District Energy Systems: An Analysis of Virginia Law

  • NVRC commissioned the McGuire Woods legal and consulting firm to describe the legal framework within which local governments, authorities, utilities, private companies, or public-private partnerships can develop, own, and operate district energy systems in Virginia
  • District energy systems provide an opportunity to greatly improve the efficiency of how we use energy in our urban areas.
    • District energy systems provide heating and cooling, and sometimes electricity generation, to urban centers and campus settings through a network of centrally operated heating and cooling equipment and distribution pipes.
    • District energy systems can operate more efficiently and at lower cost than using individual energy systems in each building
  • The legal analysis found that:
    • There are clear existing paths for public and/or private establishment, ownership and operation of district energy systems
    • District energy systems will likely be subject to complex legal frameworks
    • Depending on the ownership arrangements and system characteristics, the operation may be subject to limitations of powers of localities under the “Dillon Rule”, to State Corporation Commission Regulation, and land use and environmental regulations.
    • The Code of Virginia provides paths to development of district energy systems, but could be amended to provide more clarity about how district energy systems can be developed and operated.
  • Read the full report