Virginia Governor Signs Dominion-Backed Bills. All Eyes on Regulators Now.

Virginia Governor Abigail Spanberger signed legislation that will impact how electricity costs are assigned to data centers and how Dominion Energy recovers costs for burying power lines. The new laws grant the State Corporation Commission (SCC) increased authority to regulate utility costs, specifically directing them to ensure residential customers do not unfairly pay for data center electricity generation and distribution expenses.

Previously, a provision in the bill would have required data centers to cover capacity market costs from PJM Interconnection, but Governor Spanberger removed this, replacing it with broader regulatory power for the SCC. These capacity costs, which surged from $28 to $329 per megawatt-hour, have contributed to a 1.5% to 5% increase in customer bills due to rapid data center grid connections and insufficient new power generation.

Another key aspect of the legislation allows Dominion Energy to spend up to $900,000 per mile for a strategic undergrounding program, recovering costs from ratepayers. This program, which adds a $4.88 monthly fee to typical residential bills and was set to expire in 2028, drew criticism from ratepayer advocates. While Governor Spanberger's amendments to give the SCC more discretion to reject the undergrounding program were largely rejected by the legislature, she stated she received a "commitment" from Dominion to limit such projects to contain costs.

Steve Haner, a senior fellow at the Thomas Jefferson conservative think tank, noted that the legislature is now paying closer attention to Dominion's requests, indicating a shift in oversight. The overall intent of the accepted amendments is to ensure fairness and prevent residential customers from subsidizing data center energy needs.