Richmond, Virginia, USA
#00226
Case study of
#00220 Create a large-load tariff class with minimum take, long contract term and exit fees
Implementer
Virginia State Corporation Commission, on application by Dominion Energy Virginia
Timeline
Since Jan 1, 2026
Location
Description
Virginia's State Corporation Commission approved a new GS-5 rate class for customers at or above 25 MW with a 75% load factor, effective 1 January 2027. Terms include a 14-year minimum contract, payment of at least 85% of transmission and distribution costs and 60% of generation costs, and collateral of $1.5 million per MW. The commission also removed roughly $350 million of recoverable revenue tied to speculative projects.
The cost allocation improved materially, but residential bills still rose about $16 a month to roughly $165, and the Piedmont Environmental Council calculates that 61% of grid upgrade costs still fall on ratepayers once the contract term ends. The structural reason is a term mismatch: a 14-year contract against transmission assets with a far longer depreciation life leaves a residual that someone else eventually pays.
For comparison, Ohio's shorter 12-year term with an 85% minimum take on capacity produced a measurable forecast reduction (large-load queue halved); Virginia's longer term with split percentages across cost categories produced more complete near-term cost allocation but no comparable reported filtering effect.
Metrics
8Lessons learned
- Contract term versus asset depreciation life is where the residual cost shift lives. A 14-year commitment against 40-year transmission assets leaves 61% of upgrade costs with ratepayers, by the estimate of an independent advocacy group.
- A tariff reduces the cost shift; it does not eliminate it. Residential bills still rose about $16 a month after approval — the number a replicating jurisdiction should plan for rather than zero.
- Removing recoverable revenue tied to speculative projects is a distinct and underused lever, worth $350 million here, and it is separate from the tariff terms themselves.
- Compare designs before copying one. Ohio optimised for filtering speculative demand (uniform 85% minimum take on capacity) and got a halved forecast; Virginia optimised for cost-allocation completeness (split percentages across cost categories, longer term) and got no comparable reported filtering effect.
Sources
2Documented Jul 28, 2026