Power grid auction falls short of meeting 2028-29 energy needs, organizing group cites data centers
Central Virginia's power grid, managed by PJM Interconnection, is facing a significant electricity shortfall for 2028-29, largely due to the rapid demand from data centers, particularly in Chesterfield County where Google has campuses. This deficit is driving up electricity costs, which will be passed on to ratepayers, although Dominion Energy aims to shield residential customers through a new rate class for high-energy users. The issue raises questions about the region's ability to support continued data center expansion.
PJM Interconnection, which oversees electricity distribution for 13 states including Virginia, announced that its recent auction for the 2028/2029 distribution year fell short by nearly 6.8 gigawatts, an amount sufficient to power millions of homes. PJM attributes this deficit primarily to the rapid growth of data centers, with an anticipated 30 gigawatt increase in demand from data centers, largely in Virginia, between 2024 and 2030.
Dominion Energy, a key provider in the region, confirmed that data centers are a major factor in the increased demand, alongside the retirement of fossil-fuel plants. The utility stated that higher capacity costs from the auction would be reflected in customer bills after its 2027 biennial review, but expressed confidence that a new rate class (GS-5) for high-energy users like data centers will prevent residential customers from subsidizing these costs.
The Chesterfield County Board of Supervisors, where Google operates three data center campuses, is reportedly not interested in inviting more data centers, reflecting public opinion concerns about costs and environmental impact. Virginia Governor Abigail Spanberger, however, defended the commonwealth's commitment to data center development, highlighting their economic benefits and the opportunity to set industry standards, despite an average seven-year wait time for grid connection for new facilities.