Virginia SCC Orders Dominion to Charge Data Centers Up Front for Their Own Substations, and Leaves the Bigger Lines for Later

Ninety-four cents. That is what the Virginia State Corporation Commission says a typical Dominion Energy Virginia household using 1,000 kilowatt-hours will see added to its monthly bill from the company’s revised transmission rider, down from the $2.90 Dominion projected when it filed ^[1]. The bill figure is the smaller part of the July 31 final order in Case No. PUR-2026-00056. The larger part is a directive: Dominion must write a rule that makes new data centers pay up front for the substations and lines built only to connect them ^[1].

The order has drawn a week of statements since. Gov. Abigail Spanberger’s office claimed credit on Aug. 5 ^[3], and the Piedmont Environmental Council, which testified in the case, sent supporters a second alert on Aug. 10 ^[4]. Read against the order, the claims run ahead of what was decided.

What the SCC decided in the Rider T1 case

The case is Dominion’s annual recovery of what it pays PJM Interconnection for transmission service, collected partly in base rates and partly through an adjustable charge called Rider T1 ^[1]. Dominion filed May 1, 2026, for a rate year running Sept. 1, 2026, through Aug. 31, 2027 ^[1]. The commission held hearings July 14 through 16 ^[1].

On the money itself, the SCC had little choice. Under Virginia Code § 56-585.1 A 4, these PJM charges are “deemed reasonable and prudent,” and the order says “the Commission is without discretion to add or subtract from these costs” ^[1]. It approved a total revenue requirement of $1,538,974,037: $598,621,989 through base rates and $940,352,048 through Rider T1 ^[1]. Dominion’s application put the total at $206,899,352 above what current rates would produce ^[1]. The rider takes effect for service on and after Sept. 1 ^[1].

Where the commission did have discretion was in who pays. It approved an amended 12 coincident peak method, which spreads costs by each class’s share of the system’s 12 monthly peaks, with two changes ^[1]. One adjusts class allocations to forecast billing units for the rate year; as Dominion explained it, rapid large-load growth means the adjustment produces lower rates for the other classes ^[1]. The other applies the 85% minimum transmission demand charge for large-load customers that begins Jan. 1, 2027, treating those customers as if they draw at least 85% of contract demand ^[1]. “At the extremes,” the order says, that cuts the residential class’s allocation factor by 2.84% and raises the GS-4 class’s by 4.33% ^[1]. Staff, Dominion, the Virginia Committee for Fair Utility Rates and the Attorney General’s Division of Consumer Counsel supported the method ^[1].

The contribution in aid of construction: what it covers

The order sorted the parties’ direct-assignment proposals into three tiers: “direct connect” facilities such as transmission substations; supplemental projects caused by large-load interconnections; and backbone upgrades, including Regional Transmission Expansion Plan projects, that large loads benefit from along with others ^[1].

It acted on the first tier only. Dominion must file, after coordinating with staff, amendments to its line extension policy “that would require a mandatory CIAC for defined types of transmission facilities,” within 90 days ^[1]. A CIAC, or contribution in aid of construction, is a payment the customer makes toward the capital cost up front. The order defines the reach narrowly: the policy applies prospectively and covers “direct connect” facilities, “generally meaning substations and the lines connecting the customer to the bulk transmission system,” where a new or expanding large-load customer is the but-for cause ^[1]. Dominion is to propose an explicit definition when it files ^[1].

The charge is net of revenue, as Dominion’s distribution line extensions already are: projected revenue from the customer is credited against the capital cost, and the customer pays the rest ^[1]. The order limits that credit to revenue from the customer’s transmission charges ^[1]. It also tells Dominion and staff to consider how the CIAC “can be used to offset or reduce collateral requirements in an equitable manner” ^[1]. That last point matters for developers. A PEC witness testified that a CIAC “would completely eliminate all risk [of stranded costs] going forward” ^[1]. The commission did not say whether a data center that pays up front should post less security; it asked Dominion to propose an answer.

Neither the order nor the parties’ statements in the record this column draws on estimate what the contribution will total, or name a project it would apply to. As this column noted on Aug. 6, the cost of serving a large load depends on terms set outside the headline; here the terms are not yet written.

What it leaves for the next docket

The upstream tiers stay open. The order says a direct-connect policy “may not address all instances” of reliability costs that appear to be caused by large loads, and that the record “supports a more deliberate approach to the question of direct assignment of higher-order transmission costs” ^[1]. In the new docket the commission may consider extending the CIAC to those costs, “a blended approach” that sends higher-order supplemental costs to the GS-5 large-load class, or keeping to direct connect alone ^[1]. A footnote adds a planning angle: if Dominion has a financial reason to avoid triggering a CIAC, extending the policy to supplemental projects “could drive more regional planning” ^[1]. The commission also noted that FERC is considering reforms that may overlap with state efforts ^[1].

The second open question is the territory boundary. Old Dominion Electric Cooperative asked that large-load transmission costs in the Dominion zone be assigned to large-load customers regardless of which utility serves them ^[1]. The SCC said its jurisdiction covers Dominion’s own retail customers and sent the cross-utility question to the Mutual Operating Agreements on file at FERC, calling it “an equity issue that can go in both directions” ^[1]. Dominion must work with ODEC and other distribution utilities toward “an acceptable and symmetrical approach” and file a status update within 120 days ^[1].

Where the sides stand

Dominion opposed direct assignment in the case, arguing the new minimum demand charges should be allowed to mature first; its preferred fallback was assigning costs to the GS-5 class where a transmission certificate case finds GS-5 load driving need ^[1]. After the order, spokesman Jeremy Slayton said: “When we file our amended line extension policy, we will be adding even more protections for our residential customers to ensure our more energy intensive customers continue to pay their fair share” ^[3].

Data center companies wanted contributions to be optional. Amazon proposed a voluntary CIAC “as a way to reduce ratepayer burden,” asked that customers electing it “receive top priority in Dominion’s interconnection queue,” and opposed mandatory direct allocation ^[1]. Google supported a voluntary CIAC for substations, with ongoing maintenance shared by the system ^[1]. The commission made it mandatory.

Ratepayer and environmental groups asked for more. Appalachian Voices argued for assigning supplemental project costs to the customers driving them; Sierra Club and NRDC sought a CIAC with refunds for everything from the meter to the backbone ^[1]. PEC president Chris Miller called the order a precedent but said it “does not resolve who should pay for the billions of dollars in other supplemental and regional transmission projects driven by unprecedented data center growth in Virginia” ^[2]. PEC’s Aug. 10 alert adds that the change is “not retroactive,” so already-approved lines such as Germanna in Culpeper and Daves Store in Prince William County stay spread across all customers ^[4].

The governor said the order “makes sure that data centers are paying the full cost of the transmission infrastructure their developments require” ^[3]. That holds for direct connect facilities once a policy is approved. It does not yet hold for supplemental or regional lines ^[1].

Ohio moved on a different cost the same week. On Aug. 5 the Public Utilities Commission of Ohio ordered AEP Ohio, in Case 26-113-EL-ATA, to require 180 days’ notice before a data center returns to default service, then buy its energy through separate auctions or spot purchases with “the entirety of the cost assigned to the data center customer” ^[5]. Virginia’s order is about wires; Ohio’s is about energy supply.

What I’m watching

About Oct. 29. Dominion’s amended line extension policy, due 90 days from the order by this column’s count ^[1]. The first things to read: its definition of “direct connect,” and whether a CIAC lowers collateral.

About Nov. 28. The Dominion-ODEC status update on cross-territory costs, due in 120 days by this column’s count ^[1].