Virginia – SCC approves Chesterfield gas plant and Dominion rate hike, creates new rate class for data centers
The State Corporation Commission on Tuesday handed Dominion Energy two major approvals, after the board OK’d the controversial Chesterfield Energy Reliability Center as well as the utility’s new rates for customers and contract requirements for high load customers, including data centers.
Chesterfield Energy Reliability Center (CERC) gets the green light
State regulators approved the CERC, a 944 megawatt gas peaker plant, which will be built on the site of the former coal fired plant at the Chesterfield Power Station near the Dutch Gap Conservation area south of Richmond. The SCC also gave approval to Dominion to add a CERC Rider to utility bills to recover the $1.47 billion it is anticipated to cost to build the project.
For months, community members and environmental advocates have railed against the proposed plant, citing environmental and health concerns for residents. With SCC approval, the construction, expected to start in 2026, is one step closer with the project slated for completion in 2029.
The most fervent opponents of the plant said that Tuesday’s final order was a blow that worsened, not alleviated, their concerns. Others said building a fossil fuel-reliant plant would counter the Virginia Clean Economy Act, which requires that gas power plants be retired by 2045, barring potential risks to reliability.
Friends of Chesterfield board chair Glen Besa, said:
Under the Clean Economy Act there was a moratorium on new gas plants and Dominion was to phase out all existing gas and coal plants by 2045.
” In this first test of this law, the SCC has failed,”
The surrounding community has been free of the former coal plant’s pollution since it was retired in 2023 after burning for 70 years. While the gas plant will pollute significantly less than the coal plant, neighbors with fresh memories of the old plant didn’t want the new one built in their community.
Chesterfield NAACP President Nicole Martin, said,
To say we’re disappointed is an understatement,
“Today’s decision puts Dominion’s profits over the health and wellbeing of those living in fenceline communities in Chesterfield and beyond.”
The SCC’s final order states that the decision is not about choosing the CERC over compliance with the VCEA.
The evidence in this case clearly establishes that there is an imminent reliability threat for Dominion and its customers and that the CERC project addresses that threat in a manner that is in accordance with the public interest and the VCEA
The plant is anticipated to only run 37% of the year to help meet demands during the hottest and coldest days. The regional transmission grid, PJM, has said that Virginia is the most energy constrained part of their region – in part due to the concentration of high load data centers in the commonwealth. Virginia also is one of the largest importers of energy in the country.
The final piece of the puzzle that Dominion needs to get shovels in the ground for the CERC project is approval of the air permit from the Department of Environmental Quality. A final hearing is scheduled in December before a final decision is made.
Dominion spokesperson Jeremy Slayton said,
This project will provide reliable power for hundreds of thousands of homes, businesses, schools and hospitals in Chesterfield and beyond.
”As part of our all of the above energy strategy, it will ensure our region has the reliable power we need to continue growing and thriving,”
Dominion rate increase approved, new rate class created
Starting next year, utility bills will rise for Dominion Energy ratepayers, the SCC also determined Tuesday. In January 2026, the base rate will increase by $11.24 monthly for the average residential user, and in January 2027 an additional $2.36 would be added monthly. Those increases are at a lower rate than Dominion requested.
The SCC allowed a return on equity to increase from 9.7% to 9.8%, which is lower than the 10.4% the utility requested.
The SCC commissioners said in a statement after the order was announced,
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
“ In this case, that has resulted in an increase in rates, but not to the extent requested by Dominion.”
Dominion initially requested a base rate increase of a total of $822 million in 2026 and $345 million for 2027. The SCC ultimately allowed a lower total amount of $565.7 million in 2026 and $209.9 million in 2027.
Slayton said,
We recognize the impact this will have on our customers.
”We are offering more energy-saving programs and assistance options than ever before. Every month, thousands of our customers benefit from programs that help lower their bills and get the support they need,”
In December, Dominion plans to launch an online hub for all their programs that customers can use to try and save on their bills.
The newly-approved plan also creates a new rate class for high load customers that use over 25MW and a load factor of more than 75% monthly. That requirement captures most data centers, as well as industrial and commercial customers. These customers are also required to sign 14-year contracts that will ensure they will pay for their proposed energy costs, even if they use less or if the data centers aren’t built.
The minimum demand charges for these users would be 85% for transmission, 85% for distribution, and 60% for generation. They would be charged more if they exceed those minimums.
Peter Anderson, Director of State Energy Policy with Appalachian Voices, in a statement, said:
Data centers and other large energy users create a special set of risks, and we are pleased to see the Commission engage with these emerging issues here.
”Residential customers should not be subsidizing these wealthy companies, and Virginians are relying on the Commission to address these fundamental questions of fairness.”
Dominion serves about 450 data centers in Virginia. A coalition of data center companies had proposed their own plan to the commission that was less stringent as the plan Dominion put forward, however the SCC did not accept it.
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Virginia – SCC approves Chesterfield gas plant and Dominion rate hike, creates new rate class for data centers, source
