Surging electricity prices are taking center stage in the Virginia November elections as state officials warn that voters will be burdened with more than $5 billion in rate increases over the next 10 years.
Virginia voters are less than two weeks away from selecting a new governor, attorney general, lieutenant governor, and several members of the state’s legislature. With electricity bills only expected to rise, price hikes could be a defining factor in how some voters cast their ballots.
Throughout the Trump administration thus far, electricity prices have surged, outpacing the rate of broader inflation.
In the latest Consumer Price Index report released by the Bureau of Labor Statistics last month, electricity prices rose by around 6.2% for the year ending in August. This was more than double the rate of inflation, which rose slightly to 2.9% for the year.
BLS was expected to release updated numbers for September on Friday, and many in the industry are bracing for electricity prices to increase yet again.
In Virginia alone, the Energy Information Administration found that the average price of electricity in the residential sector was $0.1492 per kilowatt hour in July, up from $0.1431 per kilowatt hour the year before.
What’s driving the price hikes?
Republicans, including President Donald Trump himself, have repeatedly blamed renewable energy and clean energy policies for higher prices — an argument echoed among state energy officials in Virginia.
Glenn Davis, a former state lawmaker and director of Virginia’s Department of Energy, told the Washington Examiner that clean energy policies, particularly the Virginia Clean Economy Act, have been a substantial driver of higher prices in recent years.
The Virginia Clean Economy Act, passed and signed into law by former Democratic Gov. Ralph Northam in 2020, pledged to transition the state’s electric grid to 100% clean energy by 2050.
To reach that target, utilities like Dominion Energy are mandated to generate a certain amount of renewable power each year. If they cannot generate that power themselves, they must buy renewable energy credits.
Davis explained that to cover the cost of these credits, utilities will be forced to increase rates. In the case of Dominion Energy, those costs are to the tune of $5.5 billion.
“All $5.5 billion is going on the rate payers’ bills,” Davis said, adding that the rate increases will be spread out over the next 10 years. “It’s things like that that are driving the cost to ratepayers that have nothing to do with power generation or putting more electrons on the grid.”
The Virginia Department of Energy estimates that at least 54% of the $43 monthly electricity bill increases seen between May 2020 and this year were directly attributable to the Virginia Clean Economy Act.
Some energy experts have dubbed this argument “simplistic,” given there are so many variables in play when determining electricity rates.
“For starters, a lot of the rate increases are due to the state’s utilities making decisions to build new infrastructure that is costly, and passing that cost on rate payers, and that has nothing to do with the demands of the clean economy,” Joel Eisen, an energy law professor with the University of Richmond, told the Washington Examiner.
“The fact that Dominion is buying renewable energy credits to comply with the Economy Act is only one factor that goes into setting prices,” Eisen said, adding, “I find that argument that Dominion had to buy renewable energy credits so rates are going up, simply ignores basics of public utility.”
Davis did admit that green policies in the state aren’t the sole driver behind electricity price hikes, as the region has seen an increase in fuel prices, and data center buildout contributes to increased costs for transmission infrastructure.
Effect of the gubernatorial election
The most recent electricity price hikes seen in Virginia came last month, Davis told the Washington Examiner, bringing energy bills to the top of voters’ minds as they prepare to head to the polls.
“This is the first time I’ve ever seen energy as one of the top items that voters are talking about,” Davis said. “They’re seeing their bills going up, and now they’re starting to pay attention.”
Democrats have seized on these high electricity prices, with nonprofit group and Democratic backer Clean Virginia launching a tour called “The Energy Bills are Too Damn High.”
Former Rep. Abigail Spanberger, Virginia’s Democratic gubernatorial candidate, has repeatedly emphasized her plan to lower energy bills if elected next month. She has vowed to increase local energy generation with advanced technologies such as nuclear power, fusion, geothermal, and hydrogen, and prevent data centers from driving up energy costs for other consumers.
While the Republican candidate, Virginia Lt. Gov. Winsome Earle-Sears, has also promised to fight to reduce the cost of living, she has focused far less on energy prices. This might not give Democrats the extra leg up they are looking for, however, Eisen warned.
“I think there are other issues that have gotten much more traction [during the election cycle],” Eisen said, such as job losses during the government shutdown. “I don’t really see either side turning this into some sort of winning political argument.”
At the same time, neither candidate will be able to take much action in the short term to curb the electricity price hikes, particularly as price hikes expected to hit consumers next year were decided during the PJM Interconnection capacity auction this summer.
“Any governor in Virginia, in particular, has a very limited ability to directly influence what you and I pay for electricity,” Eisen said. He added that outside factors, such as wholesale prices set by grid operator PJM or pressure from utilities on the state’s corporation commission to consider rate increases, are more likely to leave an impact.
“So, whether one candidate or the other winds up winning this election is going to not have a terribly significant impact on electricity bills,” Eisen said.
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As of Thursday, Spanberger was leading Earle-Sears in the polls, garnering 52% of the vote among survey respondents. The poll, released by Suffolk University, found that 43% of voters were throwing their support behind Earle-Sears.
The campaigns for both Spanberger and Earle-Sears did not respond to the Washington Examiner’s request for comment.
