Data centers in Virginia ordered to pay for transmission upgrades
Virginia's State Corporation Commission has ordered data centers to pay for power grid upgrades exclusively used by their facilities, preventing these costs from being passed on to general ratepayers. This decision, influenced by Governor Abigail Spanberger's administration, is projected to save Virginians hundreds of millions of dollars. The ruling mandates Dominion Energy to develop a new policy for cost allocation.
Virginia state regulators have issued an order requiring data centers to cover the costs of power grid upgrades built exclusively for their operations. This decision by the State Corporation Commission (SCC) follows pressure from Governor Abigail Spanberger's administration, which advocated for data centers to bear these expenses rather than burdening Virginia families and small businesses with higher electricity bills.
Dominion Energy, the utility responsible for over 200 transmission line projects aimed at meeting the demands of Virginia's growing data center industry, had initially sought to increase electricity rates to fund these upgrades. However, the SCC's order now mandates Dominion to develop a policy ensuring data centers directly pay for new substations and transmission lines that serve them exclusively. Governor Spanberger praised the ruling, stating it ensures data centers pay their 'full cost' for required infrastructure, with projections indicating hundreds of millions in savings for Virginians.
Chief Energy Officer Josephus Allmond emphasized the decision's importance, noting it shifts transmission costs directly caused by data centers from general ratepayers to the data centers themselves. The article also touches on broader energy discussions in Virginia, including a bipartisan call for a special session to address energy needs and concerns raised by Lt. Gov. Hashmi regarding Dominion Energy's proposed merger with NextEra. Hashmi has urged regulators to extend the review period for the merger, citing outdated regulatory guidelines and the need to assess public benefit, grid reliability, and the ability to meet growing energy demands. Meanwhile, opposition to data centers and associated transmission lines continues in several counties, including Spotsylvania, Orange, Culpeper, Loudoun, and Prince William, with Loudoun County schools specifically taking a transmission line fight to the Virginia Supreme Court.