The Virginia State Corporation Commission ("SCC") convened a Geothermal Working Group to evaluate the feasibility of implementing a Renewable Portfolio Standard ("RPS") program requirement for Phase I and Phase II utilities to procure and retire Renewable Energy Certificates ("RECs") from geothermal heating and cooling systems. This initiative, mandated by the 2024 Regular Session of the Virginia General Assembly, Acts of Assembly Chapter 597 (Senate Bill 508), sought to assess how a geothermal REC ("GREC") carve-out could be integrated within Virginia's existing RPS framework. The working group, consisting of representatives from the geothermal industry, utilities, government agencies, and advocacy organizations, held a series of meetings between July and September 2024 to gather input and identify critical factors impacting the feasibility of a GREC carve-out within the RPS program requirements.

The working group identified 14 feasibility factors, including GREC calculation methods, verification processes, affordability and equity concerns, supply chain and workforce considerations, and the growth potential of the geothermal market in Virginia. Their discussions highlighted the complex nature of implementing a GREC carve-out, revealing that while some factors currently support feasibility, others present significant challenges that must be addressed for successful program implementation.

Key findings include the need for a clearly defined GREC calculation and verification processes, concerns regarding the affordability and accessibility of geothermal technologies, and the necessity of establishing appropriate carve-out percentages and deficiency payment levels. Based on stakeholder feedback, the report outlines several recommendations aimed at enhancing program feasibility, including creating performance-based incentives, expanding the geothermal supply chain, and implementing equitable support mechanisms for residential and commercial installations.

The findings of the working group suggest that a number of critical factors are not currently defined or configured to support the feasibility of a GREC carve-out. Changes would be needed to overcome the challenges identified and enhance feasibility.