Dominion Proposes New Rate Class for Data Centers

Virginia’s primary electrical utility, Dominion Energy, has proposed the creation of a new rate class for data centers.The new class would apply to utility customers who consume more than 25MW of energy and have a monthly load factor of more than 75 percent. This will result in many, if not most, of the approximately 450 data centers within its coverage zone being classified in the new customer class.

The new rate class will also require high-use customers to sign a 14-year contract, ensuring they will pay for their proposed energy costs, even if they use less or if the data centers aren’t built. The utility said that this is to ensure that if companies propose a data center and the energy infrastructure is built to support it, then they will cover the costs regardless of whether they construct it or not.

Under the rules, developers would be subject to a minimum demand charge of 85 percent for transmission and distribution infrastructure and 60 percent for generation. If they exceed those minimums, they would be charged more.

The amended proposal would mean that the new rate class only applies to new customers who use more than 50MW and come online after January 2026. Additionally, it would reduce the minimum demand obligations to 75 percent for transmission and distribution, and 50 percent for generation, for non-shopping customers, and to zero percent for shopping customers.

“Make no mistake, load growth from large customers presents a massive earnings opportunity for Dominion shareholders. The company’s objective is to vigorously protect that opportunity by shifting as much risk as possible from its shareholders onto its high-load customers,” said Nikhil Vijaykar, an attorney for the Data Center Coalition in the hearing. “That is why Dominion wants to lock high load customers into 14-