(The Center Square) – Dominion Energy must return to Virginia regulators this fall with proposed changes that could shift more transmission infrastructure costs to data centers and other large electricity users under a new order from the State Corporation Commission.
The commission’s July 31 final order gives Virginia Electric and Power Company, which does business as Dominion Energy Virginia, 90 days to file proposed amendments to its line-extension policy and 120 days to provide a status update on a broader effort to develop a new approach for assigning those costs.
The company also must work with Old Dominion Electric Cooperative and other electric distribution companies to develop an approach for assigning costs in those cases and provide the commission with a status update within 120 days, or by Nov. 28.
The commission said the goal is to find an acceptable and symmetrical way to assign costs when large-load customers drive the need for new transmission infrastructure.
The order does not immediately create a new charge for data centers or determine how much residential customers could save. Dominion’s proposal will be reviewed in a separate case.
The commission issued the directives as part of its final order on Dominion’s annual request to recover transmission expenses through Rider T1, a charge included on customers’ electric bills. The approved Rider T1 rates take effect Sept. 1.
Virginia Electric and Power Company, which does business as Dominion Energy Virginia, initially sought approval to recover about $1.54 billion in transmission costs. The company originally estimated the request would add $2.90 to the monthly bill of a typical residential customer using 1,000 kilowatt-hours.
That estimate later fell to 94 cents after Dominion updated its filing to account for additional electricity sales and an 85% minimum-demand requirement for its largest customers.
First-year Democratic Gov. Abigail Spanberger’s administration said those changes reduced the revenue requirement by about $58 million and lowered the residential share by about 6%.
In a statement Wednesday, Spanberger called the decision a victory for ratepayers, saying the order “makes sure that data centers are paying the full cost of the transmission infrastructure their developments require.”
In written comments filed in the case, the administration argued that large-load customers should pay their fair share of the grid infrastructure built to serve them. It urged the commission to use a stricter test to identify projects that would not have been needed without a large customer’s demand.
The commission created the GS-5 class for customers with electricity demand of at least 25 megawatts, including large data centers. Beginning Jan. 1, those customers generally must pay transmission and distribution charges based on at least 85% of their contracted demand, even when their actual electricity use is lower.
Dominion has said it plans to propose GS-5-specific Rider T1 rates in its 2027 annual update.
This post was originally published on The Center Square.
