Virginia is the data center capital of the world.
The Sierra Club's Virginia chapter estimated in a 2025 report nearly 1,300 data centers will call the state within the next few years.
As these data centers are built and come online, energy researchers say customers will foot the bill. Plenty of people on social media seem to think data centers already had something to do with their high electric bills this month.
But Dominion Energy says that’s not the case. Recent bill increases were because of weather and inflation, Utibe Bassey, the vice president of customer relations at Dominion, told WHRO. Extreme temperatures this winter meant people used more energy to heat their homes than in decades. Fuel and critical infrastructure such as poles, wires and transformers are more expensive.
“Data centers are paying their fair share,” Bassey said. “In fact, data centers pay more in upfront costs. They pay more in demand charges, and they actually are in a completely separate rate class.”
Under current rate structures, data centers pay the full cost of the electricity they use, Dominion Energy spokesperson Cherise Newsome wrote in an email.
Starting in 2027, a new rate class called GS-5 will require data centers to take on more upfront costs and make longer-term commitments to protect residential customers, she said.
But Shelby Green, a researcher at the national Energy and Policy Institute, said this isn’t the whole story.
Data centers power our internet use, including Google searches, watching Netflix and artificial intelligence. They consume a lot of energy to do it and need more power than ever.
Green said it’s residential customers who are paying for the costs of new infrastructure to satisfy that increasing demand.
“Bills are also currently going up because of the additional rider that was put onto customers' bills this month to pay for a $1.47 billion gas plant,” she said.
The rider for that gas plant in Chesterfield went into effect March 1 for all Dominion customer classes. Dominion wrote in a filing to the State Corporation Commission that the gas plant was the only way to meet the energy demands of data centers. Renewables, the company stated, couldn’t produce the amount of energy required.
One hyperscale data center, like those operated by Google, Amazon and Microsoft, can consume 100 megawatts of power continuously. That’s enough to power around 16,500 homes in the U.S. And they need that energy nonstop: The data centers Dominion powers can only have 5 minutes and 42 seconds of down time per year, Dominion stated in the filing.
The more the new gas plant runs to meet that demand, the more fuel costs accumulate and are eventually passed to all customers, Green said.
“If we didn't have data centers increasing in our state, our energy demand would be flat or even decreasing,” said Paige Wesselink, the digital strategy manager at the Virginia chapter of the Sierra Club.
In other words, she said, we probably wouldn’t need a new gas plant to begin with.
‘Fair share’
Fuel costs already make up one of the largest and most volatile portions of customer bills, according to Kajsa Foskey, the director of the Virginia Energy Consumer Alliance.
And natural gas — which will be used for the Chesterfield gas plant – is especially volatile, she said.
“Fuel costs are 100% passed on to customers,” Foskey said. “What that means in practice is that utilities basically forecast their costs for fuel. Sometimes those forecasts are accurate, and then other times, especially when there's extreme weather events or events in the world that affect global markets, those fuel prices can spike.”
The war in Ukraine, for example, caused fuel prices to spike a few years ago. Bassey said it’s too early to tell how the war in Iran will affect fuel prices, but any impacts wouldn’t affect customers until later in the year.
The Alliance backed a piece of legislation in the General Assembly this year that would have required Dominion to cover part of those fuel costs, Foskey said.
“If utilities have to bear some portion of the cost for fuel, then we can imagine that they might make different decisions about their purchasing and what types of fuel they rely on,” she said.
It would also alleviate some of the financial burden on families, she said.
The version of the bill that was passed doesn’t require Dominion to share fuel costs but directs the SCC to study ways to reduce fuel risk.
Wesselink said data centers aren’t paying their fair share.
“We can say that data centers are paying their fair share when they are investing in clean energy that powers their data centers and no costs from data center energy production are being passed on to people's electric bills,” she said.
In the meantime, residents have begun pushing back on data center developments in communities around the state, and Virginia’s legislators have considered nixing tax breaks for the centers. More are in the pipeline, but eight Virginia data center projects were reportedly scrapped in 2025 after facing local resistance.
