Everything you need to know about the rising energy costs in Virginia—including what can be done about it, and who’s responsible.
For Virginia households already juggling rent, groceries, and childcare costs, even small increases in monthly bills can become stressors.
That pressure is showing up in electric bills across Virginia, sometimes sharply—and Dominion Energy recently received approval from the state for another rate increase that adds a little more than $11 a month to the average household’s bill. With more hikes likely on the horizon, frustration has grown over a simple question:
Why is electricity getting more expensive, and does it have to be this way?
A new analysis suggests the answer is no.
What the findings say, in brief
Synapse Energy Economics’ report, published Dec. 4, found that Virginia households could save as much as $712 a year on energy costs by 2030—that’s an 18% reduction—if state leaders act quickly to remove barriers that are driving up costs and slowing the transition to cheaper, cleaner power.
The report reaches a clear conclusion: delays, bottlenecks, and who pays for explosive demand growth are what’s driving up Virginians’ bills. Here are the highlights:
Bottlenecks: At the center of the problem is PJM Interconnection, the regional grid operator managing electricity for Virginia and 12 other states. PJM oversees which power plants are allowed to connect to the grid—a process that has become deeply backlogged.
- More than 2,000 mostly clean energy projects, including wind, solar, and battery storage, are currently stuck waiting in PJM’s interconnection queue.
- The average project now waits five years before it can begin delivering electricity.
- Nearly half of projects entering the queue ultimately drop out, often because delays and rising interconnection costs make them financially unviable.
Those delays matter because clean energy projects are among the cheapest and fastest sources of new electricity. When they can’t come online, Virginia is forced to rely on older fossil fuel plants that cost more to operate and maintain. Those higher costs are passed directly to Virginia customers.
Data centers: Virginia is home to the largest concentration of data centers in the world, and their growth is reshaping the state’s energy system.
- Electricity demand in Virginia is projected to increase by more than 100% over the next decade, far outpacing most other states.
- Data centers are the primary driver of that growth.
- Much of Dominion Energy’s recent rate increase, regulators acknowledged, was driven by the need to serve that demand.
- And under current rules, households help shoulder these costs, even though data centers consume vastly more power than the average home.
Without policy changes made by state leaders such as Governor-elect Abigail Spanberger, Ghazala Hashmi as Lieutenant Governor-elect, and the state General Assembly, the report warns, families will continue to pay for infrastructure built primarily to serve utility energy needs.
Here’s what could help: Instead of offering abstract recommendations, the report highlights four policy actions that could significantly lower energy costs:
- Require data centers to bring their own clean energy—by building it or buying it instead of forcing the cost of infrastructure to raise bills for households.
- PJM and state leaders need to commit to clearing the backlog of clean energy waiting to connect to the grid. Thousands of winds, solar, and battery projects are stuck in long approval lines, even though they could provide cheaper electricity, fast.
- Rein in utility profit margins. Guaranteed profits for monopoly utilities can encourage unnecessary spending that customers pay for.
- Use smart electrifications to lower costs for everyone. As more Virginians switch to electric cars and appliances, using smart charging and off-peak rates can reduce strain on the grid.
RELATED: New Google data center near Richmond sparks fears over higher bills, water, and climate
Myth vs. Fact: Here’s how clean energy actually works
For years, clean energy has been framed as an environmental choice: good for the planet, but costly for consumers. The Synapse report tells a different story.
Myth: Clean energy makes electricity more expensive.
Reality: Clean energy is often the cheapest new power available.
Wind and solar projects have no fuel costs, meaning their prices are not tied to volatile gas or coal markets. Once built, they deliver electricity at a stable, predictable cost. That stability helps protect households from sudden bill spikes.
Myth: Virginia can’t rely on clean energy.
Reality: Delays are the real problem.
The report finds that thousands of clean energy projects are ready to deliver cheap power but are stuck waiting years to connect to the grid. During that time, Virginia relies on aging fossil fuel plants that are more expensive to operate and maintain.
Myth: Clean energy won’t work when the wind doesn’t blow or the sun doesn’t shine.
Reality: That’s a fairy tale. Clean energy is actually built on a resilient system that’s practical and reliable.
Any clean energy system uses a combination of local energy sources (not just windmills, but windmills, geothermal, and hydropower) that feed storage containers with small footprints (batteries, compressed air, and pumped hydro storage). This makes it available consistently and inexpensively, with no spikes from faraway oil supplies.
Myth: Clean energy is about climate goals.
Reality: Clean energy is a cost-control strategy.
The report shows that clean energy is an affordability tool. By replacing expensive energy generation with lower-cost wind, solar, and battery storage, the state can reduce overall system costs. Those savings can translate directly into lower household bills over time.
