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Utility Business

Dominion, Duke Beef Up Budgets as Data Center Demand Booms

Feb. 13, 2025

The amount of contracted capacity at Dominion from data center operators climbed 88% in the second half of 2024.

Executives at Dominion Energy Inc. and Duke Energy Corp. have added a combined $17 billion to their five-year capital investment plans, with both groups saying that the data center boom shows no signs of slowing.

At Dominion, which services the heart of the U.S. data center industry in Northern Virginia, Chairman, President and CEO Bob Blue and his team have bumped up their capex plan covering 2025 to 2029 by nearly $7 billion to $50.1 billion. The company’s Virginia utility will get more than $41 billion of that sum to feed rate base growth executives think will average 9.4% annually through the end of the 2020s.

The numbers around data centers and Dominion are dumbfounding: From the beginning of July through the end of December, companies committed to nearly 19 gigawatts of power, growing Dominion’s contracted capacity by 88% to more than 40 GW. Blue noted, in addition to increased demand in the core of Northern Virginia, data center players are increasingly moving down the Interstate 95 corridor from there and added that the Richmond area is growing “pretty substantially” as well.

Q4 Earnings Rundown

Richmond-based Dominion produced a fourth-quarter net profit of $145 million on revenues of $3.4 billion. Income was down from $331 million in the last three months of 2023 due to several asset impairments and charges stemming from the retirement of several assets. For the year, Dominion’s weather-normalized sales growth clocked in at 2.1%, powered by 4.4% growth from commercial customers. Executives also affirmed that the Coastal Virginia Offshore Wind project is on track to be completed by late 2026. They recently lifted the project’s cost estimate to $10.7 billion from $9.8 billion because of higher network upgrade costs assigned by PJM.

Duke produced fourth-quarter profits of nearly $1.2 billion, up from $991 million a year earlier, on operating revenues of $7.36 billion. Retail sales, also adjusted for weather, across the company rose 0.6% during the quarter but it was industrial clients providing the biggest boost with 4.2% growth. For the year, however, commercial customers’ growth of 2% drove total growth of 1.2%.

“We’ve analyzed the data several ways, and certainly we believe some of this growth is attributable to the new batch system, which naturally incents customers to get into the process early,” Blue told analysts on a Feb. 12 conference call. “But what’s undeniable is that data center growth in Virginia is not slowing down. In fact, it’s accelerating and we’re taking every step to meet this opportunity.”

It’s a similar story at Charlotte-based Duke, where Chair and CEO Lynn Good and her team on Feb. 13 unveiled an $83 billion five-year spending plan that’s $10 billion larger than their forecast for 2024 through 2028 had been. Advanced manufacturing projects in the pipeline for the Carolinas, Florida and other areas Duke services account for some of that growth, executives said, but data centers are playing a growing role: Good said data centers now account for half of the company’s pipeline for 2029.

President Harry Sideris, who will take over as CEO from Good in April, said the data centers now being built are focused more on cloud computing while new ones on the drawing boards are focused far more on generative artificial intelligence, which demands a lot more energy. Sideris added that the recent unveiling of DeepSeek and the ensuing discussions about it possibly blunting projected load growth haven’t slowed down hyperscalers.

“They’re full speed ahead. They’re looking at the fact that these efficiencies may actually increase the demand for AI,” Sideris said. “We have not seen any pullback. In fact, we’ve seen a lot more discussions with accelerating some of their work.”

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.