There were numerous developments in the energy sector in Southside and Southwest Virginia in 2024. Here’s a recap of some highlights and a few things to watch in 2025.
One of the biggest ongoing stories centers on Virginia’s rising electricity demand, which is forecast to nearly triple by 2040 if the commonwealth remains a fast-growing market for data centers, the large buildings full of computers that power online services from Amazon to Zelle.
Where will all that electricity come from? That’s a question without a universally agreed-upon answer. Different people and organizations have different priorities, from adding new solar and wind farms, to developing emerging nuclear technologies, to expanding the use of natural gas.
Meanwhile, changes could be coming to your electric and natural gas bills. Multiple utilities serving Southwest and Southside Virginia have received, or are asking for, approval from state regulators to raise their rates to bring in more money to cover capital expenses, inflation and other costs.
Utility rates going up
Higher rates usually mean higher bills for customers, although sometimes one part of your bill going up can be offset by another part of your bill going down — for example, if the price of natural gas goes down, it can make up for an increase in the part of the bill that covers operations, maintenance and capital costs.
Appalachian Power asked the State Corporation Commission for permission to earn $95 million more per year and got about a tenth of that. Its original proposal would have increased the average 1,000-kilowatt-hour monthly residential electric bill by about $10; instead, the average bill will go up $1.39.
Central Virginia Electric Cooperative received the OK to raise its average residential bill by more than $8.
Old Dominion Power is proposing a compromise that would raise its average residential bill by nearly $18, which is less than its original request that would have raised the average bill by more than $21.
Columbia Gas and Roanoke Gas are supporting compromises that would raise their non-gas base rates, adding $6 and $4, respectively, to that portion of their average residential customers’ monthly bills.
Solar in the spotlight
Virginia’s demand for electricity is growing quickly, mostly because data centers draw huge amounts of power and Virginia has the largest data center market in the world (most, but not all, of them are in Northern Virginia).
At the same time, the Virginia Clean Economy Act of 2020 requires Virginia’s two largest utilities, Dominion Energy and Appalachian Power, to have carbon-free power portfolios by 2045 and 2050, respectively, with specific targets for new solar, wind and battery storage.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
On the solar side, a new database revealed that local governments have approved about 13,000 megawatts of new solar in the past decade, with nearly half of it in Southside Virginia thanks to the region’s relative abundance of flat, inexpensive land.
The database also showed that local governments are increasingly rejecting new solar proposals, with about 40% getting the axe this year. This year marks the first time that Virginia will approve less new solar than during the previous year, according to a state energy official.
Here’s something to keep an eye on when the General Assembly convenes in January: Citing Virginia’s need to meet its clean-energy targets, some lawmakers in the House and Senate want to give the state more power to approve new solar if a local government rejects it.
A state commission has proposed a new board to advise localities about large solar projects. It’s also floated the idea of having its opinions become binding approvals, overriding local authority.
Two more items to watch in 2025:
- A pending state regulatory proceeding could significantly change the financial calculus for future residential solar panel owners in Appalachian Power territory.
- Proponents of shared solar (in which users subscribe to solar energy production instead of owning panels) are advocating for affordability.
Other solar news you might have missed:
- Two utility-scale solar farms could have been Patrick County’s first, but the developer withdrew them from consideration.
- The solar developer Energix was fined $158,000 for violations of state environmental regulations; this was the third year in a row it received such fines.
- Local schools and at least one community college are exploring powering their own buildings with solar.
- A Southside company wonders whether solar and agriculture could better coexist if cows could graze around panels.
Exploring nuclear options
The nuclear buzzword this year has been “SMR” — an initialism for “small modular [nuclear] reactor.”
SMRs are designed to be cheaper and smaller than traditional large nuclear reactors, with perhaps 300 megawatts of power generation compared to 1,000 at a bigger plant. Their viability is as yet unproven because no commercial SMR has yet been deployed in the United States.
Last year, Gov. Glenn Youngkin predicted that the nation’s first SMR would be in Southwest Virginia; this year he said the first SMR would still be in Virginia but not in the Southwest.
That’s a possibility. Appalachian Power is exploring building an SMR in Campbell County, while Dominion is considering having one at its North Anna power plant in Louisa County (and considering having Amazon pay for it).
Appalachian also plans to seek permission to recover its SMR development costs by charging customers, thanks to legislation passed this year.
Framatome Inc., which named a new president and CEO this year, is investing $49 million and adding more than 500 jobs in its Lynchburg-area facilities. The company supplies nuclear fuel and maintenance services and says it anticipates a wave of new commercial nuclear demand.
For even more future nuclear developments, look to the stars: Lynchburg-based BWX Technologies is developing nuclear fuel and components for spacecraft.
Natural gas starts to flow
After a decade of legal and permitting challenges, the Mountain Valley Pipeline began operating on June 14.
The 303-mile, 42-inch-diameter pipeline is designed to transport up to 2 billion cubic feet of natural gas daily from West Virginia through six Virginia counties, ending at a Transco compressor station in Pittsylvania County.
It was first announced in 2014 with a $3.5 billion price estimate and a 2018 completion date. Today, its final price tag stands at $8.1 billion.
Roanoke Gas says the Mountain Valley Pipeline is a necessary component of its plan to expand natural gas service to Franklin County residents and a business park.
While the main pipeline is up and running, opponents continue to protest a proposed $370 million MVP Southgate extension into North Carolina.
Related to that Transco station in Pittsylvania County, the natural gas company Williams plans to add just over 26 miles of pipeline in the county adjacent to its existing Transco corridor. It’s part of a larger project that extends into North Carolina and aims to allow the system to carry more gas.
Natural gas could supply the power for a future cluster of data centers in Pittsylvania County. A Herndon company, Balico, originally proposed a new 3,500-megawatt gas power plant to supply energy to more than 80 data centers but has since dialed back its plans in the face of community opposition.
Hydroelectric upgrades
Appalachian Power was tapped to get $5 million in federal funding to upgrade its Claytor hydroelectric plant on the New River in Pulaski County.
Dominion has canceled its hydroelectric pump storage project in Tazewell County, citing its $2 billion price tag and the utility’s focus on other forms of power.
Google to tap wind power
A Botetourt County wind farm that’s been 10 years in the making has found a household name to buy its electricity: Google. The internet giant has agreed to purchase all of the power that will be produced by the 79.3-megawatt facility, which is anticipated to begin operating in 2026.