An upheaval is underway in the nation’s electricity sector, and Virginia is ground zero. As the data center capital of the world, the state faces surging demand, ballooning utility bills, and a bottlenecked grid — all challenges that policymakers are navigating while maintaining a legally mandated course toward carbon neutrality.

Now, the state is poised to become the first in the nation to quantify and examine ways to reduce waste on the electric grid — a potentially monumental move toward reining in rates and speeding the clean energy transition. Maximizing usage of our existing network of power lines and related infrastructure, backers say, could also help close the gap between the public interest and that of investor-owned utilities.

House Bill 434 would direct Appalachian Power Co. and Dominion Energy, the state’s two predominant vertically integrated utilities, to gather and report detailed data on their grid utilization. The measure won final approval from Virginia’s Democratic-controlled legislature this week and now heads to the desk of Gov. Abigail Spanberger — a Democrat whose victory in November was fueled in part by anxiety over rising electricity costs. As one of the earliest proposals Spanberger offered after her election to address energy affordability, the bill looks certain to become law.

Many experts say the information the measure would require is itself meaningful: Utilities have long resisted gathering and reporting such metrics, in part because doing so could hurt their case to build out more infrastructure that pads their bottom lines.

But advocates for HB 434 say its real impact could come after the utilization data has been reviewed by regulators, who must then establish a timeline for utilities to optimize grid usage. The bill directs officials to give special consideration to ​“non-wires alternatives” like batteries and line sensors.

“The fact that Virginia became the first state to introduce this sort of legislation is pretty significant,” said Charles Hua, the founder and executive director of PowerLines, a nonprofit that aims to lower utility bills and supports HB 434. ​“But this would just be the first step of a long journey.”

The legislation is premised on an incredible reality: Roughly half the electric grid goes unused about 99% of the time. Poles, wires, substations, and other components are built out to deliver electrons during periods of maximum demand, such as during the recent cold snap brought on by Winter Storm Fern. But those peak events are rare.

“This is where this conversation has been stuck for 20 years,” said Pier LaFarge, the co-founder and CEO of Sparkfund, which helps utilities deploy and manage distributed energy sources. ​“We’ve built the grid to peak … then said, ​‘How much space is left?’ But what’s amazing is, the grid only is at peak 50 to 200 hours a year out of 8,760.”

Another factor is that some kilowatt-hours are lost as they travel from the point of generation to the customer, especially along lower-voltage AC distribution lines.

“Local poles and wires, that is, the distribution grid, is really not that efficient,” Hua said. ​“But you never would really know, because there’s not a ton of transparency around spending.”

HB 434 would prompt Appalachian Power and Dominion to examine and quantify these utilization gaps and inefficiencies as part of a regulatory proceeding this fall. The state’s utilities commission would then review and approve that data and direct the companies to increase grid utilization.

The measure requires regulators to evaluate key technologies — from energy storage to synchronous condensers, which reduce line loss — to improve use of the grid. It also opens the door for regulators to weigh grid utilization when considering utility proposals to instead expand their infrastructure.

In theory, these steps should lead to lower rates for customers. ​“Electricity rates are a math equation,” Hua said, where the top of the fraction is the cost of grid infrastructure, among other investments, and the bottom half is the number of kilowatt-hours sold.

Increasing grid utilization divides the fixed cost of the poles and wires — roughly the same numerator — by more electrons, a much higher denominator. ​“Therefore, you’re lowering the per-unit price of electricity,” Hua said, ​“and you’re lowering utility bills for all consumers.”

Exactly how significant this ​“denominator effect” will be isn’t clear yet – not without the data HB 434 requires utilities to compile. But experts say that growing the bottom of the fraction is a win for both customers and the investor-owned utilities, which make more money the more kilowatt-hours they sell.

Grid optimization also gives these utilities a pathway to making capital investments that earn them a guaranteed profit more quickly than building new power plants. That pathway runs through grid-scale batteries, according to LaFarge.

“Batteries have enormous value to the grid because they’re electron time machines. You can charge them up when there’s plenty of energy on the grid and no congestion or scarcity,” LaFarge said, and then discharge them when demand is at its height. ​“It creates more room on the grid using the grid you have. That unique nature of batteries is their superpower.”

While storage technology has been around for a decade, until very recently it was more expensive than building poles and wires and harder to justify to regulators.

“What has changed in the last 18 to 24 months is batteries have gotten staggeringly cheap,” LaFarge said, and utilities can invest in them and improve their bottom lines. ​“This is one of our most important messages around utilization: Utilities can earn more on capital assets [and] have higher revenue while delivering cheaper power to people.”

LaFarge’s company has worked with Dominion on other forms of distributed generation, including EV charging. For batteries, he said, ​“the Virginia utilization bill certainly creates an even bigger opportunity.”

To be sure, increased grid utilization is far from the only step Virginia lawmakers can take to tamp down skyrocketing electricity costs. Tying rates to performance metrics such as affordability and efficiency, increasing targets for batteries and other cheap sources of clean energy, and enabling more large-scale solar projects are among a host of legislative proposals that would also help lower prices — and that all could also become law this year.

It’s also true that the one-page HB 434 is more suggestion than mandate, and its speedy passage through the Virginia General Assembly — including by a nearly unanimous vote in the House of Delegates — raises questions about its impact. And the onus will be on the state’s utilities to measure, report, and improve grid utilization, albeit with prodding from regulators.

Still, Jigar Shah, a longtime energy entrepreneur and the director of the U.S. Department of Energy Loan Programs Office under former President Joe Biden, believes the legislation will put utilities on the hook, even as it gives them leeway to collect and analyze utilization data.

“What’s not acceptable is for folks to say, ​‘It’s not possible and rates are going up 9% a year,” said Shah, who helped shape and advocate for the bill as an adviser to the nonprofit Deploy Action. He also pointed out Spanberger’s support and regulators’ engagement in the bill.

“It’s not something that we expect to be buried in a [utility] filing and it goes to die,” he said. ​“I think there’s actual interest in it from folks on the commission to continue moving it.”

For LaFarge, the broad consensus around the legislation is a reason for optimism, not skepticism.

“This is a bipartisan idea that really is having its moment, and we’re excited to see the successes of this bill replicated in dozens of states,” LaFarge said. ​“I think the regulated utility compact is about to surprise people with its ability to solve these problems to the benefit of the climate, the economy, and people who use energy in their daily lives.”

Disclosure: Charles Hua is a member of Canary Media’s board of directors. The board has no influence over Canary Media’s reporting.

Elizabeth Ouzts

is a contributing reporter at Canary Media who covers North Carolina and Virginia.