The State Corporation Commission has approved a new electricity rate class, GS-5, for large users such as data centers with a demand of 25 megawatts or more, effective January 1, 2027. Certain large customers will pay minimum percentages of contracted distribution, transmission, and generation demand to help protect other ratepayers from infrastructure costs. The Commission approved smaller base-rate increases for Dominion Energy than requested—$565.7 million for 2026 and $209.9 million for 2027—resulting in lower residential increases of $11.24 and $2.36 per month, respectively. Dominion’s authorized return on equity was slightly raised from 9.7% to 9.8%, below the company’s 10.4% request. The Commission emphasized balancing cost recovery with reasonable rates for customers. The SCC writes:
The State Corporation Commission has approved the creation of a new rate class for the biggest users of electricity, including data centers.
In its final order issued today in Dominion Energy’s biennial review, the Commission said the new GS-5 rate class will comprise customers demanding 25 megawatts or more. The new rate class will be effective beginning January 1, 2027.
In addition, to help insulate ratepayers from the costs around the rapid build-out and construction of infrastructure to support businesses such as data centers, certain large-scale customers will be required to pay a minimum of 85% of contracted distribution and transmission demand, and 60% of generation demand, among other requirements.
The Commission in its order also rejected Dominion’s requested base-rate increases of $822 million in 2026 and $345 million for 2027. Instead, it found that the evidence presented supports an increase of $565.7 million in 2026 and $209.9 million in 2027.
For a typical residential customer, the approved rates would mean monthly increases of $11.24 in 2026 – 23.7% lower than Dominion’s request – and $2.36 in 2027 – 51.2% lower than the company had requested.
In its decision, the Commission also approved an increase in Dominion’s authorized return on equity from 9.7% to 9.8%, less than the company’s requested return of 10.4%.
The Commissioners wrote: “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.”
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