Virginia Mandates Appalachian Power Virtual Power Plant Pilot
- Data Centers Grid Capacity Grid Connection & Reliability Regulatory
Marin Holt
- 0
- 5 minutes read
- HB1467 passed Virginia House 98-0 on February 9, 2026 and Senate on March 12, 2026
- Directs Appalachian Power to petition SCC for VPP pilot tariff by November 15, 2026
- Pilot program launch target July 1, 2027; initial phase review by July 1, 2028
- Builds on Virginia Code 56-585.1:16 mandating Dominion Energy 450 MW VPP program
- HB562 and SB487 separately authorize Virginia electric cooperatives to establish VPP programs
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Virginia’s General Assembly passed House Bill 1467 with a unanimous 98-0 House vote on February 9, 2026, directing Appalachian Power to petition the State Corporation Commission for approval to launch a virtual power plant pilot program by November 15, 2026. The Senate passed the bill on March 12, advancing it to Governor Abigail Spanberger for signature ahead of an April 13 deadline. A companion measure, HB562 and SB487, separately authorizes Virginia’s electric cooperatives to establish VPP programs under similar terms.
What the Legislation Requires
Under HB1467, Appalachian Power, an AEP subsidiary serving southwestern Virginia, West Virginia, and Tennessee, must file a petition with the SCC proposing a tariff structure that allows residential and commercial customers to enroll in a VPP program, either directly or through third-party aggregators. Eligible distributed resources include rooftop solar, behind-the-meter battery storage, managed EV charging, and smart thermostats. Participating customers who install battery storage retain a portion of stored energy for personal backup use while selling surplus to the grid during peak demand events. Aggregators receive nondiscriminatory access to customer and grid data under the approved tariff. The pilot’s initial phase is scheduled to conclude by July 1, 2028, when the SCC will review program data and outcomes.
Why Virginia Is Acting Now
Appalachian Power approached Virginia legislators proactively about the VPP concept in response to rising electric demand driven by the rapid expansion of data centers across the state. Northern Virginia already hosts the world’s largest concentration of hyperscale data centers, and new grid connections for Dominion Energy customers have stretched to seven or more years. HB1467 extends a policy framework already codified for Dominion Energy: Virginia Code § 56-585.1:16 mandates that Dominion establish a utility-scale VPP targeting up to 450 MW of distributed resources, with at least 15 MW dedicated to residential battery storage incentives, and required Dominion to petition the SCC by December 1, 2025. Extending that mandate to Phase I utilities like Appalachian Power positions distributed flexibility as a statewide capacity strategy rather than a Dominion-only initiative.
Implications for the PJM Market
If enacted and approved by the SCC, Appalachian Power’s VPP pilot would be among the first utility-mandated programs in the PJM mid-Atlantic grid market, where capacity prices have surged as reserve margins tighten with data center load growth. PJM already operates mature demand response and capacity markets, meaning an enrolled and approved VPP resource bids capacity directly into future delivery-year auctions once sufficient participation is achieved. Virginia advocates cite lower ratepayer costs, deferred transmission investment, and improved integration of customer-owned renewables as primary benefits. The unanimous House passage signals that Virginia views aggregated distributed flexibility as a core grid capacity strategy, one it intends to replicate across all utility service territories.
Critical Perspective
Appalachian Power must petition the SCC
