Virginia approves dominion energy rate hike while shifting more grid costs to data centers

Virginia’s State Corporation Commission has approved a controversial Dominion Energy rate increase that will add $16 monthly to typical residential electricity bills starting in 2026. The decision, reached after months of legal proceedings and lengthy hearings, also requires data center operators to shoulder more costs for necessary electrical grid upgrades.

The rate restructuring represents an attempt to address the growing strain that energy-hungry data centers place on Virginia’s power infrastructure. As these facilities proliferate across the state to meet surging demand for cloud computing and digital services, they require significant grid investments to ensure reliable electricity delivery. Under the new arrangement, data center companies will bear a larger share of these upgrade costs rather than passing them entirely to residential customers.

Consumer advocacy groups have expressed mixed reactions to the commission’s decision. While they welcome provisions that could discourage speculative data center development by making operators pay more of their true infrastructure costs, advocates argue the measures don’t go far enough to protect ordinary ratepayers from shouldering the burden of industrial growth.

The ruling highlights the ongoing tension between Virginia’s booming data center industry and residential electricity affordability. As the state continues attracting major tech companies seeking to expand their server capacity, regulators face mounting pressure to balance economic development with fair cost allocation. The $16 monthly increase will still place additional financial strain on households already grappling with rising energy costs, even as the state attempts to make large-scale digital infrastructure pay its fair share of grid modernization expenses.