Virginia data centers face backlash over power line payments as residents still foot the bill
Virginia regulators are debating who should pay for new power lines required by the booming data center industry. Currently, residential customers bear a significant portion of these costs, a situation that has prompted renewed hearings at the State Corporation Commission. Discussions focus on proposals for data centers to directly fund infrastructure costs they necessitate.
Virginia's State Corporation Commission is once again addressing the contentious issue of who should bear the cost of new power line infrastructure necessitated by the state's rapidly expanding data center industry. A decade after a failed effort led by Prince William County resident Elena Schlossberg to make Amazon cover the cost of a transmission line for a Haymarket data center, residents continue to pay the bill.
A recent three-day hearing, held July 14-16, saw participants largely agree that data centers should be responsible for the infrastructure costs they generate. However, the hearing concluded without a definitive ruling that would shift these expenses away from residential customers.
Dominion Energy, a key utility, is attempting to allocate approximately $1.5 billion in new transmission costs among its various customer groups. A 2024 state audit projects Dominion may spend up to $18 billion by 2040 on data center-related transmission, with residential customers currently slated to cover 55% of this total compared to 26% for data centers. Proposals discussed included mandatory Contributions in Aid of Construction (CIACs), which would require data centers to pay upfront for their dedicated facilities, a model already successfully implemented by Northern Virginia Electric Cooperative (NOVEC), which has collected $1.7 billion in advance payments. Dominion also proposed a new large-load rate class for data center infrastructure slated for January 1.