Appalachian Power sees ‘explosive’ growth from data centers, other big customers 8%
By Matt Busse8%
7/31/2026, 1:45:00 AM
BS Summary: This article contains 25 faulty reasoning types, including Overconfidence Bias, Pessimism Bias, and Anchoring Bias, with Hasty Generalization as the most egregious example at 7.2% saturation with 143 hits. Analysis detected 1,618 faulty-reasoning hits from 1,989 analyzed words, generating a BS Score of 21.4% and a BS Rank of 8% (22,115 of 23,849 articles). This article is better (less manipulative) than 92.70% of the article peer group.
Appalachian Power recently told state regulators that it’s in talks with 36 potential large-load customers in Virginia.
It remains to be seen how many of these potential customers will actually bring their proposals to fruition and connect to the grid.
Photo by Matt Busse.
Appalachian Power is seeing “explosive and unprecedented” interest from data centers and other big customers.
The electric utility recently told state regulators that it’s in talks with 36 potential large-load customers in Virginia whose combined power demand would total about 25,000 megawatts.
“Like many other public utilities, APCo is experiencing explosive and unprecedented growth driven by large-load customers — primarily data centers, including hyperscalers,” Brian Abraham, president and chief operating officer of Appalachian Power, told regulators.
“The magnitude of the potential load and the level of customer interest that APCo is currently experiencing is unlike any previous load additions the Company has experienced to date.”
For context, 25,000 megawatts is more than triple the company’s recent peak demand, recorded in February, of about 7,200 megawatts across its service area.
Appalachian Power has 1.1 million customers in Virginia, West Virginia and Tennessee, and about half of them are in Virginia.
Brian Abraham.
Courtesy of American Electric Power.
Assuming an average home uses 1,000 kilowatt-hours of electricity per month, 1,000 megawatts is equivalent to supplying approximately 730,000 average homes.
Even “less than a handful” of the potential large-load customers interested in joining Appalachian Power’s system could constitute the company’s single biggest sector, potentially greater than all of its other customers combined, Abraham said.
But it remains to be seen how many of these potential customers will actually bring their proposals to fruition and connect to the electric grid.
Appalachian Power spokesperson George Porter said in an email to Cardinal News that the company’s talks with potential large customers are “in various stages of inquiry or negotiation.”
“Not all prospective projects ultimately move forward, and it would be speculative to predict which ones may or may not proceed,” Porter said.
“Our project pipeline for prospective customers (of all types) also changes daily as new opportunities emerge.”
Citing confidentiality agreements, Porter declined to provide details on the three dozen potential large customers in Virginia or specify how many are data centers, the buildings full of computer servers that power the online world.
Nonetheless, several data center projects in progress, including in Botetourt, Pittsylvania and Wythe counties, are known to be working with Appalachian Power.
Appalachian Power’s outlook illustrates a rising interest in electricity demand spearheaded by data centers and seen around the country — particularly in Virginia, where data center developers have heavily focused on Northern Virginia but have begun expanding more into Southwest and Southside Virginia.
Abraham’s comments were in written testimony submitted with Appalachian Power’s application , filed in late May, asking Virginia’s State Corporation Commission for permission to raise its rates .
The company must submit its rates for review every two years, and the SCC must decide the latest case by Jan.
15.
With many details about Appalachian Power’s potential large customers still up in the air, it also remains to be seen how they could impact the average customer in the years to come.
Generally speaking, new large-load customers provide more revenue toward a utility’s expense of providing electric service, which can reduce how much residents and smaller businesses must pay.
On the other hand, the cost of transmission upgrades and new power generation as large customers increase the demand on the grid is typically shared by all of a utility’s customers.
Political and regulatory efforts appear to be underway nationwide, including in Virginia, to have data centers and other big users pay more.
Dana Wiggins, director of consumer advocacy for the Richmond-based Virginia Poverty Law Center, said that for residents to benefit from large customers’ revenue being paid into the system, those large customers must pay for any new infrastructure that they require.
The VPLC advocates for residential ratepayers during utility regulatory cases.
“That’s not necessarily something that’s part of the equation right now, and so that’s something to keep an eye on,” Wiggins said.
The service areas of Virginia electric utilities.
Source: State Corporation Commission.
Data center industry expanding in Southwest, Southside Va.
In Northern Virginia, which has been dubbed the “data center capital of the world,” there’s a yearslong wait to get new projects onto the electric grid.
Dominion Energy, which serves the Northern Virginia market, told the SCC in February that the company has a queue of large customers that have requested to connect their projects to the grid, and their demand totals 70,000 megawatts — almost triple the all-time peak demand of the company’s regional transmission zone.
Another 2,000 to 3,000 megawatts of new requests arrive each month.
Of that 70,000 megawatts, customers totaling 25,000 megawatts are set to connect to the grid by the end of December 2031.
Dominion is reviewing the other 45,000 megawatts of requests to determine when those customers will come online.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.
]
In recent years, Southwest and Southside Virginia have seen new data center projects proposed as developers seek advantages such as more quickly available power capacity, cheaper land, lower taxes and available water supply.
“There is more capacity available [in Appalachian Power’s service area] because some industrial customers have left the service territory over the years and the residential customer base and regular commercial classes also diminished over time,” Wiggins said.
“So they do have capacity currently to accept some large-load customers like data centers.”
One developer, TAC Data Centers, told Cardinal News in June that it chose an eastern Wythe County site in large part due to its proximity to an extra-high-voltage 765-kilovolt transmission line.
William Castle, director of regulatory services for Appalachian Power, told the SCC that since 2024, the company has contracted for 540 megawatts of data center load in Virginia in addition to the three dozen prospective customers, and it has contracted for “more than double that amount” in West Virginia.
Porter, the company’s spokesperson, declined to provide details on who signed the contracts for that power in Virginia.
Nonetheless, data center projects that have been announced in Appalachian Power’s Virginia service territory include:
a Google data center in Botetourt County,
a Stack Infrastructure project in Pittsylvania County,
TAC Data Centers’ project planned for Wythe County, and
another Wythe County data center that initially was announced by a company called Solis Arx but which has since been acquired by New York City-based Fluidstack .
Exact power requirements for these projects remain unknown.
TAC Data Centers has said its Wythe County project will require at least 1,000 megawatts of power capacity.
Appalachian Power has committed to providing at least 299 megawatts for the Stack Infrastructure project, with no restrictions above that figure.
Google has said it will buy the entire 79-megawatt output of a Botetourt County wind farm for its data center portfolio but has also said that amount won’t cover all of Botetourt data centers’ needs.
Not all large-load customers joining Appalachian Power’s service area are data centers.
For example, the company expects a 450-megawatt steel plant owned by Charlotte, North Carolina-based Nucor Corporation to begin service in West Virginia this year and be fully operational next year.
Who will pay for future grid improvements?
Data centers and other large users of electricity often require infrastructure improvements, such as new transmission lines, to connect to the electric grid.
“The Company has been involved in discussions with several potential new large load customers whose load requirements would significantly increase the Company’s Virginia retail load, and correspondingly, require the Company to make significant infrastructure investments to provide service,” Abraham told regulators.
Large-load utility customers often pay for infrastructure specifically designed for them, such as electric substations on their properties.
But the expense of other infrastructure, such as a transmission line that serves a large customer but which can also be seen as improving overall service reliability, is typically spread among all utility customers.
Appalachian Power customers pay for this shared transmission infrastructure through a rate adjustment clause , a charge that’s folded into customers’ monthly bills.
Dominion Energy customers have a similar charge in their bills.
A utility can also use rate adjustment clauses to recover other costs, such as those associated with developing new power generation.
For example, both Dominion and Appalachian are exploring building small modular nuclear reactors; Dominion already charges customers for early site development costs associated with SMRs, while Appalachian Power has said it intends to do the same .
In recent years, rate adjustment clauses have been the biggest driver of bill increases for both Dominion Energy and Appalachian Power customers, more than base electric rates or fuel costs, according to an SCC report published last fall .
For both utilities, the largest of all rate adjustment clauses is the one associated with power transmission.
Once large customers join the grid, they bring with them large amounts of revenue to help cover transmission and other electric service costs.
Dana Wiggins.
Courtesy of Virginia Poverty Law Center.
“It could certainly spread the load across so that it’s not all being borne by a smaller group of customers,” Wiggins, of the Virginia Poverty Law Center, said of new large-load customers potentially joining Appalachian Power’s service area.
But the investments to serve large customers come with risks.
If a utility builds new infrastructure to serve a large customer, and then that customer goes out of business or otherwise stops electric service, other customers — such as residents — are stuck paying more of the bill.
“The risks associated with large-load customers are tied in part to the need for generation and transmission investments,” Porter told Cardinal News.
“If those investments are not fully recovered from the customers driving the need for them, they could contribute to additional rate pressure for residential and other existing customers.”
Sentiment appears to be growing behind the idea of reducing risks to residents while having data centers pay more toward the infrastructure that serves them.
The SCC in June approved new requirements for new large-load customers in Appalachian Power’s service territory.
These include 14-year contracts and minimum charges, although the SCC did not establish a separate customer class for large Appalachian Power customers as it did with Dominion Energy last year.
In March, the Trump administration announced the Ratepayer Protection Pledge , a voluntary, nonbinding agreement among participating technology companies designed to shield residential customers from bearing the costs of data center-driven grid improvements.
Among other things, the pledge states, “Companies will pay for all new power delivery infrastructure upgrades required to service their data centers, including adequate network upgrade costs to ensure that these expenses are not passed on to the ordinary household.”
A Google spokesperson cited that pledge in May when telling Cardinal News that the company would pay for the infrastructure needed for its Botetourt County data center project.
[Disclosure: Google is one of our donors through its Google News Initiative, which helped support our expansion in the New River Valley.
Donors have no say in news decisions; see our policy .]
Botetourt County’s government concurs, stating on its project website for the Google data center, “Upgrades required specifically to serve the data center in Botetourt County — such as new substations, transmission lines, or distribution improvements will be paid for by Google.”
Dominion Energy has a case pending before the SCC that has produced several ideas — but no final decisions — about how data centers and other large customers might pay more toward infrastructure in that utility’s territory.
They include required upfront payments or voluntary payments to move ahead in the utility’s connection queue, according to the Prince William Times .
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