New utility rate class approved for data centers
Virginia’s State Corporation Commission has approved the creation of a new rate class for the biggest users of electricity, including data centers.
The SCC also approved an increase in Dominion’s basic rate, but not as much as the utility requested.
A final order issued by the SCC on Nov. 25 in Dominion Energy’s biennial review says the new GS-5 rate class will be for customers demanding 25 megawatts or more. It will take effect on Jan. 1, 2027.
“In addition, to help insulate ratepayers from the costs around the rapid build-out and construction of infrastructure to support businesses such as data centers,” the SCC announced, “certain large-scale customers will be required to pay a minimum of 85% of contracted distribution and transmission demand and 60% of generation demand, among other requirements.”
A report by the Electric Power Research Institute said data centers could consume up to 9% of U.S. electricity generation by 2030, mostly due to the exploding use of AI. In Virginia, which has the highest concentration of data centers in the world, data centers accounted for approximately 26 percent of the state’s total electricity consumption in 2023.
Related story: Dominion seeks rate hike
The SCC rejected Dominion’s request to increase the base rate of $822 million in 2026 and $345 million for 2027. Instead, it found that the evidence presented supports an increase of $565.7 million in 2026 and $209.9 million in 2027.
According to the SCC, the approved rates would increase the typical residential customer’s electric bill by $11.24 in 2026 and $2.36 in 2027. That is 51.2% lower than what Dominion had requested.
“As the utility regulator, we are obligated by law to set a revenue requirement that affords the company an opportunity to recover reasonable and prudent projected costs and earn a reasonable rate of return,” the SCC commissioners wrote. “In this case, that has resulted in an increase in rates, but not to the extent requested by Dominion.”
Wouldn’t it be nice to receive 9% interest on your investments. That’s what they gave to DR. Why not the generous 2% that banks give? Real estate investors want and get 14-18% on this investments. There is something wacky in this world
AI data centers may be celebrated as economic wins, but they come at a steep cost. If you live in Maryland, Virginia, Pennsylvania, or neighboring states, brace yourself: electricity rates could rise by as much as 20% in the coming years. These facilities consume enormous amounts of power, and the burden is quietly shifted onto everyday residents. Tech companies profit, while local households pay the price.
Meanwhile, state and local governments chase revenue with little regard for capacity or sustainability. Fairfax County, surrounding jurisdictions, and the Commonwealth itself monetize everything, property taxes, traffic congestion, vehicle ownership, yet it’s never enough. Taxes climb far faster than wages, demanding more and more from working families. The pattern is clear: growth for institutions, strain for citizens.