Virginia Shared Solar Program Update: Newly Effective Regulations and Minimum Bill Proceedings

On February 10, 2025, the Virginia State Corporation Commission (the “Commission”) issued an Order ("Order") adopting the amended Rules Governing Shared Solar Program (20VAC5-340-10 et seq.) (the “Rules”), to be effective February 14, 2025. The Commission amended the Rules pursuant to amended Va. Code § 56-594.3 and Va. Code § 56-594.4, which were passed by the Virginia General Assembly during its 2024 session and were effective July 1, 2024, (the "2024 Shared Solar Legislation"). The Commission previously issued an Order on November 25, 2024, adopting the amended Rules, but that Order was suspended pending its consideration of a Petition for Reconsideration and Clarification.

The 2024 Shared Solar Legislation directed the Commission to (i) modify certain Rules applicable to Virginia Electric and Power Company’s (d/b/a Dominion Energy Virginia) (Dominion) shared solar program, and (ii) establish a similar shared solar program for Appalachian Power Company (APCo) customers. The amended Rules establish APCo’s shared solar program and make modifications to Dominion’s shared solar program. These are the first material amendments to the Rules since their adoption in December 2020 (see prior alert here).  The following briefly summarizes certain key provisions from the amended Rules:

Shared Solar Rules Amendments

I.   New Shared Solar Program in APCo Territory

The amended Rules establish a new shared solar program for APCo customers, to be effective July 1, 2025.

Consistent with the 2024 Shared Solar Legislation, the definition of “shared solar facility” as used for purposes of APCo’s shared solar program (and also Dominion’s program) is as follows:

1. Generates electricity by means of a solar photovoltaic device with a nameplate capacity rating that does not exceed 5,000 kilowatts of alternating current;
2. Interconnected with the distribution system of Dominion or APCo in the Commonwealth;
3. Has at least three subscribers;
4. Has at least 40% of its capacity subscribed by customers with subscriptions of 25 kW or less; and
5. Is located on a single parcel of land.[1]

Subscriber organizations cannot enroll subscribers until the project receives an executed interconnection agreement, all required permits for the shared solar facility and, for a shared solar facility registered with APCo, after July 1, 2025.

II.    Program Sizes

• APCo Program Size: APCo’s maximum aggregate capacity is the lesser of 50 MW or 6% of peak load.
• Dominion Program Size: Dominion’s maximum aggregate capacity is divided into two parts:
  • Part 1: 200 MW
  • Part 2: Up to an additional 150 MW when the Commission determines that:

(i) at least 90% of the megawatts of the aggregate capacity of Part 1 have been subscribed, and

(ii) that project construction is substantially complete.

Additionally, 75 MW of Part 2 can serve no more than 51% of low-income customers.

A shared solar facility is “subscribed” when a customer has made an initial payment or deposit to the owner of the facility.[2]

“Substantial completion” means “all requirements for interconnection with the electric transmission or distribution system have been met by the shared solar facility and it is signified by a letter or comparable written document from the utility signifying that the shared solar facility has been constructed consistent with applicable standards for interconnection.”[3]  Dominion or APCo must provide this letter as soon as reasonably practical, but no later than 30 days after the Commissioning Test (as set forth in 20 VAC 5-314-90) or comparable project milestone.

Dominion is to notify the Commission once 90% of the Part 1 aggregate capacity has been subscribed and the related project construction is substantially complete.

III.    Substantial Completion and Program Queue

Under the amended Rules, the newly defined term “substantial completion” replaced the previously undefined term “mechanical completion” in 20VAC5-340-40. This term is used in determining how long a subscriber organization has to construct an awarded project before it gets removed from the program queue.

That time period (and additional deposit amount and extension period) now varies depending on the date the project received its award, as follows:

• Projects approved prior to January 1, 2025:
  • If substantial completion is not reached within 36 months of award date, then the project is removed from the queue, unless the subscriber organization pays an additional deposit of $25/kW to maintain its position for an additional 12 months.
• Project approved on or after January 1, 2025:
  • If substantial completion is not reached within 24 months of the award date, then the project is removed from the queue, unless the subscriber organization pays an additional deposit of $75/kW to maintain its position for an additional 9 months. If the project still fails to reach substantial completion within an additional 9 months (after paying the deposit), then the project is removed from the queue.

Also new to the amended Rules is the ability of a subscriber organization to toll the above time periods if a subscriber organization notifies the utility that it is prepared to proceed with the Commissioning Tests (as set forth in 20VAC5-314-90) or comparable project milestone, and the utility must delay proceeding with the interconnection for reasons beyond the utility’s control.[4]

Each utility must now list on its website the date the project is either anticipated to reach substantial completion or the date the project reached substantial completion.

The program queue will first rank accepted facilities by the date of awarded capacity and then by the date of anticipated substantial completion.

Subscriber organizations now have an obligation to notify the utility within 10 days of any reduction in a project’s anticipated installed AC capacity or its ability to achieve the anticipated substantial completion date.

For each wait-listed project, the list will rank projects by the date it was placed on the waitlist.

IV.    Renewable Energy Certificates

• APCo: Under APCo’s program, all renewable energy certificates (RECs) are transferred to APCo.
• Dominion: Under Dominion’s program, REC ownership/transfer depends on when a shared solar facility is registered in the program:
  • Part 1: Subscriber organizations own all RECs.
  • Part 2: Subscriber organizations transfer RECs to Dominion to be retired in compliance with Dominion’s renewable portfolio standard obligations.

V.    Minimum Bill; Minimum Bill Calculation 

In establishing the minimum bill, the Commission is to:

• Consider further costs the Commission deems relevant to ensure subscriber customers pay a fair share of the costs of providing electric services (or, in the case of Dominion, and generation sufficient to meet customer needs at all times);
• Minimize the costs shifted to customers not in a shared solar program; and
• Calculate the benefits of shared solar to the electric grid and to the Commonwealth, including among other things avoided costs, and deduct such benefits from other costs.[5]

Low-income customers are only exempt from a minimum bill if subscribed to a shared solar facility registered with Dominion, not APCo.

The minimum bill calculations will occur in their respective proceedings (see “Minimum Bill Proceedings” below).

Minimum Bill Proceedings

In addition to adopting the amendments to the Rules, in its Order, the Commission initiated minimum bill proceedings for Dominion and APCo.  Based on the Order, APCo must file its proposed minimum bill with the Commission by April 1, 2025. Dominion must file its proposed minimum bill by May 1, 2025. Their respective proposals are to include the following:

• The costs of all utility infrastructure and services used to provide electric service;
• The administrative costs necessary for operation of the shared solar program;
• Any other costs necessary to ensure subscribing customers pay a fair share of the costs of providing electric services;
• A quantification of the benefits of shared solar to the electric grid and to the Commonwealth; and
• An explanation of how the minimum bill proposed ensures that the costs shifted to customers not in a shared solar program are minimized. [6] [7]

Following receipt of each proposal, the Commission will issue procedural orders, including hearing schedules and opportunities for participation and comment.

In its Order, the Commission indicates that it anticipates holding a hearing regarding APCo’s proposed minimum bill at the end of May 2025, to implement the program by July 1, 2025. The Commission did not provide an anticipated hearing date for Dominion’s proposed minimum bill.

For more information about the Shared Solar Rules or minimum bill proceedings, please contact Brad Nowak, co-chair of Williams Mullen’s Energy Practice Group, or Dylan Gillis, associate with the Energy Practice Group.