HOUSE BILL NO. 2027

AMENDMENT IN THE NATURE OF A SUBSTITUTE

(Proposed by the House Committee on Labor and Commerce

on ________________)

(Patron Prior to Substitute—Delegate Thomas)

A BILL to amend the Code of Virginia by adding a section numbered 56-580.1, relating to State Corporation Commission; certificate of operation for high load facilities.

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 56-580.1 as follows:

§ 56-580.1. Certificate of operation for high load facilities.

A. As used in this section, "high load facility" means any facility or combination of facilities that, in the Commission's discretion, effectively operate together as a facility that either (i) is not in operation before July 1, 2026, and has an electricity demand of 100 megawatts or greater or (ii) is in operation before July 1, 2026, and has a modification that will increase the facility's electricity demand to 100 megawatts or greater.

B. No person shall operate a high load facility without first having obtained a certificate of operation from the Commission.

C. The Commission shall permit the operation of a high load facility only upon a finding that such facility and associated facilities (i) will have no material adverse effect upon the rates paid by customers of any regulated public utility in the Commonwealth, taking into account any likely generation, transmission, or distribution needs attributable to the operation of the high load facility; (ii) will have no material adverse effect upon reliability of electric service provided by any regulated public utility; (iii) will have no material adverse effect upon the incumbent electric utility's ability to comply with applicable energy and environmental laws and regulations, including any obligation to retire electric generating units under subdivision B 3 of § 56-585.5, taking into account any likely generation, transmission, or distribution needs attributable to the operation of the high load facility; (iv) would be consistent with the Commonwealth Clean Energy Policy under § 45.2-1706.1; and (v) are not otherwise contrary to the public interest. The requirements of clauses (iii) and (iv) shall be deemed satisfied if the petition provides clear and convincing evidence that such high load facility will purchase a percentage of the high load facility's annual electric load from zero-carbon resources located within the PJM transmission region, measured on an hourly basis, equal to 50 percent of such facility's annual electric load by January 1, 2030, 70 percent of such facility's annual electric load by January 1, 2035, and 100 percent of such facility's annual electric load by January 1, 2040. For purposes of this subsection, "zero carbon resources" means electric generating units that do not emit carbon dioxide as a byproduct of combusting fuel or manufacturing fuel for combustion to generate electricity and "zero carbon resources" do not include carbon capture and sequestration facilities.

D. In review of a petition for a certificate to operate a high load facility, the Commission shall give consideration to the effect of the facility and associated facilities on the environment and establish such conditions as may be desirable or necessary to minimize adverse environmental impact and shall consider (i) whether adequate notice has been given to the incumbent electric utility serving the area where the high load facility would be located; (ii) whether the applicant has provided adequate information to the public and interested stakeholders regarding the high load facility's energy use, its impacts on the electric grid, its impacts on the environment, and its consumption of natural resources; (iii) whether there is sufficient energy, capacity, and grid infrastructure to support the operation of the high load facility; (iv) the cumulative impacts on the environment and on the reliability of the electric grid that could result from the permitting and operation of multiple high load facilities in the same geographic area; (v) the high load facility's contribution to economic development in the Commonwealth; and (vi) whether the permitting and operation of the high load facility would create an unreasonable cross-subsidy across customers served by the incumbent electric utility.

E. The Commission shall issue its final order on a petition for a certificate no later than 180 days after the submission of a complete petition. For any certificate issued pursuant to this section, the Commission shall have the discretion to establish any conditions to such certificate deemed necessary to carry out the purposes of this section.

F. The applicant for a certificate to operate a high load facility shall be assessed a fee as prescribed by the Commission for the purpose of funding the costs of administering and enforcing the provisions of this section.

2. That the State Corporation Commission (the Commission) shall conduct a proceeding to establish minimum criteria for the issuance of a certificate of operation for a high load facility, as defined in § 56-580.1 of the Code of Virginia, as created by this act, fees for applicants for certificates to operate a high load facility, and requirements for public notice and an opportunity for hearing. In developing the minimum criteria, fees, and notice and hearing requirements, the Commission shall seek public input and consult with the Department of Environmental Quality, the Department of Energy, the Commission on Electric Utility Regulation, and any other person the Commission deems appropriate. The criteria, fees, and notice requirements shall be adopted in accordance with the Commission's Rules of Practice and Procedure and shall become effective no later than July 1, 2026.