As part of legislation to re-regulate the state's electricity industry, Virginia enacted a voluntary renewable energy portfolio goal in 2007. Legislation passed in 2009 (HB 1994) expanded the goal, encouraging investor-owned utilities to procure a percentage of the power sold in Virginia from eligible renewable energy sources. Legislation passed in 2012 (SB 413) allows investor-owned utilities to meet up to 20% of a renewable energy goal through certificated research and development activity expenses related to renewable energy and alternative energy sources. In addition to allowing participating utilities to recover costs for RPS programs, the Virginia State Corporation Commission (SCC) also offers utilities an increased rate of return (profit) for each “RPS Goal” attained from qualified renewable energy generation facilities approved before January 1, 2013 or offshore wind and nuclear power facilities after July 1, 2013. Power purchase agreements entered into after July 1, 2013 transfers ownership of RECs to participating utility.
Each investor-owned electric utility must report to the Commission annually by November 1st on its efforts, if any, to meet the RPS Goals, its overall generation of renewable energy, and any advances in renewable generation technology. Electricity must be generated in Virginia or in the interconnection region of the regional transmission entity.
The RPS targets are defined as percentages of the amount of electricity sold in 2007 (the "base year"), minus the average annual percentage of power supplied from nuclear generators between 2004 and 2006.
The RPS schedule is as follows:
* '''RPS Goal I:''' 4% of base year sales in 2010
* '''RPS Goal II:''' Average of 4% of base year sales in 2011 through 2015, and 7% of base year sales in 2016
* '''RPS Goal III:''' Average of 7% of base year sales in 2017 through 2021, and 12% of base year sales in 2022
* '''RPS Goal IV:''' Average of 12% of base year sales in 2023 and 2024, and 15% of base year sales in 2025
Investor-owned incumbent electric utilities can gain approval to participate in the voluntary RPS program from the SCC if the utility demonstrates that it has a reasonable expectation of achieving the 12% target in 2022.
Eligible energy resources include solar, wind, geothermal, hydropower*, wave, tidal, and biomass energy.
* Onshore wind and solar power receive a double credit toward RPS goals.
* Offshore wind receives triple credit toward RPS goals.
* Existing renewable energy generators are eligible for RPS compliance.
''* Hydropower excludes pumped storage, and the amount of wood derived from trees that would be otherwise used by Virginia lumber and pulp manufacturers is capped at 1.5 million tons annually.''