                                 CODE OF VIRGINIA

SOLAR-POWERED OR WIND-POWERED ELECTRICITY GENERATION; POWER PURCHASE AGREEMENTS;
PILOT PROGRAMS (§ 56-594.02)

A. The Commission shall conduct pilot programs under which a person that owns or
operates a solar-powered or wind-powered electricity generation facility located
on premises owned or leased by an eligible customer-generator, as defined in §
56-594, shall be permitted to sell the electricity generated from such facility
exclusively to such eligible customer-generator under a power purchase agreement
used to provide third party financing of the costs of such a renewable
generation facility (third party power purchase agreement), subject to the
following terms, conditions, and restrictions:

   1. Notwithstanding subsection G of &#xA7; 56-580 or any other provision of
   law, a pilot program shall be conducted within the certificated service
   territory of each investor-owned electric utility (&#8220;Pilot
   Utility&#8221;);

   2. Except as provided in this subdivision, both jurisdictional and
   nonjurisdictional customers may participate in such pilot programs on a
   first-come, first-serve basis. The aggregated capacity of all generation
   facilities that are subject to such third party power purchase agreements at
   any time during the pilot program shall not exceed 500 megawatts for Virginia
   jurisdictional customers and 500 megawatts for Virginia nonjurisdictional
   customers. Such limitation on the aggregated capacity of such facilities shall
   constitute a portion of the existing limit of six percent of each Pilot
   Utility&#8217;s adjusted Virginia peak-load forecast for the previous year
   that is available to eligible customer-generators pursuant to subsection E of
   &#xA7; 56-594. Notwithstanding any provision of this section that incorporates
   provisions of &#xA7; 56-594, the seller and the customer shall elect either to
   (i) enter into their third party power purchase agreement subject to the
   conditions and provisions of the Pilot Utility&#8217;s net energy metering
   program under &#xA7; 56-594 or (ii) provide that electricity generated from
   the generation facilities subject to the third party power purchase agreement
   will not be net metered under &#xA7; 56-594, provided that an election not to
   net meter under &#xA7; 56-594 shall not exempt the third party power purchase
   agreement and the parties thereto from the requirements of this section that
   incorporate provisions of &#xA7; 56-594;

   3. A solar-powered or wind-powered generation facility with a capacity of no
   less than 50 kilowatts and no more than three megawatts shall be eligible for
   a third party power purchase agreement under a pilot program; however, if the
   customer under such agreement is a low-income utility customer, as defined in
   &#xA7; 56-576, or is an entity with tax-exempt status in accordance with
   &#xA7; 501(c) of the Internal Revenue Code of 1954, as amended, then such
   facility is eligible for the pilot program even if it does not meet the 50
   kilowatts minimum size requirement. The maximum generation capacity of three
   megawatts shall not affect the limits on the capacity of electrical generating
   capacities of 25 kilowatts for residential customers and three megawatts for
   nonresidential customers set forth in subsection B of &#xA7; 56-594, which
   limitations shall continue to apply to net energy metering generation
   facilities regardless of whether they are the subject of a third party power
   purchase agreement under the pilot program;

   4. A generation facility that is the subject of a third party power purchase
   agreement under the pilot program shall serve only one customer, and a third
   party power purchase agreement shall not serve multiple customers;

   5. The customer under a third party power purchase agreement under the pilot
   program shall be subject to the interconnection and other requirements imposed
   on eligible customer-generators pursuant to subsection C of &#xA7; 56-594,
   including the requirement that the customer bear the reasonable costs, as
   determined by the Commission, of the items described in clauses (a) and (b) of
   such subsection;

   6. A third party power purchase agreement under the pilot program shall not be
   valid unless it conforms in all respects to the requirements of the pilot
   program conducted under the provisions of this section and unless the
   Commission and the Pilot Utility are provided written notice of the
   parties&#8217; intent to enter into a third party power purchase agreement not
   less than 30 days prior to the agreement&#8217;s proposed effective date; and

   7. An affiliate of the Pilot Utility shall be permitted to offer and enter
   into third party power purchase arrangements on the same basis as may any
   other person that satisfies the requirements of being a seller under a third
   party power purchase agreement under the pilot program.

B. The Commission shall review the pilot program established pursuant to
subsection A in 2015 and every two years thereafter during the pilot program. In
its review, the Commission shall determine whether the limitations in
subdivisions A 2 and 3 should be expanded, reduced, or continued.

C. Any third party power purchase agreement that is not entered into pursuant to
the pilot program established pursuant to subsection A is prohibited in the
Pilot Utility&#8217;s service territory, unless such third party power purchase
agreement is entered into between a licensed supplier and a retail customer
pursuant to &#xA7; 56-577 where such supplier is responsible for serving 100
percent of the load requirements for each retail customer account it serves.

D. If the Commission approves a tariff proposed for electric power provided 100
percent from renewable energy that serves 100 percent of the load requirements
for each retail customer account it serves under such tariff, hereafter referred
to as a &#8220;green tariff,&#8221; such a green tariff shall not be available
to any party to a third party power purchase agreement for the account being
served by such power purchase agreement, and such an agreement shall remain in
effect notwithstanding the approval of the green tariff.

E. Nothing in this section shall be construed as (i) rendering any person, by
virtue of its selling electric power to an eligible customer-generator under a
third party power purchase agreement entered into pursuant to the pilot program
established under this section, a public utility or a competitive service
provider, (ii) imposing a requirement that such a person meet 100 percent of the
load requirements for each retail customer account it serves, or (iii) affecting
third party power purchase agreements in effect prior to July 1, 2013.

F. Nothing in this section shall abridge any rights of either party to an
agreement between a Pilot Utility and a group purchasing organization acting on
behalf of Virginia local governments regarding the purchase of electric service.

G. The Commission shall, by December 1, 2013, establish guidelines concerning
(i) information to be provided in notices required under subdivision A 6 and
(ii) procedures for aggregating and posting to the Commission&#8217;s web site
information derived from the aforesaid notices, including total capacity
utilized by pilot projects for which notice has been received and capacity
remaining available for future pilot projects. In addition, the Commission may
adopt such rules or establish such guidelines as may be necessary for its
general administration of the pilot program established under this section.

HISTORY: 2013, cc. 358, 382; 2017, c. 803; 2020, cc. 1187, 1188, 1189, 1193,
1194, 1239; 2021, Sp. Sess. I, cc. 361, 362; 2024, cc. 783, 827.