The simple version

• Virginia's State Corporation Commission approved a Dominion Energy rate increase that adds about $11.24 per month to a typical residential bill in 2026, with another $2.36 per month in 2027.
• The average Virginia residential rate reached 15.96 cents per kilowatt-hour in February 2026, up from 14.22 cents a year earlier.
• The driver is grid spending to serve AI data centers: PJM's latest capacity auction tied nearly 5,100 of a 5,250 megawatt load increase to data center demand and cleared at the price cap.
• A new GS-5 rate class in 2027 shifts more cost onto very large data center customers, but does not fully insulate households from costs already in the system.
• This explains how the AI buildout shows up on a real electric bill. It does not predict where rates go next.

On November 25, 2025, the Virginia State Corporation Commission issued its final order in the Dominion Energy Virginia biennial review (Case No. PUR-2025-00059). The order approved a $565.7 million revenue increase for 2026, with an additional $209.9 million step-up in 2027. For a typical residential customer, that translates to $11.24 per month more in 2026, and another $2.36 per month on top of that starting in 2027. The SCC trimmed Dominion's original request by 23.7 percent.

The SCC's order stated the rate structure was designed 'to help insulate ratepayers from the costs around the rapid build-out and construction of infrastructure to support businesses such as data centers.' Translated into plain English: the utility needs to spend a lot of money on transmission, generation, and substations to serve hyperscale AI compute, and the SCC is trying to keep ordinary households from carrying that burden alone.

Why this is specifically an AI story

PJM Interconnection, the regional grid operator covering Virginia and 12 other states, ran its 2027/2028 capacity auction on December 17, 2025. The auction cleared at $333.44 per megawatt-day, the FERC-approved price cap, for a total cleared cost of $16.4 billion. PJM reported that of the roughly 5,250 megawatt increase in peak load forecast versus the previous auction, nearly 5,100 megawatts came from data center demand. The auction also fell 6,623 megawatts short of the reliability target, the first time the entire PJM region missed it.

PJM's independent market monitor, in analysis reported by Utility Dive in January 2026, attributed roughly $6.5 billion (about 40 percent) of the $16.4 billion in cleared costs directly to data center load. Those capacity costs do not stay at the wholesale level. They flow through to retail electric bills as higher generation, transmission, and distribution charges. Virginia is the geographic center of this story because Loudoun County hosts the densest cluster of data centers in the world, but every PJM state, from New Jersey to Ohio to West Virginia, pays into the same capacity market.

What the numbers look like on a real Virginia bill

Per the U.S. Energy Information Administration's Electric Power Monthly release for February 2026, the average Virginia residential rate was 15.96 cents per kilowatt-hour, up from 14.22 cents in February 2025. That is a 12.2 percent year-over-year increase, compared to a 7.4 percent rise in the national average over the same period. EIA data puts average residential consumption in Virginia at roughly 993 kilowatt-hours per month.

• Average Virginia bill at 14.22 cents per kWh (Feb 2025): roughly $141 per month.
• Average Virginia bill at 15.96 cents per kWh (Feb 2026): roughly $158 per month.
• Year-over-year increase: about $17 per month, or roughly $208 per year.
• The $11.24 per month SCC adjustment is one piece of that increase; the rest reflects generation, fuel, and capacity costs flowing through other riders.

The Real Cost lens

Take just the $11.24 per month piece the SCC approved for 2026. Over a year that is $134.88. If the household had instead invested $134.88 per year at 7 percent (a rough long-run S&P 500 average), it would compound to roughly $13,700 over 30 years. The 2027 step-up of another $2.36 per month adds more on top. That is one rate case in one state. PJM capacity prices have set new records two auctions in a row, and unless data center demand growth eases or new generation comes online faster than forecast, the structural pressure on rates continues past this case.

Who pays for what under the new GS-5 rate class

The SCC's November order does try to shift more cost onto data centers themselves. Starting January 1, 2027, a new 'GS-5' rate class applies to customers demanding 25 megawatts or more. These customers must commit to paying for at least 85 percent of contracted distribution and transmission demand, and 60 percent of generation demand, whether or not they actually use it. The point is to stop hyperscale customers from forcing the utility to build for a peak that never materializes.

What the new rate class does not do, at least not yet, is fully insulate residential customers from the embedded transmission and generation costs already baked into the system. Those costs are already in the next several years of rate cases.

What this means

For a Virginia household this is a recurring increase you mostly cannot opt out of, because residential customers cannot practically switch utilities. The roughly $17-per-month year-over-year rise, about $208 a year, is partly the $11.24 SCC adjustment and partly generation, fuel, and capacity costs flowing through other riders. With PJM capacity prices setting records two auctions running and data center demand still growing, the structural pressure on rates likely continues past this one case. The most useful thing a household can do is read the rider lines on the monthly bill against the SCC's posted tariff to see which charges are flowing through.

What this is NOT

Not a prediction about where electricity rates go next. Not a recommendation to switch utilities (most Virginia households cannot in any practical sense). Not a statement that AI itself is good or bad. Just the math on a specific SCC order and a specific PJM capacity auction, and how those numbers show up on a real household bill.

Sources

• Virginia State Corporation Commission, Final Order in Dominion Energy Virginia Biennial Review, Case No. PUR-2025-00059, November 25, 2025 (scc.virginia.gov)
• PJM Interconnection, 2027/2028 Base Residual Auction Results press release, December 17, 2025 (insidelines.pjm.com)
• U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A retail residential prices, data for February 2026 (eia.gov/electricity/monthly)
• PJM Independent Market Monitor analysis on data center share of capacity costs, reported in Utility Dive, January 2026 (utilitydive.com)
• Federal Energy Regulatory Commission, PJM capacity market price cap orders (ferc.gov)