Stan Blackwell has been in the utility business for nearly three decades.
During his career, he has seen the utility industry experience low and flat growth. For an investor-owned utility, like his employer, Dominion Energy, that meant razor-thin O&M budgets, low headcounts, and enterprise-wide frugality in order to return value to investors.
While much of the energy discourse of the day includes dystopian warnings of grid collapse under the weight of AI and data center demand, Blackwell paints a different picture. And you should probably trust him— he leads the data center practice at Dominion Energy, which powers the so-called “Data Center Alley” in Loudon County, Virginia.
Dominion Energy connects 15 data centers, totaling 1 GW of load, on average each year, according to Blackwell. And the future is bright: Dominion Energy has approximately 50 GW of data center capacity requests signaling continued growth for the business. While managing the unprecedented amount of new load comes with a unique set of challenges, he wouldn’t trade today’s landscape for the flat or low growth years.
“It used to be that a utility built two substations a year,” Blackwell told POWERGRID International. “We have roughly a hundred in the pipeline now. It’s an earnings driver. We’re adding head count. What problem would you rather have, growth or no growth?”
Data centers could consume up to 9% of U.S. electricity by 2030 — more than double the amount currently used — according to a recent report by EPRI. Utilities across the country are grappling with how to keep up with the demand as so-called hyperscalers demand hundreds of megawatts of power at a time. It’s led to a resurgence of the beleaguered nuclear industry as tech giants like Amazon and Google back small modular reactor startups, while Microsoft bankrolls the rebirth of a shuttered plant.
While Dominion Energy is leading the way in engaging with data center customers and managing the load growth paradigm shift, less experienced utilities are largely learning on the fly. Blackwell will join Uzma Siddiqi, senior manager of grid modernization at Seattle City Light, in the upcoming POWERGRID webinar “Threat or opportunity? How utilities view surging data center growth” on Nov. 4. Register to attend the free webinar here.
Data center demand has been steadily growing in Dominion Energy’s service territory for the past decade. The volume required a specialized department, the data center practice, to manage accounts and provide cross-functional support.
Blackwell is keen to share Dominion Energy’s playbook. The first tip: Data centers move fast. Really fast. Above all else, their top priority is speed to market, making grid access critical. That pace has pushed Dominion Energy to embrace innovation and take on some new, unexpected responsibilities.
Early on in the data center boom, Dominion Energy key account representatives “became half real estate agents,” advising prospective data center customers on the areas of the service territory that were supportive of growth and development. Ultimately, an inquiring data center is in search of three key facts when assessing a site for development: 1) Proximity to transmission, 2) available capacity, and 3) political climate. None of the stages require exhaustive feasibility studies or reports, if you know who to ask.
Dominion Energy will prequalify properties for data center development based on local leader sentiment, transmission corridors, and available capacity. Dominion Energy’s strategy is to share as much upfront information with the data center developer as possible to smooth the process.
“We’re very much involved on the front end,” Blackwell said.
Dominion Energy’s data center playbook looks like this:
Step 1: Appoint a utility point of contact (key account manager) to manage schedules and
Step 2: Upfront system planning. If there’s a change in plan, a separate meeting will be scheduled with engineers from both the utility and data center developer
Step 3: Distribution and transmission planning
Step 4: Construction. A utility project manager guides construction, exchanging information in the field with the data center developer.
“If you create that customer face, you have to listen to the customer to coordinate all the various activities that take place in a utility. That’s how (Dominion Energy’s) data center practice developed: we had to get everyone rowing in the same direction,” Blackwell said. “It’s a very different support function than traditional key accounts.”
Blackwell believes that data center development leads to broader benefits for the customer base. For one, growth supports utility investments, and data centers often require heightened resilience.
But even for the most experienced utilities, data center development in the U.S. can seem like the Wild West. Speculative projects litter interconnection queues from coast to coast, facility sizes continue to increase, and there’s no uniform standards for managing these customers.
During a load shed event, will data centers be considered critical facilities, like hospitals? How do utilities ensure they meet preexisting energy delivery obligations? How can infrastructure keep up with demand growth?
Join the POWERGRID International webinar “Threat or opportunity? How utilities view surging data center growth” on Nov. 4. Register to attend the free webinar here.
