Design and Construction Report staff writer
Virginia’s State Corporation Commission has ruled that data centers must pay the cost of transmission infrastructure built exclusively to serve their facilities, a decision state officials say will save residents and small businesses hundreds of millions of dollars.
The order shifts responsibility for new transmission projects dedicated to large electricity users, including data centers, away from general ratepayers and onto the companies driving the demand.
“I am proud that after my administration urged state regulators to protect Virginia families and small businesses from shouldering the cost of new transmission infrastructure meant to serve data centers, the SCC listened,” Gov. Abigail Spanberger said in a statement. “This order — which is projected to save Virginians hundreds of millions of dollars — makes sure that data centers are paying the full cost of the transmission infrastructure their developments require.”
The filing was submitted to the commission by Chief Energy Officer Josephus Allmond on behalf of Virginia ratepayers.
“It is hard to understate the importance of this decision from the SCC for Virginia families and businesses,” Allmond said. “Instead of spreading transmission costs caused directly by data centers across all ratepayers, now data centers will pay for those costs directly.”
Virginia is home to the world’s largest concentration of data centers, particularly in Northern Virginia, where rapid growth has increased demand for electricity and prompted concerns over who should bear the cost of expanding the transmission grid.
Earlier this year, the governor signed legislation imposing a tax on data centers based on energy consumption, tightening environmental standards for backup generators and giving local governments additional authority to evaluate the impacts of proposed data center developments.
