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Bill

SB 505

Electric utilities, certain; purchased power cost risk mitigation practices.

2026 Regular Session Introduced by Creigh Deeds

SB 505 creates a cost-sharing mechanism allowing Virginia utilities to adjust rates more frequently to recover fuel and purchased power costs from ratepayers.

Acts of Assembly Chapter text (CHAP0030)
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Bill Summary · SB 505

Legislative bill overview

SB 505 establishes a cost-sharing adjustment mechanism for Virginia utilities to recover fuel and purchased power costs from ratepayers. The bill requires the State Corporation Commission to develop a reporting framework that allows utilities to more dynamically adjust rates based on fluctuating energy costs rather than waiting for traditional rate case reviews.

Why is this important

Energy costs are volatile and can fluctuate significantly between rate cases, creating timing mismatches where utilities either absorb unexpected costs or customers face sudden rate spikes. This mechanism aims to streamline cost recovery and potentially stabilize rate adjustments, though it fundamentally shifts how utility expense burdens are distributed and recovered from ratepayers in real-time.

Potential points of contention

  • Rate transparency and predictability: Customers may face less predictable bills if rates adjust more frequently based on fuel costs, making household budgeting more difficult
  • Utility profit incentives: Mechanisms that allow easier cost recovery could reduce utility incentives to control fuel and purchasing expenses efficiently
  • Regulatory oversight balance: More frequent adjustments may reduce the State Corporation Commission's traditional oversight capacity to scrutinize whether costs are reasonable and justified
  • Low-income consumer impact: Vulnerable populations dependent on stable utility costs may face disproportionate burden from more volatile rate adjustments

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

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