Facing unprecedented demand for energy in Virginia, officials have been searching for quick and creative ways to get more power on the grid.
One of Dominion Energy’s latest initiatives, prompted by state lawmakers, would draw on a collection of the state’s smallest energy resources, some of which could be sitting in your home.
The concept is called a virtual power plant — a decentralized network that aggregates energy savings or output of devices such as electric vehicle chargers and appliances. Home and business owners would be rewarded for participating.
“Collectively, all of these technologies can function as a power plant, putting power onto the grid although they are dispersed,” said Del. Phil Hernandez (D-Norfolk), who sponsored the legislation, at a committee hearing last year.
“This is a bill that seeks to lower energy costs for families and cleanly and efficiently meet the growing demand for power here in the Commonwealth. So hopefully it’s a win-win for everyone.”
Dominion has submitted its proposed structure for the program, abbreviated as VPP, and state regulators are expected to rule later this summer on whether to approve it.
Here’s what you should know:
How to build a virtual power plant
Virginia’s 2025 Community Energy Act outlines that Dominion should aggregate up to 450 megawatts of electricity through its pilot virtual power plants.
“That’s a lot,” said Dominion spokesperson Craig Carper. “That’s like a large power plant.”
Carper said some people think of VPPs more as “virtual power plans” because they are essentially a digital organizational tool.
“It includes things such as energy storage batteries, smart thermostats, electric school buses, that can all be controlled through advanced software to provide services like a traditional power plant,” he said.
The U.S. Energy Department states on its website that VPPs “will be a key near-term solution to existing energy challenges,” including rising costs, interconnection backlogs and distribution system congestion.
Dominion’s proposed pilot would comprise almost a dozen programs.
About half are existing programs, such as the utility’s Peak Time Rebates program, which rewards customers for reducing electricity use during times of high demand, and Smart Thermostat Rewards, which lowers or increases a participating home’s smart thermostat by a few degrees during extreme weather events.
Newer proposed initiatives include tapping into customers’ electric vehicle chargers and on-site battery storage.
Spokesperson Tim Eberly said Dominion also plans to work with companies, such as those that produce electric water heaters or smart thermostats, to directly enroll residential, commercial and industrial customers.
Solar panels will not be included because they already send power to the grid through Dominion’s net metering program. But a homeowner could offer capacity from batteries that store energy from solar.
To pay for the program, in part, Dominion hopes to add a “rider” fee to customer bills, averaging about 20 cents per month, Eberly said. That would also cover the cost of programs such as energy efficiency and weatherization.
Working out the details
Many energy advocates in Virginia are supportive of pursuing virtual power plants. But not everyone agrees on how exactly the program should work.
Kate Pollard, an attorney representing the Clean Energy Solutions Coalition, said at a State Corporation Commission hearing last week that regulators should question whether Dominion’s proposal is structured to “achieve the full potential envisioned by the General Assembly.”
“At a time when Virginia needs every available megawatt of cost-effective capacity, the commission should ensure that this pilot is designed to maximize participation, achieve the scale contemplated by statute and provide the strongest possible foundation.”
She advocated for changes, including increasing the utility’s scale of residential battery programs and increasing compensation for participating households.
Brandon Praileau, Virginia program director for the nonprofit Solar United Neighbors, said the proposed pilot is “a great starting point.”
But he thinks it should rely less on programs that require customers to make changes, such as peak demand rebates, and more on technology that can automatically add energy to the grid.
The program “has to be successful for us” to meet exploding energy demand, Praileau said.
“A program that could ease demand by utilizing existing resources that are on the grid, or new technologies that can be deployed to the grid, that aren’t fossil fuels, that are much more efficient and cheaper to deploy, I think it's in Dominion's best interest to make sure that this works.”
Utility officials don’t expect the VPP program to eliminate the need to build more power infrastructure anytime soon, such as natural gas plants, as part of its “all of the above” approach to meeting demand, Carper said.
“For us to be responsible, we do have to build. But we need to think before we build and make sure that we’re using the resources and programs and tools that we’ve got at our disposal appropriately, in conjunction with that growth.”
If approved by the SCC, Dominion plans to ramp up the pilot program later this year. It will run through July 2028, at which time officials would evaluate making it permanent.
