Virginia’s New Energy Plan: What It Means for Valley Businesses

Virginia released its 2026 Energy Plan on October 1, laying out a roadmap for how the Commonwealth proposes to meet rapidly growing electricity demand while maintaining reliability, controlling costs and continuing toward a net-zero electric grid.

For businesses in the Top of Virginia region, perhaps the most important takeaway is the sheer scale of the challenge facing Virginia.

After nearly two decades of relatively flat electricity demand, the Commonwealth is entering what the Energy Plan describes as a period of growth not seen since the years following World War II. Much of that new demand is concentrated in Northern Virginia and is being driven by the continued expansion of data centers and other large energy users. Virginia's Dominion service territory alone is projected to see electricity consumption grow approximately 7.2% annually through 2035.

That growth carries both economic opportunities and significant infrastructure requirements.

The Energy Plan contemplates a major expansion of Virginia's energy system over the coming decades, including substantial new solar generation and battery storage, offshore wind, advanced nuclear generation, additional natural-gas capacity in some scenarios, distributed energy resources and major investments in transmission infrastructure. Importantly, the plan recognizes that no single energy source can satisfy Virginia's growing needs while simultaneously maintaining reliability and meeting the Commonwealth's existing clean-energy requirements.

For Shenandoah Valley businesses and local governments, however, an equally important question is where that infrastructure will be located.

While much of Virginia's projected electricity-demand growth remains concentrated in Northern Virginia, meeting that demand will require generation, transmission, substations, storage and other infrastructure across a much broader geographic area. Rural and exurban communities therefore have an important stake in decisions being made about Virginia's energy future, even when much of the underlying demand originates elsewhere in the Commonwealth.

The Energy Plan recognizes this challenge and calls for a more coordinated statewide approach to energy and transmission siting rather than addressing projects individually. It also recommends strengthening revenue-sharing arrangements so communities hosting energy infrastructure receive predictable local benefits — potentially including mechanisms that could reduce energy costs for local households and small businesses.

For the Top of Virginia region, that discussion is particularly important. Frederick County and the surrounding Shenandoah Valley possess many of the characteristics sought for large energy projects: available land, existing and proposed transmission corridors, proximity to Northern Virginia and access to major transportation and utility infrastructure. Protecting local land-use priorities while ensuring that communities hosting infrastructure receive an appropriate share of its economic benefits will likely become an increasingly important policy discussion.

Affordability is another major concern.

Virginia historically benefited from comparatively competitive electricity prices. From 2015 through 2025, inflation-adjusted average retail electricity prices actually declined approximately 9.5%. More recently, however, that trend has reversed. Virginia's inflation-adjusted average retail electricity price increased 4.6% between 2024 and 2025, exceeding general inflation, with increases occurring across customer classes.

The Energy Plan identifies several factors behind those increases, including higher natural-gas costs, infrastructure investment and sharply higher PJM capacity costs. Data-center growth is an important part of that equation. PJM's capacity-market clearing price increased from approximately $29 per megawatt-day in June 2024 to $444 per megawatt-day in June 2025. The Energy Plan cites analysis finding that forecast data-center demand accounted for approximately 63% of the capacity-market revenue requirement for the 2025–2026 delivery year.

For businesses, these trends matter. Electricity is not simply a household expense; it is an operating cost affecting manufacturers, retailers, restaurants, offices, warehouses and virtually every other Chamber member. The Energy Plan itself recognizes that affordability for manufacturers and small businesses depends not only on the price of electricity, but also on reliability, power quality and the predictability of future costs.

One encouraging component of the plan is its emphasis on ensuring that large new energy users pay the incremental costs associated with serving them. The administration proposes cost-allocation policies intended to prevent generation, transmission and distribution costs attributable to new data centers from simply being shifted to existing households and businesses. It also proposes requiring greater demand flexibility from large new data-center connections during periods of grid stress.

The Energy Plan therefore presents both an opportunity and a challenge for the Shenandoah Valley.

Virginia needs substantially more electricity to remain economically competitive, and the construction of new generation, transmission and energy infrastructure can itself create investment, jobs and opportunities for local businesses. At the same time, the Commonwealth must ensure that existing businesses and residents are not asked to shoulder disproportionate costs — financial or otherwise — associated with meeting electricity demand concentrated elsewhere.

As implementation of the 2026 Energy Plan moves from planning to policy, the Top of Virginia business community should have an important voice in that conversation: supporting the reliable and affordable energy necessary for continued economic growth while ensuring that the communities hosting Virginia's next generation of energy infrastructure share meaningfully in its benefits.