Virginia Governor Abigail Spanberger signed two bills Friday that reshape how the state handles electricity costs and grid infrastructure spending. The legislation, sponsored by Senate President Pro Tem Louise Lucas and Del. Destiny LeVere Bolling, grants regulators authority to assign electricity costs to data centers and permits Dominion Energy to spend $900,000 per mile burying local distribution lines.
The bills emerged from intense lobbying by Dominion Energy, Virginia's dominant utility. Data center development has surged across the state, driven by major tech investments and proximity to federal facilities. The cost-assignment mechanism allows regulators to determine how data centers contribute to electricity expenses, a contentious issue because these facilities consume enormous amounts of power while potentially shifting costs to residential and small business customers.
The second provision authorizes Dominion to accelerate undergrounding of distribution infrastructure, replacing overhead power lines. The utility argues this improves reliability and storm resilience. Environmental groups and consumer advocates, however, have raised concerns about cost-shifting to ratepayers and the environmental footprint of burying lines at scale.
The legislation now moves to Virginia's State Corporation Commission, the regulatory body overseeing utility operations. Regulators must establish the framework for determining data center electricity cost allocation and evaluate Dominion's undergrounding proposals.
Consumer advocates warn the bills hand significant power to Dominion without sufficient safeguards. The data center cost-assignment language remains vague about whether facilities will pay full infrastructure expenses or if costs will remain distributed across all ratepayers. This matters because Virginia's residential and business customers already pay some of the nation's higher electricity rates.
The SCC has already grappled with Dominion's rate increases. In 2023, the commission approved a 9.9 percent rate hike affecting 2.7 million customers. Additional cost pressures from data center infrastructure expansion could