Virginia kept its climate law. Dominion sees a loophole.

Even as data centers spike energy demand and electricity rates rise, Virginia has stood by its landmark climate targets when other states, from New York to Hawaii, have wavered. Legislators in the data center capital of the world didn’t just preserve the 2020 Virginia Clean Economy Act earlier this year; they strengthened it — expanding requirements for energy providers to invest in battery storage, community solar, and energy efficiency.

But now, Virginia’s largest electric utility is putting the law to its toughest test yet. In rural Cumberland County, Dominion Energy is proposing to build one of the nation’s biggest natural gas facilities, even though the statute prevents new fossil fuel plants and says all of them must shut down within two decades.

Utility regulators can waive the rules on fossil fuel generation if they determine grid reliability is at stake, a loophole Dominion exploited last year to win approval for another gas facility, in Chesterfield County outside Richmond, that is a third of the size of the proposed Cumberland project. If the company uses that same escape clause to build an even larger plant and operate it into midcentury, it will add to worries that the 2020 law’s fossil fuel phaseout is a mere paper tiger: still on the books but lacking any real teeth.

Dominion first announced plans for the Cumberland facility in May. The combined-cycle gas plant, designed to provide power 24/7 and reuse its own waste heat to maximize efficiency, would sit along the James River in a county of 10,000 people. It would boast 3 gigawatts of capacity, more than any operating gas plant in the U.S. except for a 4.3-GW complex in Florida.

The plant proposal is still in its early stages. Dominion got its first approval last week from the Cumberland Planning Commission; it also needs permission from the county Board of Supervisors. The company will also apply for two state permits: one from environmental officials that sets air pollution limits, and one from utility regulators on the State Corporation Commission to affirm the need for the plant. Both state processes, Dominion says, could stretch into 2028, and even if approved on schedule, the soonest the facility would begin operating is 2033.

Critics of the plant say it will harm the region’s rural character and increase local air pollution. ​“We are not only deeply concerned about our own people, land, and water,” Katie Hoffman, of community group Protect Cumberland, said in a news release, ​“but also about the health of our neighbors in surrounding counties.” The facility will also spew large amounts of planet-warming emissions.

Despite these concerns, Dominion claims that the plant is necessary to keep the lights on in the state and that no lower-cost, zero-carbon options exist to maintain grid reliability. Convincing utility regulators of those facts is key to snagging a state permit under the Virginia Clean Economy Act. Similarly, though Dominion is supposed to convert to 100% clean power by 2045, the law allows the company to run gas plants past that date on a case-by-case basis to ensure reliability.

In advocating for more gas, Dominion projects that data centers will spike demand in the coming years and account for half its electricity sales by 2035. The company relied on those forecasts in its latest long-term plan, which was accepted by regulators last year and calls for nearly 6 GW of new gas infrastructure by 2036. That plan, which stops in 2039, also includes Coastal Virginia Offshore Wind, the largest such project in the country, and other forms of renewable energy.

But clean energy advocates say that the blueprint for zero-carbon energy falls woefully short — not least because it doesn’t account for the 2045 phaseout date. So the nonprofits Appalachian Voices and the Southern Environmental Law Center hired an independent consultant to run numbers that do account for that deadline. The result: Even assuming the utility’s own huge demand projections, the most economical mix of generation sources in the future includes more nuclear, more solar and wind, and much more battery storage — but no new gas.

“Storage is especially important to keep costs low while meeting the zero-carbon requirement,” the consultancy concluded in its February 2025 analysis. ​“Additionally, with more storage resources, the model shows that CO2 emissions can be reduced sooner by replacing the least efficient gas resources.”

The study helped inform Virginia’s pioneering new battery storage law, which expands Dominion’s short-duration battery targets more than fivefold to 16 GW by 2045. And in April, regulators approved more than 1 GW of storage combined with solar in its territory, the company noted in an email. The green light represents ​“one of the largest approvals of solar and battery storage since the passage of the Virginia Clean Economy Act,” Dominion spokesperson Jeremy Slayton said.

The Southern Environmental Law Center and other critics welcome that general investment. But in the specific case of the Cumberland plant, they say, Dominion determined it needs to build a gas plant before seriously evaluating low-cost nonfossil-fuel alternatives. In fact, the company announced the plant before it issued a request for proposals to build a generation source in the county. That narrowly drawn RFP was issued in early July; proposals are due in mid-December.

“The biggest concern this RFP raises for me is how Dominion limits eligible resources to its own definition of ​‘dispatchable,’” said Emma Clancy, attorney at the Southern Environmental Law Center. As was the case in the RFP for the controversial, 1-GW Chesterfield plant, the definition includes only gas and nuclear. It excludes grid batteries, even though they can charge up when wind and solar power is abundant and discharge those clean electrons when needed.

“An economic assessment that looks at only gas and nuclear is almost certain to select gas,” Clancy said. ​“But that outcome shouldn’t be construed as evidence that this is actually the best choice for ratepayers — not to mention the Cumberland community.”

Indeed, Dominion customers could pay a hefty price for the multibillion-dollar project. If it doesn’t come online until 2033, it would operate for just over a decade before the 2045 deadline, when the company is supposed to stop burning carbon. At that point, the plant could be outfitted to operate on green hydrogen — an expensive fuel in extremely short supply — or would have to shutter. In either case, consumers could be left holding the bag.

“This is not a piece of infrastructure that’s only meant to last 12 years,” said Shawn Kelly, the Virginia-based regulatory director for clean energy trade group Advanced Energy United. ​“These things are built to last 30, 40, 50 years.”

Alternatively, the company could just keep the plant running using the reliability escape clause, the climate crisis notwithstanding. Asked whether the company might switch the plant to hydrogen by 2045 or simply shut down, a spokesperson didn’t acknowledge either option.

“If it is determined in the future these stations will continue to be needed to maintain reliability beyond 2045,” Slayton said, ​“we would petition the Virginia State Corporation Commission at that time.”

That answer is exactly what critics fear.

“By not addressing this critical issue upfront, effectively, the utility is being permitted to plan and build for non-compliance in 2045,” Nate Benforado, senior attorney with the Southern Environmental Law Center, said by email. By that time, he said, the reliability exception could be a foregone conclusion.