Virginia advances pilot for underground 500-kV transmission lines
(UI) — Virginia lawmakers are advancing legislation that would expand the state’s underground transmission pilot program, allowing the State Corporation Commission (SCC) to approve up to four new qualifying high-voltage transmission projects — including 500-kilovolt lines — for construction in whole or in part underground.
Senate Bill 827, offered as a substitute by the Senate Commerce and Labor Committee, modifies Virginia’s existing underground transmission pilot program to broaden eligibility and extend its timeline.
Under the bill, the SCC may approve up to four qualifying transmission projects filed between July 2025 and July 2033 for inclusion in the pilot. Projects must demonstrate that underground construction is technically feasible and that the overall cost is reasonable and in the public interest.
To qualify, an application must include:
- Engineering analysis demonstrating feasibility of underground placement;
- Comparative cost projections for overhead versus underground construction;
- Formal support, by resolution, from each locality where underground segments would be installed.
The legislation also permits the Commission to deny an otherwise qualifying project, provided it publicly shares its rationale.
Local cost-sharing requirement
A significant component of the proposal requires local governments to shoulder at least 50% of the “marginal cost” of placing transmission infrastructure underground. Marginal cost is defined as the difference between the projected cost of underground construction and the cost of overhead construction.
Localities would have several financing options, including:
- Imposing an additional electric utility levy of up to $0.99 per month on residential customers;
- Issuing a general obligation bond subject to voter referendum;
- Allocating local funds over multiple fiscal years;
- Using a combination of these methods.
If a locality withdraws its support within 30 days of project approval, the SCC must modify its order to remove the project from the pilot program.
The bill also allows local governments to acquire adjacent rights-of-way for co-location of other public utilities, provided they do not interfere with transmission construction or operations.
Expanded scope and timeline
The substitute increases the number of allowable pilot projects from two to four and extends the SCC’s final reporting deadline from December 1, 2024, to December 1, 2034.
The final report must analyze:
- Underground construction costs,
- Consumer rate impacts,
- Grid reliability and operability,
- Construction timeline accuracy,
- Economic development and aesthetic benefits.
Approval of a transmission line under the pilot would satisfy certain zoning and statutory requirements and streamline portions of the regulatory review process.
The legislation does not prohibit future underground approvals outside the pilot program but sets specific parameters for qualifying projects within it.
If enacted, the measure would mark a significant policy shift in how Virginia evaluates and finances underground high-voltage transmission infrastructure, particularly in areas where local governments seek underground placement for economic development or community planning reasons.
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