Virginia Puts Data Centers in a Rate Class of Their Own
Virginia hosts the largest concentration of data centers in the world, and its regulator has now built a rate structure around that fact. In its final order in Dominion Energy Virginia's 2025 biennial review, issued on November 25, 2025, the State Corporation Commission (SCC) created a new GS-5 rate class for customers demanding 25 megawatts or more. The class takes effect on January 1, 2027. A fact sheet the SCC posted on February 24, 2026 sets out how the new rules will work and why the commission adopted them.
Large load customers such as hyperscale data centers will have their rates set separately, based on the costs of serving them, rather than sharing a class with other large commercial users. New large load customers that contract for service on or after January 1, 2027 must take and pay for electric service for at least 14 years. Large load customers must pay at least 85% of the transmission and distribution costs incurred to serve them each month, regardless of how much electricity they actually use.
The data center provisions sat inside a broader rate decision that will be felt by every Dominion customer. For a typical residential customer, the approved rates mean a monthly increase of $11.24 in 2026, which the SCC said is 23.7% lower than Dominion requested, and $2.36 in 2027, 51.2% lower than 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 commissioners wrote.
A utility that builds substations, lines and generation for a 300 MW campus recovers those costs over decades through rates. The differential treatment of generation, at 60% rather than 85%, reflects the fact that generation costs are more fungible. Dominion is part of PJM Interconnection, and the cost pressure that prompted the GS-5 class is not only local. Three follow-up items will determine how much the new class changes outcomes. The SCC described Virginia as "one of the first states to adopt comprehensive safeguards." Whether the rules are strict enough to protect households without pushing investment elsewhere will become clear only once the class is in operation.