Will 2026 be the year General Assembly stops reckless data center development?

Will this be the year the Virginia General Assembly takes action to rein in unconstrained data center development? To date, our state leaders have failed to protect Virginians from the short- and long-term effects of reckless data center growth. Currently, there is no overarching state plan to manage the cumulative impacts on our energy costs, our air quality and our natural resources. Until meaningful reform legislation is passed, Virginia needs to pause all approvals of new data center projects, so state agencies can actually assess the impacts, identify the repercussions that await us if we continue with the status quo, and make a plan to mitigate them.

Dozens of bills aimed at bringing more transparency and oversight to data center development have been introduced by members of the General Assembly. There are several great bills that touch upon the four pillars of reform, which include state-level oversight; transparency around energy, water, and emissions of the industry; ratepayer protections; and sustainability incentives to mitigate impacts on our communities and resources.

But there is one specific bill that actually gets to the root of the problem: H.B. 155, sponsored by Del. Josh Thomas. This oversight bill would require a certificate of operation from the State Corporation Commission (SCC) for any new high-load facilities exceeding 25 megawatts of electricity.

Right now, most new data center proposals in Virginia require between 60-90 MW of electricity, so this bill would encapsulate all new data center applications. The certificate would require the SCC to weigh grid capacity, reliability, rate effects (increased costs) on other customers, environmental and public health impacts, including alignment with the state’s clean energy policy, and whether or not it’s otherwise contrary to the public interest.

Delegate Thomas’s keystone bill addresses regional issues that have reached beyond the localities’ purview or their ability to fully evaluate impacts on their communities. H.B. 155 is key to getting data center reform right.

Virginia now has more than 500 data centers statewide, with approximately five times more square feet of data center space in the pipeline. In the next 10 years, data center energy demand will triple our electric grid, requiring thousands of miles of new transmission lines and hundreds of substations. This all comes with increased costs to ratepayers, increased water consumption and thousands of new onsite fossil fuel backup generators on top of the 9,000already permitted.

We are in this situation because there is no comprehensive state plan to support smart growth of the data center industry. If H.B. 155 passes, it could create genuine reform. And, when combined with the impact of other important proposed bills that address demand response, backup generator usage, water consumption, and tying the sales tax exemption to renewable energy commitments, Virginia will finally be on track to build a smarter digital future. Over the past two years, the General Assembly has taken little action on data center legislation. Meanwhile, other states have seen what happened here and are proactively taking action to implement additional oversight, transparency, ratepayer protection and impact studies before approving data centers. It is time that the Virginia General Assembly passes legislation that lays the groundwork for reforms that will bring discipline into what has been a decentralized, disjointed and haphazard approach. We can’t afford to just nibble around the edges of this issue with minor tweaks to local governance. State-level oversight and coordination across the agencies of state government is what’s needed to bring real reform.

Written by Julie Bolthouse

Director of Land Use

The Piedmont Environmental Council

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