Virginia Democrats are looking to increase the power bills data centers pay and drop the costs for all other ratepayers. The bill passed unanimously out of committee earlier this week.
The bill does three things: increase an existing Dominion Energy assistance program, moves more power lines underground, and, after a substitute agreed to Monday evening, aims to make data centers pay for excess energy use.
Here’s the bill author, Democratic Senate President Louise Lucas, who said the effort would lead to $8.3 million in savings to state energy bills, $13 million in savings for local governments, and an about three percent reduction to all non-data center customers.
“There are more than 200 energy bills this session, and as far as I’m aware, this is the only proposal to reduce rates in the near term,” Lucas said.
Joe Reed is a lobbyist who defended the change on behalf of Dominion Energy.
“It’s a short-term fix to skyrocketing capacity prices and a short-term fix to bringing these data centers online and generate revenue which will generate long term benefits,” Reed told the committee.
Reed went on to explain how the law would essentially increase the piece of the energy cost pie for data centers while shrinking it for the rest of us.
Lynchburg Republican Mark Peake was among those hoping for a clear reason to vote in favor of the effort.
“It would be as of Jan 1, 2027, the second largest base rate decrease in over 25 years," Reed said before Peake replied: "That’s what I wanted to hear.”
Representatives of the data center industry said they had concerns, hoped they’d get the right to build their own power in the future, and that negotiations on the bill would be ongoing.
"The data center industry is committed to paying for the power it uses," Nicole Riley with the Data Center Coalition said, adding the ability to "self-build" would "shield ratepayers from 100% of the costs" of infrastructure, "not just the financing costs."
Whatever gets out of the Senate will face the House of Delegates after crossover next week.
