This came after pushback in mid-October, where regulators (from a formal Virginia State Corporation Commission SCC Staff Testimony filing) sought the companies to propose a 10-year customer package that includes nearly $2 billion in bill credits and limits on staffing reductions or consolidation at generation facilities and local offices. However, Dominion and NextEra did not agree to freezing rates for six years, as Virginia Gov. Abigail Spanberger urged last month, nor to a three-year rate cap regulatory fallback proposal by the Attorney General's Consumer Counsel.

Instead of freezing rates, the companies are banking on their original nearly $2 billion package to appease the public by way of temporary, spread-out credits despite an evolving AI boom driving electrification and rate prices.

Utility leadership defending 'burden of proof' in regulatory standard

The utilities' stance reflects a broader national tension, where the rapid expansion of AI infrastructure is indirectly forcing the hands of state boards to re-examine legacy legal frameworks. Under the Virginia Utility Transfers Act, merging utilities are not explicitly required to prove that a deal provides a net positive benefit to customers, unlike states like California or New York, which do.

In the summary version of the joint rebuttal testimony filed with NextEra in the SCC court on Nov. 2, Dominion CEO Bob Blue stated: “While the standard does not have a ‘net benefit’ demonstration requirement as may exist in other jurisdictions, I likewise believe that it is not a weak burden. It is a reasonable one. Virginia…allows these types of corporate transactions to go forward so long as there is assurance that the essential functions of the public utility will not be compromised.”

John Ketchum, chairman and CEO of NextEra Energy, added in part: “We have already put forward a historic package of benefits for Dominion Energy Virginia customers, workers and communities, and we are going even further… We have listened carefully to stakeholders, and our filing accepts the vast majority of the additional protections proposed by Commission Staff and the Consumer Counsel while offering targeted alternatives to a limited number of remaining provisions.”

This challenge is already playing out beyond Virginia. Last month, the Pennsylvania Office of Consumer Advocate filed a formal complaint and subsequent amendment with the Pennsylvania Public Utility Commission (PUC) against PPL Electric Utilities to contest how cost allocations and reliability risks stemming from large-scale data centers are shifted onto everyday ratepayers. The PUC has since granted PPL Electric Utilities a motion for more time to formally respond to the challenge.

In Virginia, the regulatory loophole viewed by advocates is in the state’s traditional regulatory cycle. The SCC evaluates and adjusts utility base rates every two years (via Virginia's biennial rate reviews), which is why NextEra Energy and Dominion insist on keeping the current legal framework.

However, critics argue this review structure raises a bigger concern of outdated regulatory guidance across states, long established before an evolving AI era. These massive electrification demands of data centers and other large-scale customers indirectly pressure the average small business and residential customer to foot related expenses without these “next-gen” frameworks modified for the new energy landscape.

“Moratoriums on the building of data centers are not bans on development; they are a message that says there is a wrong way and right way to build data centers,” CEO and co-founder of Camus Energy Astrid Atkinson told T&D World in a statement as an advocate for grid modernization. “The right way is to ensure you work with local communities to provide benefits through reducing energy bills and maximizing clean energy resources.”

States like Virginia and Pennsylvania could become the trailblazers in defining what a modernized, uniform utility framework looks like—moving the industry beyond today's siloed corporate and regulatory positions.