The Virginia State Corporation Commission trimmed Dominion Energy’s rate increase and approved its plan to create a new rate class for large load customers like data centers.
In an order issued Nov. 25, the SCC approved the new GS-5 rate class to become effective Jan. 1, 2027. The new class will help insulate other customers from the rapid buildout of infrastructure needed to serve new data centers, the commission said. Any customers with demand of 25 MW or greater and a load factor of at least 75% will go into GS-5.
Customers in the new class will sign electricity service agreements that last 14 years. If they leave Dominion’s service early for a competitive service provider (CSP), they will have to pay an exit fee that covers 85% of the contracted demand’s distribution and transmission costs and 60% of its generation costs.
“Dominion must consider aggregate forecasted demand over a long-term planning period, must plan to meet those needs with supply resources that typically require many years to develop, and must construct generation to be ready to serve high load customers who are eligible to select a CSP in the future,” the SCC said in its order. “Accordingly, the commission finds that the minimum generation demand charges shall apply to these new shopping customers.”
That will reasonably recover the costs of infrastructure Dominion built to serve such customers even if they retire early, the commission said.
GS-5 customers can reduce their capacity during the ESA term by up to 20% at no cost and an additional 30% if another customer agrees to assume the associated capacity. Each capacity reduction requires a 36-month notice.
The SCC also rejected Dominion’s requested base rate increases of $822 million for 2026 and $345 million for 2027, instead approving $565.7 million in 2026 and $209.9 million in 2027. Those translate into $11.24 more on a typical residential customer’s bill in 2026 and $2.36 more on monthly bills in 2027, which are 23.7% and 51.2% lower than what Dominion had requested, respectively.
The SCC also approved a higher return on equity for Dominion, raising it from 9.7% to 9.8%, which is below the 10.4% it requested.
“As the utility regulator, we are obligated by law to set a revenue requirement that affords the company an opportunity to recover reasonable and prudent projected costs and earn a reasonable rate of return,” the SCC said. “In this case, that has resulted in an increase in rates, but not to the extent requested by Dominion.”
In another order issued Nov. 25, the SCC approved Dominion’s Chesterfield Energy Reliability Center (CERC), a 944-MW natural gas plant made up of four GE Vernova 7F combustion turbines. The turbines will be built in the footprint of a retired coal plant and alongside two existing combined cycle power plants.
The plant is the first natural gas-fired generator that the SCC had to evaluate since the Virginia Clean Economy Act was passed in 2020. Dominion said it was needed to keep pace with demand growth. The plant will cost the average residential customer 60 cents on their monthly bill.
“This case therefore is not about choosing CERC over compliance with the VCEA (or CERC versus renewable generation, demand-side management or batteries, for that matter). Instead, the commission is called upon to determine whether a ‘threat to the reliability or security of electric service to the utility’s customers’ exists, such that the CERC project is required to obviate such threat,” the SCC said in its order. “As discussed herein, the evidence in this case clearly establishes that there is an imminent reliability threat for Dominion and its customers and that the CERC project addresses that threat in a manner that is in accordance with the public interest and the VCEA.”
While the commission acknowledged that some of the forecasted load growth for Virginia and the rest of PJM may be overstated, it also said the demand for power is certainly on the rise. It cited the spiking capacity prices in the RTO, as well as NERC reports that PJM could run short of reserves in extreme weather in the second half of this decade.
The CERC order was opposed by environmental groups including Clean Virginia, which called the approval disappointing.
“Despite major flaws in Dominion’s application and planning process, the commission granted approval to a gas plant that breaks Virginia’s commitments to clean air, further drives up electric bills and which would not be necessary absent the gluttonous energy demands of Big Tech companies,” Executive Director Brennan Gilmore said. “If this is the decision the commission came to under existing rules, then it is upon Virginia’s elected leaders to better align these rules with the interests of all Virginians.”
