Virginia lawmakers consider data center electricity costs, environmental standards for tax exemptions

Virginia lawmakers are actively engaged in legislative discussions that could significantly impact data center operations and development across the state. A bill, heavily supported by Dominion Energy, Virginia's dominant electric utility, has reached Governor Abigail Spanberger's desk for final approval. This legislation, which cleared the General Assembly despite the Governor's rejected cost-saving suggestions, would impose specific electric grid upgrade costs directly onto data centers. If signed into law, it would also authorize Dominion Energy to allocate $900,000 per mile for burying local distribution lines. Concurrently, the Virginia General Assembly is divided over the future of tax exemptions for data centers. While leaders in the state Senate are pushing for a complete elimination of Virginia's sales and use tax exemption for data centers, the House of Delegates has put forward an alternative spending plan. This plan proposes to retain the exemption but would attach new conditions, requiring data centers to adhere to stricter environmental standards, demonstrate a commitment to energy efficiency, and prohibit co-location with carbon-emitting power facilities. The contrasting approaches highlight ongoing debates about balancing economic development with environmental and infrastructure concerns in the rapidly growing data center sector.