                                 CODE OF VIRGINIA

PILOT PROGRAMS FOR COMMUNITY SOLAR DEVELOPMENT (§ 56-585.1:3)

A. As used in this section:
			&#8220;Eligible generation facility&#8221; means an electrical generation
facility that:

   1. Exclusively uses energy derived from sunlight;

   2. Is placed in service on or after July 1, 2017;

   3. Is not constructed by an investor-owned utility and either (i) is acquired
   by an investor-owned utility through an asset purchase agreement or (ii) is
   subject to a power purchase agreement under which an investor-owned utility
   purchases the facility&#8217;s output from a third party; and

   4. Has a generating capacity of:
   				a. Not more than two megawatts; or
   				b. More than two megawatts if not more than two megawatts of the output
   from the electrical generation facility is selected in an investor-owned
   utility&#8217;s RFP for dedication to its pilot program.
   				&#8220;Generating capacity&#8221; means an electrical generation
   facility&#8217;s nameplate rated capacity measured in direct current
   megawatts.
   				&#8220;Investor-owned utility&#8221; means an electric utility that is a
   Phase I Utility or a Phase II Utility.
   				&#8220;Low-income community&#8221; means a census tract within the
   Commonwealth designated by the U.S. Department of Housing and Urban
   Development in 2019 or any year thereafter as a qualified census tract for
   purposes of the Low-Income Housing Tax Credit pursuant to &#xA7; 42 of the
   Internal Revenue Code.
   				&#8220;Participating generating facility&#8221; means an eligible
   generation facility that is selected by an investor-owned utility through its
   RFP for inclusion in its pilot program.
   				&#8220;Participating third party&#8221; means, for investor-owned
   utilities, a Virginia nonresidential-class customer, an affiliate, a solar
   development entity, or a nonjurisdictional customer that takes on the
   obligation, as part of a variable-output contract, of pilot program costs not
   recovered through the voluntary companion rate schedule as specified in
   subdivision B 8.
   				&#8220;Participating utility&#8221; means (i) each investor-owned utility
   and (ii) any utility consumer services cooperative that elects to conduct a
   pilot program under subsection C.
   				&#8220;Phase I Utility&#8221; means an investor-owned incumbent electric
   utility that was, as of July 1, 1999, not bound by a rate case settlement
   adopted by the Commission that extended in its application beyond January 1,
   2002.
   				&#8220;Phase II Utility&#8221; means an investor-owned incumbent electric
   utility that was, as of July 1, 1999, bound by a rate case settlement adopted
   by the Commission that extended in its application beyond January 1, 2002.
   				&#8220;Pilot program&#8221; means a community solar pilot program
   conducted by a participating utility pursuant to this section following
   approval by the Commission, under which the participating utility sells
   electric power to subscribing customers under a voluntary companion rate
   schedule and the participating utility generates or purchases electric power
   from participating generation facilities selected by the participating
   utility.
   				&#8220;Pilot program costs&#8221; means all of a participating
   utility&#8217;s identified, projected, and actual costs of its pilot program,
   including costs for (i) purchased power; (ii) renewable and other
   environmental attributes; (iii) transmission and distribution services; (iv)
   generating capacity and energy balancing; (v) RFP process costs; (vi)
   administrative and marketing charges; (vii) capital costs and operations and
   maintenance expenses related to building, owning, and operating eligible
   generating facilities; and (viii) a reasonable margin, which margin shall be
   the weighted average cost of capital.
   				&#8220;Pilot program period&#8221; means the three-year period ending
   three years following the date the first subscription is entered into by a
   customer.
   				&#8220;RFP&#8221; means the request for proposal process conducted by an
   investor-owned utility.
   				&#8220;Small eligible generation facility&#8221; means an eligible
   generation facility with a generating capacity of less than 0.5 megawatt.
   				&#8220;Solar development entity&#8221; means a business entity organized
   primarily for the purpose of proposing, developing, constructing, purchasing,
   or selling at wholesale all or part of the output of an eligible generation
   facility. A solar development entity may be organized in any form and may be a
   special purpose entity.
   				&#8220;Utility aggregation cooperative&#8221; has the same meaning
   ascribed to &#8220;cooperative&#8221; in &#xA7; 56-231.38.
   				&#8220;Utility consumer services cooperative&#8221; has the same meaning
   ascribed to &#8220;cooperative&#8221; in &#xA7; 56-231.15.
   				&#8220;Voluntary companion rate schedule&#8221; means a rate schedule
   approved by the Commission upon application by a participating utility that
   provides for the recovery of the pilot program costs by the participating
   utility.

B. Notwithstanding the provisions of subsection B of § 56-234 and §§ 56-249.6
and 56-585.1, each investor-owned utility shall conduct a pilot program for
retail customers as follows:

   1. Each investor-owned utility shall design its own pilot program and within
   six months of receiving Commission approval shall make subscriptions for
   participation in its pilot program available to its retail customers on a
   voluntary basis.

   2. An investor-owned utility shall select eligible generating facilities for
   dedication to its pilot program through an RFP process, under which process:
   				a. Each investor-owned utility shall have issued one or more public RFPs
   for eligible generating facilities and the purchase of all energy output and
   associated renewable energy certificates and other environmental attributes.
   				b. Each RFP shall:

      1. State the price and non-price criteria used by the investor-owned utility
      in selecting proposals for dedication to its pilot program; and

      2. Require as a criterion for selection that eligible generating facilities
      with a combined generating capacity of not less than two megawatts, and any
      eligible generating facility with a generating capacity of more than two
      megawatts, be first placed in service on or after July 1, 2017.
      					c. Each investor-owned utility is authorized to select, under an asset
      purchase or power purchase agreement, small eligible generating facilities
      for dedication to its pilot program without regard to whether price criteria
      are satisfied by their selection if the selection of the small eligible
      generating facilities (i) materially advances non-price criteria, including
      a criterion favoring geographic distribution of eligible generating
      facilities, provided that the generating capacity of small eligible
      generating facilities does not exceed 25 percent of the utility&#8217;s
      pilot program&#8217;s minimum generating capacity specified in subdivision
      3, or (ii) is located in a low-income community as provided in subdivision
      15.
      					d. An investor-owned utility shall not select through its RFP an
      electrical generation facility with a generating capacity of more than two
      megawatts for its pilot program unless (i) the costs can be appropriately
      documented for the portion of the facility&#8217;s output, which portion
      shall not exceed two megawatts, that is dedicated to the pilot program and
      (ii) for a Phase II Utility only, the portion of the facility&#8217;s
      generating capacity selected pursuant to this subdivision does not exceed 50
      percent of the investor-owned utility&#8217;s pilot program&#8217;s minimum
      generating capacity specified in subdivision 3. The portion of the
      facility&#8217;s generating capacity that exceeds the portion of the
      facility&#8217;s generating capacity that is selected pursuant to this
      subdivision shall not be applied in determining whether the pilot program
      satisfies requirements of subdivision 3 regarding a pilot program&#8217;s
      minimum generating capacity.
      					e. In selecting eligible generating facilities for dedication to its
      pilot program, an investor-owned utility shall give due consideration to
      relative costs, economic development benefits, and geographic diversity of
      eligible generating facilities and ensure that the selection of such
      facilities complies with the requirements of subdivision 15 regarding the
      location of eligible generating facilities in low-income communities.
      					f. The investor-owned utility&#8217;s application to the Commission
      shall include a description of the application of the price and non-price
      criteria in the investor-owned utility&#8217;s selection of participating
      generating facilities from among the proposals submitted in response to the
      RFP.

   3. The amount of generating capacity of the eligible generating facilities in
   an investor-owned utility&#8217;s pilot program shall not be less than (i) 0.5
   megawatt if the pilot program is conducted by a Phase I Utility or (ii) 10
   megawatts if the pilot program is conducted by a Phase II Utility.

   4. The amount of generating capacity of the eligible generating facilities in
   an investor-owned utility&#8217;s pilot program shall not exceed (i) 10
   megawatts if the pilot program is conducted by a Phase I Utility or (ii) 40
   megawatts if the pilot program is conducted by a Phase II Utility.

   5. An investor-owned utility shall have the option of increasing the amount of
   generating capacity of the eligible generating facilities in its pilot program
   above the amount most recently approved by the Commission, in such increments
   as the investor-owned utility elects, as follows:
   				a. Any such increase shall not result in an amount of generating capacity
   that exceeds the cap specified for the investor-owned utility&#8217;s pilot
   program under subdivision 4;
   				b. No such increase shall be authorized until such time that 90 percent of
   the amount of generating capacity of the eligible generating facilities then
   approved for its pilot program has been subscribed by customers through the
   investor-owned utility&#8217;s voluntary companion rate schedule;
   				c. An investor-owned utility may seek any number of increases in the
   amount of generating capacity of the eligible generating facilities in its
   pilot program, subject to the conditions in subdivisions a and b; and
   				d. The investor-owned utility shall select eligible generating facilities
   for any increase in the generating capacity of its pilot program through an
   RFP process that complies with the requirements of subdivision 2.

   6. Each pilot program shall expire at the end of its pilot program period,
   unless renewed or made permanent as provided in subsection G.

   7. The renewable energy certificates and other environmental attributes
   associated with the voluntary companion rate schedule shall be retired by the
   investor-owned utility on the subscribing customer&#8217;s behalf.

   8. An investor-owned utility shall recover all its pilot program costs
   primarily through its voluntary companion rate schedule. However, pilot
   program costs that are not recovered through the voluntary companion rate
   schedule shall be recoverable from a participating third party and not from
   the investor-owned utility&#8217;s Virginia jurisdictional customers. To the
   extent participating third parties are obligated for pilot program costs not
   recovered through the voluntary companion rate schedule, variable-output
   contracts between participating third parties other than affiliates and
   investor-owned utilities shall be negotiated at arm&#8217;s length and shall
   not be reviewable by the Commission and shall require no further Commission
   approvals pursuant to Chapter 4 (&#xA7; 56-76 et seq.) or other applicable
   law.

   9. At the conclusion of the pilot program period, to the extent that the pilot
   program is not made permanent or extended, each participating generating
   facility shall cease to be part of the pilot program and shall return to
   operation under the variable-output contract with a participating third party.

   10. Any fixed generation costs and fixed purchased power costs shall remain
   fixed for subscribing customers throughout the duration of the subscribing
   customers&#8217; continuous and uninterrupted participation in the voluntary
   companion rate schedule. A subscribing customer&#8217;s participation in the
   voluntary companion rate schedule shall be deemed to be continuous and
   uninterrupted notwithstanding a change in the location where the customer
   receives service if the new location continues to be within the investor-owned
   utility&#8217;s service territory and the customer provides the investor-owned
   utility with notice of the change prior to or within 90 days following the
   change. Investor-owned utilities are authorized to decrease the generation or
   purchased power rate, or both, at any time to reflect cost reductions, if any,
   subject to Commission review. If, pursuant to subdivision 9, the pilot program
   is not made permanent or continued, the subscribing customers&#8217;
   subscriptions to the voluntary companion rate schedule shall survive the
   termination of the pilot program.

   11. A subscribing customer&#8217;s usage that exceeds the amount subscribed
   for under the voluntary companion rate schedule shall be billed under the
   customer&#8217;s applicable standard rate.

   12. An investor-owned utility shall not require a subscribing customer to
   enter an agreement or subscription for participation in a pilot program of
   more than 12 months&#8217; duration unless the subscribing customer&#8217;s
   subscription exceeds 100 kW, or its equivalent in kWh, at the time the
   customer initially enters into the agreement or subscription.

   13. As part of an arrangement with a solar development entity, a utility may
   enter into an agreement that provides for risk sharing and collaboration in
   marketing a utility&#8217;s pilot program if the solar development entity is a
   participating third party.

   14. An investor-owned utility shall have the ability to close its pilot
   program to new subscribers according to the terms of the voluntary companion
   rate schedule upon notice to the Commission. This option shall be exercisable
   once per year, upon the anniversary date of the Commission&#8217;s order
   approving the voluntary companion rate schedule.

   15. Notwithstanding any provision of this section to the contrary, effective
   July 1, 2020, an investor-owned utility shall not select an eligible
   generating facility that is located outside a low-income community for
   dedication to its pilot program unless the investor-owned utility
   contemporaneously selects for dedication to its pilot program one or more
   eligible generating facilities that are located within a low-income community
   and of which the pilot program costs equal or exceed the pilot program costs
   of the eligible generating facility that is located outside a low-income
   community.

C. Notwithstanding the provisions of subsection B of § 56-234 and §§ 56-249.6
and 56-585.1, upon application of a utility consumer services cooperative the
Commission shall review a proposal submitted by the cooperative for a voluntary
companion rate schedule. If the Commission finds that the proposal is reasonable
and prudent, it shall approve the voluntary companion rate schedule for the
cooperative to conduct a pilot program pursuant to this section. No utility
consumer services cooperative shall be required to conduct a pilot program
pursuant to this section. In making an application to the Commission pursuant to
this subsection, a utility consumer services cooperative shall have flexibility
to design its voluntary companion rate schedule in a manner that,
notwithstanding anything to the contrary in this section, provides the
cooperative the ability to:

   1. Construct or purchase its generating facilities, or dedicate a portion of
   its existing power supply portfolio, for its community solar pilot program
   along with one or more other utility consumer services cooperatives, one or
   both Phase I or Phase II Utilities, or a utility aggregation cooperative,
   through requests for proposal or through a contract with a third party or a
   utility aggregation cooperative;

   2. If constructing or purchasing its generating facilities, or dedicating a
   portion of its existing power supply portfolio, for its pilot program through
   a utility aggregation cooperative, include generating facilities that may be
   already in service or may be first placed into service at any time;

   3. Utilize generating facilities of any generating capacity for its pilot
   program;

   4. Physically locate the generating facilities used for the pilot program
   inside or outside of its certificated service territory;

   5. Design its voluntary companion rate schedule in coordination with one or
   more utility consumer services cooperatives, such that participating
   subscribers from both cooperatives subscribe to an identical rate schedule;

   6. Permanently end its pilot program for all subscribers according to the
   terms of the voluntary companion rate schedule; and

   7. Recover pilot program costs that are not recovered through the voluntary
   companion rate schedule by including unrecovered purchased power expense in
   the cooperative&#8217;s cost of purchased power and through a regulatory asset
   for unrecovered costs that are not purchased power expense, subject to the
   oversight of the cooperative&#8217;s board of directors, which regulatory
   asset shall be approved by the Commission.

D. The participation of retail customers in a pilot program administered by a
participating utility in the Commonwealth is in the public interest. Voluntary
companion rate schedules approved by the Commission pursuant to this section are
necessary in order to acquire information which is in furtherance of the public
interest. The Commission shall approve the recovery of pilot program costs that
it deems to be reasonable and prudent. The Commission shall also approve the
pilot program design, the voluntary companion rate schedule, and the portfolio
of participating generating facilities. No Commission review or approval of
individual participating generating facilities, agreements, sites, or RFPs shall
be required pursuant to this section or any other section of the Code.

E. Any voluntary companion rate schedule approved by the Commission pursuant to
this section shall not be considered a tariff for electric energy provided 100
percent from renewable energy pursuant to &#xA7; 56-577.

F. Each participating utility shall report on the status of its pilot program,
including the number of subscribing customers, to the Governor, the Commission,
and the Chairmen of the House Committee on Labor and Commerce and the Senate
Committee on Commerce and Labor. The report shall be filed the earlier of (i)
three years after the date a customer of the participating utility first
subscribes to its pilot program or (ii) July 1, 2022. If a participating utility
closes its pilot program to new subscribers pursuant to subdivision B 14, it
shall notify the Governor, the Commission, and the Chairmen of the House
Committee on Labor and Commerce and the Senate Committee on Commerce and Labor
not later than three months after such closure, which notification shall (a)
describe the reasons for the closure and (b) be provided in lieu of the status
report otherwise required by this subsection.

G. At any time after filing its report on the status of its pilot program as
required by subsection F, a participating utility may, in its application
proceeding, move the Commission to make its pilot program permanent. The motion
shall include a compliance filing with conforming changes to the participating
utility&#8217;s applicable rate schedules. Upon the Commission&#8217;s granting
of the motion, the pilot program shall become a regular rate schedule of the
participating utility.

HISTORY: 2017, c. 580; 2019, cc. 742, 763; 2020, c. 663.