"Glaring Subsidization": Virgi... Note

"Glaring Subsidization": Virginia Questions Cost Allocation For Data Centers

Virginia Governor Abigail Spanberger's office, along with major tech companies like Meta, Google, Amazon, and Microsoft, presented their views on Dominion Energy's proposal to allocate transmission project costs at a Virginia State Corporation Commission hearing. The governor's office advocates for a "but for" cost causation standard, requiring contributions in aid of construction (CIAC) payments, and a shift to a summer/winter peak and average cost allocation method. Google questioned the timing of these changes, suggesting it is too soon to assess the effectiveness of recent adjustments to Dominion's rate class GS-5. Dominion's proposal aims to recover approximately $1.5 billion in transmission costs through an increased Rider T-1, which was initially estimated to raise residential bills by $0.94 per month. Google argues that the new GS-5 rate class, designed to shift costs, should be sufficient to address the issue. Commission staff attorney Andrew Major suggested a gradual multi-year transition if a methodology other than 12 coincident peak demands (12CP) is adopted. Major also highlighted a perceived cross-class subsidization benefiting new GS-5 customers. Amazon and Loudoun County also supported voluntary CIAC payments to reduce ratepayer burdens and clarify financial responsibility. Michael Goggin of Grid Strategies argued for utilizing the PJM regional competitive transmission planning process to reduce costs for all customers. The Virginia Attorney General's Office generally supports direct assignment when a cost causer can be identified. The commission is expected to issue a decision by August 1st.
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