Virginia data center boom pushes Dominion deeper into costly power market

The surge comes as Virginia Electric expects to buy 23% of its energy supply from the wholesale electricity market operated by grid manager PJM Interconnection, which serves 67 million people in a territory that stretches from Washington, D.C., to Chicago. That's up from 14% in 2021.

Scott Gaskill, vice president of regulatory affairs for Virginia Electric, said the utility's own generation portfolio is the best hedge against PJM market prices. The planned merger with NextEra is expected to accelerate Dominion's buildout of power plants and renewable energy, reducing its reliance on PJM market purchases.

"Every megawatt-hour generated by company-owned resources reduces the need to purchase energy from the PJM market," Gaskill said in his July 28 testimony filed with Virginia regulators.

Virginia Electric serves 2.7 million homes and businesses in Virginia. Fuel costs could drive up the average monthly bill by as much as 13% to $195 from $173, according to Virginia regulatory filings. The increase would only be about 5% if Dominion can issue bonds to defer some fuel cost recovery from customers into future years, the filings said.