Photo: Jon Moore / Unsplash
Dominion Energy is asking Virginia's State Corporation Commission for permission to recover just over $1 billion in fuel and purchased-power costs the utility says it underestimated — a shortfall the company blames largely on a brutal January cold snap and a nearly 30% year-over-year jump in the cost of power it buys from the regional grid. For Prince William County ratepayers already watching their bills climb alongside the county's data center boom, the case now before regulators could mean years of added charges stacked on top of costs they're already paying down from Dominion's last fuel shortfall.
What Dominion Is Asking For
In its original filing this spring, Dominion told the SCC it would need about $2.69 billion to cover new fuel and purchased-power costs for the year running July 2026 through June 2027, on top of a projected $1.078 billion balance left over from prior periods — more than half of it, about $567 million, tied to January's extended freeze alone. Vice President of Regulatory Affairs Scott Gaskill told regulators the company had to “reliably serve a higher-than-expected load at a time when the costs to serve that load are the highest.”
Dominion laid out two ways to recover the leftover balance. Under the first, customers would pay it all off within a single year, raising the average residential bill by roughly $21.79 a month for that year. Under the second — the option Dominion prefers — most of the new costs would still hit bills right away, but the bulk of the old balance would instead be “securitized”: financed through bonds and repaid by customers over several years, similar to a mortgage.
Fuel costs are what's known as a pass-through expense: state law lets Dominion recover up to 100% of what it spends on fuel and purchased power, without adding any profit margin. That limits how much the SCC can simply reject — the real fight is over how fast, and how, customers pay it back.
What the SCC Hearing Settled
The SCC spent two days in mid-August hearing evidence on the case. By then, the numbers had narrowed: a typical residential customer is already paying about $8 more a month for fuel under an interim rate Dominion has been charging since July. Recovering the remaining deferred balance the traditional way, over one year, could add roughly $13 more a month. Spreading it out through securitization would add far less — about $1.75 a month over a 10-year term, or about $2.25 a month over seven years.
SCC staff recommended the seven-year securitization option if the commission decides to approve financing at all, and Dominion said it would not oppose that timeline. The commissioners have not yet issued a ruling on which method Dominion will ultimately use.
Data Centers Get a Mention
Much of the hearing focused on what's actually driving the higher costs. Gaskill pointed to increasingly volatile and hard-to-forecast electricity prices in the PJM regional market. But the Office of the Attorney General's Consumer Counsel, which represents residential ratepayers in SCC cases, argued the evidence pointed to a more specific culprit: data center load growth as a primary driver of Dominion's exposure to volatile market prices and purchased-power costs. SCC staff separately flagged a pattern of Dominion buying more power on the open market when its own generation falls short, combined with what staff called significant load growth across its territory.
The scale of that growth is documented: the U.S. Energy Information Administration reported that summer peak electricity demand in PJM's Dominion zone hit 23,905 megawatts in 2025 — 23% higher than in 2019. Prince William County, with one of the largest concentrations of data center development in the country, sits near the center of that growth.
Not the First Time
Dominion has gone this route before. In November 2023, the SCC approved securitizing about $1.3 billion in fuel costs that had built up between mid-2020 and mid-2023, spreading repayment over roughly 7.25 years at an estimated $3.10 a month — instead of up to $14.72 a month under the traditional method. That bond is still being paid down by customers today. Layering a new multiyear repayment plan on top means Prince William County ratepayers could soon be covering two separate fuel-cost bonds on the same monthly bill.
Getting to this point required new state legislation, too: securitizing this round of fuel costs depended on a bill from Sen. Louise Lucas and Del. Destiny LeVere Bolling clearing the General Assembly this year, alongside separate legislation directing the SCC to examine whether Dominion is managing its fuel-purchasing decisions efficiently in the first place.
What Happens Next
The SCC is expected to rule on both the recovery amount and the repayment method following the August hearing; no decision had been issued as of this writing. Because the fuel factor adjusts on its own schedule, any ruling would show up on Prince William County electric bills as a separate line item alongside the existing 2023 fuel-bond charge already on customers' statements.
The Gazette will follow the case as it moves through the SCC and report on any ruling or bill impacts specific to Prince William County customers.
Read More
Subscribe: woodbridgegazette.com
Follow us: Instagram @WoodbridgeGazette · X @WBGazetteVA