Sen. Warner backs bill to curb data centers’ impacts on electricity prices
Senator Mark Warner is co-sponsoring federal legislation, the Power for the People Act, aimed at addressing the impact of data centers on electricity prices and grid reliability in Virginia. The bill seeks to ensure data centers cover the full cost of infrastructure upgrades and encourages self-generation. Virginia has recently seen electricity price increases, and Dominion Energy, the state's largest utility, has received approval for new rate increases and will implement a new rate class for large-scale energy users like data centers starting in 2027.
Senator Mark Warner (D-Va.) has announced his support for the Power for the People Act, federal legislation designed to mitigate the rising electricity costs and reliability concerns attributed to data centers in Virginia. As the "data center capital of the world," Virginia is experiencing a surge in data center proposals, particularly in Loudoun County.
The proposed legislation seeks to mandate states explore new rate classes for data centers, establish a Federal Energy Regulatory Commission rule ensuring data centers fund necessary infrastructure upgrades, and enhance accountability in local electricity infrastructure. Senator Warner emphasized that corporations operating data centers in Virginia should bear the full costs, preventing them from being passed on to consumers. The bill also aims to incentivize data centers to generate their own power, utilize clean energy, and adhere to prevailing wage standards.
Virginia's electricity prices have risen by 14.5% over the past year. Dominion Energy, the state's primary electric utility, received approval from Virginia's State Corporation Commission for rate increases in 2026 and an additional hike for 2027. Amid these concerns, Dominion Energy is also facing a proposed $67 billion acquisition by NextEra, which would create the world's largest regulated electric utility. The PJM Interconnection, which manages the grid for 13 Mid-Atlantic states including Virginia, estimates that data center growth could add $70 to average family monthly bills and raises concerns about grid reliability by 2027 if power plant completion does not keep pace with demand.
Despite industry arguments from the Data Center Coalition that data centers pay their full energy costs and can even help reduce residential rates by absorbing fixed grid costs, Dominion Energy will implement a new rate class for large-scale energy users, including data centers, starting in 2027. This new structure will require these users to pay at least 85% of distribution and transmission demand and 60% of generation demand, aiming to better protect residential customers from cost burdens.