The governor’s energy plan is not a light read.
It begins with three full pages of acronyms. I had to keep two tabs open so I could follow along without losing my place.
Before the plan gets to the policy recommendations, almost half of the 157-page document is a primer on Virginia’s energy use and production — which actually is quite useful for anyone who needs a briefing to understand where we stand, particularly as conversations about data centers dominate public discussion.
In that spirit, before I deal with the governor’s policy recommendations, let’s review some relevant facts and figures that may not be so well-known.
Virginia’s energy imports were declining until data centers boomed. Now we import 30.6% of our power
There’s a whole lot going on in this chart, so let’s look at it several ways. First, notice that Virginia’s electricity demand was fairly steady until 2021. That’s when it started rising — driven by the energy demands of data centers.
This also means that when the Virginia Clean Economy Act was passed in 2020, we were in a different era — one of steady demand, not rising demand. That’s why critics say the Clean Economy Act is an ill fit for today’s realities and why supporters say we need to accelerate the transition to renewable energy.
(The Clean Economy Act is the law that mandates Virginia’s two biggest utilities, Dominion Energy and Appalachian Power, convert to non-carbon sources by 2045 and 2050, respectively. Our standard disclosure: Dominion is one of our donors but donors have no say in news decisions; see our policy. You can become a donor, too, and test that proposition.)
Next, notice that top bar, the gray one with black lines. Those are electricity imports. You’ll see that Virginia has always imported a lot of power, but that amount was declining until data centers took off. In 2020, Virginia imported 18.4% of its power. Now it’s up to 30.6%. Only California imports a bigger share of its power. Maybe there’s nothing philosophically wrong with importing power, but we’ll get to some practical problems shortly.
Meanwhile, notice these changes: Coal has almost disappeared as an energy source for Virginia-produced power. It was shrinking before the Clean Economy Act was passed, but that law has accelerated the retirement of coal-fired plants, most of which were aging anyway. The big change in energy generation has been more use of natural gas — essentially, natural gas has squeezed out coal. However, it’s hard to miss that yellow bar that first shows up in 2017 and then gets bigger. That’s solar. We’ll shortly have more data on solar, too.
Data centers have driven up Virginia’s use of coal-based energy
There are two practical problems with importing power. First, it’s often expensive. Second, it’s typically carbon-based fuel, which is not a problem if you’re a coal producer but is if you care about carbon emissions. “Virginia’s electricity imports are largely powered by coal in West Virginia and legacy fossil-fuel facilities across PJM, largely in Pennsylvania and Ohio,” the report says. PJM is one of those acronyms you’ll need to know — that’s the name for the multistate power grid that Virginia is part of. The bottom line: The more energy we import, the more we rely on coal. Or, put even more simply, Virginia’s data centers are basically burning coal, just in another state.
Despite all the solar energy we’ve added, virtually all our non-carbon energy is nuclear
For seven straight years, we’ve added more solar power than anything else to the grid. Anyone who lives in, or has driven through, Southside Virginia can see this in all the solar farms glittering in the fields. Solar is the cheapest form of energy we can produce; it’s also the quickest to get built and onto the grid. That’s why we’re seeing so much of it. Despite all that solar growth, here’s one inconvenient fact: Solar hasn’t made that much difference in keeping carbon off the grid. “The commonwealth’s existing nuclear fleet provides more than 95% of Virginia’s carbon-free electricity,” the report says. If you find that worrisome, or controversial, just wait. We’ve got more.
Lack of transmission lines is driving up energy costs
We’re all familiar with congestion on the highway. Transmission lines are congested, too, this report says, as we try to move more and more power over the same transmission lines we’ve had.
The general goal, when moving electricity, is not simply to move power, but to move cheap power. Congested transmission lines are making it difficult to move cheap power into Virginia, the report says. Here’s what it says: “Rapid load growth in Northern Virginia combined with permitting and construction delays on major regional transmission projects has significantly constrained interstate import capacity. … Congestion prevents lower-cost electricity generated elsewhere in PJM and Virginia from flowing into Northern Virginia, where congestion is highest in the commonwealth. To maintain real-time grid stability, grid operators are forced to commit more expensive local generation or dispatch higher-cost regional resources.”
Since that “rapid load growth” is caused by data centers, here’s an example of how data centers are driving up power costs — by creating circumstances where utilities have to import power and, because transmission lines are full, they have to go with higher-priced electricity nearby than lower-priced electrons further away. Could we create lower-priced energy nearby? In theory, yes. In practice, it would have to go somewhere and not many people want an energy plant next to them — and even if they did, it would still require some transmission lines. Spanberger has pushed for data centers to generate power on site; that’s easy to do with up-from-the-ground data centers, much harder to retrofit onto existing facilities.
Here’s what that congestion is costing ratepayers: The governor’s energy plan says that in 2021 Dominion customers had to pay $144.6 million more due to congestion on the transmission lines. In the first half of 2026, that amount soared to $643.9 million.
We need more transmission lines
This is the other shoe dropping. If the lack of transmission lines is driving up costs, then it follows that we need more of them. This plan says we do need more of them — and fast. “PJM’s latest reliability modeling indicates that Virginia’s import demand will exceed its physical transmission capacity by 2028,” the plan says.
The governor’s plan doesn’t mention any projects by name. However, there are currently two proposed 765-kilovolt transmission lines proposed that, if approved, would be in the highest voltage category of transmission lines in the U.S., both under the auspices of Valley Link, and would move power into Northern Virginia, the northern route from West Virginia, the southern route from Appalachian’s Joshua Falls substation in Campbell County to Culpeper County.
Neither has been particularly popular with people who live near the routes; both candidates for U.S. House in the 5th District have opposed the southern line and just this week the Campbell County Board of Supervisors went on record against the project. Consider this foreshadowing for part two of my columns on the governor’s energy plan: There are many things that might seem logical but which entail political difficulties. This is one of them.
All the governor’s plan says is that “resolving Virginia’s transmission constraints without imposing unsustainable rate burdens requires a combination of traditional new high-capacity transmission additions alongside advanced, lower-cost grid strategies (e.g., advanced transmission technologies, adding transmission along existing rights-ofway, and offsetting transmission needs through local generation, storage, and demand flexibility).”
There are a lot of controversial things packed into that one sentence. Transmission lines are controversial. So is local power generation; in theory, people like it, until something is proposed near them. Ditto energy storage. Demand flexibility can be controversial, too; nobody wants to be told they need to power down now and try another time.
The plan holds out the hope that more transmission lines could lead to lower bills, although it doesn’t say that explicitly: “Increasing interstate transmission capacity could reduce congestion costs and give ratepayers greater access to lower-cost electricity. Studies by the U.S. Department of Energy, the North American Electric Reliability Corporation, and the University of Michigan have found that expanding interstate and interregional transmission could reduce customer costs.”
Data centers have broken the business model
Here’s what the plan says: “While large commercial load growth historically helped suppress customer rates in Virginia by spreading fixed infrastructure costs across a larger volume of sales, modern grid constraints have inverted this dynamic. Today, the surge in data center demand has exceeded available grid capacity, creating upward pressure on rates due to additional generation, transmission, and distribution capacity that needs to be built out to serve this load.”
Here’s what that means: Business growth used to be good for the grid because it supplied more customers to absorb the cost of regular upgrades. However, data centers have grown so much that we now need to upgrade the grid specifically for them, and ratepayers have been getting stuck with the cost.
Now for potentially the most controversial part:
Utilities are not on track to meet the Clean Economy Act mandates
The plan flat-out says this: “Virginia’s investor-owned utilities resource additions are not on track to meet the VCEA’s net zero goals.” It then goes on to ding both Dominion and Appalachian for finding ways around those mandates: “As of its 2025 Integrated Resource Plan, Dominion’s preferred plan is to build roughly 8 GW [gigawatts] of new natural gas generation; the preferred plan does not include any retirements of existing or planned fossil fuel generation and notes the intention to use the VCEA’s reliability exception to exempt new and existing fossil generation from retirement. APCo’s fossil fuel generation is primarily located in West Virginia; APCo plans to retire its only Virginia gas plant and to convert its West Virginia plants from coal to gas by 2040. While the VCEA does not apply to APCo’s West Virginia assets, continued use is not aligned with VCEA’s net zero goals.”
That raises a policy question: Since the Clean Economy Act was passed in one era (pre-data center boom), is it still realistic in this new era? If Virginia really means what it says in the Clean Economy Act mandates, what would it take to get Virginia off carbon-based fuels? We’ll deal with those in part two on Friday, but at least now we’re all on the same page in terms of understanding the baseline facts.
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