RICHMOND, Va.—Gov. Abigail Spanberger on Thursday signed legislation that directs regulators to assign electricity costs to data centers and allows Dominion Energy to spend $900,000 a mile burying local distribution lines.
The bills from Senate President Pro Tem Louise Lucas, D-Portsmouth, and Del. Destiny LeVere Bolling, D-Henrico, could have also required data centers to cover the costs of buying electricity from the capacity market through PJM Interconnection, the regional grid operator for Virginia, 12 other states and the District of Columbia. But that requirement was removed by Spanberger and replaced with more regulatory authority to allocate costs.
Those capacity market costs, used when there’s peak strain on the grid, ballooned from about $28 per megawatt-hour in 2023 to $329 in 2025, contributing to a 1.5 to 5 percent increase in all customers’ bills. The pace at which data centers want to connect to the grid and the lack of new power generation have caused a supply-and-demand imbalance, raising costs.
The provision on underground cables would allow Dominion to spend up to $900,000 a mile for a strategic undergrounding program. The program allows the utility to recover its costs and maintain its profit margin by burying the local distribution lines that deliver power to homes underground. Those lines are less prone to storm damage that causes outages. The program was set to expire in 2028.
