The Virginia House of Delegates voted unanimously on Monday to pass HB 434, which directs the State Corporation Commission (SCC) to work with the state’s two major utilities to establish grid utilization metrics and develop timelines for improvement in those measurements.
The bill requires the state’s two major utilities — Dominion Energy and Appalachian Power (referred to in state law as “a Phase I Utility” and “a Phase II Utility,” respectively) — to submit petitions to the SCC by November 1, 2026 that establish metrics to assess the current performance of the electric grid and compare that performance to what the bill calls “optimal utilization of existing electric grid assets.”
If the bill is signed into law, the SCC must then issue a final order regarding the petitions by July 1, 2027, in which Commission staff will analyze the utilization data and report on the potential for each utility to improve its performance through the use of so-called “non-wires alternatives” (NWAs). The final order will also establish a timeline for each utility to increase its electric grid utilization based on approved metrics.
Following the order, the utilities will be required to submit seasonal assessments of grid utilization and implementation of the metrics, and the Commission may utilize the metrics in evaluating future utility requests for approval of cost recovery for capital investments.
After its unanimous passage in the House, the bill moved to the state Senate. It currently sits with the Senate Committee on Commerce and Labor.
The SCC has submitted a required statement in the proceeding that states the bill is not expected to have a fiscal impact on Virginia ratepayers.
The importance of improving grid utilization
Electric grid utilization measures how efficiently the electric grid is used relative to its maximum capacity. Because the grid must be built to handle the single highest moment of annual demand (i.e. the “peak”), its capability is effectively underused for most of the year.
Improving utilization means developing a means of handling peak demand that doesn’t require expensive and under-used infrastructure upgrades.
HB 434 calls for the grid utilization data gathered by the utilities to address three specific metrics:
- The ratio of distribution system peak load to total distribution electric grid capacity
- The ratio of current electric load delivered to total potential deliverable electric load over the distribution system
- The percentage of kilowatt-hours of electricity lost during the distribution process or by the distribution system
Improving utilization without costly upgrades
The bill calls for the Commission to develop recommendations for grid utilization improvements that employ NWAs, specifically calling out four technologies that qualify:
- Energy storage resources
- Customer-owned or customer-financed capacity resources
- Utility-owned distributed generation resources
- Virtual power plants (VPPs)
The use of these NWAs can reduce the need for building expensive new substations or transmission lines to handle infrequent demand spikes.
Some heading
Virginia’s electric grid operators are under unique pressure to deliver power efficiently. The state is well-known for its large data center capacity, driving what some call “the next industrial revolution.”
State lawmakers have worked in recent years to address the need for more electricity infrastructure — efforts that have not always been met with approval by the state’s executive branch. For example, former governor Glenn Youngkin vetoed a 2025 bill that would have tripled the state’s energy storage capacity.
However, things seem to be changing in 2026. Newly-elected Governor Abigail Spanberger issued a day-one executive order that directs all agencies to prepare reports with recommendations to reduce costs across a wide range of areas, including energy. And the unanimous passage of HB 434 portends a willingness to tackle energy issues head on.
Bill tracking for HB 434 is available from Virginia’s Legislative Information System.
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