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One in all America’s greatest utilities has proposed elevating shopper payments by 14 per cent subsequent yr to cowl prices linked to hovering electrical energy demand and inflation, in a blow to Donald Trump’s pledge to slash power costs.
Dominion Power, which gives energy to three.6mn clients in Virginia, North Carolina and South Carolina, mentioned the rising price of labour, supplies and upgrades to the grid required it to extend costs for the primary time in additional than 30 years to make sure a dependable service.
It follows related requests to regulators by different US utilities, together with Con Edison, which in February proposed growing electrical payments in New York Metropolis by 11.4 per cent subsequent yr. Utilities are boosting spending on energy era and networks required to bolster the ageing electrical energy grid and to produce knowledge centres, that are essential to the US sustaining its lead in synthetic intelligence applied sciences.
The deliberate electrical energy value rises come at a time when shoppers are apprehensive that the administration’s tariffs coverage will ignite one other spherical of sharp value rises. The US president has vowed to sort out inflation by slashing power prices by 50 per cent, at the same time as shopper power payments preserve rising.
Paul Zimbardo, managing director at Jefferies, warned that Trump’s tariff threats towards Canada and Mexico would elevate costs for grid gear and additional expose ratepayers to increased funds. “Those rate increases are certainly going to be larger going forward,” Zimbardo mentioned.
Dominion’s proposed charge will increase would apply to utility clients in Virginia, the place the corporate’s largest buyer base resides. The state can also be the location of Loudoun County, residence to the biggest focus of information centres on the earth, with 200 knowledge centres in operation and greater than 114 scheduled to be constructed.
“What’s undeniable is that data centre growth in Virginia is not slowing down. In fact, it’s accelerating,” Robert Blue, Dominion’s chief government, informed analysts in its most up-to-date earnings name in February. The utility has nearly doubled its knowledge centre buyer demand since July, with 40GW in contracted demand with knowledge centres as of December 2024.
Dominion’s deliberate value enhance would require approval from Virginia’s State Company Fee, an impartial state company with regulatory authority over utilities.
US electrical energy demand, which is already at report highs, is anticipated to rise additional this yr after 20 years of stagnation, based on the US Power Data Administration.
A typical month-to-month invoice for a Dominion buyer is $140, based on the corporate, which is proposing to extend the bottom charge by 6.1 per cent or $8.51 per thirty days in 2026 and by a further $2 per thirty days in 2027. On high of that rise, it plans to extend a month-to-month gasoline cost for a typical buyer by $10.92 from July 1. In whole, common month-to-month payments would rise by about 14 per cent from January 1, based on the corporate.
Dominion additionally needs excessive power customers, resembling knowledge centres, to make 14-year commitments to pay for his or her requested energy — even when they use much less power than anticipated.
A current Financial institution of America report discovered that US utility funds had been rising a lot increased than total inflation. The financial institution discovered that in January, utility funds had been up 6 per cent yr on yr, 3.5 proportion factors increased than the rise within the value of power companies within the shopper value index and three proportion factors increased than the annual inflation charge.
Ed Baine, president of Dominion’s utility operations in Virginia, mentioned the corporate was ready to supply choose clients entry to invoice help 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 mentioned.
