Dominion Energy faces rising costs amid Virginia data center boom

Dominion Energy is facing rising fuel costs in Virginia due to a surge in electricity demand from the state’s massive data center market. Fuel expenses for Virginia Electric and Power Company have increased nearly 90% over the last five years, rising from $2.31 billion in 2021 to a projected $4.35 billion through June 2027.

This growth has increased the utility's reliance on the volatile wholesale electricity market managed by PJM Interconnection. Virginia Electric expects to source 23% of its energy from the wholesale market, up from 14% in 2021. While nuclear fuel costs are estimated at less than one penny per kilowatt-hour, wholesale electricity prices can reach 6.28 cents per kilowatt-hour.

The energy demand spike has drawn political attention. Virginia Governor Abigail Spanberger has indicated she will intervene in the regulatory review of NextEra Energy’s proposed $66.8 billion merger with Dominion. The Governor intends to advocate for commitments regarding clean energy investments, job protections, and the affordability of residential power bills.