Virginia requires data centers to fund their own power infrastructure

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Virginia now makes data centers pay for their own power lines

Virginia hosts 570 data centers, more than any other US state

Spanberger says the policy could save residents hundreds of millions

The US state of Virginia is requiring data centers to cover electricity infrastructure costs created specifically by their rapidly growing power demands.

The move comes as electricity prices across the state have risen sharply alongside the expansion of artificial intelligence facilities.

State officials say the new requirement could prevent ordinary electricity customers from carrying costs associated with large data center developments.

Data centers face higher infrastructure costs

Virginia has become the largest data center hub in the United States, with at least 570 facilities operating across the state.

Their growing electricity consumption has required major investments in transmission infrastructure, increasing pressure on the regional power system.

The State Corporation Commission, Virginia’s public utility regulator, has ordered data centers to pay for transmission infrastructure used exclusively by their facilities.

The requirement means utilities can no longer spread those dedicated infrastructure costs across their wider customer base.

Electricity prices in the region have already increased substantially, with PJM Interconnection raising prices by 76% during recent capacity market changes.

Monitoring Analytics, an independent market watchdog, has attributed much of that increase to growing demand from data centers.

The issue has become politically important as artificial intelligence companies continue expanding computing capacity across Virginia.

Some local authorities have even asked employees and institutions, including schools, to reduce electricity consumption during periods of high demand.

"We are taking real steps to address rising energy costs for Virginians," said the Governor of Virginia, Abigail Spanberger.

"I will continue to work with the General Assembly and take action to make sure data centers pay their fair share, adhere to strict environmental standards, and listen to the concerns of local communities.”

Washington’s promise reaches the states

The Virginia decision follows President Donald Trump’s effort to make major AI companies finance infrastructure required by their expanding operations.

Trump met leading AI companies at the White House in March and urged them to “pay their own way” for necessary infrastructure.

The administration expanded that approach in July by calling on governors, utilities, and data center developers to follow similar principles.

Critics have questioned whether voluntary commitments can significantly change electricity costs without enforceable state or federal requirements.

Virginia is currently among the few states taking concrete action against rising electricity costs linked to large electricity users.

Oregon has also introduced higher electricity rates for data centers consuming at least 20 MW, under provisions contained within its POWER Act.

Portland General Electric subsequently increased rates for those large consumers by 30%, while residential electricity costs fell by approximately 1.3%.

The Virginia approach differs by focusing specifically on infrastructure dedicated to individual data center projects.

The policy could become increasingly important as AI companies expand AI tools requiring increasingly powerful computing facilities and greater electricity supplies.

If other states adopt similar requirements, data centers could face more direct responsibility for infrastructure costs they generate.

For Virginia households, however, the immediate question is whether the policy actually prevents future electricity increases rather than simply changing who pays existing infrastructure bills.

Spanberger said the state expects the measure to save Virginians “hundreds of millions of dollars” while requiring data centers to pay their fair share.

Via Tom's Hardware