Article Text
Government and municipal institutional accounts participating in a statewide electricity-purchasing group saw an overall 24.9% rate increase take effect July 1 in Dominion Energy territory, adding costs for public entities that include local governments and school divisions.
The change applies to accounts participating in the Virginia Energy Purchasing Governmental Association, or VEPGA. It does not represent an increase in residential electricity rates. The effect on each participating government or public institution will depend on the rate schedules covering its accounts.
“The overall impact on a particular member will vary depending on their individual rate schedules,” the Virginia Association of Counties said in an advisory.
VEPGA pools the purchasing power of entities represented by the Virginia Municipal League and the Virginia Association of Counties. It represents more than 170 counties, cities, towns, school divisions and service authorities.
The association’s negotiating team agreed in principle to a Dominion contract covering July 1, 2026, through June 30, 2028. The increases were reportedly divided between the two years to lessen the initial rate shock. Members are nevertheless projected to see another increase of at least 12% on July 1, 2027.
“Members can also expect at least another 12% increase effective July 1, 2027,” the counties association advisory said.
That projection assumes there are no additional increases in fuel costs or riders, including one associated with the Regional Greenhouse Gas Initiative. No dollar estimate was provided for the effect on Fairfax County, Fairfax County Public Schools, the Town of Herndon or the City of Fairfax.
Fairfax County and its school system have hundreds of facilities that could be affected, including schools, public-safety centers, offices and administrative buildings. The supplied information does not establish how many individual accounts are covered or how the higher rates will translate into the county and school system’s total electricity expenses.
Herndon expects the change to raise its electricity costs, although the town had not determined whether the increase would affect specific capital projects. The town began a multiyear energy initiative in 2025 to reduce consumption at its facilities.
“These energy efficiency projects at Town facilities are anticipated to help reduce energy use beginning in FY 2027,” town chief communications officer Brent Heavner said.
Herndon expects to begin estimating the resulting savings and incorporating them into its planning during the fiscal 2028 budget cycle.
Fairfax City also plans to use efficiency and cost-saving measures to limit the effect on its finances. “Adjustments will be made to minimize fiscal impacts,” Matthew Kaiser of Fairfax City said.
The city has adopted a Green Building Policy that raises performance standards for municipal buildings. It also hired an energy manager to track and improve energy efficiency. “The energy manager will seek ways to optimize building performance starting this fall,” Kaiser said.
The public-sector increase follows a separate change for residential customers. A base-rate increase approved by the Virginia State Corporation Commission took effect Jan. 1, reportedly adding about $11.24 per month to the bill of a typical homeowner. That residential change is distinct from the 24.9% increase affecting VEPGA governmental and municipal institutional accounts.
The absence of locality-specific estimates means the immediate budget consequences remain unclear. For now, the figures available describe the overall VEPGA rate change, while the cost for each member will depend on its mix of facilities, accounts and applicable rate schedules.