The outsized impacts of data centers in our communities will again make data center reform a priority for The Piedmont Environmental Council and our partners in the Virginia Data Center Reform Coalition during this year’s Virginia General Assembly session. Our efforts will be focused on our four pillars of data center reform — state oversight, ratepayer protection, enhanced transparency, and mitigating impacts — but we will also be closely monitoring other trends we expect to see this year, including legislation intending to address demand response.
- State oversight · PEC supports establishing a state-level regulatory review process by the State Corporation Commission, in addition to the existing local review, to help Virginia plan for and mitigate land use, water, air quality, and energy impacts from this expanding industry and evaluate the regional impacts of data center development affecting neighboring jurisdictions.
- Ratepayer protection · We expect ratepayer protection to be a major topic during this legislative session as electric bills continue to rise for Virginians. PEC believes the data center industry should pay its fair share, which is why we intervened in the State Corporation Commission’s ratemaking case with Dominion Energy earlier this year. We hope to see bills that will prevent residents and businesses from shouldering industry risks and subsidizing the billions of dollars in costs associated with the data center industry’s energy infrastructure needs.
- Enhanced transparency · To make good decisions, Virginia and its localities need good information. PEC supports legislation that would require local disclosure and statewide reporting on data center energy use, water consumption and emissions to ensure informed review of new applications and monitoring of existing data centers to enhance statewide planning.
- Mitigation of impacts · We hope to see bills that will mitigate the impact of data centers on Virginia communities and resources, such as requiring higher clean energy and efficiency standards for data centers, or requiring offsets for impacts to water and land resources. Mitigation could also include either reducing or eliminating the state tax exemption for data centers, or instituting a tax on data centers — and using the tax revenue from either to help balance the state’s budget and fund conservation and clean energy programs.
- Demand response · PEC expects to see discussion and legislation around demand response strategies that would pay large energy customers like data centers to disconnect from the grid during times of peak energy demand in an effort to increase grid reliability. We are watching this topic cautiously, as we are concerned it may encourage more data centers to use on-site gas turbines to meet their energy needs during peak times, enable the data center industry to build far beyond the grid’s capacity, and cost Virginians money.