Virginia Data Center Legislation Stalls as Energy Crisis Looms

UPDATE: The future of Virginia’s data center regulation hangs in the balance as over 60 bills introduced in the General Assembly face serious setbacks. With only two weeks left in the legislative session, advocates express deep concern that vital measures to control data center growth are stalling, risking a potential energy crisis.

In a striking warning, Chris Miller, president of the Piedmont Environmental Council, stated, “We’re approving data centers too fast, and the energy that goes with them is out of control.” Virginia is already grappling with the highest data center electricity consumption in the nation, with these facilities consuming more than 20% of the state’s electricity— a figure projected to soar to between 39% and 57% by 2030.

The General Assembly’s failure to pass significant legislation this year could have devastating effects. Miller highlighted that data centers could require between $400 billion to $500 billion in infrastructure investments to support their escalating energy demands. “It’s terrifying that we’re not even asking the question, ‘Do we have enough water to meet that demand?’” he emphasized, as large data centers can consume up to 5 million gallons of water daily for cooling.

Two critical bills that could provide oversight—SB619 and SB339—show promise but have stalled. SB619 aims to require new high-load facilities to seek approval from the State Corporation Commission (SCC) and demonstrate energy sustainability. Despite passing the Senate 23-16 with bipartisan support, it was laid on the table by a House subcommittee. Meanwhile, SB339, which calls for a study on cost allocation for data center energy usage, unanimously passed in the Senate but faces delays in the House.

Miller warned, “There are some good bills that passed, but they don’t address the core problem.” He called for immediate action from both the House and Governor Abigail Spanberger, who has not yet commented on potential further legislation.

As discussions continue, unresolved issues regarding water use persist. Reports indicate that current data on water consumption by data centers is outdated, with no centralized tracking in place. Legislators are also considering ending the data center sales and use tax exemption, which could generate nearly $1 billion in revenue if allowed to expire at the end of this year. Proponents argue that this industry supports 74,000 jobs and contributes $9.1 billion to Virginia’s economy annually.

The urgency of the situation cannot be overstated. With critical votes pending and the clock ticking down, the General Assembly faces a pivotal moment. Advocates and industry representatives are calling for a robust regulatory framework to balance economic growth with environmental sustainability.

As this legislative session draws to a close, all eyes are on Virginia lawmakers. Will they respond to the urgent call for regulation, or will they let this critical opportunity slip away? The decisions made in the coming days will have lasting implications for the state’s energy future and resource management.