A new law signed by Virginia Gov. Glenn Youngkin will require Dominion Energy to propose a virtual power plant (VPP) pilot with up to 450 MW of capacity before December of this year.
The pilot program must evaluate electric grid capacity needs and virtual power plants’ ability to provide grid services during times of peak electric demand. This includes peak shaving, a strategy used for reducing electricity consumption during peak demand periods. It must also consist of aggregations of distributed energy resources totaling up to 450 MW and include distributed energy resources located in multiple geographic regions of the Commonwealth.
VPPs are an aggregation of consumer-owned distributed energy resources such as solar-plus-batteries, electric vehicles, appliances and backup generators. The aggregation of these resources can be collectively controlled to benefit the grid and potentially obviate a utility’s need to activate a traditional peaking power plant. At their heart, VPPs enable a flexible, resilient grid that can adapt readily to shifting electricity demand on a more localized basis than centralized power.
VPPs are growing in popularity in many states as a way for utilities to draw electricity from ratepayers’ devices make it easier for utilities to meet peak demand without having to build new generation, which ultimately helps bring down energy costs for everyone.
The law requires Dominion to propose programs of at least 15 megawatts incentivizing residential customers to purchase battery storage devices. The legislation’s original version originally included language also provided “full subsidization of residential battery storage program costs for qualifying low-income utility customers,” but it was later removed. Dominion must also propose a tariff for residential, commercial and industrial customers by Nov. 15, 2026.
Dominion must use the pilot to evaluate methods to “holistically optimize demand,” including:
- a stakeholder process to receive feedback on program design;
- a review of reasonable enrollment and performance incentives for participating customers;
- potential incentives for the purchase of a battery storage device, including increased incentives for customers in historically economically disadvantaged communities;
- operational parameters for grid services, including the annual maximum number of grid events, the maximum duration of such grid events and conditions under which a participating customer may opt out of a grid event; and
- reasonable mechanisms to disenroll customers for nonperformance.
When the pilot ends in July 2028, the State Corporation Commission, which regulates utilities, will evaluate the pilot program’s effectiveness in providing grid services during times of peak demand and develop a permanent program with set procurement targets and performance metrics.
Bills to implement VPP programs are also underway this legislative session in Illinois and California, among others. The Illinois bill also directs the Illinois Power Agency to procure 15 GW of energy storage by 2035, nearly twice what was proposed in a similar 2024 bill and equal to what’s required in California, which uses twice as much electricity as Illinois.
(See also: Legislation and action ramps up for virtual power plant industry & How to leverage virtual power plants for a better grid)
By December 2027, Dominion must also propose an expansion to its electric school bus program that allows it to tap energy stored in idled buses’ batteries. Virginia’s law only applies to Dominion’s business in Virginia.
The electric utility shall not own the electric school buses as a part of its proposed program, but such electric utility may own the related storage batteries. The electric utility shall only use the bus storage batteries to access the stored electricity at times when the participating school system determines that the electric school buses are not needed to transport students.
Gov. Youngkin has a reputation for his heavy veto hands, so his signing off on the VPP legislation is a sigh of relief to VPP proponents. The governor made headlines last year after the whopping 153 bills he vetoed set a record for the most bills vetoed in Virginia’s history. This session, he broke his own record, rejecting 196 bills.
With the governor acting on all remaining bills for the Old Dominion, Virginia’s 2025 legislative session is a wrap.
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