by Michelle Moore, Bridge2Blue
Virginians are being inundated with ads from big tech companies and their allies urging lawmakers and officials to preserve the preferential tax and regulatory treatment enjoyed by data centers and power companies.
Their aggressive lobbying makes the priority clear: protecting profits. Big data firms, fossil-fuel interests, utilities, and developers are working to preserve the framework that benefits them financially. The real question is who is standing up for taxpayers and ratepayers—and who is addressing the rising costs being shifted onto Virginians.
In a June special budget session, Virginia lawmakers will decide whether to continue giving data centers and some of the world’s wealthiest companies a $1.9 billion annual tax break—roughly 6 percent of the state’s annual budget—or end the subsidy and invest that revenue in Virginia communities. The issue is at the center of the state budget impasse: the Senate pushing to phase out the tax break and the House resisting.
At the same time, public pressure is mounting. Voters increasingly see the state’s favorable treatment of data centers as unfair: unchecked expansion is raising costs, straining resources, and harming communities. More people are questioning projects that shift costs onto taxpayers and ratepayers, fall short on job promises, strain water and energy supplies, damage air, water, and land, and depress home values. After all, who wants to live next to a data center or high-voltage transmission lines?
If these projects are truly beneficial to Virginians, why are these deals negotiated behind nondisclosure agreements? Why are they pushed through streamlined approval processes and granted exceptions to existing standards? And why do taxpayers and voters tolerate decisions made on their behalf that produce outcomes so clearly out of balance?
Virginians want good-paying jobs—especially in communities long overlooked by Richmond—to strengthen local tax bases and spur growth. But that should not mean prioritizing the profits of multinationals and regulated utilities over the well-being of ordinary Virginians. There are better paths to lasting job creation than bad deals that leave families with higher bills, strained water supplies, and communities scarred by industrial sites, transmission lines, and pollution.
Without reasonable intervention, rates will keep climbing—even though Virginia’s underlying electricity demand is essentially flat once data center load is removed. In other words, outside of the data center boom, Virginia is not experiencing the kind of demand growth that would justify massive statewide expansion of power generation and transmission.
Yet while Virginians are already paying more for everyday expenses due to Federal budget cuts and White House actions, they are also being asked to fund new power infrastructure they will barely use and that delivers little proportional benefit to the state or local communities. In effect, they are helping finance higher profit margins for the industries that gain the most from data center growth: big tech, utilities, fossil-fuel interests, and developers.
Consider Dominion Energy, a major beneficiary of Virginia’s data center boom. Recently, the State Corporation Commission (SCC), the independent agency that regulates investor-owned utilities, approved a large gas “peaker” plant in Chesterfield that Dominion said was needed for reliability.
But reliability for whom? The answer is clear: reliability for data center expansion with ratepayers covering an estimated $1.47 billion in costs.
Rather than scrutinizing the concentrated demand straining the grid—overwhelmingly tied to data centers—and requiring stronger mitigation from the largest new users, regulators accepted that justification and approved the project. For utilities, the incentive is straightforward: when more infrastructure is built, construction costs are passed on to ratepayers and the utility earns a guaranteed return.
Now, Dominion is moving ahead with what has been described as a multi-billion-dollar project and the largest fossil-fuel plant in Virginia history: a 3,000-megawatt facility in Cumberland. The full price tag is not public, but Virginians are likely to pay a substantial share.
Greater reliance on fossil fuel leaves Virginia more exposed to global fuel price spikes and multinational energy markets that push prices up, not down. If affordability is the goal and cleaner energy a path, then Virginia must address the real forces behind this costly infrastructure buildout. These plants are a major step backward from the Virginia Clean Economy Act, and stronger oversight and new cost-lowering tools cannot offset the rising costs of new generation and transmission.
A new rate class for heavy users is not enough. Individual ratepayers should not have to fund infrastructure for privately owned data centers, and neighboring communities should not have to absorb the harms of air and water pollution, falling property values, and damage to places like the James River’s Dutch Gap Conservation Area.
As Virginians and voters, we can demand a fair deal—one in which data centers pay their fair share and data centers and utilities are not allowed to harm and pollute Virginia communities:
- Tell your legislators to end massive data center tax breaks – Take Action
- Urge your legislators to stop polluting Virginia communities –Take Action
Virginia should attract investment—but on terms that are fair, balanced, responsible, and accountable to Virginians and their communities.
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UPDATE 12:15 pm by Lowell:
WARNER SPONSORS BILL TO ENSURE VIRGINIANS AREN’T STUCK FOOTING THE BILL FOR BIG DATA CENTERS
WASHINGTON – U.S. Sen. Mark R. Warner (D-VA) co-sponsored the Power for the People Act, legislation to rein in the rising electricity costs Virginians are facing by addressing the huge amounts of energy required by data centers.
Amid the growing use of artificial intelligence (AI), corporations and big technology companies’ build out of data centers has exploded and is projected to continue to rapidly increase. As more and more data centers aim to connect to the power grid, consumers across Virginia and the country are footing the bill for the infrastructure required to bring them online. Because data centers use so much power, they are also increasing energy demand which is further driving up electricity prices and placing a heavy burden on our electric grid – raising the risk of reliability issues such as blackouts. The Power for the People Act holds data center operators accountable for their role in driving up energy prices through reforms that would prevent consumers from subsidizing data center development through their utility bills. It also ensures that data centers connecting to the grid do not overwhelm it, preventing grid reliability issues that result in power outages, and ensuring that all of this work is done with strong labor standards in place, creating good-paying jobs.
“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,” said Sen. Warner. “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.”
Because of data centers, consumers in the mid-Atlantic grid region (PJM) – the nation’s largest electric grid serving 67 million Americans in 13 states, including Virginia, and Washington, D.C. – have paid or will pay:
- Over $21 billion in capacity costs in the last three capacity auctions (July 2024, July 2025, and December 2025) alone (which are the costs to secure available energy supply for future years) due to projected data center demand. These costs were to secure supply for the period of June 2025 – May 2028, according to PJM’s Independent Market Monitor.
- By 2028, the average household in PJM will see their energy bills increase by $70 per month because of data centers – that’s $840 per year – and that’s just due to rising capacity costs (not even taking into account all the other factors impacting energy bills like the price of wholesale energy and transmission costs). Capacity costs alone could balloon to $163 billion through 2033 if no action is taken to address the imbalance of supply and demand in PJM’s capacity market, according to NRDC.
Data centers are significant energy consumers. New hyperscale data center facilities can consume well over 100 MW, enough energy to power hundreds of thousands of homes. There are currently 603 data centers in Virginia and over 3,700 data centers across the U.S. with new facilities being proposed every day. 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.
The enormous energy needs of data centers push costs for consumers higher in the following two ways:
- They increase overall electricity demand, outpacing available electricity supply – resulting in higher utility bills across the grid; and
- They require expansions of the electric grid and the cost of these upgrades are in many cases passed onto all electricity customers – not just the new data centers.
Additionally, the rapid influx of data center energy demand combined with power supply constraints is pushing electric grids across the country dangerously close to their limits, which increases the risk of blackouts.
To address these affordability and reliability issues, the Power for the People Act:
- Ensures data centers are paying for the energy costs they cause by:
- Directing states to evaluate the need for new rate classes specifically for data centers to more effectively assign costs caused by that customer class, while providing technical assistance to states to support this process.
- Directing the Federal Energy Regulatory Commission (FERC) to issue a rule to ensure data centers are paying for the local transmission upgrades that would not be needed if the new data center did not exist – increasing accountability in local transmission projects which often lack oversight.
- Creates a system to manage data center interconnection to the grid that would protect affordability and grid reliability 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.
- Create good paying jobs with strong labor standards by paying locally prevailing wages and using registered apprenticeship programs.
- Provides resources to improve data center load forecasting, including weeding out duplicative or speculative requests, as accurate data center energy demand projections are key to ensuring proper investment in the grid and preventing overly inflated energy bills.
Sen. Warner is joining Sens. 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), and Angela Alsobrooks (D-MD) in sponsoring this legislation.
The Power for the People Act is supported by The Consumer Federation of America, National Consumer Law Center, Public Citizen, Maryland People’s Counsel, Illinois Citizens Utility Board, New Jersey Division of the Rate Counsel, Oregon Citizens Utility Board, Delaware Division of the Public Advocate, NRDC, and Union of Concerned Scientists.
“It’s unconscionable that people’s utility rates are rising because of data centers being built by billion dollar companies to fuel their AI products,” said Ben Winters, Director of AI and Privacy at the Consumer Federation of America. “This bill is a critical step in remedying this injustice that brings the very real issues of affordability and Big Tech abuse to the forefront.”
“The Power for the People Act helps shield families from unfair and unaffordable data center subsidization on their electric bills,” said Olivia Wein, Senior Attorney at the National Consumer Law Center. “It is outrageous that households are stuck paying billions of dollars to energy companies for costs that should be borne by data centers. The added expense is particularly harmful for low-income households who already face impossible choices between paying the monthly electric bill and paying for food, medicine, and rent.”
“The way we currently regulate electricity doesn’t work for the city-sized power demands of data centers. The Power for the People Act modernizes regulation to protect residential customers from subsidizing wealthy data centers, saving residential customers in Maryland and across the country from paying billions of dollars in electricity costs to support data center growth,” said Maryland People’s Counsel David S. Lapp.
“Across the country, the rapid growth of data centers is the number one threat to affordable electricity—energy costs will continue to hit record highs if we don’t act now. The Power for the People Act would hold data centers accountable for their impact on the grid, helping ensure reliability and affordability for everyone,” said Sarah Moskowitz, Executive Director at the Citizens Utility Board of Illinois. “These companies are among the wealthiest in the world, and it is simply unacceptable for everyday consumers to foot the bill for their energy guzzling. The Power for the People Act would rein these companies in and help restore balance to our energy system.”
“The Power for the People Act takes a balanced approach. It holds data centers accountable for their impact on the grid while providing them with tools to manage their energy needs,” said Brian Lipman, Director for the New Jersey Division of Rate Counsel. “Without this legislation, residential customers will be unprotected from higher rates and potential blackouts and brownouts at peak times – during the hottest summer days and coldest winter nights. We must protect customers from these risks, while enabling data centers to plan responsibly. This bill is an important first step toward that goal.”
“Oregon is becoming a top destination for data center growth in the country and we have seen that growth in home power bills rising by more than 50% in five years,” said Bob Jenks, Executive Director of Oregon Citizens’ Utility Board. “This federal legislation would allow us to go further than state policy allows, supporting more affordable energy bills for American families.”
“Data centers are transforming the energy sector at a speed and a scale unlike anything in decades, increasing electricity costs for worse reliability at a time when families can least afford spiking costs. Individual data centers can have the energy needs of cities, impacting the energy system and the communities around them. Collectively, the explosive growth in data centers is worsening the reliability of our energy system and imposing enormous costs – expensive transmission upgrades, rapidly increasing capacity prices, increasing energy prices – that will be paid by electricity customers. We must ensure that the economic opportunities that data centers provide for some does not come at the expense of everyone else,” said Jameson Tweedie, Public Advocate for the State of Delaware. “The Power for the People Act helps do just that, protecting the reliability of our energy system by ensuring new power generation is built to match the power demands of data centers, while requiring data centers to pay for the costs they impose on the system to protect existing customers.”
“Congress needs to step in and make sure utility customers don’t get stuck with the bill for the data center construction boom, or the increased pollution that boom will cause if those companies don’t bring their own new, clean energy. This commonsense legislation will hold data centers accountable and make sure they are paying the real costs for all the power they are using. Power for the People is an important step in the right direction, and Congress should act on it pronto,” said Jackson Morris, Director, State Power Sector at the Natural Resources Defense Council.
“This legislation answers an urgent challenge: how to grow the economy while insulating mom & pop retail customers from rising electric bills caused by data centers. It modernizes our electric sector’s approach to this new part of the economy, creating an orderly process for connecting data centers and ensuring that data centers are flexible and clean. These are necessary steps to address rapidly rising bills and ensure that data centers pay their fair share,” said Abe Silverman, Assistant Research Scholar at the Ralph O’Connor Sustainable Energy Institute, Johns Hopkins University.
“This timely and comprehensive legislation provides a clear path for data center development, securing new economic growth while implementing crucial safeguards that protect the affordability and reliability of electricity for average residential and small customers,” said Suzanne Glatz, Principal Consultant at Glatz Energy Consulting and previously Director, Strategic Initiatives & Interregional Planning at PJM Interconnection.
Full text of the Power for the People Act is available here.
