Yes, Virginia, There Is a Way to Get More DERs on the Grid

(Editor’s note: Some stories just take longer, which is why this week’s post is coming on Thursday. Veteran energy reporter Elizabeth McGowan wrote her first piece for E/lectrify last December, digging into the challenges of getting rooftop solar online in Virginia, as solar advocates were waiting on a key decision from the State Corporation Commission. As you will read in McGowan’s update, the outcome was not what they had hoped for, but the clean energy community is now pinning its hopes on a state task force aimed at removing obstacles to distributed energy resources. It’s a great intro for next week’s post, which will be an Energy Literacy post on ─ yup ─ DERs.)

Renewable energy advocates seeking to loosen Dominion Energy’s stranglehold on nonutility-owned solar projects in Virginia would ordinarily scoff at a legislative fix centered on a groan-inducing concept — forming yet another task force.

But that didn’t seem to be the case this legislative session. Instead, advocates rallied around measures intended to smooth a now bumpy and expensive path for developers itching to connect clean energy projects of up to 5 megawatts to the electric grid.

House Bill 285 and Senate Bill 223 would create a 15-member task force charged with developing “a comprehensive strategy to advance energy affordability and the Commonwealth's transition toward integrated distributed energy resource markets.”

“Distributed energy resources,” or DERs, is industry shorthand for a range of clean technologies, including rooftop solar, battery storage, heat pumps and smart thermostats that can help ratepayers cut their electric bills. The “distributed” part means they are installed on a utility’s distribution network, the poles and wires that deliver electricity to customers’ homes and businesses from bigger transmission lines.

A final revised version of the bill now awaits the signature of Democratic Gov. Abigail Spanberger, who has through April 13 to sign, veto or amend the legislation. Identical versions were advanced on March 14, the last day of the General Assembly session, on a 22-17 vote in the Senate and a 93-3 vote in the House of Delegates.

On March 31, Spanberger signed several energy-related bills, largely aimed at protecting customers from paying for new generation and infrastructure needed for data centers or other large energy users.

If HB285/SB 223 are signed, as expected, the Distributed Energy Resources Task Force will begin meeting in July. Members will be a mix of legislators, state and local officials, consumer advocates, and small business, data center and utility representatives. Over the coming months, they will review state policies on DERs and, by Nov. 1, propose reforms to ensure these technologies can connect to the grid and participate in electric power markets.

Lt. Gov. Ghazala Hashmi, a former Democratic senator from Richmond, will lead the task force, which will be an advisory commission within the Department of Energy. Hashmi was one of the original sponsors of SB 223 and worked with key individuals and groups to design the scope and mission of the task force.

“The task force can help identify practical steps to expand these resources while maintaining affordability and reliability,” said Hashmi, who with Spanberger was elected in November. “Establishing this body will ensure Virginia thoughtfully plans for the growing role of distributed energy in meeting rising electricity demand and building a more resilient grid.”

 Advocates for the task force maintain that Virginia utility customers deserve easier access to rooftop solar and other DERs, which Dominion has thus far successfully stifled by imposing strict and cost-prohibitive standards. With accessible and affordable DERs, Virginia could serve as a model for holding the line on rate increases while also meeting unprecedented demand for electricity with a grid free of fossil fuels, they argue.

 What happens in Virginia is worth watching because the state is home to the largest concentration of data centers in the world, which has driven explosive growth in electricity demand and put an unprecedented strain on the grid. That mammoth need for energy is not only compromising utility commitments to a carbon-free grid but also saddling ratepayers with higher electric bills.

 For instance, residential customers in Dominion territory are now paying an average of $16 more per month because of a rate increase approved last November by the State Corporation Commission, the state’s utility regulators. That means the average monthly residential electric bill would be roughly $165 through 2027.

 And, in that same month, the SCC greenlighted Dominion’s first new natural gas power plant in years. The 944-megawatt Chesterfield project would be constructed on the site of a retired coal plant near the James River south of Richmond. Expected to cost upward of $1.47 billion, it is just one in a string of anticipated requests to add natural gas infrastructure that Dominion has said is necessary to accommodate data center growth.

Opponents have emphasized that Dominion’s pursuit of gas is at odds with the Virginia Clean Economy Act of 2020, which requires the utility to provide 100% clean electricity to the grid by 2045. The law also calls for the state to develop 16,000 MW of solar and onshore wind power, 5,200 MW of offshore wind generation and 3,100 MW of energy storage capacity.

Follow-up legislation in 2021 (SB 1284) stated “it is also the policy of the commonwealth to enable widespread integration of DERs, including energy storage, and to increase the security of the grid by supporting distributed renewable energy projects and storage with the potential to supply electricity to critical facilities during a widespread power outage.”

Solar pioneer Tony Smith, the CEO and founder of Staunton-based Secure Solar Futures, is encouraged by prospects for the task force. While the Nov. 1 deadline set in the bills is “ambitious,” he said, “it’s aligned with action.”

“This is about syncing policy with the moment decisions are made, not delaying them,” he said, adding that task force members won’t be starting from scratch in July because so many concrete recommendations are already circulating.

For example, a group he spearheaded, the Distributed Solar Alliance, has been engaged in back-and-forth clashes with the SCC over hurdles Dominion has erected to the deployment of small-scale solar arrays (which I covered in my previous post on E/lectrify here).

At issue was Dominion’s insistence that any solar projects of 250 kilowatts or more be equipped with a device called a “direct transfer trip,” which can automatically disconnect systems from the grid in the event of any kind of power disruption or emergency. The utility also requires that developers link these larger projects to substations with an advanced form of cabling called dark fiber optic transmission line, to the tune of between $150,000 and $250,000 per mile.

Another mandatory piece of hardware, a distributed generation relay panel – a special electric panel that also disconnects DERs from the grid in an emergency -- runs around $250,000. Combined, the equipment can add millions to a solar project’s price tag. 

Those mandates have forced schools, churches and small businesses across Dominion’s service territory to pare down or pull the plug on planned solar projects.

Following hearings on Sept. 30 and Oct. 1, 2025, the SCC issued a ruling in early February, accepting Dominion’s arguments that its requirements were “reasonable.”

The commission’s 10-page ruling acknowledged that the utility’s requirements for DTT are so high that many projects are downsized, delayed or canceled.

However, they said that Dominion’s DTT requirements are not only reasonable but also promote grid reliability and the safety of both the public and utility personnel.

For Smith, the SCC ruling is “history now,” and he supports a legislative remedy. “We put in three years of blood, sweat and tears to patiently go through a judicial process with the State Corporation Commission,” he said. “We no longer place any trust in the commission to make the right decision about this issue.”

Dominion did not respond to requests for comment about the SCC’s February ruling or the legislation creating the task force.

Veteran energy attorney Cliona Robb, who has advised Smith’s alliance, said the February decision revealed how regulators and Dominion have thwarted state legislation that encourages the advance of distributed energy.

“The SCC erred on the side of rubberstamping what Dominion wanted,” said Robb, a partner at the of Richmond-based law firm of ThompsonMcMullan. “Instead of paying attention to (Virginia laws) they’re only paying attention to Dominion Energy.”

“The General Assembly has made its support for distributed energy clear. If we’re fortunate, the task force will produce revisions to the code that get enacted in 2026,” Robb said. “Those revisions are what can force Dominion to play by national standards that are the least cost to ratepayers.”

The Pew Charitable Trusts and North Carolina Clean Energy Technology Center just released a searchable database that lists more than 400 DER-related laws  approved at the state level nationwide since 2021. The Virginia section includes SB 1284 and 21 other pieces of legislation enacted through 2025. Some of them lay out parameters for microgrids and virtual power plants, which use varying combinations of DER technologies.

(It’s notable that the SCC did not completely rubberstamp Dominion’s latest request for a $1.2 billion rate increase. The commission cut that amount by about $400 million and gave Dominion only a small increase ─ 0.1% ─ on the profit margin it is allowed on the money it invests in new generation and the grid. The utility had asked for a 0.7% increase, from 9.7% to 10.4%.)

Jim Purekal works for Advanced Energy United, an industry advocacy group, as director of legislative affairs in Virginia. He wasn’t directly involved in Smith’s SCC case, but like many, he was concerned about the outcome.

“Ratepayers are the real losers,” he said about the commission’s ruling in favor of Dominion. “It’s time for us to incentivize these projects, not suppress them with roadblocks.

Virginians are victims of a Dominion business model that discourages open competition, he said, adding that the utility wants to control the projects needed to meet the state’s electricity needs. Factored into the utility’s rate increases, those buildouts are a financial burden for ratepayers.

Conversely, solar and other distributed generation, largely funded through private capital, allow Virginians to be part of the solution by taking ownership of their energy demand.

SCC rulings “have made that harder, but we do think this task force, because of its structure, could be poised for success,” Purekal said. “To determine the value of the end product, it will come down to the individuals seated at the table.”

Josephus Allmond, previously a staff attorney at the Southern Environmental Law Center, represented the nonprofit Appalachian Voices at the SCC evidentiary hearing last fall and, like others, is encouraged by the cross-industry representation on the DER task force.

Spanberger recently appointed Allmond as Virginia’s first chief energy officer, a new cabinet-level post focused on meeting the state’s long-term energy needs and controlling electricity costs for families.

Speaking prior to Spanberger’s appointment, Allmond said he would like to see the task force “move the ball in the right direction” by opening a glide path for connecting solar projects to the grid immediately. But that will happen only if the task force better educates the SCC about when to challenge Dominion on restrictive and shortsighted safety standards.

“If not, we’re leaving an important tool in the shed,” Allmond said. “Customers have to remember that a lot of the projects Dominion is proposing, we won’t see until 2030, 2031 or beyond.”

By June 30, 2027, the task force must issue a report summarizing policies put into place and actions taken by the SCC, utilities and other stakeholders to increase market access to distributed energy resources.

Hashmi has not publicly revealed which utility will be on the 15-member task force. Some fear that if it’s Dominion, the utility will wield its outsize influence, which has kept a chokehold on third-party renewable energy projects.

That’s a valid concern, Smith said.

“But the process is designed to move beyond positions to outcomes,” he said. “If it stays outcome-focused, no single stakeholder should define the result.”

Those outcomes could help Virginia policy evolve beyond the foundational VCEA and include untapped DERs to strengthen energy affordability and sustainability as well as grid resilience and security.

“First and foremost, it’s a chance to build common ground around the state’s goals and strategies,” Smith said.

Virginia imports roughly 40% of its electricity. And during peak demand — which is summertime for both Dominion and regional grid operator PJM — the market price for those electrons surges because they are purchased at a premium cost at daily auctions. Never mind that electricity prices and demand are soaring year-round because the state is the nerve center for data center expansion and utilities can barely keep pace.

It should be rooftop solar’s chance to shine.

“Distributed generation has always been a stepchild of utility-scale solar,” Smith said. “But that’s changing. Producing energy where you use it has tremendous leverage.”

Elizabeth McGowan is a longtime energy and environment reporter based in Washington, D.C. She has won numerous awards, including a Pulitzer Prize for “The Dilbit Disaster: Inside the Biggest Oil Spill You Never Heard Of” as a staff correspondent for InsideClimate News. Her adventure memoir, Outpedaling ‘The Big C’: My Healing Cycle Across America, was published in 2020. Learn more: https://elizabethmcgowan-author.com/