Dominion scrambles to meet soaring power demand

In June 2022, Loudoun County staffers met with Dominion Energy officials to hear their plans to increase power reliability for data centers. Dominion said it was “contemplating system upgrades,” according to a county report. But three weeks later, with no warning to the county, Dominion started telling data centers new power delivery would be severely limited until January 2026 as it temporarily paused hookups for new data centers.  

The news stunned Buddy Rizer, Loudoun’s economic development director, who has overseen more than a decade’s worth of data center development in Northern Virginia. Even last week, a year later, Rizer said he was still shocked. “I remain stunned at the way that rolled out,” he said.     

The news also sent shock waves through the data center community nationwide -- it was the talk of an industry conference last month in Tysons Corner. The idea that Dominion Energy, which is obligated by law to bring power to any business that requests it, could not deliver?

At the time, Rizer was hoping for 10 million more square feet of data centers. Suddenly, power was limited.  

Dominion said that was temporary. Two Dominion executives, Alan Bradshaw, vice president for strategic partnerships, and Matt Gardner, vice president for transmission planning, said in a lengthy interview last week their company is working hard to fix the power crunch by 2025.  

They insisted Dominion has plenty of generation capacity, and that the problem lies with transmission congestion. In the meantime, they say, they are also working with new data centers to supply them with less power upfront in exchange for more power later.  

Still, the situation raises serious questions. When Dominion completes its upgrades, will it have to play catch up again?What will happen if dozens more data centers come online in Prince William County? What will happen in Fauquier, where six proposed data centers wait in the wings?Who is paying attention to power needs as county supervisors consider applications for new data centers? And how did Dominion get it wrong?  

The Dominion executives offered several explanations for falling behind. They had transmission improvements underway which they thought would be adequate. They were caught by surprise with the rapid acceleration of data needs, driven in part by people’s increased use of the internet during the pandemic. They now see how the trend is zooming exponentially on an upward curve that Gardner called “a paradigm shift” – and are basing new plans on that.  

But a presentation by Dominion to PJM Interconnect, whichoperates the electric grid in 13 mid-Atlantic states, shows how early the trend started. The data show there were nearly 50%hikes in data center power requests each year from 2017 to 2019. Actual power demand, which runs less than fully contracted power, was increasing more than 20% year after year – rising 27% in 2019, 2020 and 2021.  

During the same period, Loudoun supervisors approved ever-increasing amounts of data center square footage – up 30% in 2018, up 39% in 2019 and up 18% in 2020, according to data analyzed by Loudoun resident Jim Hanna. 

As the supervisors kept approving data center projects, power needs were not part of the planning process. After all, Dominionhad always delivered.   

“It was like, sure, you want it, whatever you want, you got it. Wedidn't really understand the energy piece of it. The supervisorsdidn't; I didn't,” said Gem Bingol, Piedmont Environmental Council’s land-use representative in Loudoun. 

Bingol has a theory about why Dominion missed the explosion: “Maybe they knew it was coming, but they didn't know it was coming as fast as the wave came.”  

Others think Dominion was in denial. Says Rizer: “People weren'tbelieving their eyes. Like, ‘The demand can't be that. That can'treally be the demand.’”  

PJM, which relies on data from Dominion for predictions, was also caught flat-footed. It said that because its earlier forecasts had failed to capture the data center explosion, they thought Dominion’s planned transmission projects were sufficient.  

But by July 1, 2022, three days after Dominion met with Loudoun County officials, PJM had caught on. On that date, it filed a one-page notice that cited “unprecedented load growth” driven by data centers since 2018. The notice dryly spoke of “immediate need” – but it smelled of emergency. 

At the time, Dominion was engaged in 44 transmission projects, the notice said, based on expected increases of 2,050 megawatts of load growth through 2025. One megawatt is a million watts, enough to power roughly 250 homes. In effect, those projects were providing enough electricity to power more than 500,000 homes. 

Two Dominion workers upgrade some of the wires at the Clover Hill Substation near Manassas. Jill Palermo.

But based on the spike in demand, PJM was now forecasting 4,000 more megawatts of load needed by 2027. PJM said that Dominion would need 13 more projects to serve Loudoun and would need to skip competitive bidding to complete them faster, according to the PJM notice.  

Three months later, in October, PJM called for 16 more projects. They included replacing old power cables, transformers and breakers, and running a new 500kilovolt transmission line 3.5 miles east from the region’s north-south “backbone” line to a substation near data center alley.The cost: more than $627 million, nearly all paid for by ratepayers. 

In a report issued in January, PJM admitted its earlier forecasts had been way off. It said its predictions in 2022 were 20% too low for 2028 and were 39% too low for 2038.In 2022, it said Dominion would see overall loads of about 28,000 megawatts in 15 years. Now, driven by the spike in data center demand, it was expecting loads of 41,000 megawatts in Dominion’s “zone” (a multi-state area)by that date. The power demand of France runs about 42,000 megawatts, according to the International Energy Agency.  

Dominion and PJM were slow to catch on to zooming power needs driven by data centers. This graph shows how far off early forecasts were for the coming 15 years. PJM adjusted its 15-year forecast (dotted line) this spring. Note: numbers of the left axis represent peak load; 43K means 43,000 megawatts of power. Source: Dominion Energy 

Meanwhile, to compensate for its shortfalls until 2026, Dominion made deals with new data centers. Noting that data centers typically start up at less than full load or “capacity,” the utility offered reduced amounts of power to start and promised more later.  

“None of them actually use the power right away,” said Dominion’s Bradshaw. Most, apparently, took the offer.   

For example, it was reported in May that developer PowerHouseData Centers had leased a 265,000-square-foot center in Ashburn for which Dominion arranged to immediately supply 15 megawatts of power with another 15 coming by 2025. By late 2025, Dominion will add 60 megawatts more, for a total of 90 megawatts, when work is done on a new substation.  

“I think the industry has done an amazing job of flexing loads and transferring loads and reassessing timelines. This is what the(data center) industry does, by and large. And the thing that people forget is, power is their currency. That's what they sell,” said Rizer. 

Dominion has created charts that show that it takes about four years for an average data center to use all the capacity it asks for. But some say this model won’t work anymore. 

Data center load requests still rising 

Most of the projects to decongest transmission in Loudoun’s data center alley are expected to be finished by 2025 or 2026. At that point, says Rizer, data centers will get the power they want. “They will get it. They may not get it between now and 2026. But after 2026, they'll get it.” 

In addition, Dominion is planning to run a 500-kilovolt transmission line from Pacific Boulevard in Sterling north to and westward along U.S 7 to the “backbone” near the Luck Stone quarry. That would create a box – some call it a loop – of transmission lines surrounding data center alley.  

And Dominion executives said two very big projects have gone out to bid, though they wouldn’t describe them. They said their new finely tuned predictions will let them catch up with and stay abreast of future loads.  

A no trespassing sign near the Clover Hill substation neat the Manassas Regional Airport. The substation is receiving upgrades but is just down the road from a new $40 million Wakeman Substation. Jill Palermo.

But others are not so sure. Bingol, and several others close to the data center industry, said, due to the rapid hike in power needs, Dominion could fall behind again.   

One data center executive, who asked not to be named, said the industry has changed vastly over the past 10 years. He said a decade ago, his customers would ask for 1,500 to 5,000 watts per rack of servers. Then, about four years ago, customers started to cram more and more chips into their servers. Power requests moved up fast: from 5,000 to 12,000 to 20,000 to even 100,000 watts per rack, he said. “I’ve got one that even requested 250,000 watts per rack,” he said.  

Not only have power needs leapt, but data centers known as “hyperscalers,” owned by cloud giants such as Amazon or Microsoft, need all their power right away -- unlike “co-locators” that ramp up over time. And, he said, data centers that used to use perhaps 40% of their power, keeping the rest in abeyance for emergencies, have now figured out how to use 80% of their power capacity. Data centers that are liquid cooled will use four to 10 times more power yet, industry experts said.  

The industry executive noted that Dominion believes that the power data centers actually use is significantly less than what they request.   

“What we're trying to say is, yes, that was the case, 10 years ago, but it's changing. Super-computing is changing; AI is changing;hyperscalers are changing these equations where they'redemanding more power,” said the data center operator who asked not to be named. 

Dean Nelson, CEO of Cato Digital, said at a recent conference in Tysons Corner that artificial intelligence alone will increase data demand by three times in the next five years. 

Dominion “underestimated the growth of the market. And our market is growing incredibly,” said the data center operator. The data center industry was not to blame, he said, adding that Dominion was “not listening.” 

Fauquier officials press Dominion on transmission lines 

Members of the Fauquier County planning commission and board of supervisors met last week with Steve Precker, a spokesman for Dominion, to see what they could learn about Dominion’s plans for their county. They learned very little. 

Dave Gibson, a Fauquier resident with a background in environmental consulting, using the load numbers disclosed by most of the operating and pending projects in Fauquier,calculated that if all projects were built, they would total 1,500megawatts of power.  

Precker told the county officials that without load requests from data centers Dominion could not specify where transmission lines or substations would be built.   

“Without having a specific project to talk about right now, I can’tadequately say, ‘Yes, we're going to put a new transmission line in this area of the county or redo a substation over here,’” he said. 

Precker did tell the board members that Dominion projects the power load of its data centers will more than triple between 2020 and 2027.  

“Whereas it used to be 20 to 30 megawatts per building, we are now really looking at 60. Plus, many data centers are building campuses now with multiple buildings. So, we're seeing campuses of over 100 megawatts, over 300 megawatts, that wehave to figure out how to power.” 

That increased load in Loudoun and Prince William would likely mean more lines traversing Fauquier to feed them, he said. But again, he would not be specific. 

Supervisor Holder Trumbo, I-Scott, has said he is not so concerned about Fauquier becoming a nest of data centersbecause tight zoning will prevent it. But he is worried that the county will be overrun with transmission lines serving data centers built in Prince William and Fauquier. 

Pecker said that decisions on whether to host data centers are made by the counties. “That, we have nothing to do with,” he said.  

“But we don't either,” said Trumbo. “They control their own destinies -- at our expense.”