Virginia’s Electricity Infrastructure Investment: Navigating Uncertainty and Future Planning
Virginia is on the brink of a massive infrastructure overhaul with a proposed $270 billion investment in electricity infrastructure over the next two decades. However, the resilience of this plan hinges on several unpredictable factors. As the power sector faces significant uncertainty, it becomes crucial to modernize integrated resource planning (IRP) processes, ensuring they effectively address future uncertainties and safeguard consumers.
An effective IRP is a utility’s blueprint for meeting future electricity needs cost-effectively and reliably. Given the extensive investments required to meet Virginia’s growing electricity demand while adhering to the Virginia Clean Economy Act, Dominion Energy faces unique challenges.
As utilities, including Dominion, seek approvals for substantial investments, the stakes rise, primarily driven by the data centers’ demand surge. PJM, the regional transmission organization overseeing the electric grid across 13 states and the District of Columbia, forecasts a 32 GW peak demand growth in the region by 2030. Notably, over 90% of this increase is attributed to data centers, with the Dominion zone projected to experience the most significant rise in summer peak demand. Consequently, Dominion must devise strategies that are reliable, affordable, and adaptable across various potential futures.
Examining the Current Resource Planning Framework
The current IRP approach in Virginia, particularly its scenarios and sensitivities analysis, tends to evaluate individual variables in isolation, failing to fully capture the interactions between multiple uncertainties. For instance, while high-and-low gas price sensitivities demonstrate how portfolio costs fluctuate with different natural gas price assumptions, they do not explore how these price changes might impact renewable resource economics or competition for clean baseload resources.
A more comprehensive IRP would consider a wider array of plausible futures. For example, a constrained supply chain scenario could involve simultaneous increases in solar and storage costs due to tariff and import restrictions and a rise in gas turbine costs due to equipment backlogs. Modeling these risks together would reveal how supply chain pressures interact, indicating which resources are most affordable and available for procurement.
The Tennessee Valley Authority (TVA) exemplifies this approach. In its 2025 IRP, TVA developed six scenarios considering underlying causes. Scenarios like the “Higher Growth Economy” and “Stagnant Economy” explore varying economic conditions, while the “Net-Zero Regulation Plus Growth” scenario combines clean energy advancements with stringent greenhouse gas regulations. By integrating these dynamics, TVA captures how changes in demand, technology, and climate policy interact to shape resource portfolio economics.
For Dominion, a utility servicing a major data center hub, it’s crucial to evaluate load growth, capacity prices, transmission constraints, and resource build limits collectively within an integrated, coherent set of future conditions. Rapid load growth can increase generation and transmission demand, drive higher regional capacity prices, and limit the pace of new resource interconnections and construction. Treating these conditions independently may underestimate the challenges that could arise if they occur simultaneously.
A Comprehensive, Scenario-Based Approach to Planning
The current IRP’s limitations can pose significant risks for ratepayers and utilities’ ability to achieve clean energy targets. Misestimating demand or committing to resources based on unmaterialized assumptions could leave ratepayers bearing the costs of unnecessary investments, increasing the risk of stranded assets. Conversely, underestimating future growth or deployment pace could result in underbuilding, necessitating higher costs for additional capacity or infrastructure later.
Dominion’s latest IRP stakeholder survey highlights the public’s vision for a modernized, low-carbon grid. Stakeholders advocate for doubling renewable build limits, eliminating new natural gas builds, boosting energy efficiency targets, and introducing more flexibility and clean firm generation resources. They also urge Dominion to evaluate advanced transmission technologies, varied storage durations, and changing data center demand.
Testing these clean energy sensitivities in isolation would not capture their interdependent functioning. A higher energy efficiency target alters the system’s storage or peak generation needs, while banning new natural gas requires higher renewable build limits and transmission optimization to maintain reliability. CATF recommends that Dominion combine these variables into cohesive scenarios, allowing stakeholders to shape not only individual assumptions but also the interactions under different conditions and their impact on resource portfolio outcomes.
Virginia regulators and legislators should consider adopting frameworks that are more risk-aware in assessing scenarios. These frameworks should stress-test near-term decisions across multiple potential futures, a method known as scenario analysis.
Advanced modeling methods can aid planners in identifying flexible, adaptable near-term portfolios that minimize long-term risks. These methods, already used in real-world planning to reduce risk, are available today. For instance, California recently passed a bill requiring grid planners to account for uncertainty and optionality to make more prudent decisions.
As Dominion prepares its 2026 IRP update, due later this fall, and for future IRPs, the utility has an opportunity to enhance its planning process by developing meaningful scenarios that reflect coherent, consistent futures. The state should also consider incorporating updated frameworks and methods that better minimize risks for Virginia’s customers. A comprehensive portfolio framework would instill confidence in regulators, stakeholders, and the public that Dominion’s resource pathways can remain reliable and resilient across various uncertain conditions while protecting ratepayers from costly decisions based on narrow assumptions.
Original Story at www.catf.us