Virginia Data Center Bills Stalled, Urgent Action Needed Now

URGENT UPDATE: The Virginia General Assembly is facing a critical juncture as over 60 data center-related bills introduced this session struggle to gain traction. With only two weeks remaining in the legislative session, nearly half of these bills have been either postponed or left unaddressed in committee, raising alarms among environmental advocates and lawmakers alike.

This year’s legislative session has put a spotlight on the rapid growth of data centers in Virginia, which currently consume over 20% of the state’s electricity. Experts warn that this figure could escalate to between 39% and 57% by 2030, according to a recent report from the Electric Power Research Institute. “We’re talking about a potential $400 to $500 billion investment in infrastructure to support these facilities,” stated Chris Miller, president of the Piedmont Environmental Council.

Miller expressed deep concern regarding the General Assembly’s missed opportunity to address the escalating demand for energy and water resources. “It’s terrifying that we’re not even asking the question, ‘do we have enough water to meet that demand?’” he lamented. Data centers can use up to 5 million gallons of water daily for cooling, intensifying the pressure on Virginia’s already strained water supply.

Among the stalled legislation, two significant bills, SB619 and SB339, aimed to enhance regulatory oversight of data centers. While SB619 would require new high-load facilities to seek approval from the State Corporation Commission (SCC) and demonstrate energy sustainability, it has faced roadblocks in the House of Delegates. Although it passed the Senate with bipartisan support, a subcommittee recommended laying it on the table earlier this week, casting doubt on its future.

Similarly, SB339, which aims to study the cost allocation of electricity transmission from high-load customers, has also stalled despite unanimous support in the Senate. Advocates fear that without these measures, Virginia’s resources could be overwhelmed by unchecked data center growth.

As the clock ticks down, Miller urges lawmakers and the governor to prioritize more comprehensive legislation. “There are good bills that passed, but they don’t address the core problem, which is we’re approving data centers too fast, and the energy that goes with them too, without oversight,” he stated.

The situation is further complicated by potential changes to the data center sales and use tax exemption. The Senate’s budget proposal includes nearly $1 billion in revenue from allowing this exemption to expire at the end of the year, while the House version does not. Supporters of the data center industry argue that these facilities are vital for economic growth, providing 74,000 jobs and contributing $9.1 billion to Virginia’s economy annually.

The 2024 JLARC report highlights the economic benefits of data centers, emphasizing their role in job creation and tax revenue generation. “Virginia’s status as a preferred destination for investment is based on its longstanding commitment to a competitive tax and regulatory environment,” said Nicole Riley, director of Virginia government affairs for the Data Center Coalition.

As the Assembly grapples with these pressing issues, it remains to be seen whether sufficient action will be taken to mitigate the environmental impacts of data centers. With the deadline approaching, all eyes are on the House and Gov. Abigail Spanberger to act decisively.

The outcome of this legislative session could shape Virginia’s energy future for years to come. Advocates and citizens are left waiting, hoping for a resolution before it’s too late. Keep an eye on this developing story as it unfolds.