A centerpiece of a bipartisan push for oversight of the data centers that are poised to send electricity demand and rates ballooning failed on Thursday in an early General Assembly test.

Earlier Thursday, rural and suburban legislators clashed over the first of a series of bills to oversee the so-far unregulated growth of data centers. While some suburban lawmakers want guardrails, legislators from rural counties said they worry such measures would discourage the facilities from coming to their job- and tax- squeezed communities.

A House of Delegates subcommittee tabled a bill, House Bill 2027 , that would have given the State Corporation Commission a say in whether facilities drawing more than 100 megawatts of electricity, enough to power 25,000 homes, should be permitted.

People are also reading…

Data centers like the one QTS operates in Henrico County require a constant supply of electricity.

The bill was part of a package aimed at giving the state oversight of the explosive growth of data centers in Virginia.

“We have to do something about load,” said the bill’s sponsor, Del. Josh Thomas, D-Prince William, in arguing for the measure.

Prince William and Loudoun counties have been the epicenters of data center development, a trend that has made Northern Virginia home to more data centers than anywhere else in the world, but where their impact on neighbors and on historic and natural resources has sparked opposition for years.

More recently, the huge amounts of energy needed by data centers have raised environmentalists’ concerns. Dominion Energy has said projections of soaring demand for power, driven largely by data centers, means it will likely need to build more gas-fired plants and that rates could rise sharply. Environmentalists say that would undercut Virginia’s efforts to cut carbon emissions, detailed in the 2020 Clean Economy Act.

Gov. Glenn Youngkin said Monday in his State of the Commonwealth address that the Virginia Clean Economy Act "simply is not working." He called for an "all of the above" approach to energy and for Virginia to continue to be "the data center capital of the world."

Under Thomas’ bill, the SCC would need to certify that a proposal for a facility that needed 100 megawatts or more of electricity would not boost other ratepayers’ bills because of any additional power plants, transmission lines or equipment the facility would need to connect with the grid.

The SCC would also need to certify that such a facility would not affect a utility’s ability to reliably deliver power to all its customers, that it would be consistent with the state’s clean energy policy and that it would not otherwise be contrary to the public interest.

Kate Smiley, Virginia government affairs director for the Data Center Coalition, an association of data center operators and developers, criticized the proposal.

“This would add to the extremely long list of permits that you already need to get from the state, local, federal level in order to operationalize here in Virginia,” she said.

Vince Barnett, the data center lead for the Virginia Economic Development Partnership, said that if the bill were enacted, it would slow the state’s efforts to attract and retain high-quality jobs and investments.

He said an unintended consequence of the bill is that it would signal "to these sectors that we are targeting that our doors are closed."

Rural-suburban clash

Earlier Thursday, another data center bill sponsored by Thomas, House Bill 1601, passed a House Counties, Cities and Towns committee panel by a 5-3 vote, with all three House members from rural districts opposing.

Under that bill, a locality would have to complete a site assessment to evaluate a proposed big energy user's impact on water supplies, nearby farms, parks and forests before approving any rezoning or special-use permit. In addition, localities would have to look at how much noise a facility would create.

Del. Keith Hodges, R-Middlesex, who voted against the measure, said he is concerned that the bill did not also ask localities to consider the impact on employment.

“Rural counties are trying to recruit businesses and get tax revenue,” said Del. Will Morefield, D-Tazewell. He added that his 2021 bill on sales tax exemptions for data centers in distressed communities, which passed the House by a 90-8 vote and the Senate by a 39-0 vote, aimed to bring those facilities to rural communities like those in his Southwest Virginia district.

The package of bills on data centers that a bipartisan coalition is pushing this year take a different approach from the several bills sidetracked last year. This year's measures outline a state role, through rate regulation, permitting, tax incentives and data disclosure.

Several stress an SCC role to ensure that data centers do not force up other ratepayers’ bills, one of the criteria in Thomas' measure.

Measures echoing the 2024 session’s effort to give localities more zoning control are also in the hopper this year.

Virginia National Guard provides water distribution in Richmond on Friday