Virginia SCC approves Dominion gas plant in Chesterfield

Dominion Energy‘s $1.47 billion natural gas power plant in Chesterfield County received the Virginia State Corporation Commission‘s approval Tuesday, despite opposition from neighbors and environmental groups.

Dubbed the Chesterfield Energy Reliability Center, or CERC, the project was filed for SCC approval in March. Dominion submitted an application for a certificate of public convenience and necessity to construct a 944-megawatt natural gas plant, which would provide electricity at peak demand hours. It’s projected to be in operation by June 1, 2029, according to the SCC’s decision.

The Sierra Club, Appalachian Voices, the NAACP, Advanced Energy United and other organizations, as well as individual Chesterfield residents, advocated against the building of the peaker plant, citing increased costs to residential power customers and potential environmental impacts.

However, the Fortune 500 utility argued that the plant is needed “to provide system reliability,” as power demand has increased substantially due to greater artificial intelligence and overall internet use in recent years. Meanwhile, Dominion is required by the Virginia Clean Economy Act, signed into law in 2020, to produce almost all power via renewable sources by 2045, although fossil fuel plants can be used under the law as backup resources as authorized by the SCC.

According to the SCC, this is the first new natural gas plant submitted for evaluation since the passage of the VCEA. “Since that time the commission has approved [Dominion’s] requests to build or purchase energy from approximately 3,500 megawatts of solar and 2,500 megawatts of offshore wind assets,” the decision says. “This case … is not about choosing CERC over compliance with the VCEA. Instead, the commission is called upon to determine whether a ‘threat to the reliability or security of electric service to the utility’s customers’ exists, such that the CERC project is required to obviate such threat.”

Ultimately, the commission found in Dominion’s favor, noting that data center development and load growth in the PJM regional power grid, which includes Virginia, has created a need for more power generation. According to the ruling, load forecasts in Dominion’s territory are the highest in the PJM grid, with about 5% growth in energy demand expected yearly over the next 15 years.

“There is little doubt that Dominion’s need for additional generation assets is urgent,” the opinion says. “The near-term reliability concerns motivating the CERC project … cannot be addressed by non-carbon-emitting resources.”

Dominion next seeks approval from the state Department of Environmental Quality to build the plant.

“This is good news for our customers, Virginia’s economy and the reliability of the grid,” the utility said in a statement Tuesday. “This project will provide reliable power for hundreds of thousands of homes, businesses, schools and hospitals in Chesterfield and beyond. As part of our all of the above energy strategy, it will ensure our region has the reliable power we need to continue growing and thriving. We look forward to concluding the Virginia Department of Environmental Quality’s permitting process next month and getting to work on this important project next year.”

Advanced Energy United, a national organization that opposed the plant, called the SCC’s decision a “step backward” in a statement Tuesday.

“Virginians need low-cost energy, but this approval allows Dominion to move forward with one of the most expensive options on the table,” said Shawn Kelly, Advanced Energy’s regulatory director. “Utilities across the country are using proven tools like battery storage, demand flexibility and modern grid management to meet peak needs at lower cost. This approval embraces none of these lower-cost options.”

Glen Besa, board chair of anti-plant Friends of Chesterfield, said in a statement that the SCC “just gutted the Virginia Clean Economy Act and gave Dominion Energy a blank check to build new gas plants and raise our electric bills. This decision only benefits Dominion shareholders and Big Tech, the richest corporations in the world, to power their data centers at our expense.”

Although Dominion came out the winner with CERC’s approval, the SCC rejected its requests for base-rate increases of $822 million in 2026 and $345 million for 2027, instead ruling that the utility should raise rates by $565.7 million next year and $209.9 million in 2027. The commission also created a new rate class for the biggest users of electricity — 25 megawatts or more — effective Jan. 1, 2027.

Certain large-scale customers, such as data center developers, will be required to pay a minimum of 85% of contracted distribution and transmission demand, as well as 60% of generation demand.