Virginia’s uncertain energy future calls for more resilient planning
Virginia faces up to $270 billion in proposed electricity infrastructure investment over the next 20 years – but how resilient is this plan if load growth or other key assumptions turn out differently than forecast? The power sector is entering a period of considerable uncertainty; shifting technology costs, expanding behind-the-meter natural gas generation, costly fossil fuel retirement delays, and projected electricity demand growth – with U.S. electricity consumption expected to grow approximately 30-50% above 2025 levels by 2050, according to the EIA. As a result, the complexity of utility investment decisions has grown significantly. It’s time to modernize integrated resource planning (IRP) processes to better account for future uncertainties and thereby better protect ratepayers.
A robust IRP – a utility’s long-term plan to reliably meet future electricity needs at least cost – is essential, where planning needs to account for a wide range of risks, uncertainties, and future conditions. These challenges are particularly consequential for Virginia’s largest electric utility, Dominion Energy, given the scale of investment needed to meet Virginia’s rapidly growing electricity demand while transitioning its power system under the Virginia Clean Economy Act.
Utilities, including Dominion, are seeking approvals for increasingly large investments, and these costs are ultimately recovered through customer bills. The stakes are high as data centers drive a surge in Virginia’s electricity demand. PJM – the regional transmission organization that operates the electric grid across 13 states and District of Columbia, including Virginia – projects 32 GW of peak demand growth in the region by 2030. Over 90% of that projection is attributable to data centers, with the Dominion zone expected to see the largest absolute increase in summer peak demand. Dominion must therefore identify resource strategies that remain reliable, affordable, and resilient across a range of plausible futures.
Current resource planning approach
The current IRP approach in VA, particularly its scenarios and sensitivities analysis, largely evaluates individual variables independently and does not fully capture how multiple uncertainties interact with one another. For example, its high-and-low gas price sensitivities show how portfolio costs change under different natural gas price assumptions but do not examine how higher or lower gas prices might interact with other factors, such as renewable resource economics or competition for clean baseload resources.
To better assess portfolios’ robustness, IRP scenarios need to reflect a comprehensive and broader view of plausible futures. For instance, a constrained supply chain scenario could involve solar and storage costs rising 10% due to tariff and import restrictions at the same time as gas turbine costs increase by 15% due to equipment backlogs. Modeling these risks together would show how supply chain pressures can interact to reflect which resources are most affordable and available to procure.
The Tennessee Valley Authority (TVA) provides a real-world example of this approach. In its 2025 IRP, TVA developed six different scenarios around underlying causes. For instance, its “Higher Growth Economy” scenario assumes technology-driven productivity gains that stimulate the economy and increase electricity demand, while its “Stagnant Economy” scenario assumes rising debt and inflation that constrain demand. Its “Net-Zero Regulation Plus Growth” scenario combines substantial clean energy advancements with extensive electrification, economic growth, and more stringent greenhouse gas regulations. By incorporating these interconnected dynamics into its scenarios, TVA captures how changes in demand, technology, and climate policy can interact to shape the economics of different resource portfolios.
For Dominion, a utility serving a major data center hub, it is critical to evaluate load growth, capacity prices, transmission constraints, and resource build limits together within an integrated, internally consistent set of future conditions. These factors are linked – rapid load growth can increase demand for generation and transmission, drive higher regional capacity prices, and limit the pace at which new resources can be interconnected and built. Treating these conditions primarily as separate sensitivities may understate the challenges that could arise when they materialize simultaneously.
A holistic, scenario-based, risk-aware approach
These limitations in the current IRP can create significant risks for ratepayers and for the ability of utilities to achieve their clean energy targets. If Dominion overestimates demand or commits to resources based on assumptions that do not materialize, ratepayers could be left paying for unnecessary or underutilized investments, increasing the risk of stranded assets. Conversely, if the utility underestimates future growth or the pace at which resources can be deployed, it could underbuild and later face higher costs to procure additional capacity or infrastructure. Taken together, these challenges make the case for a more robust approach to scenario planning.
Dominion’s latest IRP stakeholder survey reveals a clear, unified direction from the public comments. Stakeholders envision a modernized, low-carbon grid, but they noted that the IRP needs to better reflect plausible low carbon futures. For example, a majority voted to double renewable build limits, eliminate new natural gas builds, boost energy efficiency targets, and introduce more flexibility and clean firm generation resources. In open-feedback, stakeholders further urged Dominion to evaluate advanced transmission technologies, varied storage durations, and changing data center demand.
Testing these clean energy sensitivities individually as isolated variables would fail to capture how they function together in reality. A higher energy efficiency target changes how much storage or peak generation the system needs, while a ban on new natural gas requires higher renewable build limits and transmission optimization to maintain reliability. CATF recommended that Dominion combine these variables into cohesive, plausible scenarios that answer what stakeholders call for, allowing the public to shape not only individual assumptions, but also how those inputs interact under different conditions and ultimately affect resource portfolio outcomes.
Beyond scenario design, Virginia regulators and legislators should consider the framework used to assess scenarios and incorporate more risk-aware IRP methods. Frameworks should not only assess different future scenarios separately; they should also identify near-term decisions and then stress-test them across many possible futures – an approach that is known as scenario analysis.
Moreover, enhanced modeling methods can help planners identify near-term portfolios that are flexible, adaptable, and minimize long-term risks. These methods are already applied to real-world planning to reduce risk for utilities and their customers and are available for use today. For instance, California legislators recently passed a bill that will require grid planners to account for uncertainty and optionality to generate more prudent decisions.
As Dominion develops its 2026 IRP update, due later this fall, as well as for future IRPs, the utility has an opportunity to strengthen its planning process by developing meaningful scenarios that reflect coherent, internally consistent futures. The state should also consider incorporating updated frameworks and methods into future IRPs that better minimize the risks for Virginia’s customers. A more comprehensive portfolio framework would give regulators, stakeholders, and the public greater confidence that Dominion’s resource pathways can remain reliable and resilient across a range of uncertain conditions while helping protect ratepayers from the risks of costly decisions based on narrow assumptions.
