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One of America’s biggest utilities has proposed raising consumer bills by 14 per cent next year to cover costs linked to soaring electricity demand and inflation, in a blow to Donald Trump’s pledge to slash energy prices.
Dominion Energy, which provides power to 3.6mn customers in Virginia, North Carolina and South Carolina, said the rising cost of labour, materials and upgrades to the grid required it to increase prices for the first time in more than 30 years to ensure a reliable service.
It follows similar requests to regulators by other US utilities, including Con Edison, which in February proposed increasing electric bills in New York City by 11.4 per cent next year. Utilities are boosting spending on power generation and networks required to bolster the ageing electricity grid and to supply data centres, which are critical to the US maintaining its lead in artificial intelligence technologies.
The planned electricity price rises come at a time when consumers are worried that the administration’s tariffs policy will ignite another round of sharp price rises. The US president has vowed to tackle inflation by slashing energy costs by 50 per cent, even as consumer energy bills keep rising.
Paul Zimbardo, managing director at Jefferies, warned that Trump’s tariff threats against Canada and Mexico would raise prices for grid equipment and further expose ratepayers to higher payments. “Those rate increases are certainly going to be larger going forward,” Zimbardo said.
Dominion’s proposed rate increases would apply to utility customers in Virginia, where the company’s largest customer base resides. The state is also the site of Loudoun County, home to the largest concentration of data centres in the world, with 200 data centres in operation and more than 114 scheduled to be built.
“What’s undeniable is that data centre growth in Virginia is not slowing down. In fact, it’s accelerating,” Robert Blue, Dominion’s chief executive, told analysts in their most recent earnings call in February. The utility has almost doubled its data centre customer demand since July, with 40GW in contracted demand with data centres as of December 2024.
Dominion’s planned price increase will require approval from Virginia’s State Corporation Commission, an independent state agency with regulatory authority over utilities.
US electricity demand, which is already at record highs, is expected to rise further this year after two decades of stagnation, according to the US Energy Information Administration.
A typical monthly bill for a Dominion customer is $140, according to the company, which is proposing to increase the base rate by 6.1 per cent or $8.51 per month in 2026 and by an additional $2 per month in 2027. On top of that rise, it plans to increase a monthly fuel charge for a typical customer by $10.92 from July 1. In total, average monthly bills would rise by about 14 per cent from January 1, according to the company.
Dominion also wants high energy users, such as data centres, to make 14-year commitments to pay for their requested power — even if they use less energy than anticipated.
A recent Bank of America report found that US utility payments were rising much higher than overall inflation. The bank found that in January, utility payments were up 6 per cent year on year, 3.5 percentage points higher than the rise in the price of energy services in the consumer price index and 3 percentage points higher than the annual inflation rate.
Ed Baine, president of Dominion’s utility operations in Virginia, said the company was prepared to offer select customers access to bill assistance programmes.
“We know our customers are feeling the impact of inflation in other areas of their lives, and some of our customers may need assistance with their power bills. We’re here to help,” he said.
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