The 2026 General Assembly is likely to amend the Virginia Clean Economy Act (VCEA) to greatly expand the construction of utility-scale batteries for our electric grid. Based on the current prices for Virginia battery installations, this may saddle ratepayers with $54 billion in new capital expenses over 20 years.
The Commission on Electric Utility Regulation (CEUR) has endorsed a revised version of a bill that passed in the 2025 General Assembly but was vetoed by Governor Glenn Youngkin (R). The senators and delegates on the panel discussed the bill briefly at two meetings last week without anybody even asking what this might cost.
The lack of attention to costs on this battery bonanza bill is legislative and media malpractice when the political meme of the day is affordability. But the same thing happened last year as a similar bill rode a railroad track to fast approval.
The Virginia Clean Economy Act, as passed in 2020, included a demand for battery installations and deemed them “in the public interest.” Appalachian Power was directed to develop 400 megawatts of battery storage by 2045, and Dominion Energy a larger 2,700 megawatts. The assumed technology to be used was batteries of up to four-hour duration, so that was a total for both utilities of up to 12,400 megawatt-hours of backup.
How many hours the batteries can discharge is the key metric, so the faceplate megawatt value must be multiplied by their claimed duration. What the VCEA is demanding now is about 12.4 gigawatt hours (GWH) of storage. From here on, this discussion will use GWH. A gigawatt hour is a great deal of electricity, the output of a nuclear plant or that natural gas plant Dominion just got approved.
Instead of the current 12.4 GWH mandate, the bill heading to the legislature in January calls for just under 92 GWH of backup battery power, an increase of almost 80 GWH over the current target for 2045. More than half of that will have to be from long-duration batteries, some of them 10-hour facilities, and some of them batteries discharging for 24 hours or longer.
As of now, there are few (if any) utility-installed 10-hour battery facilities, and large batteries producing power for 24 continuous hours are an industry pipe dream. Their current costs and thus their future costs are unknown.
But four-hour duration batteries are being built, and we have prices from bids. The Virginia State Corporation Commission (SCC) just refused Appalachian Power’s request to build one, citing the cost of about $800,000 per megawatt-hour. Dominion Energy recently filed an application for two more such facilities, now pending at the SCC, and they averaged about $675,000 per megawatt hour (or $675 million per GWH).
Battery storage systems remain eligible for federal tax credits despite the many other changes in the 2025 tax law, but it is not clear if those project prices pending at the SCC are before or after those tax credits were applied. Tax credits only mean that part of the project bill is sent to taxpayers rather than to ratepayers. The availability of tax credits didn’t save the recent Appalachian Power proposal from rejection on cost grounds.
At $675,000 per megawatt-hour, 80 GWH of additional battery storage will have a capital cost of $54 billion. That doesn’t include the annual profit margin the utilities will expect as they amortize that expense, or their annual operating costs, all of which must also come from ratepayers. The batteries already demanded by VCEA would cost $8.4 billion at $675,000 per megawatt-hour, so the new total could be more than $62 billion.
Even with the tax credits, and even if prices decline, the expense will force a major increase to everybody’s electricity bills by the 2030s and 2040s. And it will be for industrial-scale projects that produce no power of their own but merely store it from somewhere else.
Achieving that total storage goal assumes a viable 24-hour battery solution will come into existence at all and won’t cost way more than a four-hour battery. There is every chance the cost per megawatt hour for batteries that discharge that long will be higher than for the smaller, shorter duration technology. They will certainly be massive facilities.
Cost isn’t the only crucial question that failed to come up in the cursory discussion at the meeting.
If all those batteries are someday drained by a future long-term power disruption, how do the utilities recharge the 92 GWH of electricity they can hold? Does that mean we need even more generation just to prop up the batteries? If intermittent wind or solar plants must produce all the power needed, how quickly could they recharge the whole system? For 92 GWH, it won’t be overnight.
The cost of creating the electricity being stored in batteries (repeatedly) is another major ratepayer cost simply being glossed over, in the hope nobody will ask. Efficiency is well under 100%. It takes more power to recharge the batteries than they can later discharge. Their ability to hold electricity at all begins to degrade with constant cycling.
Then there are safety concerns, with public resistance to large battery installations just as problematic as their opposition to large solar projects. Will the Assembly include a mechanism to override local concerns over their location? Are the authors of this bill correct that the federal safety standard they cite applies to large, utility-scale projects?
How did the authors of this bill, whoever they really were, set those targets? There was no reference to any engineering study or modeling behind the numbers. In one of its recent integrated resource plans, an option that retired all its natural gas plants, Dominion proposed 57 GWH of added batteries, far less than the 80 GWH that this bill envisions for it by 2045. In its preferred development plan, however, only 8 GWH of battery storage were proposed by 2045. Why does Dominion need ten times more?
The bottom-line problem with this bill is that the forum where the utilities should go to propose and debate how much battery power they need, of what kind, at what cost, and when it should be built, is the SCC. These are engineering issues. The idea that legislators today can predict the best storage combinations for 2040 or 2045 is ludicrous.
Steve Haner is a Senior Fellow for Environment and Energy Policy. Steve Haner can be reached at [email protected]
