SCC approves increase in Dominion Energy power bills
Increased rates for Dominion customers, a new rate-class for high-energy users, and a new methane gas-fired power plant were all approved by the State Corporation Commission.
By Sean Jones
This piece originally appeared on November 25 at Virginia Scope
Dominion Energy customers will soon see their monthly bills go up after the State Corporation Commission today approved Dominion’s plan to increase residential base rates. The SCC also created a new rate class for high-energy users, such as data centers, and signed off on a contentious new methane gas-fired power plant in Chesterfield County to help meet growing electricity demand.
The SCC said its decision would ultimately increase the average resident’s electric bill by $11.24 in 2026 and $2.36 in 2027.
The approved base rate increase totals $565.7 million in 2026 and $209.9 million in 2027, which is lower than the $822 million Dominion originally wanted for just 2026.
The higher rates reflect inflationary pressures, helping cover the rising costs of grid equipment, utility poles, wires and transformers, according to Dominion.
“We recognize the impact this will have on our customers,” said Dominion spokesman Jeremy Slayton. “We are offering more energy-saving programs and assistance options than ever before.”
Over the past decade, Virginia has become the world’s data center capital. Most of those facilities used to store, manage and process data for a variety of companies are in Northern Virginia, but these high-energy sites are starting to spread across the rest of the commonwealth.
The growth of that industry comes with added costs of electrical infrastructure and ballooning power demand, which is forecasted to double over the next 10 years.
Some Virginians have argued that the companies behind data centers should be required to pay higher electric bills, given the facilities’ disproportionate energy use.
Environmental groups and local residents in Chesterfield have staunchly opposed Dominion Energy’s planned power plant in the county, which will be used to help the utility company meet demand.
Chesterfield activists say they have been “gutted” by the SCC’s approval of the 944 megawatt power plant.
Glen Besa, chair of the community advocacy group Friends of Chesterfield, said the decision allows Dominion to continue raising electric bills at the benefit of shareholders and big tech corporations.
“Not only are we obligated to foot the $4.5 billion bill for the gas plant but we’ll be paying inflated prices for methane gas to fuel the plant for the next 30 years,” Besa said. “Under the (Virginia) Clean Economy Act there was a moratorium on new gas plants and Dominion was to phase out all existing gas and coal plants by 2045. In this first test of this law, the SCC has failed.”
Brennan Gilmore, executive director of Clean Virginia, a nonprofit that focuses on good governance and environmental issues, said today’s decisions by the SCC reflect a broken system that leans toward business and away from Virginia families.
“Today’s SCC decisions make one thing clear: Virginia’s utility regulatory system is in bad need of repair,” Gilmore said. “With data centers driving astronomical new costs and families already stretched thin, Virginia’s elected leaders should focus on reforming our system of energy planning and oversight to more effectively place the public interest at the core of our energy decisions.”
The SCC said the new “GS-5” rate class for high-energy users was intended to protect everyday ratepayers from the costs associated with industries like data centers. The new rate was approved on Tuesday as part of Dominion’s biennial review, where it asks the commission to approve plans that will have major impacts on customer rates.
Dominion’s customers using 25 megawatts or more of energy per month will be required to pay for at least 85% of the electric transmission lines to and from their facilities. They will also be required to pay for 60% of energy demand.
“As the utility regulator, we are obligated by law to set a revenue requirement that affords (Dominion Energy) an opportunity to recover reasonable and prudent projected costs and earn a reasonable rate of return,” the SCC said in a statement. “In this case, that has resulted in an increase in rates, but not to the extent requested by Dominion.”
The SCC report states that while data center development is “not an insignificant contributing factor” to rising energy demand in Virginia, it is “not the only underlying reason.”
The new, higher rate goes into effect Jan. 1, 2027.
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