Legislation designed to give politicians in the US state of Virginia more oversight of the region’s data centers has suffered an early setback.
A bipartisan group of lawmakers has drawn up a series of bills to try and regulate data center developments. The state is home to the busiest data center market in the world, Northern Virginia, which hosts hundreds of digital infrastructure facilities.
While this has been a boon for many counties when it comes to tax revenue, it has put a strain on the state’s power and water infrastructure, and there is growing unease in many communities about the volume of data center developments.
A report from the state's Joint Legislative Audit and Review Commission, released last December, showed that, at current rates, Virginia will not produce enough electricity to support unconstrained data center growth. The report projects that, under an unconstrained model, average monthly energy consumption in the state could reach more than 30,000GWh by 2040, far outstripping supply.
Virginia data center laws: A win and a defeat
The second proposed Virginia data center bill to come forward as part of the oversight plan, House Bill 2027, was put to the test in Virginia’s House of Delegates last Thursday. If enacted, it would mean data center developments requiring 100MW or more would have to seek permission from the Virginia business regulator the State Corporation Commission (SCC), which would need to check any new developments would not adversely impact grid reliability for other users.
However, the House Labor and Commerce Committee voted 6-0 against the legislation, which had been sponsored by Prince William County delegate Josh Thomas (Dem). Opponents of the bill who spoke at the committee said it would send the wrong signals to the data center industry that Virginia is not looking for their business.
Earlier in the day, another bill sponsored by Thomas relating to data centers, House Bill 1601, passed the House Counties, Cities and Towns committee 5-3.
This would require data centers and other large power users seeking rezoning permission to undertake more assessments on the impact of their plans on communities.
Lawmakers unite in Virginia data center regulation push
A previous attempt by the same group of politicians to introduce data center legislation in Virginia stalled last year.
Now they have come back with new laws, focusing on rate regulation, permitting, tax incentives, and disclosure of data. Many stress a greater role for the SCC in regulating data centers.
When the bills, dubbed a “framework for responsible growth,” were launched last week, Virginia Senator Russett Perry (Dem), of Loudoun County, Northern Virginia, told a press conference that the data center industry in the state had “largely grown unchecked.”
“If we fail to act, the unchecked growth of the data center industry will leave Virginia's families and will leave their businesses footing the bill for infrastructure costs, enduring environmental degradation, and facing escalating energy rates,” Perry said in comments reported by Bisnow. “The status quo is not sustainable.”
The key pieces of legislation in the package are House Bill 2101 and SB960, its Senate counterpart. These would compel Virginia regulators to investigate whether digital infrastructure projects are causing residents to pay more for their electricity. If this was found to be the case, new rules would have to be created to ensure data center operators bear these costs.
To make it into law, the bills will need to clear the House and the Senate, and be signed into law by state governor Glenn Youngkin, who is a big supporter of data center developments in Virginia. In a speech last week, Youngkin said: “Data centers alone support 74,000 jobs, bring in $9.1 billion in Virginia GDP, and generate billions in local revenue,” and called for the state to remain “the data center capital of the world.”
