PART 16
For years, the number of data centers asking for connection dates from Dominion Energy had been a secret. But there were hints of trouble.
In 2022, Dominion said its overworked transmission lines could not handle new arrivals to Virginia’s Data Center Alley and there would be a four-year delay for full power. In 2024, the utility extended the delay to seven years.
A year ago, the company — whose entire load for all customers peaks at about 25 gigawatts — said 40 gigawatts worth of data centers were waiting for hookup. It was clear Dominion could not handle that load, but, again, details were unavailable.
Now a State Corporation Commission hearing has parted the curtain. What it revealed surprised and infuriated the one dozen data center companies, citizens, and environmental groups that participated, including:
• Dominion has approved 111 new data center projects to be connected by the end of 2031 and has 220 more waiting in a queue. The total power load of all of them surpasses 70 gigawatts, Dominion said, equal to the output of 70 North Anna nuclear plants. Google lawyer Will Cleveland called it “an almost incomprehensible amount of load.”
• For the 220 applicants still waiting in the queue — requesting 50 gigawatts of power — the company says it can study and approve only about 10 of them a year. Meanwhile, the list of applications is growing by 10 a month. Amazon estimated the wait time for new applications could be up to 24 years.
Dominion’s approval process united big data companies and environmentalists over what they see as its deficiencies. Amazon offered to be flexible in its power needs and to build on-site generators. Google said it would pay for its substations and transmission lines.
The Piedmont Environmental Council liked that — to a point. “What makes a whole lot more sense is they pay for all their infrastructure, transmission lines, all the upstream costs, everything,” said Julie Bolthouse, the council’s director of land use.
She was not so enthusiastic, though, over Google’s idea that the data center giants should get expedited approval in exchange for their payments.
The question becomes: Why do so many data centers keep applying for electrical hookups when they know they can’t be connected to the grid for years and possibly decades — or never?
Some at the hearing suggested that the list could not be real — that it must be crammed with speculators. But Dominion officials said few applicants have dropped out.
Remington Technology Park got approval from the Fauquier County supervisors on July 9 to use fuel cells to power its buildings because Dominion said it would take five years to get a connection to the electric grid. Some data centers built in Loudoun County have had to wait years for full power, as the transmission lines were not adequate for their load. One Vantage data center there built its own gas turbine generation plant to get fast power.
When Amazon’s Village Place Technology Park in Gainesville was being planned in 2021, the question of where its power would come from was not publicly resolved. A substation across the highway, mentioned as a source of power, is still under construction. Four of the data centers have been built and, according to Amazon, are being “brought online in phases.” But neighbors call the quiet towers “zombies.”
Carter Wiley, a Fauquier County real estate broker familiar with data center deals, said the companies tolerate the astounding waits because Northern Virginia is the “doorway into the Internet.”
Theresa Ghorzi, a Loudoun resident opposed to more transmission lines, said the long queue is due to speculation — “queue squatting” to get a place in line.
“I think this is a Wild West casino-type market,” said Bolthouse. “Everybody thinks that they’re going to be the winner in the end. Everybody’s got their own little plan for how they think they’re going to win. They’re all obviously not going to win, because there’s no way.”
Amazon’s energy adviser, Cameron Brooks, said it’s simple: “The value of holding a future energization date in what is by far the most valuable data center market in the world far exceeds the minimal cost of maintaining a queue position.”
The application path
Whatever the reason, the onslaught of applications has presented Dominion — and the region — with a big problem.
The entire 13-state Mid-Atlantic grid may not have enough generation to power the 111 new data centers with a load of 27 gigawatts that Dominion has approved so far. Despite a mad scramble to add solar and gas turbine power, the grid operator’s CEO, David Mills, told members in a May 6 letter that “new generation simply cannot be built fast enough to offset the combined effect of retiring supply and surging demand.”
Until May 2025, Dominion approved connections on a first-come, first served basis, according to Matthew Gardner, Dominion’s vice president for transmission planning. But after approving 27 gigawatts of data center load through 2031, Dominion decided to slow its rate of approval considerably.
The 111 it approved through 2031 added, on average, 4.5 gigawatts a year. The new process will approve between 2 and 3 gigawatts a year, because that is all the transmission grid can absorb, Gardner said. He called it “the speed at which the industry can currently grow.” (He did not say why 4.5 gigawatts a year through 2031 was OK.)
Dominion puts the applications into a queue made up of batches of 10, comprising 2 to 3 gigawatts of load. Each batch is studied for the effect on the grid and how its power will be transmitted. One batch is studied at a time, and processing each batch can take a year.
When a batch’s assessment is finished, it moves on to the next stages, which include permitting, engineering and actual construction. Those can add five to 10 more years to the process, according to a chart provided by Dominion.
Dominion says it currently has 15 batches in its queue; it is taking them in order.
That does not make data center companies happy. The whole process can create an “untenable, serialized bottleneck,” said Carolyn Berry, a Washington, D.C., energy lawyer who represents Google. It could take 15 years to get to the last batch in the current queue, putting projects in a “state of indefinite limbo,” she said, and the total time from application to connection could run up to 24 years.
Stan Blackwell, Dominion’s director of data center practice, called that claim “hypothetical” and “speculative,” but he did not offer an alternative timeline.
Impact on ratepayers?
Berry said the inefficiencies in the system play to Dominion’s “well-documented capital bias.” She and others noted that the projects were not put into batches based on their geographic closeness, but on their application dates — so they are spread all over the state.
She argued that Dominion is inclined toward inefficiency and overspending because it gets a guaranteed return for whatever it spends on infrastructure. “The more they spend, the more their shareholders earn,” she said. She added that a poorly managed queue could “justify Dominion’s investment in unnecessary infrastructure which — while great for shareholders — is bad for ratepayers,” who pay infrastructure costs in their electric bills.
She said just the 233 substations dictated by the waiting projects could cost ratepayers between $5.8 billion and $11.6 billion. Dominion did not respond to emails or calls.
Berry proposed a substantially different process to deal with applicants, including making them pay more to apply, studying applications in geographic clusters, allowing a data center to buy or build its power infrastructure, and finding ways to move those applicants up in the timeline.
The State Corporation Commission appeared to like some of those ideas. Prodded by the commission to improve its process, on June 12 Dominion proposed cutting up to eight months off its study stages and hiking the fee to join the queue from $250,000 to a nonrefundable $500,000.
As instructed by the state commission, on June 30 Dominion and other participants weighed in on whether data centers could jump ahead in the queue if they paid for their substations or reduced their power use in times of grid stress. Most said it was OK, as long as it benefited other customers. Dominion said it was even considering asking projects to pay for the extra generation they require.
The Piedmont Environmental Council said any such plan needed to look at effects on air quality, public health and Virginia clean energy policy, and must not encourage onsite fossil fuel generation.
But the idea that data centers could buy their way onto a fast track did not sit well with everyone.
“Why would you want to expedite the grid connection without energy to support it?” asked Ghorzi in a later interview. “I’m flabbergasted, like beyond my comprehension.”
