Virginia lawmakers advance solar, toxins policy with budget still underway

Virginia lawmakers convened their latest legislative session in Richmond, advancing several environmental bills and policies while still deliberating the state budget. Governor Abigail Spanberger is set to review all bills by April 14, with lawmakers returning on April 23 to finalize budget details. Among the key legislative outcomes, new policies aim to expand solar generation, regulate emerging toxins, and enhance transparency from the rapidly growing data center industry. The legislature also addressed the significant energy and water demands of data centers, especially in Northern Virginia. HB 496 passed, allowing localities to require data centers to submit public estimates of annual water use. SB 553 mandates water providers to report monthly water supplied to data centers with air permits. Mike Rolband, director of the Virginia Department of Environmental Quality (DEQ), and Julie Bolthouse, land use director with the Piedmont Environmental Council, both commented on the importance of these measures for water supply planning. A bill that originally pushed the industry to use batteries for backup power passed, but only after the battery-backup provision was removed. The law does, however, prohibit DEQ from issuing new air permits for generators emitting above "Tier IV" standards. Additionally, a voluntary "flexible demand response" program was proposed, allowing high energy users like data centers to reduce usage during peak times without using diesel generators. However, SB 619, which would have required State Corporation Commission (SCC) approval for new data centers exceeding 25 megawatts, failed despite advocacy from Sen. Kannan Srinivasan (D-Loudoun County) and Julie Bolthouse, who saw it as crucial for state oversight. A major point of contention remaining in the budget discussions is the potential elimination of the retail sales and use tax exemption on computer equipment, which saved data centers $1.6 billion last fiscal year. Senate Democrats propose ending this exemption by January 1, 2027, to fund infrastructure and education, while opponents, including labor unions, warn of job losses and the industry leaving the state. Krystal James, a data center foreman, spoke in Richmond against ending the tax exemption. Other environmental initiatives included measures to restore coastal habitats, protect wetlands, and address cumulative environmental impacts on communities.