Dominion Energy Reports 88% Surge in Data Center Demand

Demand for data centers is surging across the United States, driven by the exponential growth of data creation, a shift toward cloud computing, and increasing integration of artificial intelligence by major tech firms. Utilities like Dominion Energy in Northern Virginia and NIPSCO in Indiana are grappling with how to supply enough power for this rapid expansion, with Dominion reporting a near doubling of contracted capacity since mid-2024 and proposing new rate structures to ensure large users pay their share. Nationwide, data centers now account for a significant and growing share of electricity consumption, leading utilities and states to balance the promise of economic investment with concerns over power supply and cost distribution to the public. While tech giants such as Amazon, Google, Meta, and Microsoft are the primary tenants, demand also comes from a broad range of industries moving operations to the cloud. The sector is experiencing record-low vacancy rates and record rent growth, with nearly $100 billion in new data center construction expected to be needed in 2025 alone. Despite challenges around energy infrastructure and local impacts, industry experts and utility leaders agree that data centers are poised for continued growth in the coming years.