URGENT UPDATE: Virginia’s legislative efforts to regulate data centers are faltering as more than 60 related bills face significant setbacks in the General Assembly. With just two weeks remaining in the current session, advocates express deep concern that inadequate measures could exacerbate the state’s growing resource challenges.
In a session that has seen over 60 data center bills introduced, approximately half have been deferred to next year or stalled in committee. Chris Miller, president of the Piedmont Environmental Council, warns that the increasing demand from data centers threatens Virginia’s energy and water resources. “The energy infrastructure and water supply will impact significantly more land than the data center footprint itself,” he stated.
A recent report from the Electric Power Research Institute reveals alarming projections: Virginia is the only state where data centers consume over 20% of the total electricity, and by 2030, this could surge to between 39% and 57%. Miller emphasizes the staggering financial implications, estimating a need for $400 to $500 billion in infrastructure investments to support this expansion.
Two critical bills, SB619 and SB339, aimed at enhancing regulatory oversight, have shown initial support but are now stalled. SB619 would mandate that new data centers obtain approval from the State Corporation Commission (SCC) and demonstrate sustainable energy sourcing before construction. Although it passed the Senate with bipartisan support, a House subcommittee recently recommended laying it on the table.
Miller stresses the urgency for the House to act swiftly, noting, “There are some good bills that passed, but they don’t address the core problem, which is we’re approving data centers too fast, without oversight.” He urges Governor Abigail Spanberger to signal support for more comprehensive regulatory measures.
Water usage by data centers is also a pressing concern, with large facilities potentially consuming up to 5 million gallons of water daily for cooling. The Joint Legislative Audit and Review Commission found that while current water use is sustainable, it is on the rise. Miller warns, “Nobody seems to be doing the analysis… It’s terrifying that we’re not even asking the question, ‘Do we have enough water to meet that demand?’”
Another critical piece of legislation, HB589, aimed to require water utilities to report water supplied to data centers, but it was also sidelined in committee. Proposals for more stringent regulations are expected to face challenges as a substitute bill with relaxed standards progresses.
Despite these hurdles, some legislation has advanced, such as mandates for public utilities to implement demand flexibility programs and establish emission standards for data centers. Furthermore, the future of the data center sales and use tax exemption hangs in the balance, with the Senate’s budget proposal including nearly $1 billion in revenue from its expiration.
Proponents assert that data centers are vital economic drivers, generating 74,000 jobs and contributing $9.1 billion to Virginia’s economy annually. The Data Center Coalition maintains that the industry’s growth is essential for investment and job creation, emphasizing the need for a balanced regulatory approach.
As the clock ticks down on the legislative session, stakeholders are watching closely for last-minute developments. The urgency for effective regulation is palpable as advocates push for action to ensure Virginia’s resources can sustainably meet the escalating demands of the data center industry.
Stay tuned for updates on this developing story as the Virginia General Assembly navigates these critical legislative challenges.
