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Bill

HB 903

Electric utilities; performance-based regulatory framework.

2026 Regular Session Introduced by Rip Sullivan

Virginia legislature orders study on switching electric utilities to performance-based regulation tied to reliability and clean energy goals instead of traditional cost-recovery models.

Approved by Governor-Chapter 701 (effective 7/1/2026)
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Bill Summary · HB 903

Legislative bill overview

HB 903 requires Virginia's State Corporation Commission to study and report on implementing performance-based regulation (PBR) for electric utilities. PBR ties utility profits to meeting specific performance metrics—such as reliability, customer service, and clean energy goals—rather than traditional cost-of-service regulation. The bill mandates the SCC deliver findings and recommendations to the General Assembly by a specified deadline.

Why is this important

Electric utility regulation directly affects electricity rates, service quality, and Virginia's clean energy transition. Performance-based regulation could align utility incentives with state policy goals (renewable energy, grid modernization, efficiency) but may also alter how utility profits are structured, affecting both consumer rates and utility investment decisions. The study will inform whether Virginia adopts this increasingly popular regulatory model used in other states.

Potential points of contention

  • Rate impact uncertainty: PBR could lower or raise consumer electricity rates depending on design; supporters claim efficiency gains reduce costs, while critics worry utilities will increase rates to maintain profits under new metrics
  • Utility industry concerns: Utilities may resist performance metrics that constrain profitability or impose costly compliance requirements; they may prefer predictable cost-recovery models
  • Environmental vs. affordability trade-offs: Performance metrics favoring clean energy expansion might increase short-term costs for low-income households, creating equity concerns alongside climate benefits

Compiled from official sources — confirm details with the bill’s official record.

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