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Considered one of America’s largest 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 Energy, which supplies energy to three.6mn prospects 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 comparable requests to regulators by different US utilities, together with Con Edison, which in February proposed rising 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 provide knowledge centres, that are important to the US sustaining its lead in artificial intelligence applied sciences.
The deliberate electrical energy value rises come at a time when shoppers are frightened 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 maintain rising.
Paul Zimbardo, managing director at Jefferies, warned that Trump’s tariff threats towards Canada and Mexico would elevate costs for grid tools and additional expose ratepayers to greater funds. “These fee will increase are definitely going to be bigger going ahead,” Zimbardo mentioned.
Dominion’s proposed fee will increase would apply to utility prospects in Virginia, the place the corporate’s largest buyer base resides. The state can also be the positioning of Loudoun County, dwelling to the most important focus of information centres on the planet, with 200 knowledge centres in operation and greater than 114 scheduled to be constructed.
“What’s plain is that knowledge centre progress in Virginia just isn’t slowing down. Actually, it’s accelerating,” Robert Blue, Dominion’s chief government, advised 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 improve 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 file highs, is predicted to rise additional this yr after twenty years of stagnation, in line with the US Power Info Administration.
A typical month-to-month invoice for a Dominion buyer is $140, in line with the corporate, which is proposing to extend the bottom fee by 6.1 per cent or $8.51 per thirty days in 2026 and by an extra $2 per thirty days in 2027. On high of that rise, it plans to extend a month-to-month gas cost for a typical buyer by $10.92 from July 1. In complete, common month-to-month payments would rise by about 14 per cent from January 1, in line with the corporate.
Dominion additionally desires 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 latest Financial institution of America report discovered that US utility funds have been rising a lot greater than total inflation. The financial institution discovered that in January, utility funds have been up 6 per cent yr on yr, 3.5 share factors greater than the rise within the value of power companies within the shopper value index and three share factors greater than the annual inflation fee.
Ed Baine, president of Dominion’s utility operations in Virginia, mentioned the corporate was ready to supply choose prospects entry to invoice help programmes.
“We all know our prospects are feeling the influence of inflation in different areas of their lives, and a few of our prospects may have help with their energy payments. We’re right here to assist,” he mentioned.
