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Dominion Energy argues that because of inflation and infrastructure needed for data centers, their rates for regular customers should go up. In multiple filings Monday, March 31, Dominion officials asked the Virginia State Corporation Commission (SCC) for a series of fuel and base rate increases, which if approved would constantly increase power bills for local residents over the next two years. 

The company is asking for a base rate increase of $8.51 per month in 2026 and then $2 per month in 2027. If all these increases get approved, a customer’s bill in Appomattox, Buckingham, Cumberland and Prince Edward would cost $10.51 more in January 2027 than it does in April 2025. This wouldn’t be the full bill, just a portion. The base rate is a fixed cost on the monthly bill that doesn’t change except with the SCC’s permission. Companies argue that the base rate helps them cover the costs involved with providing electricity, such as maintaining infrastructure or improving it. Dominion officials argue this is needed to cover significant infrastructure costs that either have already arrived in some areas or appear to be on the horizon, in regards to solar projects and data centers. 

Dominion officials also point to inflation over the last two years, including increases in labor costs, as well as the price of materials and equipment. That includes things like cables and wires, utility poles, transformers, transmission lines and other power generation equipment, which will be needed for the already approved solar projects in the region, as well as infrastructure for planned data center projects in both Prince Edward and Appomattox counties. If approved by the SCC, this would be Dominion’s first increase in the base rate since 1992. 

Company also asks for fuel rate hike

As we mentioned, there were multiple filings on Monday. The second involved a request that if approved, would take effect this year. Dominion officials argued in the filing that because of extended cold weather conditions this winter and higher forecasted fuel prices, they need to increase the fuel rate portion of the bill for residential customers as well. They’re asking for a $10.92 monthly fuel rate increase. 

If approved, the new fuel rate would take effect on July 1, 2025, and the new base rates would take effect on January 1, 2026 and January 1, 2027.

“Outside of major storms, we deliver uninterrupted power 99.9% of the time, and we’re significantly reducing storm-related outages as well,” said Ed Baine. He serves as President of Utility Operations for Dominion Energy Virginia. “This proposal allows us to continue investing in reliability and to serve our customers’ growing needs.”

In addition to new rates, the company also proposed a new rate class for high energy users, including data centers, as well as new consumer protections to ensure these customers continue to pay the full cost of their service and other customers are protected from stranded costs. Under the proposal, high energy users would be required to make a 14-year commitment to pay for their requested power – even if they use less. So to be clear, under this plan, if a company requests a certain amount of power, that’s what they’ll be paying for, even if they don’t use it all. That would make setting up a data center more expensive for companies. 

A growing need, Dominion Energy argues

All of these changes are being requested, Dominion officials wrote in the filings, to combat inflation and also help pay for improvements to the energy grid as more high-energy projects come online. 

That includes data centers like those planned for Prince Edward’s HIT Park and in Appomattox County. The Prince Edward site stands at 280 acres. The Appomattox project is a bit bigger at 452 acres, with plans to build a $3 billion data center campus. That Appomattox facility alone will require an estimated 300 megawatts of power from a combination of Central Virginia Electric Cooperative and Dominion Energy. 

It also includes infrastructure potentially needed to feed energy to projects like those. Dominion is dealing with one such situation in neighboring Charlotte County. The current transmission line running from Chase City to Farmville isn’t big enough, lacks enough capacity to handle all of the planned solar projects expected to feed into it. 

That’s caused PJM, the regional transmission authority, to order several projects put on hold, including two in Charlotte. Dominion has also placed a third project in Charlotte on hold, as it would also feed into the same line. The solution PJM requires is to test the line again in August. So many projects have been suspended or outright withdrawn now that it might have capacity enough for the rest. If not, the authority is ordering Dominion to design, build and install a much larger transmission line, which will take several years to complete and isn’t cheap, hence the request for rate hikes to help cover the cost of this and similar work expected as more data centers go online. 

What happens next? 

The State Corporation Commission will schedule a hearing this spring for Dominion’s request. Company officials say they understand the increases would come at a time residents are already feeling the pinch of higher bills. 

“We know our customers are feeling the impact of inflation in other areas of their lives, and some of our customers may need assistance with their power bills,” Baine said. “We’re here to help. Our Energy Share program not only offers among the most supportive bill assistance in the country, but also provides free home energy efficiency upgrades to help lower your energy use and save on your monthly bills.”

You can go to https://www.dominionenergy.com/virginia/billing/billing-options/energyshare to sign up for the Energy Share program.