Dominion Energy Leads Virginia Toward a Smarter Grid with Virtual Power Plants

Dominion Energy is making headlines as it pioneers an innovative approach to managing Virginia’s electric grid. With new legislation signed in 2025, the company is preparing to launch a virtual power plant (VPP) pilot program. This move positions Dominion Energy at the forefront of grid modernization and distributed energy solutions in the state.

What Is a Virtual Power Plant?

A virtual power plant aggregates energy resources like home batteries, electric vehicles, solar panels, and even backup generators across many homes and businesses. Rather than relying on traditional peaker power plants, a VPP lets utilities tap into these distributed devices collectively. This enables a more resilient and flexible grid, meeting peak demand without building new infrastructure.

For Dominion Energy, this technology means harnessing the power already available in neighborhoods. It provides customers with incentives to participate while helping the entire community by keeping electricity costs lower and improving grid stability.

Virginia’s Mandate for Dominion Energy

In May 2025, Virginia’s governor signed a landmark law requiring Dominion Energy to propose a VPP pilot by December. The program is designed with a capacity of up to 450 MW, incorporating both residential and commercial participants. Notably, it includes incentives for at least 15 MW of new home battery systems.

The legislation sets specific milestones. By December 2027, Dominion Energy must also propose expanding its electric school bus program, using bus battery storage to provide power during peak demand. These batteries can feed stored energy back into the grid when the buses aren’t transporting students. Read more details on the full scope of the law and its goals in Utility Dive's coverage.

Key Benefits and Goals of the VPP Pilot Program

Dominion Energy’s VPP initiative isn’t just about technology. It’s about solving real challenges:

• Grid Resilience: By tapping distributed energy, outages become less likely and the power supply remains more stable during storms or periods of high demand.
• Cost Efficiency: Aggregated renewable resources can avoid the need for expensive new peaking plants, potentially reducing energy bills for everyone.
• Community Incentives: Homeowners, schools, and small businesses can gain incentives for adding battery storage or participating in demand response events.
• Environmental Progress: Virtual power plants promote clean energy adoption by optimizing the use of solar and battery storage.

To further understand how the system will support grid operations, and how it could set a model for other states, see the insights from pv magazine USA. This article explains how the program includes broad geographic participation and considers equity incentives for lower-income communities.

How Will Dominion Energy Engage Customers?

Participation in Dominion’s VPP program will be open to both individuals and businesses. The company plans to:

• Offer enrollment directly or via third-party aggregators.
• Provide battery storage incentives and opportunities for electric vehicle integration.
• Use a transparent stakeholder process to refine the program and determine appropriate performance incentives.

Customer devices, including solar systems and smart appliances, will become part of the grid solution. The pilot will run through 2028, after which Virginia’s utility regulators will evaluate its effectiveness and consider permanent adoption.

For a broader look at how VPPs are tackling Virginia’s unique energy challenges, visit Microgrid Knowledge.

Looking Ahead: Dominion Energy and Virginia’s Energy Future

With this VPP pilot, Dominion Energy is setting a benchmark for other utilities nationwide. By leveraging local resources and promoting innovation, the company aims to deliver reliable power while fostering a more sustainable energy future. Community members are encouraged to learn about these new opportunities and consider how they might participate in building a smarter, cleaner grid.

As Dominion Energy’s program unfolds, it could inspire broader adoption across the country, marking a turning point for distributed energy and grid modernization in the United States.