Electric cooperative substation construction agreements
Summary
Virginia SB377 (Chapter 22) permits electric cooperatives to enter construction agreements with large industrial members (20+ MW demand) requiring 230+ kilovolt interconnection. Upon substation completion, the member transfers ownership to the cooperative, which operates and maintains the facility at the member's sole expense. The bill explicitly excludes all acquisition, operation, and maintenance costs from the cooperative's general and base rates, protecting non-member ratepayers from cross-subsidization. The bill is identical to HB 1191 and takes effect July 1, 2026.
What changed
Virginia Senate Bill 377 enacts Chapter 22 of the Virginia Acts of Assembly, creating a new framework for electric cooperative substation construction agreements. The legislation permits cooperatives to enter agreements with industrial members meeting specific thresholds (minimum 20 MW electric demand in the prior calendar year, requiring 230+ kV transmission interconnection). Upon final completion, the member must transfer substation ownership to the cooperative, which then operates and maintains the facility at the member's exclusive expense. Critically, all costs of acquisition, operation, and maintenance are excluded from the cooperative's general and base rates and may not be recovered from any other ratepayer.
Electric cooperatives in Virginia should review current and planned substation projects with qualifying large industrial members to ensure compliance with the new framework by the July 1, 2026 effective date. Cooperatives should consult with legal counsel to structure any affected agreements under the new provisions and confirm proper cost allocation treatment. Large industrial members seeking cooperative interconnection should prepare for ownership transfer obligations upon project completion. Non-member ratepayers benefit from the explicit rate protection provisions.
What to do next
- Review existing or planned substation agreements with large industrial members to assess compliance needs
- Consult legal counsel to structure affected agreements under SB377 provisions
- Update cost allocation procedures to exclude member-specific substation costs from general and base rates
Source document (simplified)
ChangeBridge / Virginia / SB377 Enacted SB377 Senate Bill Enacted 2026-03-31
Electric substation construction agreements; electric cooperatives.
Utility consumer services cooperatives; substation construction agreements. Permits an electric cooperative to enter into an agreement to construct a substation with a member receiving regulated electric service, with an electric demand of at least 20 megawatts during the most recent calendar year, that requires a point of interconnection with a transmission line system of 230 kilovolts or more. The bill provides that, upon final completion of a substation constructed under such an agreement, the member shall transfer ownership of such substation to the cooperative for the cooperative to operate and maintain at the member's sole expense. Under the bill, the costs of acquisition, operation, or maintenance of such a substation shall be excluded from the cooperative's general and base rates and shall not be recovered from any other ratepayer. This bill is identical to HB 1191.
Bill Details
State Virginia
Session 2026 Regular Regular Session
Chamber Senate
Official Source lis.virginia.gov/bill-details/20261/SB377
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Sponsors
Scott Surovell (Sen - D) Lamont Bagby (Sen - D) Christie New Craig (Sen - R) Todd Pillion (Sen - R)
Action History
2026-03-31 Approved by Governor-Chapter 22 (effective 7/1/2026) 2026-03-10 Governor's Action Deadline 11:59 p.m., April 13, 2026 2026-03-10 S Enrolled Bill communicated to Governor on March 10, 2026 2026-03-09 S Fiscal Impact Statement from State Corporation Commission (SB377) 2026-03-04 S Signed by President 2026-03-04 H Signed by Speaker 2026-03-04 S Bill text as passed Senate and House (SB377ER) 2026-03-04 S Enrolled 2026-02-27 H Passed House (96-Y 0-N 0-A) 2026-02-27 H Read third time 2026-02-26 H Read second time 2026-02-24 H Reported from Labor and Commerce (22-Y 0-N) 2026-02-18 H Referred to Committee on Labor and Commerce 2026-02-18 H Read first time 2026-02-18 H Placed on Calendar 2026-02-16 S Fiscal Impact Statement from State Corporation Commission (SB377) 2026-02-13 S Read third time and passed Senate (39-Y 0-N 0-A) 2026-02-12 S Engrossed by Senate - floor substitute (Voice Vote) 2026-02-12 S Senator Surovell Substitute agreed to 2026-02-12 S Reading of substitute waived (Voice Vote) 2026-02-12 S Floor offered Senator Surovell Substitute 2026-02-12 S Committee substitute rejected (Voice Vote) 2026-02-12 S Read second time 2026-02-12 S Floor substitute printed 26107668D-S2 (Surovell) 2026-02-11 S Passed by for the day Block Vote (Voice Vote) 2026-02-11 S Constitutional reading dispensed Block Vote (on 1st reading) (40-Y 0-N 0-A) 2026-02-11 S Rules suspended 2026-02-10 S Committee substitute printed 26107087D-S1 2026-02-09 S Reported from Commerce and Labor with substitute (12-Y 0-N 2-A) 2026-02-09 S Senate committee offered 2026-02-03 S Fiscal Impact Statement from State Corporation Commission (SB377) 2026-01-13 S Referred to Committee on Commerce and Labor 2026-01-13 S Prefiled and ordered printed; Offered 01-14-2026 26105247D
Votes
2026-02-09 Reported from Commerce and Labor with substitute (12-Y 0-N 2-A) Yea: 12 Nay: 0 2026-02-11 Constitutional reading dispensed Block Vote (on 1st reading) (40-Y 0-N 0-A) Yea: 40 Nay: 0 2026-02-13 Read third time and passed Senate (39-Y 0-N 0-A) Yea: 39 Nay: 0 2026-02-24 Reported from Labor and Commerce (22-Y 0-N) Yea: 22 Nay: 0 2026-02-27 Passed House (96-Y 0-N 0-A) Yea: 96 Nay: 0
Committee Referrals
2026-01-13 S Commerce and Labor 2026-02-18 H Labor and Commerce
Bill Text Versions
2026-01-13 Introduced 2026-02-09 Comm Sub 2026-02-10 Comm Sub 2026-02-12 Comm Sub 2026-03-04 Enrolled Legislative data powered by LegiScan (CC BY 4.0)
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