The Regulatory Cliff, the Fiber Ring, and Two Buildings That Could Actually Work

This session covered five tracks simultaneously: Dominion's rate structure, building candidates, flood zone status, the DEQ generator ruling, and the Virginia budget standoff. Most of what we found either confirms or sharpens earlier work. Two findings are genuinely new and consequential.

One is a rate structure change that makes large-scale private data centers significantly more expensive starting January 2027. The other is a flood zone comparison that tells us which downtown Norfolk buildings can realistically house compute infrastructure and which can't.

We also flag two corrections to Session 5's findings before they reach this page — one on the substation identity, one on the SNA ring completion timeline — because that's how this works.

Dominion's Rate Structure: A Cliff at 25 Megawatts

We've been working from an unverified claim: that connecting at primary voltage (Schedule GS-4) rather than secondary voltage saves a data center roughly $10,000 per year per 500 kW of load. This session we pulled the actual tariff.

The more significant finding is what happens above 25 megawatts. In November 2025, the SCC approved a new Schedule GS-5 for Dominion's high-load customers — defined as those requiring 25 MW or more. GS-5 takes effect January 1, 2027.

The policy implication is direct: any facility staying below 25 MW remains on GS-4, avoids the 14-year take-or-pay obligation, and retains financial flexibility. A municipal or community-owned compute facility designed to stay modular and sub-25 MW — exactly the model we've been describing — sidesteps the new schedule entirely. Private hyperscale operators building at 50, 100, or 200 MW cannot.

This is a genuine competitive advantage for the modular public model, and it arrives courtesy of a Dominion tariff ruling that was aimed at making large customers pay their grid costs. The policy intent and the advocacy interest align, for once.

The SNA Fiber Ring: Still Under Construction

The Southside Network Authority's Regional Connectivity Ring (RCR) — 119 miles of fiber connecting the five Southside cities — was originally projected to complete in August 2024. It didn't. As of May 2025, construction was still ongoing, with fiber pulling in progress and permitting challenges in Virginia Beach among the reported delays.

We also found a detail in the May 2025 board minutes worth noting directly: the SNA board was asked by the City of Chesapeake to issue a Letter of Support for the Etheridge Lakes Data Center. The board chair asked staff to draft a letter expressing general support for data centers in the region — while noting that support for the concept doesn't imply support for any individual project.

This is small but revealing. The SNA, a public authority whose fiber ring is the key connectivity asset for any Hampton Roads compute build, is already being asked to weigh in on individual data center projects. The precedent being set now — whether the SNA treats data centers as generic economic development wins or as infrastructure decisions with conditions — will matter.

A note on our numbers: Gemini's research found a January 2026 board meeting citing 82% conduit completion, 26% fiber completion, and a June 2026 target. Those figures are plausible given the May 2025 record, but we can't independently confirm the January 2026 minutes from public sources. We're treating the completion timeline as UNVERIFIED pending direct confirmation.

The Substation Question: Not Brambleton

In earlier sessions we referenced "Brambleton Substation" as the primary grid entry point for downtown Norfolk, citing Parcel ID 04337700. Both pieces of information were wrong, and we're correcting them here.

This matters because the grid connection point is central to the siting argument for municipal compute in downtown Norfolk. We had a wrong answer and were citing it as confirmed. We're not doing that anymore.

Flood Zones: Two Buildings Pass, One Doesn't

Any proposal for compute infrastructure in Norfolk has to answer the flood question. The city is on some of the most flood-exposed land on the East Coast — land sinking at roughly 4.5mm per year while sea levels rise on top of that. A data center that goes underwater in the 2040s is not a commons asset; it's a liability.

We checked FEMA flood zone designations for the three primary candidate sites.

Zone AE doesn't make Dominion Tower impossible — it makes it expensive and complicated. Given that we already have two Zone X (Shaded) candidates with large floor plates and downtown fiber access, there's no reason to lead with the flood-zone-burdened site.

Dominion Tower's location — at Waterside, directly on the Elizabeth River — is also the most visible piece of the Norfolk skyline. A community compute project doesn't need to be at Waterside. It needs to be practical.

440 Monticello and 101 West Main: The Two Viable Candidates

We've now verified the two leading building candidates for a downtown Norfolk municipal compute node.

What makes these two useful together is that they're different risk profiles. 440 Monticello is financially stressed — which makes negotiation more tractable but also more complex (CMBS pools have servicer rules, not landlord discretion). 101 West Main is more straightforward as a leasing proposition. A municipal authority might pursue one as a primary and keep the other as an alternative, or use both for geographic redundancy within the downtown core.

What neither building has yet is a confirmed fiber entrance point from the SNA ring. That's the next step for Track B.

The Virginia Budget: Still Unresolved

The Virginia General Assembly adjourned its regular session on March 14 without a budget. A special session is scheduled for April 23. The DCRSUT — the data center sales tax exemption that cost the state an estimated $1.6 billion in foregone revenue in FY2025 — remains in effect while negotiations continue.

The two sides: the Senate, led by Finance Committee Chair Louise Lucas, wants repeal effective January 1, 2027. The House position is to honor existing contracts (which run to 2035) while finding other mechanisms for "fair share" revenue from the industry. The data center lobby is negotiating directly with Lucas and House Appropriations Chair Luke Torian.

We flagged an error in our research notes: an earlier version of this session's findings described the House position as proposing environmental guardrails — PUE ≤ 1.2 and 90% renewable requirements. That description was inaccurate. We corrected it before it reached this post.

One quote worth recording here, from Lucas in February: "I don't believe that's going to happen" — referring to the industry's claim that repeal would cause data centers to leave Virginia. "I think they will continue to build in Virginia, but I think that they understand there's going to be a different playing field."

That's the Senate Finance Committee Chair. She controls the budget. She's not bluffing.

What We Still Don't Know

The honest accounting of open questions after this session:

The downtown Norfolk primary substation identity is unconfirmed. We know what it isn't (Brambleton, Cottage Park). We don't yet know which Dominion substation feeds the downtown core — specifically the Monticello corridor and the Granby Street corridor where 440 Monticello and 101 West Main sit. This is the most practically important piece of grid infrastructure research remaining.

The SNA RCR completion timeline is unverified past May 2025. We have a claimed June 2026 target from reported January 2026 board minutes, but we can't independently confirm it. We're watching the HRPDC meeting calendar for current board packets.

The 440 Monticello debt situation needs servicer-level verification. The CMBS pool status determines whether any anchor tenant negotiation goes through a standard leasing process or through special servicing — which changes the practical path significantly.

The Virginia budget outcome remains open. April 23 is the date.

What's Next

Session 6 will focus on three things: identifying the correct downtown Norfolk substation, confirming the SNA fiber entry points for 440 Monticello and 101 West Main, and drafting the Louise Lucas briefing memo. The memo is the first piece of direct advocacy work this project will produce — research first, advocacy second, but we now have enough on the ground to make the case.