News · 2026-08-05

Virginia orders Dominion to bill data centers for the power lines built to serve them

The Virginia State Corporation Commission issued an order on July 31, 2026 directing Dominion Energy to develop a new tariff, within 90 days, that assigns the cost of direct-connect infrastructure to the large customer that caused it. In plain terms: when Dominion builds a substation and transmission line to serve one data center, the regulator now wants that data center to pay for it, rather than folding the cost into a surcharge every household in the state pays. Of the several state-level data-center actions this week, this is the one with legal teeth.

Key facts

• Ordered July 31, 2026, with Dominion's compliance filing due within 90 days.
• The mechanism at issue is Rider T-1, a transmission surcharge spread across all ratepayers.
• Dominion sought a 2.90 dollar monthly increase to that rider to recover about 1.5 billion dollars of transmission investment; the commission approved 94 cents pending the new policy.
• Primary sources: the Governor of Virginia's release and Virginia Business's report on the order.

The background a non-expert needs is that a utility's costs are socialized by default. Building the grid is treated as a shared public good, so when new capacity is needed, the bill lands in a rider that every customer pays a slice of. That logic works fine when growth is diffuse, like a subdivision going up. It works badly when a single customer shows up asking for the power draw of a mid-sized city, connected by lines built for that customer alone and used by nobody else.

That is what direct-connect infrastructure means: the substation and the wire exist because one facility exists. The commission's language, from SCC Chief Energy Officer Josephus Allmond, asks for "cost-allocation methods that assign costs fairly, including directly to large load customers driving the need for that infrastructure," with the stated goal of "an acceptable and symmetrical approach."

What triggered it

Governor Abigail Spanberger's administration filed with the commission on ratepayers' behalf urging exactly this shift, which is a notably rare direct gubernatorial intervention in an SCC proceeding. Her office projects the change will save Virginia ratepayers hundreds of millions of dollars, though no itemized figure has been released and none can be until the tariff exists.

The scale behind the order explains the urgency. Dominion has more than 200 transmission projects underway to serve more than 600 Virginia data centers, in a state that hosts the densest concentration of them in the world. Google's facility in Botetourt County already operates on a pay-your-own-way basis, covering its own water and electric infrastructure costs, which is useful evidence that the model is workable rather than merely punitive.

A fair analogy: today the arrangement resembles an apartment building where one tenant installs an industrial freezer and the electrical upgrade is split evenly across every unit's rent. The commission has told the landlord to write a new lease clause. It has not yet written the clause, and the number in it is what actually matters.

The honest caveat

This is an order to draft a policy, not the policy itself. Dominion's compliance filing is not due for 90 days, and the company has declined to comment pending its response. Until that filing lands, nobody knows how much of the direct-connect cost actually shifts, what counts as direct-connect versus shared, or whether the tariff will be prospective only. It is entirely possible for a strong-sounding order to produce a weak tariff.

Still, this is a genuine change in kind rather than degree. It also arrives in the middle of a broader turn. Nashville's Metro Council voted this week to seize a data-center site by eminent domain, four Oregon legislators announced they will propose a three-year moratorium, and New York already paused new hyperscale data centers. CoStar counts more than 200 US communities and at least 14 states weighing restrictions, and Heatmap's tally puts over 500 local restriction policies on the books, roughly 40 percent of them enacted since June 1 alone.

What distinguishes Virginia is that it is not a ban. Moratoriums say no. Eminent domain says not here. A cost-allocation tariff says yes, and hands you the bill. If the AI buildout's real constraint turns out to be electricity rather than chips, the question of who pays for the wire is the one that ends up mattering most, and Virginia just answered it first in a way other commissions can copy.

Primary source, verified: read the paper →

Ground Truth. (2026, August 5). Virginia orders Dominion to bill data centers for the power lines built to serve them. Ground Truth. https://groundtruth.day/news/virginia-orders-dominion-to-bill-data-centers-for-their-own-power-lines.html

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  title  = {Virginia orders Dominion to bill data centers for the power lines built to serve them},
  author = {{Ground Truth}},
  year   = {2026},
  month  = {aug},
  url    = {https://groundtruth.day/news/virginia-orders-dominion-to-bill-data-centers-for-their-own-power-lines.html}
}

Topics: policy · data-centers · energy · regulation · infrastructure