and indirect economic impact of the net energy metering<\/span> program to the Commonwealth; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Any other information it deems relevant, including environmental and resilience benefits of customer-generator<\/span> facilities. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

K.<\/span> Notwithstanding the provisions of this section, § 56-585.1:8<\/a>, or any other provision of law<\/span> to the contrary, any locality that is a nonjurisdictional customer of a Phase II Utility, as defined in § 56-585.1:3<\/a>, and is in Planning District Eight with a population greater than 1 million may (i) install solar-powered or wind-powered electric generation facilities with a rated capacity not exceeding five megawatts, whether the facilities are owned by the locality or owned and operated by a third party<\/span> pursuant to a contract<\/span> with the locality, on any locality-owned site within the locality and (ii) credit the electricity generated at any such facility as directed by the governing body of the locality to any one or more of the metered accounts of buildings or other facilities of the locality or the locality’s public school division that are located within the locality, without regard to whether the buildings and facilities are located at the same site where the electric generation facility is located or at a site contiguous thereto. The amount of the credit for such electricity to the metered accounts of the locality or its public school division shall be identical, with respect to the rate<\/span> structure, all retail rate<\/span> components, and monthly charges, to the amount the locality or public school division would otherwise be charged for such amount of electricity under its contract<\/span> with the public utility, without the assessment by the public utility of any distribution charges, service charges, or fees in connection with or arising out of such crediting. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

L.<\/span> Any eligible customer-generator<\/span><\/span> or eligible agricultural customer-generator<\/span><\/span> may participate in demand response<\/span>, energy efficiency, or peak reduction from dispatch of onsite battery<\/span> service, provided that the compensation received is in exchange for a distinct service that is not already compensated by net metering credits for electricity exported to the electric distribution system or compensated by any other utility program or tariff. The Commission<\/span> shall review and evaluate the continuing need for the imposition of standby or other charges on eligible customer-generators<\/span><\/span> or eligible agricultural customer-generators<\/span><\/span> in any net energy metering<\/span> proceeding conducted pursuant to subsection E. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nNET ENERGY METERING PROVISIONS (\u00a7 56-594)\n\nA. The Commission shall establish by regulation a program that affords eligible\ncustomer-generators the opportunity to participate in net energy metering, and a\nprogram, to begin no later than July 1, 2014, for customers of investor-owned\nutilities and to begin no later than July 1, 2015, and to end July 1, 2019, for\ncustomers of electric cooperatives as provided in subsection G, to afford\neligible agricultural customer-generators the opportunity to participate in net\nenergy metering. The regulations may include, but need not be limited to,\nrequirements for (i) retail sellers; (ii) owners or operators of distribution or\ntransmission facilities; (iii) providers of default service; (iv) eligible\ncustomer-generators; (v) eligible agricultural customer-generators; or (vi) any\ncombination of the foregoing, as the Commission determines will facilitate the\nprovision of net energy metering, provided that the Commission determines that\nsuch requirements do not adversely affect the public interest. On and after July\n1, 2017, small agricultural generators or eligible agricultural\ncustomer-generators may elect to interconnect pursuant to the provisions of this\nsection or as small agricultural generators pursuant to § 56-594.2, but not\nboth. Existing eligible agricultural customer-generators may elect to become\nsmall agricultural generators, but may not revert to being eligible agricultural\ncustomer-generators after such election. On and after July 1, 2019,\ninterconnection of eligible agricultural customer-generators shall cease for\nelectric cooperatives only, and such facilities shall interconnect solely as\nsmall agricultural generators. For electric cooperatives, eligible agricultural\ncustomer-generators whose renewable energy generating facilities were\ninterconnected before July 1, 2019, may continue to participate in net energy\nmetering pursuant to this section for a period not to exceed 25 years from the\ndate of their renewable energy generating facility’s original\ninterconnection.\n\nB. For the purpose of this section:\n\t\t\t“Eligible agricultural customer-generator” means a customer that\noperates a renewable energy generating facility as part of an agricultural\nbusiness, which generating facility (i) uses as its sole energy source solar\npower, wind power, or aerobic or anaerobic digester gas, (ii) does not have an\naggregate generation capacity of more than 500 kilowatts, (iii) is located on\nland owned or controlled by the agricultural business, (iv) is connected to the\ncustomer’s wiring on the customer’s side of its interconnection with\nthe distributor; (v) is interconnected and operated in parallel with an electric\ncompany’s transmission and distribution facilities, and (vi) is used\nprimarily to provide energy to metered accounts of the agricultural business. An\neligible agricultural customer-generator may be served by multiple meters\nserving the eligible agricultural customer-generator that are located at the\nsame or adjacent sites, such that the eligible agricultural customer-generator\nmay aggregate in a single account the electricity consumption and generation\nmeasured by the meters, provided that the same utility serves all such meters.\nThe aggregated load shall be served under the appropriate tariff.\n\t\t\t“Eligible customer-generator” means a customer that owns and\noperates, or contracts with other persons to own, operate, or both, an\nelectrical generating facility, including any additions or enhancements such as\nbattery storage or a smart inverter, that (i) has a capacity of not more than 25\nkilowatts for residential customers and not more than three megawatts for\nnonresidential customers; (ii) uses as its total source of fuel renewable\nenergy, as defined in § 56-576; (iii) is located on land owned or leased by\nthe customer and is connected to the customer’s wiring on the\ncustomer’s side of its interconnection with the distributor; (iv) is\ninterconnected and operated in parallel with an electric company’s\ntransmission and distribution facilities; and (v) is intended primarily to\noffset all or part of the customer’s own electricity requirements. No\ncontract, lease, or arrangement by which a third party owns, maintains, or\noperates an electrical generating facility on an eligible\ncustomer-generator’s property shall constitute the sale of electricity or\ncause the customer-generator or the third party to be considered an electric\nutility by virtue of participating in net energy metering. In addition to the\nelectrical generating facility size limitations in clause (i), the capacity of\nany generating facility installed under this section between July 1, 2015, and\nJuly 1, 2020, shall not exceed the expected annual energy consumption based on\nthe previous 12 months of billing history or an annualized calculation of\nbilling history if 12 months of billing history is not available. In addition to\nthe electrical generating facility size limitation in clause (i), in the\ncertificated service territory of a Phase I Utility, the capacity of any\ngenerating facility installed under this section after July 1, 2020, shall not\nexceed 100 percent of the expected annual energy consumption based on the\nprevious 12 months of billing history or an annualized calculation of billing\nhistory if 12 months of billing history is not available, and in the\ncertificated service territory of a Phase II Utility, the capacity of any\ngenerating facility installed under this section after July 1, 2020, shall not\nexceed 150 percent of the expected annual energy consumption based on the\nprevious 12 months of billing history or an annualized calculation of billing\nhistory if 12 months of billing history is not available.\n\t\t\t“Net energy metering” means measuring the difference, over the\nnet metering period, between (i) electricity supplied to an eligible\ncustomer-generator or eligible agricultural customer-generator from the electric\ngrid and (ii) the electricity generated and fed back to the electric grid by the\neligible customer-generator or eligible agricultural customer-generator.\n\t\t\t“Net metering period” means the 12-month period following the\ndate of final interconnection of the eligible customer-generator’s or\neligible agricultural customer-generator’s system with an electric service\nprovider, and each 12-month period thereafter.\n\t\t\t“Small agricultural generator” has the same meaning that is\nascribed to that term in § 56-594.2.\n\nC. The Commission’s regulations shall ensure that (i) the metering\nequipment installed for net metering shall be capable of measuring the flow of\nelectricity in two directions and (ii) any eligible customer-generator seeking\nto participate in net energy metering shall notify its supplier and receive\napproval to interconnect prior to installation of an electrical generating\nfacility. The electric distribution company shall have 30 days from the date of\nnotification for residential facilities, and 60 days from the date of\nnotification for nonresidential facilities, to determine whether the\ninterconnection requirements have been met. Such regulations shall allocate\nfairly the cost of such equipment and any necessary interconnection. An eligible\ncustomer-generator’s electrical generating system, and each electrical\ngenerating system of an eligible agricultural customer-generator, shall meet all\napplicable safety and performance standards established by the National\nElectrical Code, the Institute of Electrical and Electronics Engineers, and\naccredited testing laboratories such as Underwriters Laboratories. Beyond the\nrequirements set forth in this section and to ensure public safety, power\nquality, and reliability of the supplier’s electric distribution system,\nan eligible customer-generator or eligible agricultural customer-generator whose\nelectrical generating system meets those standards and rules shall bear all\nreasonable costs of equipment required for the interconnection to the\nsupplier’s electric distribution system, including costs, if any, to (a)\ninstall additional controls and (b) perform or pay for additional tests. No\neligible customer-generator or eligible agricultural customer-generator shall be\nrequired to provide proof of liability insurance or to purchase additional\nliability insurance as a condition of interconnection.\n\nD. The Commission shall establish minimum requirements for contracts to be\nentered into by the parties to net metering arrangements. Such requirements\nshall protect the eligible customer-generator or eligible agricultural\ncustomer-generator against discrimination by virtue of its status as an eligible\ncustomer-generator or eligible agricultural customer-generator, and permit\ncustomers that are served on time-of-use tariffs that have electricity supply\ndemand charges contained within the electricity supply portion of the\ntime-of-use tariffs to participate as an eligible customer-generator or eligible\nagricultural customer-generator. Notwithstanding the cost allocation provisions\nof subsection C, eligible customer-generators or eligible agricultural\ncustomer-generators served on demand charge-based time-of-use tariffs shall bear\nthe incremental metering costs required to net meter such customers.\n\nE. If electricity generated by an eligible customer-generator or eligible\nagricultural customer-generator over the net metering period exceeds the\nelectricity consumed by the eligible customer-generator or eligible agricultural\ncustomer-generator, the customer-generator or eligible agricultural\ncustomer-generator shall be compensated for the excess electricity if the entity\ncontracting to receive such electric energy and the eligible customer-generator\nor eligible agricultural customer-generator enter into a power purchase\nagreement for such excess electricity. Upon the written request of the eligible\ncustomer-generator or eligible agricultural customer-generator, the supplier\nthat serves the eligible customer-generator or eligible agricultural\ncustomer-generator shall enter into a power purchase agreement with the\nrequesting eligible customer-generator or eligible agricultural\ncustomer-generator that is consistent with the minimum requirements for\ncontracts established by the Commission pursuant to subsection D. The power\npurchase agreement shall obligate the supplier to purchase such excess\nelectricity at the rate that is provided for such purchases in a net metering\nstandard contract or tariff approved by the Commission, unless the parties agree\nto a higher rate. The eligible customer-generator or eligible agricultural\ncustomer-generator owns any renewable energy certificates associated with its\nelectrical generating facility; however, at the time that the eligible\ncustomer-generator or eligible agricultural customer-generator enters into a\npower purchase agreement with its supplier, the eligible customer-generator or\neligible agricultural customer-generator shall have a one-time option to sell\nthe renewable energy certificates associated with such electrical generating\nfacility to its supplier and be compensated at an amount that is established by\nthe Commission to reflect the value of such renewable energy certificates.\nNothing in this section shall prevent the eligible customer-generator or\neligible agricultural customer-generator and the supplier from voluntarily\nentering into an agreement for the sale and purchase of excess electricity or\nrenewable energy certificates at mutually-agreed upon prices if the eligible\ncustomer-generator or eligible agricultural customer-generator does not exercise\nits option to sell its renewable energy certificates to its supplier at\nCommission-approved prices at the time that the eligible customer-generator or\neligible agricultural customer-generator enters into a power purchase agreement\nwith its supplier. All costs incurred by the supplier to purchase excess\nelectricity and renewable energy certificates from eligible customer-generators\nor eligible agricultural customer-generators shall be recoverable through its\nRenewable Energy Portfolio Standard (RPS) rate adjustment clause, if the\nsupplier has a Commission-approved RPS plan. If not, then all costs shall be\nrecoverable through the supplier’s fuel adjustment clause. For purposes of\nthis section, “all costs” shall be defined as the rates paid to the\neligible customer-generator or eligible agricultural customer-generator for the\npurchase of excess electricity and renewable energy certificates and any\nadministrative costs incurred to manage the eligible customer-generator’s\nor eligible agricultural customer-generator’s power purchase arrangements.\nThe net metering standard contract or tariff shall be available to eligible\ncustomer-generators or eligible agricultural customer-generators on a\nfirst-come, first-served basis in each electric distribution company’s\nVirginia service area until the rated generating capacity owned and operated by\neligible customer-generators, eligible agricultural customer-generators, and\nsmall agricultural generators in the Commonwealth reaches six percent, in the\naggregate, five percent of which is available to all customers and one percent\nof which is available only to low-income utility customers of each electric\ndistribution company’s adjusted Virginia peak-load forecast for the\nprevious year, and shall require the supplier to pay the eligible\ncustomer-generator or eligible agricultural customer-generator for such excess\nelectricity in a timely manner at a rate to be established by the Commission.\n\t\t\tOn and after the earlier of (i) 2024 for a Phase I Utility or 2025 for a\nPhase II Utility or (ii) when the aggregate rated generating capacity owned and\noperated by eligible customer-generators, eligible agricultural\ncustomer-generators, and small agricultural generators in the Commonwealth\nreaches three percent of a Phase I or Phase II Utility’s adjusted Virginia\npeak-load forecast for the previous year, the Commission shall conduct a net\nenergy metering proceeding.\n\t\t\tIn any net energy metering proceeding, the Commission shall, after notice and\nopportunity for hearing, evaluate and establish (a) an amount customers shall\npay on their utility bills each month for the costs of using the utility’s\ninfrastructure; (b) an amount the utility shall pay to appropriately compensate\nthe customer, as determined by the Commission, for the total benefits such\nfacilities provide; (c) the direct and indirect economic impact of net metering\nto the Commonwealth; and (d) any other information the Commission deems\nrelevant. The Commission shall establish an appropriate rate structure related\nthereto, which shall govern compensation related to all eligible\ncustomer-generators, eligible agricultural customer-generators, and small\nagricultural generators, except low-income utility customers, that interconnect\nafter the effective date established in the Commission’s final order.\nNothing in the Commission’s final order shall affect any eligible\ncustomer-generators, eligible agricultural customer-generators, and small\nagricultural generators who interconnect before the effective date of such final\norder. As part of the net energy metering proceeding, the Commission shall\nevaluate the six percent aggregate net metering cap and may, if appropriate,\nraise or remove such cap. The Commission shall enter its final order in such a\nproceeding no later than 12 months after it commences such proceeding, and such\nfinal order shall establish a date by which the new terms and conditions shall\napply for interconnection and shall also provide that, if the terms and\nconditions of compensation in the final order differ from the terms and\nconditions available to customers before the proceeding, low-income utility\ncustomers may interconnect under whichever terms are most favorable to them.\n\nF. Any residential eligible customer-generator or eligible agricultural\ncustomer-generator, in the service territory of a Phase II Utility who owns and\noperates, or contracts with other persons to own, operate, or both, an\nelectrical generating facility with a capacity that exceeds 15 kilowatts shall\npay to its supplier, in addition to any other charges authorized by law, a\nmonthly standby charge. The amount of the standby charge and the terms and\nconditions under which it is assessed shall be in accordance with a methodology\ndeveloped by the supplier and approved by the Commission. The Commission shall\napprove a supplier’s proposed standby charge methodology if it finds that\nthe standby charges collected from all such eligible customer-generators and\neligible agricultural customer-generators allow the supplier to recover only the\nportion of the supplier’s infrastructure costs that are properly\nassociated with serving such eligible customer-generators or eligible\nagricultural customer-generators. Such an eligible customer-generator or\neligible agricultural customer-generator shall not be liable for a standby\ncharge until the date specified in an order of the Commission approving its\nsupplier’s methodology. For customers of all other investor-owned\nutilities, on and after July 1, 2020, standby charges are prohibited for any\nresidential eligible customer-generator or agricultural customer-generator.\n\nG. On and after the later of July 1, 2019, or the effective date of regulations\nthat the Commission is required to adopt pursuant to § 56-594.01, (i) net\nenergy metering in the service territory of each electric cooperative shall be\nconducted as provided in a program implemented pursuant to § 56-594.01 and\n(ii) the provisions of this section shall not apply to net energy metering in\nthe service territory of an electric cooperative except as provided in §\n56-594.01.\n\nH. The Commission may adopt such rules or establish such guidelines as may be\nnecessary for its general administration of this section.\n\nI. When the Commission conducts a net energy metering proceeding, it shall:\n\n 1. Investigate and determine the costs and benefits of the current net energy\n metering program;\n\n 2. Establish an appropriate netting measurement interval for a successor\n tariff that is just and reasonable in light of the costs and benefits of the\n net metering program in aggregate, and applicable to new requests for net\n energy metering service;\n\n 3. Determine a specific avoided cost for customer-generators, the different\n type of customer-generator technologies where the Commission deems it\n appropriate, and establish the methodology for determining the compensation\n rate for any net excess generation determined according to the applicable net\n measurement interval for any new tariff; and\n\n 4. Make all reasonable efforts to ensure that the net energy metering program\n does not result in unreasonable cost-shifting to nonparticipating electric\n utility customers.\n\nJ. In evaluating the costs and benefits of the net energy metering program, the\nCommission shall consider:\n\n 1. The aggregate impact of customer-generators on the electric utility’s\n long-run marginal costs of generation, distribution, and transmission;\n\n 2. The cost of service implications of customer-generators on other customers\n within the same class, including an evaluation of whether customer-generators\n provide an adequate rate of return to the electrical utility compared to the\n otherwise applicable rate class when, for analytical purposes only, examined\n as a separate class within a cost of service study;\n\n 3. The direct and indirect economic impact of the net energy metering program\n to the Commonwealth; and\n\n 4. Any other information it deems relevant, including environmental and\n resilience benefits of customer-generator facilities.\n\nK. Notwithstanding the provisions of this section, § 56-585.1:8, or any\nother provision of law to the contrary, any locality that is a nonjurisdictional\ncustomer of a Phase II Utility, as defined in § 56-585.1:3, and is in\nPlanning District Eight with a population greater than 1 million may (i) install\nsolar-powered or wind-powered electric generation facilities with a rated\ncapacity not exceeding five megawatts, whether the facilities are owned by the\nlocality or owned and operated by a third party pursuant to a contract with the\nlocality, on any locality-owned site within the locality and (ii) credit the\nelectricity generated at any such facility as directed by the governing body of\nthe locality to any one or more of the metered accounts of buildings or other\nfacilities of the locality or the locality’s public school division that\nare located within the locality, without regard to whether the buildings and\nfacilities are located at the same site where the electric generation facility\nis located or at a site contiguous thereto. The amount of the credit for such\nelectricity to the metered accounts of the locality or its public school\ndivision shall be identical, with respect to the rate structure, all retail rate\ncomponents, and monthly charges, to the amount the locality or public school\ndivision would otherwise be charged for such amount of electricity under its\ncontract with the public utility, without the assessment by the public utility\nof any distribution charges, service charges, or fees in connection with or\narising out of such crediting.\n\nL. Any eligible customer-generator or eligible agricultural customer-generator\nmay participate in demand response, energy efficiency, or peak reduction from\ndispatch of onsite battery service, provided that the compensation received is\nin exchange for a distinct service that is not already compensated by net\nmetering credits for electricity exported to the electric distribution system or\ncompensated by any other utility program or tariff. The Commission shall review\nand evaluate the continuing need for the imposition of standby or other charges\non eligible customer-generators or eligible agricultural customer-generators in\nany net energy metering proceeding conducted pursuant to subsection E.\n\nHISTORY: 1999, c. 411; 2004, c. 827; 2006, c. 470; 2007, cc. 877, 888, 933;\n2009, c. 804; 2011, c. 239; 2013, c. 268; 2015, cc. 431, 432; 2017, cc. 565,\n581; 2019, cc. 742, 763; 2020, cc. 1187, 1188, 1189, 1193, 1194, 1239; 2024, cc.\n783, 827.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}