New governor could see new versions of old bills seeking to regulate the data center industry

Last year, a group of mostly Democratic Virginia legislators introduced a set of bills to deal with data center proliferation.

Then-Gov. Glenn Youngkin delivered a State of the Commonwealth address, in which the Republican said that data center control should be a local, not state, concern.

Only seven of about two dozen bills on the subject survived 2025’s General Assembly session. Youngkin then vetoed a measure that would have required developers to study proposed data centers’ impacts on their surroundings. He also vetoed legislation that would have sparked a study on responding to data centers’ high energy demands.

This year, there is a different calculus. Democratic Gov. Abigail Spanberger has been sworn in, and her inaugural speech included a line pledging to work to ensure “that high energy users pay their fair share.”

With Democrats having assumed control of the Senate and expanded their House of Delegates majority, legislators have introduced at least 28 data center-related bills covering energy, siting, water concerns, air quality and taxation, among other issues. 

Two proposals could pause any new data center openings — depending on factors including electric grid interconnection and efficiency, environmental and public health concerns and whether other consumers would have to subsidize the costs.

Other legislation would require facility operators to show the public their water consumption rates.

Northern Virginia is home to 35% of the world’s hyperscale data centers, massive warehouse-like buildings that house computers and networking equipment that store and send data. Apps, AI usage and cloud storage rely on them.

They have been spreading into Southside Virginia, and more recently, Southwest Virginia, with citizen groups banding in opposition. Viewsheds, traffic, noise, energy capacity and water use are among their concerns, while supporters tout their potential to deliver tax revenue and jobs.

Public appetite appears to be in favor of state control. A newly released Christopher Newport University poll shows a significant majority in favor of laws relating to where and under what conditions developers may build them. 

Del. Josh Thomas, D-Prince William County, said that even with new majorities in Richmond, there hasn’t been a clear change in who is for or against data center reform. But with Spanberger in the governor’s mansion, he said that good bills can become law.

“I feel optimistic,” said Thomas, whose district is home to dozens of the facilities.

The House voted 90-7 on Thursday to pass his HB 153, which would require any high-energy-use data center developer to conduct a site assessment to examine the effect its noise would have on residences and schools within 500 feet of its property boundary. The bill also would allow localities to require site assessments to examine effects on ground and surface water resources, agricultural resources, parks, historic sites and forestland on the site or adjoining land.

A similar measure, SB 130, from Sen. Adam Ebbin, D-Alexandria, sits in that body’s Finance and Appropriations Committee.

The CNU poll, released two days prior, showed that 69% of Virginians support laws prohibiting locating data centers within a mile of a national park, state park or historic site, and 63% favor site assessments that take into consideration water usage, the electric grid, carbon emissions and agricultural impacts. Eighty-one percent want a law requiring noise studies for facilities close to homes or schools.

The poll, which covered multiple issues of concern in the commonwealth, has a 4.4% margin of error.

A Spanberger spokesperson said in an email exchange last week that the governor believes Virginia needs a clear statewide strategy. She looks forward to working with localities and legislators on the “path forward” to meet energy demand while lowering power costs for families and increasing Virginia’s energy independence.

“Local leaders know their communities best, and the state can help them make informed decisions about whether or not to bring data centers to their localities,” a statement read. “Most importantly, the Governor believes that data centers should be accounting and planning for their energy generation, water usage, and other resource needs while not driving up energy costs for everyone else.”

Here are some other reform measures in the General Assembly pipeline.

Energy

Another Thomas-sponsored measure, HB 155, would require a State Corporation Commission certificate for anyone operating a new facility that demands more than 25 megawatts of power. The certificate would hinge on whether the center adversely affects other Virginia customers’ power bills, as well as its effect on the environment and public health. The commission would establish conditions to minimize those impacts.

Any developer seeking certification would have to show that it had either secured energy storage resources, developed zero-carbon electric generating resources or has a plan to implement sufficient demand reduction measures. The SCC would have to consider whether there is sufficient energy, capacity and grid infrastructure.

“It’s basically saying we need an adult in the room, in this case the SCC, to take a look at what PJM [the regional grid operator] is projecting Virginia’s share of the grid load to be and whether that fits in the long term plans,” Thomas said.

According to the CNU poll, 63% of state residents want laws requiring newly constructed data centers to derive their energy from renewable or nuclear sources.

Del. Irene Shin, D-Fairfax County, introduced HB 1515. It would place a temporary moratorium on facilities’ approval if requests for energy infrastructure connection haven’t been fulfilled. On Monday, a House subcommittee voted to carry over Shin’s legislation to the 2027 session.

Two measures — HB 503, from Del. John McAuliff, D-Loudoun County, and SB 466, from Sen. Richard Stuart, R-Westmoreland County — would codify data centers’ sole responsibility for costs related to their power demand.

Sen. Danica Roem, D-Prince William County, brought back last year’s legislation for a study on energy demand response programs. Her SB 43 is the same as the version that Youngkin vetoed last year. 

It directs the state’s Department of Energy to “evaluate and assess the benefits and impacts of and best practices and implementation recommendations for demand response programs in the Commonwealth” and to submit a report by Nov. 1.

A study on data centers from the Joint Legislative Audit and Review Committee, the General Assembly’s investigative arm, recommended it, and Spanberger’s energy platform echoed the bill “word for word,” Roem said.

Water

Two bills in the House and one in the Senate center on water-use disclosures. 

A bill from Del. Liz Guzman, D-Prince William County, HB 496, would require new centers to disclose their expected water use, including average daily use and maximum daily and annual use. The bill would ban nondisclosure agreements or any other provision preventing publication of those metrics. 

A subcommittee on Jan. 23 voted to send it to the full House.

HB 589, from Del. Shelly Simonds, D-Newport News, would require the State Water Control Board to set up resource plans for each major river basin and would give that board the option to require user data. Sen. Kannan Srinivasan, D-Loudoun County, introduced SB 553, similar to Simonds’ measure. Srinivasan’s bill was scheduled for a Tuesday subcommittee hearing.

“Currently the problem is the Virginia data centers in Virginia lack sufficient transparency,” Guzman said of her bill in a Jan. 23 hearing. “This makes it very difficult for the locality to develop strategies to ensure that there is enough water for citizens.”

Air

The House has three proposals related to air pollution.

Among the provisions in HB 507, from McAuliff, is a requirement to use stored energy for emergency backup and, after it is depleted, carbon dioxide-emitting backup generators could be used for only two hours.

Guzman’s HB 1502 would establish emissions standards for standby generators. SB 336, from Roem, would direct the Department of Environmental Quality to limit use of so-called tier 2 generators “only to sudden and unforeseeable outage events,” not planned outage events.

“They would have to use tier 4 [for planned events] instead of tier 2 generators, because tier 2 are much dirtier,” she said.

Taxes

Virginia has a sales and use tax exemption for data centers’ equipment and software, and some legislators are looking to put conditions on it.

Rep. Rip Sullivan, D-Fairfax County, introduced HB 897, which would require data center operators to restrict carbon dioxide emissions and move toward clean energy resources.

SB 45, from Sen. Creigh Deeds, D-Charlottesville, proposes that an operator show that it is up-to-date on energy efficiency and that it relies heavily on renewable energy sources in order to keep the exemption. He also has a budget language amendment that extends the exemption.

Roem, the Prince William County senator, submitted budget amendments aiming to eliminate the exemption entirely, which her other amendment says would add $1 billion to the state’s revenue estimate in the first year of the biennium, then $1.1 billion the second year. 

Del. David Reid, D-Loudoun County, introduced HB 1132, to create a local residential renewable energy incentive program derived from data centers’ real estate taxes. The funds would go toward reducing residential customers’ utility bills and reducing fossil fuel reliance for both the centers and residents.

Policy

Simonds, the Newport News delegate, sponsored HB 591, addressing “Policy of the Commonwealth” for data centers. 

It’s a catch-all bill to “promote coordination between data centers, state agencies, and regional grid operators to share information on energy usage, interconnection timelines, and barriers to rapid deployment of renewable and flexible energy resources” while requiring reporting on energy and water usage and emphasizing cybersecurity, physical security and supply chain security against “foreign adversary access or compromise.”