Virginia HB 921 Expands Commercial Electricity Choice

by our Energy Team 7 min read ElectricChoice.com Editorial
Welcome to Virginia highway sign

On April 13, 2026, Virginia Governor Abigail Spanberger signed HB 921 (cross-filed as SB 818) into law, marking the most significant expansion of commercial electricity choice in the Commonwealth since restructuring first began in 1999. The law takes effect July 1, 2026, and removes a longstanding cap that limited participation in the competitive market to a tiny share of Virginia's commercial and industrial (C&I) load.

Here's what changed, who qualifies, and what it means for large Virginia businesses.

1% cap removedPeak-load eligibility limit eliminated
5 MW thresholdNew noncoincident peak minimum
18-month returnDown from 5-year notice period

Background: Virginia's Limited Electricity Choice

Virginia passed its original restructuring legislation — the Virginia Electric Utility Restructuring Act — in 1999, opening the door to retail electricity competition. However, unlike states such as Texas, Pennsylvania, or Ohio that fully deregulated their retail markets, Virginia kept tight restrictions on who could actually participate.

The most significant restriction was the 1%-of-peak-load cap. Under the old rules, the total combined load of all customers shopping with competitive suppliers could not exceed 1% of the incumbent utility's previous-year peak demand. In practice, this meant only a handful of the very largest industrial customers could shop at any given time — and once the cap was reached, the door closed for everyone else.

Additionally, any customer that left utility service to buy from a competitive supplier faced a 5-year notice requirement to return to default utility supply. This created an asymmetric risk: businesses had to commit to the competitive market with essentially no easy exit ramp, even if market conditions changed.

The combined effect of these restrictions kept Virginia's competitive market among the smallest and least active in the Eastern Interconnection.

What HB 921 / SB 818 Changes

The new law makes two structural changes that dramatically expand access:

Eliminates the 1% peak-load cap There is no longer an aggregate limit on how much load can participate in the competitive market. The artificial ceiling is gone — if you qualify individually, you're in.
Sets a clear 5 MW eligibility threshold Any nonresidential customer whose noncoincident peak demand exceeds 5 MW can shop for a competitive electricity supplier. This replaces the vague, cap-constrained process with a straightforward individual qualification.
Reduces the return-to-utility notice from 5 years to 18 months Businesses that enter the competitive market can return to default utility service with just 18 months' notice, down from the previous 5-year requirement. This materially reduces the risk of shopping.

Who Qualifies Under the New Law?

The eligibility standard is based on noncoincident peak demand — your facility's highest individual electricity draw at any point, regardless of when the overall grid peak occurs. If your meter has ever recorded demand above 5 MW, you likely qualify.

The types of facilities that typically exceed 5 MW include:

  • Data centers and colocation facilities
  • Large manufacturing plants
  • University and hospital campuses
  • Large commercial office complexes and mixed-use developments
  • Distribution and fulfillment centers
  • Federal government installations

Virginia's booming data center corridor — particularly in Loudoun County, Prince William County, and the broader Northern Virginia region — means a substantial number of new facilities will meet this threshold on day one.

What This Means for Virginia Businesses

Before and after comparison of Virginia's electricity choice rules for commercial customers
Feature Before HB 921 After HB 921 (July 1, 2026)
Aggregate market cap1% of utility peak loadNo cap
Individual eligibilitySubject to cap availabilityAny C&I customer > 5 MW
Return-to-utility notice5 years18 months
Residential choiceNot availableStill not available
Market opennessEffectively closedOpen to qualifying C&I

Potential savings

Large C&I customers in other deregulated states routinely save 5–15% on supply costs by leveraging competitive procurement — whether through fixed-rate contracts, index-based pricing, or structured block-and-index products. Virginia businesses above 5 MW will now have access to the same strategies.

Reduced switching risk

The 18-month return notice (down from 5 years) is a meaningful safety net. If a competitive contract doesn't perform as expected or if market conditions shift unfavorably, a business can return to regulated utility rates in a year and a half rather than being locked out for half a decade.

More supplier competition

With the aggregate cap removed, competitive retail electricity providers (REPs) have a clear market signal to enter Virginia. Expect to see more suppliers offering tailored C&I products — including green energy options, demand-response programs, and real-time pricing — as the market matures.

What Doesn't Change

  • Residential customers are still excluded. HB 921 does not extend choice to homes or small businesses below the 5 MW threshold.
  • Delivery remains with the incumbent utility. Dominion Energy or Appalachian Power still owns the transmission and distribution infrastructure. Switching suppliers does not change who delivers your power or who responds to outages.
  • The State Corporation Commission (SCC) retains regulatory oversight. The SCC will continue to oversee the competitive market, approve supplier licenses, and address disputes.

Timeline and Next Steps

  1. April 13, 2026 — Governor Spanberger signs HB 921 / SB 818 into law.
  2. July 1, 2026 — The law takes effect. Eligible businesses can begin shopping immediately.
  3. Summer–Fall 2026 — Expect the Virginia SCC to publish updated guidelines for competitive supplier registration and customer switching procedures.
  4. 2026–2027 — Competitive suppliers begin actively marketing to Virginia's qualifying C&I customers; market infrastructure builds out.

How to Prepare If You Qualify

  1. Verify your peak demand. Pull your most recent 12 months of utility bills or request interval data from Dominion Energy / Appalachian Power. Confirm that your noncoincident peak has exceeded 5 MW.
  2. Understand your current rate structure. Know your all-in cost per kWh — including demand charges, riders, and fuel adjustments — so you have a clear baseline to compare against competitive offers.
  3. Engage a broker or consultant. The Virginia competitive market is new; working with an experienced energy advisor can help you navigate supplier options and contract structures.
  4. Evaluate your risk tolerance. Decide whether you prefer the certainty of a fixed rate, the potential upside of index pricing, or a hybrid approach. The 18-month return option gives you a backstop either way.
  5. Watch for SCC guidance. Stay tuned for official rulemaking from the State Corporation Commission on enrollment procedures, supplier licensing, and switching timelines.

The Bigger Picture: Virginia's Energy Evolution

HB 921 is part of a broader shift in Virginia's energy landscape. The Commonwealth has seen explosive growth in data center demand, aggressive clean-energy commitments under the Virginia Clean Economy Act, and increasing pressure on grid capacity. Opening the competitive market to large customers aligns with the state's need to attract private investment in generation while giving businesses more tools to manage costs and meet sustainability goals.

Whether this eventually expands to smaller commercial customers — or even residential — remains to be seen. But for now, Virginia's largest electricity consumers have a meaningful new option starting July 1.

Related Articles

Sources

  • Virginia Legislative Information System — HB 921 (2026 Session) — lis.virginia.gov
  • Virginia State Corporation Commission — scc.virginia.gov
  • U.S. Energy Information Administration — Virginia Electricity Profile — eia.gov