Henrico Faces About $5 Million Power-Cost Jump as VEPGA Rates Rise 24.9%

Henrico County is asking employees to cut electricity use after projecting roughly a $5 million jump in power costs tied to a Virginia Energy Purchasing Governmental Association contract that raises overall rates about 24.9% for Dominion Energy territory localities effective July 1, 2026.

WRIC reported that County Manager John Vithoulkas emailed staff about an expected 25% electricity cost increase beginning July 1, adding about $5 million to Henrico’s bill across schools and government facilities. “Each dollar we can save by conserving electricity is another dollar the county can reinvest into staff and the services we provide our residents,” Vithoulkas wrote.

Henrico buys power through VEPGA, a joint-powers association created in 2002 that negotiates multi-year electricity contracts with Dominion on behalf of more than 170 localities, school divisions and other public entities. Central Virginia members include Chesterfield, Cumberland and Dinwiddie counties as well as Hopewell, Ashland and Charlottesville, according to VEPGA materials cited by WRIC.

The Virginia Association of Counties reported that VEPGA’s negotiation team agreed in principle to a July 1, 2026–June 30, 2028 contract with Dominion. Members face a 24.9% overall increase in the upcoming contract year, with impacts varying by rate schedule, and at least another 12% increase effective July 1, 2027 — a figure VACo called likely optimistic.

For county budgets, the increase lands on facilities, schools, pump stations and street lighting — cost centers that are hard to shrink quickly. Henrico’s conservation memo asked employees to turn off lights when leaving workspaces, shut down computers at day’s end, unplug idle appliances and avoid space heaters that can cost $150–$300 per year each. Vithoulkas framed the ask as one more stewardship habit in a government that already watches tax dollars closely.

Rate pressure arrives as localities also face data-center-driven transmission debates and broader Dominion fuel and capacity costs. Even jurisdictions without large hyperscale campuses feel VEPGA increases because the association’s portfolio reflects Dominion territory cost of service. That linkage is why a Henrico facilities memo resonates in Chesterfield classrooms and Cumberland offices alike.

School divisions inside VEPGA membership may see the hike in utility line items that compete with staffing and maintenance. County managers typically cannot hedge retail residential rates for citizens, but they can model public-facility demand, invest in LED retrofits, adjust HVAC setpoints and schedule energy-intensive work off-peak where contracts allow.

VEPGA’s multi-year structure trades price certainty for stepwise increases. The 2026 jump followed by another 2027 increase means two consecutive budget cycles will carry electricity shocks unless load falls. Local governing boards will need transparent utility forecasts in proposed FY2027 and FY2028 budgets rather than midyear surprises.

Residents sometimes confuse governmental VEPGA rates with their home Dominion bills. They are related through Dominion’s cost structure but negotiated separately. Still, when counties announce multimillion-dollar public power increases, households understandably brace for residential bill pressure and demand clearer explanations from both the utility and local budget offices.

Conservation campaigns have limits. A courthouse cannot turn off security lighting, and schools cannot darken occupied classrooms. The larger structural questions — generation mix, data-center load growth, and how costs are allocated among customer classes — sit with the State Corporation Commission and General Assembly as much as with county managers.

Henrico’s public note is useful precisely because it quantifies the local hit: about $5 million. Other VEPGA members should publish comparable estimates so taxpayers can compare notes across Central Virginia. Sunshine on the municipal bill helps the public evaluate whether conservation, capital efficiency projects or revenue adjustments are proportional responses.

Employee-level steps remain worthwhile. Aggregate behavior across thousands of workstations and classrooms can shave real dollars, and Vithoulkas’s reminder that space heaters are expensive per unit is the kind of operational detail that rarely makes headlines but shows up in accounts payable.

Looking ahead, boards may accelerate energy-performance contracts, rooftop solar where net metering and procurement rules allow, and building envelope upgrades. Those projects need capital planning now if they are to blunt the 2027 increase VACo flagged.

For Henrico and peer localities, the story is not only a 24.9% contract number — it is how public institutions absorb it without cutting services residents notice. Conservation is the first lever; clearer multi-year utility budgeting and regional load advocacy are the next.

Email the Chesterfield County Board:
Jim Ingle, IngleJ@chesterfield.gov,
LeQuan Hylton, HyltonL@chesterfield.gov,
Kevin Carroll, CarrollKevin@chesterfield.gov,
Jessica Schneider, SchneiderJes@chesterfield.gov,
Mark Miller, MillerMark@chesterfield.gov,

Email the Henrico County Board:
Dan Schmitt, brookland@henrico.gov,
Roscoe Cooper III, fairfield@henrico.gov,
Misty Roundtree, threechopt@henrico.gov,
Jody Rogish, tuckahoe@henrico.gov,
Tyrone Nelson, varina@henrico.gov,

Email the Chesterfield County School Board:
Lisa M. Hudgins, lisa_hudgins@ccpsnet.net,
Steven A. Paranto, steven_paranto@ccpsnet.net,
Ann C. Coker, ann_coker@ccpsnet.net,
Jenna Darby, jenna_darby@ccpsnet.net,
Dominique R. Chatters, dominique_chatters@ccpsnet.net,

Email the Henrico County School Board:
Kristi Kinsella, kbkinsella@henrico.k12.va.us,
Ryan Young, reyoung@henrico.k12.va.us,
Madison Irving, mtirving@henrico.k12.va.us,
Marcie Shea, mfshea@henrico.k12.va.us,
Alicia Atkins, asatkins@henrico.k12.va.us,