Dominion Energy ordered to provide new cost allocation within 90 days
This text was taken from an email alert sent out on August 10, 2026. Sign up for email alerts →
Dear Supporter,
On Friday, July 31, the Virginia State Corporation Commission (SCC) issued a major ruling that, going forward, will help protect consumers’ pocketbooks from the impacts of the data center boom and related energy infrastructure buildout in Virginia.
In its ruling, the SCC found that data centers requiring large amounts of energy are the cause of massive transmission line costs and must pay for the transmission facilities that are constructed solely to serve them.
Currently, all energy customers – including residents, farms and small businesses – foot the bill for the massive transmission development solely to serve data centers, with costs applied across the board. As more and more data centers have been approved and enter the queue to be connected to the electrical grid, Dominion will build hundreds of new substations and thousands of miles of transmission lines to serve data centers at the cost of billions of dollars.
Without this ruling, responsibility for those costs would also be shared by residential and small business ratepayers, including you and me.
For years, PEC has been very vocal in calling for data centers to pay for their own electrical infrastructure and the need to protect communities and ratepayers from rising costs.
The issue originated in early 2016 when the Coalition to Protect Prince William County battled against a transmission line to the Amazon Web Services data center in Haymarket. It was in that case that Dominion first acknowledged a data center was necessitating its own dedicated transmission line that was not necessary for the larger grid or for other ratepayers. Unfortunately, the SCC did not address who should pay in that case, but the acknowledgement started a critical conversation about the need for the user causing the utility to incur the expense (i.e., the data center) to pay for its infrastructure.
Last week’s decision is a great first step toward more fair distribution of costs that will help protect communities and residents in Virginia from rising electricity costs resulting from the hundreds of substations and transmission lines in the pipeline for data centers.
Thank you to all who provided financial support on these important legal cases and who submitted comments to the SCC to demand these protections! The Commission heard our concerns – receiving over 360 comments from the public – and made the responsible decision to protect ratepayers from continuing to shoulder these costs.
What the SCC found
Bottom line: Despite objections by Dominion and the data center industry, the SCC found that large-load data centers are the cause of massive transmission line costs and must pay for transmission facilities that are constructed solely to serve them.
After years of debate and push-back from Dominion and the data center industry, the SCC’s ruling applies a long-established principle that the user (or users) that cause a utility or system to incur specific expenses should pay for them; not Virginia families and small businesses.
The SCC cited PEC’s testimony in its final ruling showing that Dominion’s existing policies do not adequately protect consumers from the costs and risks of the data center buildout.
The ruling requires Dominion to work with SCC staff to file a new cost assignment proposal consistent with the directives laid out in the ruling within 90 days.
PEC will stay engaged with the case and work to ensure that Dominion’s new proposal properly protects Virginia’s ratepayers. We will provide updates as more information becomes available.
What this ruling means and what it doesn’t: Breaking it down
While this ruling is undoubtedly a step in the right direction, it is only a part of the larger cost issues.
What the ruling includes:
- It requires Dominion to file a new cost assignment proposal within 90 days. Once received, the SCC will hold another case to review it.
- That new cost assignment must place the cost of substations and the other transmission infrastructure that directly connect data centers to the bulk power system onto the customer driving those costs; in this case, the data centers.
- The SCC also left the door open in that upcoming case for consideration of additional transmission-related costs being driven by data centers beyond direct connections, which together represent billions of dollars more in expenses.
PEC will be heavily involved in this follow up proceeding to help develop the record and press for the industry to bear full responsibility for the infrastructure costs they are driving.
What the ruling doesn’t include:
- It’s not retroactive, so any transmission projects that have already been approved will still be allocated across all ratepayers. That includes the Germanna Line in Culpeper and Daves Store Line in Prince William County, among others.
- It does not address the substantial new generation resources — including multiple natural gas-fired power plants — that Dominion has proposed to build to meet this rapidly growing demand.
- It doesn’t address the increased cost of securing power to meet peak demand on the hottest and coldest days of the year when our electric grid is most strained. That increased cost is largely due to data center demand exceeding the available energy supply.
Everyday ratepayers are not driving the need for most of the new energy infrastructure projects currently proposed, including Valley Link’s Joshua Falls-Yeat, Dominion’s Golden-Mars lines, or the large gas plants in Chesterfield and Cumberland. Therefore, PEC’s position is that the data center industry should pay the full costs of these projects.
We continue to push for a pause at the state level while legislators develop a plan to protect Virginians from increased electric bills, impacts of transmission lines, degradation of air quality, threats to water supply, and industrialization of neighborhoods that bring noise, public health and quality of life impacts. We hope you will stay engaged and help us continue to call for the critical data center reforms needed at the state level and weigh in on local proposals that impact you.
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Please reach out with any questions.
Sincerely,
Julie Bolthouse
Director of Land use
[email protected]
