Dominion Energy Virginia: Data Center Load Growth and Commercial Rate Impacts
Northern Virginia ("Data Center Alley") remains the densest concentration of hyperscale AI and cloud computing infrastructure on the planet. To support this unprecedented, 24/7 load growth, Dominion Energy is fundamentally rewriting its Integrated Resource Plan (IRP), proposing billions in new natural gas, nuclear, and transmission buildouts. As a result, standard commercial and industrial ratepayers statewide are beginning to subsidize this expansion through escalating base rates and demand tariffs in 2026.
Executive Impact
- →The Capacity Squeeze: Dominion projects its peak load could nearly double in the next 15 years, primarily driven by data centers. This forces the utility to hold legacy coal/gas online longer than planned and build massive new peaker plants.
- →Cost Socialization: The multi-billion dollar cost of laying high-voltage transmission lines to Loudoun and Prince William counties is partially socialized across all commercial ratepayers in the state via transmission riders.
- →The >5 MW Exemption: Virginia maintains a complex hybrid deregulation model. Mass-market commercial is captive, but extremely large consumers (typically >5 MW) or those requiring 100% renewable energy may qualify to shop for retail supply.
The Hyperscale Reality
A single modern AI-focused data center campus operates with the electricity footprint of a mid-sized city. Located within the PJM interconnection, Dominion Energy Virginia is legally obligated to serve this load. Their recent Integrated Resource Plan (IRP) discards previous aggressive decarbonization targets in favor of grid reliability, proposing massive new natural gas combined-cycle facilities and floating the idea of Small Modular Reactors (SMRs).
The financial math of a regulated monopoly dictates that the cost of these capital expenditures (CapEx) must be recovered from ratepayers, plus an authorized Return on Equity (ROE).
The Risk to Traditional Virginia Businesses
If you operate a hospital, a chain of grocery stores, or a traditional manufacturing facility in Virginia, you are in direct competition with the hyperscalers for grid capacity, but you do not possess their economic leverage.
While data centers frequently negotiate custom tariff structures or dedicated substations, standard commercial and industrial profiles are subject to the general rate case increases approved by the State Corporation Commission (SCC). Transmission riders—surcharges directly linked to building out the physical wires—are becoming the fastest-growing line item on Virginia commercial electricity bills.
Can You Escape to the Free Market?
Unlike fully deregulated states (Ohio, Pennsylvania) or fully regulated states (Florida, North Carolina), Virginia occupies a gray area. The state theoretically abandoned deregulation two decades ago, but left specific exemptions in the Virginia Code (Section 56-577).
- The >5 MW Rule: Customers whose demand strictly exceeds 5 megawatts may petition to purchase from a competitive retail supplier.
- The 100% Renewable Exemption: Historically, customers seeking 100% renewable power could shop if Dominion did not offer a comparable tariff. However, Dominion has aggressively closed this loophole by launching its own green tariffs, making it exceedingly difficult for mid-market businesses to escape the utility wrapper.
For 2026, Virginia commercial operators must brace for structurally higher energy baselines and focus intensely on peak demand reduction strategies (incorporating batteries and thermal storage) to mitigate rising kW capacity charges.