A bipartisan group of Virginia legislators in mid-January rolled out a passel of bills aimed at regulating data center development.
They were meant to address issues including energy and water consumption, land use and location, all topics previously unchecked in commonwealth law. Sen. Russet Perry, D-Loudoun County, said in a news conference introducing the legislation that it represented a framework that would ensure economic growth while safeguarding natural resources and ensuring fairness statewide.
By the time the General Assembly closed its regular session last month, only four of about 20 data center-related bills survived. They went to Gov. Glenn Youngkin, who has until March 24 to take action.
For Perry, who took the lead in that January news conference, it was a disappointing result.
“We didn’t do nearly enough,” she said.
Data centers — large, warehouse-like buildings that house computers and networking equipment to store, back up, process and share digital information — proliferate in Northern Virginia, particularly in Loudoun County and its neighbor across Bull Run, Prince William County.
Those jurisdictions have more data centers than any other place on the planet, but Southwest and Southside Virginia will see more of them in the coming years. Mecklenburg County is already home to a Microsoft data center campus. Pittsylvania County officials have approved one. Appomattox County has signed on for one, and Pulaski County is likely fast-tracked to get its own. Wythe County officials are pursuing a data center deal.
Multiple Northern Virginia lawmakers sponsored the data center legislation. Among their concerns was making sure individual customers aren’t paying more than their share of energy costs.
As originally written, Perry’s bill with Sen. Richard Stuart, R-Westmoreland County, SB 960, would have required the State Corporation Commission to determine this year if electric utility customers who are not classified as data centers are unreasonably subsidizing data centers’ costs. The commission would then make rules to “eliminate or minimize” such subsidies.
In the House, a bill introduced by Del. Irene Shin, D-Fairfax County, HB 2084, would have directed the SCC to work to ensure that electric companies are basing charges and schedules on “reasonable classifications” of customers, and that classifications for Dominion Energy and Appalachian Power include a separate classification for data centers.
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By the time they went through a variety of amendments, including a conference committee to resolve differences between the House and Senate, the two bills read identically. They no longer even included the words “data center,” Perry noted.
While the bills would direct the SCC to determine whether the utilities had reasonably classified customers for rates, charges, schedules and other issues, it would encode the option for the SCC only to “consider creating” new customer classifications.
“In its final iteration, HB 2084 did not direct the SCC to do anything it can’t already do; the language that eventually passed and is now on its way to the Governor’s desk delineated that the SCC shall consider if any new or separate customer classes are reasonable, which is already within the scope of the SCC’s authority,” Perry wrote in an email exchange.
Perry said that her bill had provided direction to evaluate data center industry needs when determining cost allocations, while giving the SCC full discretion in what rules it should formulate to address the issue.
“When it became clear that the only palatable language for passage was language that restated current law and didn’t address the concerns of my constituents and other stakeholders, I wasn’t willing to attach my name to it and chose instead [to] let SB 960 die,” she wrote.
Shin’s bill remained on the floor, and was passed.
Sen. Bill Stanley, R-Franklin County, voted against both of them. He said that while it’s not fair for average rate payers to take on the costs of more transmission lines or substations — electric utilities should be fully responsible for those costs, or share them with a data center developer — he couldn’t understand how the SCC would define what a reasonable utility customer classification would be.
“To me, that seemed vague, and subject to wide interpretation, so I didn’t find that to be very helpful, and especially not helpful in bringing down APCo’s [Appalachian Power] high energy bills,” Stanley said.
Among the surviving legislation is SB 1449, by Sens. Adam Ebbin, D-Alexandria, and Jennifer Carroll Foy, D-Petersburg, and HB 1601, by Del. Josh Thomas, D-Prince William County. They would govern applications for facilities using 100 megawatts of power or more, including new data center proposals.
The bills’ language, also identical after multiple revisions, states that a “locality shall require” developers to conduct site assessments examining sound profiles on residences and schools within 500 feet.
They would have localities require that the assessments examine potential effects on ground and surface water, agriculture lands, parks, historic sites and forests on or around the proposed developments.
Further, “a locality shall require” electric utilities to submit to localities a form describing what new substations and transmission voltage would be required to power what the bills call “high energy use facilities.”
“So that’ll be a first time for the industry,” Thomas said.
Should Youngkin sign the legislation into law, it would not affect developments already approved in Thomas’ district. Construction there, which has sparked complaints from residential neighbors, could put Prince William ahead of Perry’s district for sheer numbers, according to the Prince William Times.
“They will not affect current projects, and that was a bit of a fight [and] negotiation, but it’s where we had to land on it,” Thomas said.
He is hopeful that pending court cases and a recent election that changed the makeup of the county board of supervisors will mitigate the concerns that his bill can’t address.
Stanley, along with some others, including Sen. David Suetterlein, R-Roanoke County, and Sen. Mark Peake, R-Lynchburg, voted in favor of those measures. He said he is aware that data centers are coming, with tax revenue that can help modernize roads, schools and more. But localities need to be careful in how they deal with them, and not allow them to be forced in, he said.
“We want to make sure that we don’t turn into, you know, ugly data center sites in the same way we don’t want to have our farms overtaken by ugly solar panels,” he said.
One other related bill passed the House and Senate. Sen. Danica Roem, D-Prince William County, sponsored SB 1047. That bill as originally written would have required entities with an annual energy demand of at least 25 megawatts to work with large electric utilities to conserve or shift electricity use in response to demands on the power grid. The State Corporation Commission would have approved the so-called demand response programs by the beginning of next year, but the bill was amended.
The version going to the governor would have the Department of Energy and the SCC study the best way forward for demand response programs, with a report due Nov. 1, with no further action scheduled.
Thomas, who won election to Roem’s House of Delegates seat when she was elected to the Senate, said he thinks next year’s session will bring a stronger effort. Legislators in 2023 had called for a report on data centers from the Joint Legislative Audit and Review Commission, and that report came out Dec. 9.
There wasn’t enough time between then and the legislative session’s Jan. 8 start date to craft the best legislation, he said.
Among the JLARC report’s findings, which still remain for the General Assembly to address: Virginia’s electricity consumption could nearly triple within 15 years if the expected growth in data centers continues apace.
The Prince William Gateway and another project, at Devlin Technology Park in Bristow, would consume a massive amount of power, its source still unaccounted for, Thomas said.
“Each one of those, separately, will require about a gigawatt … of power, which is the same output as the Lake Anna nuclear power plant,” he said. “We’re not obviously building any new Lake Annas anytime soon. … So, you know, truly there’s no math that works to get the power for either of those two projects [if] they’re indeed constructed.”