Most Virginia manufacturers don't realize a new law shields them from paying for infrastructure built to serve massive data center customers.
Most Virginia manufacturing owners assume that when their electric utility builds new infrastructure—substations, transmission lines, distribution upgrades—the cost gets divided equally among all customers. That assumption is about to change, and in a way that actually works in small business's favor.
Buried in HB1393, a bill ostensibly about energy assistance for low-income households, is a provision that fundamentally reshapes how Dominion Energy Virginia allocates certain infrastructure costs. The change doesn't affect your bill immediately, but it will matter for rate decisions starting in 2027.
The law directs Dominion Energy Virginia to propose a new cost allocation method in any rate proceeding that begins after January 1, 2027, and before July 1, 2033. Specifically, it requires the utility to propose that capacity procurement and distribution infrastructure costs be allocated directly to a single customer class: high-demand, high-load-factor customers—defined as those using 25 megawatts or more with a load factor above 75 percent.
In practical terms, that describes data centers and similar facilities that run continuously at massive scale. It does not describe typical manufacturing operations.
By ring-fencing these costs to that specific class, the law prevents those infrastructure expenses from being spread across all ratepayers on standard rate schedules. That means small and mid-size manufacturers won't absorb a share of the cost burden created by the state's explosive data center buildout.
Virginia has become a national hub for data center development, particularly in Northern Virginia. These facilities require enormous amounts of reliable power and have driven significant utility infrastructure investment. Without this provision, those costs would traditionally be allocated across all customer classes—meaning every small business would pay a portion.
This provision creates a different outcome: the customers whose demand actually triggered the infrastructure investment bear the cost directly.
The provision becomes effective July 1, 2026. However, its real impact arrives when Dominion Energy Virginia files its next rate case after January 1, 2027. The window for this cost allocation method extends through July 1, 2033, meaning it applies to rate proceedings filed during that six-year span.
If you're a manufacturing owner tracking utility costs as part of your operational expenses, this is worth monitoring. When the utility files its next rate application, the cost allocation methodology will be part of the public record and subject to regulatory review.
The provision appears on page 1, paragraph 3 of the bill summary as passed.
For a detailed breakdown of how this applies to your specific industry segment and rate class, contact your local chamber of commerce or trade association—many are developing member guides on HB1393's manufacturing implications.