Richmond Times-Dispatch: Virginia: Dominion details data centers’ electricity demands

Virginia: Dominion details data centers’ electricity demands (richmond.com)

Dominion, in rare move, details data centers’ big electricity demands

Facebook Data Center
Facebook, whose company name is now Meta, built this data center at White Oak Technology Park in eastern Henrico County. Data centers are some of the biggest electricity users of all.

 

Data centers, some of the biggest electricity users of all, have signed agreements with Dominion Energy showing they expect to use the equivalent of 35% of the record flow of electricity the utility saw during last year’s Christmas freeze, a Richmond Times-Dispatch analysis found.

Dominion disclosed the agreements in a few pages of a 221-page State Corporation Commission filing.

The utility took the unusual step of detailing customer agreements about planned data centers — the facilities that house equipment to store and move data, power apps and provide access to computer networks — in response to challenges to its long-term forecasts of electricity demand.

That growth, which Dominion said would triple from recent years to hit 5% a year over the next 15 to 25 years, could mean an increase in the utility’s carbon emissions.

Data centers have signed so-called electric service agreements, which commit a firm to use power, for an additional 5,827 megawatts by 2032, said Alan W. Bradshaw, Dominion’s vice president for strategic partnerships, in a filing with the SCC.

Data centers that are a bit earlier in the multiyear process of developing facilities have signed agreements to pay for the power lines and substations that are necessary to link them to Dominion’s high-voltage transmission lines that cover an additional 2,008 megawatts, he said. Some of these are for substations that are to come online by 2026.

The 7,835 megawatts involved between these two types of agreements are 2.5 times as much as data centers now consume, the filing shows.

They are the equivalent of 35% of the load Dominion handled last Christmas during Winter Storm Elliot.

One megawatt is enough to power about 250 homes.

Companies that are at even earlier stages in developing data centers, meanwhile, have signed agreements to cover Dominion’s engineering and design costs for the power lines and substations needed to handle even more demand: an additional 8,658 megawatts.

The consultant engaged by SCC staff to review Dominion’s long-term forecast for electricity use had argued that the company’s forecast for data center demand was too high.

“Data center demand is elastic,” consultant Bernadette Johnson wrote in testimony submitted to the SCC by its own utility regulation and accounting staff. “It will follow low costs of real estate and power prices.”

She said the increase Dominion forecasts is larger than the actual growth her firm has measured in Texas’ self-contained electric grid, where gains have been driven by data center expansion, cryptocurrency operations and faster overall job growth than Virginia sees.

As a result, she said, Dominion’s forecast of annual electricity use in 2037 was 50 million megawatt-hours too high.

Environmental groups and a clean energy trade association also told the SCC that the plan’s electricity demand forecast is based on an unrealistic view about how many new data centers are coming.

But Bradshaw said the company’s forecast through 2032 is based on its electric service agreements and the construction letters of agreement promising to pay for lines and substations.

The forecast through 2037 reflects the engineering and design cost agreements, he said.

Bradshaw said a real estate consultancy report cited by one of the environmental groups actually said the Dallas-Fort Worth area had data centers drawing 734.4 megawatts with an additional 182.1 megawatts in development, far smaller than the 3,127 megawatts Dominion currently delivers, according to his filing.

High-voltage line

In a separate matter, an SCC hearing examiner recommended the commission approve Dominion’s proposed $63.1 million high-voltage line to handle an expected increase in electricity use in Culpeper County from a new data center.

In this case, one customer complained that costs to fund such projects to benefit big users were passed on to other customers and were making her electric service unaffordable. She said the cost should be covered instead from Dominion’s profits.

Dominion spokesman Aaron Ruby said the agreements Dominion signs with big users mean they pick up a share of the cost of new lines and substations. He said they pay a proportionate amount for the cost of generating power to meet their needs.

Dominion’s tariffs for residential and large commercial customers account for generation costs differently.

Residential customers pay 3.4933 cents per kilowatt hour used for the first 800 kilowatt-hours, and 5.3137 cents during the summer or 2.6942 during the rest of the year for any additional electricity to cover their share of the cost of most of Dominion’s generating plants. They pay an additional 0.57 cent per kilowatt hour in a surcharge that funds two newer ones and the cost of extending the operating license for the Surry and North Anna nuclear plants. Big commercial customers pay $10.265 for each kilowatt that flows into their facilities.

That means a plant drawing 1,000 kilowatts at any one instant would pay $10,265 to cover its share of Dominion’s generating costs. A residential customer using 1,000 kilowatt-hours over the course of a month would pay $44.31 for generation and the generating plant-linked surcharges — the rest of the bill covers the cost of Dominion’s power lines, fuel and other expenses.

Dominion’s long-term forecast, called an “integrated resource plan,” is subject to approval by the SCC, which can also order revisions. It is meant as a guide for future SCC actions on Dominion’s proposals for new plants or energy programs.

At the heart of environmentalists’ concerns is that Dominion’s latest integrated resource plan suggests the utility may need to keep gas-fired and three large coal-fired plants running to ensure its system can reliably deliver power, and that additional gas-fired plants may be needed, which would mean an increase in its greenhouse gas emissions.