Warner Eyes Electricity Affordability Through Data Center Bill

Virginia Sen. Mark Warner (D) is co-sponsoring legislation aimed at addressing the rising electricity costs faced by Virginians by managing the energy demand of data centers.

The Power for the People Act would direct states to evaluate the need for a new rate class specifically for data centers to ensure that they are adequately offsetting their costs. A 2024 study by Virginia’s Joint Legislative Audit and Review Commission found that data centers have paid their costs, but said that would likely change going forward. Dominion Energy, Virginia’s largest utility company, also recently created a new rate class for high wattage users.

“As I travel around the Commonwealth, I listen to Virginians and I take what they say seriously. Virginians are already being crushed by rising energy costs and they shouldn’t have to foot the bill for the data centers in their neighborhood. These companies should have to pay their own electric bills,” Warner told Loudoun Now. 

Warner’s proposed legislation would also direct the Federal Energy Regulatory Commission to issue a rule that data centers would pay for the local transmission upgrades that would not be needed if new data centers did not exist. This direction is intended to increase accountability in local transmission projects, according to Warner’s office.

Data Center Coalition Director of Virginia Government Affairs Nicole Riley told Loudoun Now the industry has been, and continues to be, dedicated to paying their fair share of costs. 

“Nonpartisan studies by JLARC, the Lawrence Berkeley National Laboratory, and others have consistently found that data centers do not raise energy prices and that data centers pay for all the power they use, just like any other customer,” she stated. “In fact, academic research shows that large load users like data centers can actually keep costs down for residential customers by absorbing more of the grid’s fixed costs. The State Corporation Commission’s new rate class for large users is intended to provide even more protection for residential ratepayers in the coming years.”

The act would also create a system to manage data center interconnection to the grid. That is intended to protect both reliability and affordability by incentivizing data centers to offset their impact on the electric grid by bringing their own new and additional power generation and battery storage systems to the grid, as well as by agreeing to certain flexibility requirements; mitigate pollution by using clean energy resources; and create jobs with strong labor standards by paying locally prevailing wages and using registered apprenticeship programs.

During a community meeting in Brambleton last month, Warner said that nuclear power may be part of the bring-your-own electricity plan.

“I think we have to bring back to the idea of nuclear power. I think not with the big, big projects, but they’re called small modular reactors. They would have one in Loudoun County that could power every data center, so would never go to the grid,” he said.

Lastly, the legislation provides resources to improve data center load forecasting by weeding out duplicative or speculative requests. In its most recent rate case, Dominion Energy also moved to address that concern by increasing the up-front costs for large power consumers.

The bill is co-sponsored by senators Chris Van Hollen (D-MD), Dick Durbin (D-IL), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Tammy Duckworth (D-IL), Tina Smith (D-MN), Peter Welch (D-VT), Angela Alsobrooks (D-MD) and Warner.

“From the expansion of data centers to the administration’s senseless tariffs to Trump’s war of choice in Iran, Virginia families are being crushed by rising energy costs,” Warner stated in the announcement. “Virginia is the data center capital of the world, and new data center proposals are popping up all the time across the Commonwealth. If corporations are going to run data centers in Virginia, they should cover the cost of them. I’m proud to support the Power for the People Act to ensure that huge corporations are not pawning off costs to working Americans.”

Warner cited the National Resources Defense Council Senior Climate and Energy Advocate Tom Rutigliano who said households within the PJM Interconnection territory – part of the region that Virginia is part – will see their bills increase by $70 a month by 2028. That is attributable to rising capacity costs caused by data centers, Rutigliano said.

Virginia is home to 603 data centers, Warner said and hundreds of those are located in Loudoun County.

“Although they are not the only factor causing electricity prices to rise, it is clear that new data center energy demand is having a considerable and growing impact on Americans’ utility bills,” according to the announcement.

Addressing residents during the recent meeting in Brambleton, Warner said communities across the country are looking at Virginia’s experience with data centers.

“My hope is that what we can do is we are kind of the guinea pig for the whole rest of the country. We have more data centers in Virginia than anywhere, so I hope the rest of the country can learn from us what we did right, what we did wrong,” he said. “And you know if they’re not going to be here, they’re going to be somewhere else. That’s one of the reasons why I don’t think you can just do a moratorium and say we’re going to put the genie back in the bottle. But we have to be smarter about this.  … I commend what your legislators have done, and I think most of the companies are starting to move to make sure the power doesn’t [impact] your bill.”

Dealing with the impact new power lines have on communities may be a tougher issue, he said. “I don’t think we’ll get there if it still has to come off the grid.”