In its unanimous ruling, the SCC concluded the proposed power line meets standards set by Virginia law and must be approved. West Virginia regulators have already approved that state's portion of the line; Pennsylvania has yet to act.
The SCC said work on the $243 million Virginia portion of the line could not begin until all the states have given it the green light.
The $1.3 billion Trans-Allegheny Interstate Line would run some 240 miles from the southwestern corner of Pennsylvania, through north central West Virginia and through northern Virginia.
Proponents have argued the Mid-Atlantic region is facing the breaking point because of surging power demands, and Virginia regulators agreed that those anticipated reliability problems "must be fixed."
After hearings this summer, an SCC examiner recommended that the commission approve an application for Virginia's portion of the power line.
"The SCC agreed with its hearing examiner that the need for the line had been proven, specifically to cure the reliability problems that will occur on an existing high-voltage line by 2011," the commission said in a statement announcing the decision.
Regulators said they considered alternatives such as new power plants and conservation and found that the transmission line is the best alternative.
But opponents maintained that Dominion hasn't done enough to meet Virginia's energy needs by upgrading equipment, through conservation and other initiatives.
"We believe that Virginians need to take care of Virginia's problems," said Robert Lazaro of the Piedmont Environmental Council. "This is about shipping electricity from coal-fired plants to New Jersey."
In a statement, Dominion called the transmission line "the best and only answer to keep the lights on in an important section of our country and our state beginning in the summer of 2011."
A Dominion vice president, John D. Smatlak, said while the utility strives to offer energy-saving programs, "There will be times that we must add transmission lines to keep electricity flowing."
Electricity wholesaler PJM Interconnections, which operates the region's power grid, has said many transmission lines operate close to their limits and may not be able to meet demand in as little as five years.
Opponents also have included business owners, who fear higher rates, and landowners who say the transmission line will carve up open space, including farms.