Early July brought 100-plus-degree temperatures to large swaths of Virginia, forcing most of the commonwealth’s air conditioners to whir all day and night. Temperatures may hit 100 degrees again this week.
But staying comfortable costs more this summer: Dominion Energy announced that, starting this month, it will add an $8-per-month charge to every domestic customer’s bill for the next year to cover higher fuel costs. Another increase, $1.80 per month, is coming this fall.
“The cost of living is so high already that a higher electricity bill is not something we need right now,” Dominion customer Margaret Murphy told WTVR. “I don’t like to see my bill go up in any way, shape, or form,” added customer Mike Uzel.
The rising bills may complicate the proposed $67-billion merger of Dominion and NextEra Energy. The deal, which amounts to NextEra purchasing Dominion, was announced on May 18 and aims to create the world’s largest regulated electric utility by market capitalization.
But it is a long process. The merger still needs to be approved by the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, the Virginia State Corporation Commission, the North Carolina Utilities Commission, and the Public Service Commission of South Carolina before it can go forward. That could take more than a year.
Energy demand is expected to jump during that time. “According to the Energy Information Administration (EIA), electricity consumption was flat for nearly 15 years, but demand has increased an average of 2.1 percent per year over the last five years,” Fred Ashton, director of competition policy at the American Action Forum, wrote in an analysis on the merger. “In EIA’s high electricity demand scenario, data center server energy use by 2050 will be more than 16 times that in 2020, 84-percent higher than its baseline case.”
One concern that regulators will need to consider is the future of data centers. Dominion says that more than a quarter of the electricity it sells in the commonwealth goes to data centers. It has connected an average of 15 data centers each year for the past 13 years.
Dominion is also looking to charge customers more to build power lines. The utility initially asked for an increase of $2.90 per month for the average household. The governor’s office wants data centers to pay the bulk of those costs. Josephus Allmond, Virginia’s first-ever chief energy officer, filed papers asking data centers to pay for all transmission lines that are now needed solely because of new data-center demands.
At least one of Virginia’s elected officials wants to slow the merger process down.
Lt. Gov. Ghazala Hashmi, a Democrat, recently sent a letter to the State Corporation Commission requesting information: “I respectfully urge the Commission to issue, expeditiously, an order requesting that Dominion and NextEra Energy not submit their acquisition application until the companies have answered the essential questions needed to understand this transaction,” she wrote. “Furthermore, I urge that the Commission attach the enclosed questions to that order, directing the companies to respond either within the Application document itself or in the accompanying prefiled direct testimony.”
She included a list of 64 questions and further stipulated that all answers be authored by a named individual and supported by relevant internal documents. If an answer was crafted for the first time—meaning that the question asked had not been considered by the companies until now—they must say so explicitly.
“I trust that neither Dominion nor NextEra will oppose this request,” Hashmi concluded. “I assume that both companies share the goal of ensuring that the Commission and the public have full knowledge of all reasons for and possible effects of the transaction.”
Her boss, Gov. Abigail Spanberger, hasn’t taken a stand on the merger yet. “My approach at this moment is to be very cautious, and recognize the devil’s in the details,” Spanberger said during a podcast earlier this month. She said she wants to learn how the merger would affect Virginia ratepayers, jobs in the energy sector, and the future generation of energy before she weighs in.
Dominion is expected to file its application to merge in September, which will give regulators 180 days to review the proposal and issue a decision.
Whether the merger goes through or not, Virginians should brace for higher utility bills for at least the next three years. Spanberger brought the commonwealth back into the Regional Greenhouse Gas Initiative this month. As Joe Thomas wrote for the Daily Signal, “This is the classic cap-and-trade scheme with a cool new, hip name.” No matter what else happens, RGGI will mean higher prices for power in the years ahead.
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