Virginia Lawmakers Push for Responsible Data Center Growth Amid Rising Concerns

RICHMOND, Va. — A bipartisan coalition of Virginia lawmakers unveiled a series of bills aimed at managing the explosive growth of data centers, a vital yet increasingly controversial part of the state’s economy. The legislative package seeks to address mounting concerns about energy use, environmental impact, and equitable cost distribution tied to the industry.

Governor Glenn Youngkin underscored the importance of data centers during his State of the Commonwealth address Monday, highlighting that the sector supports 74,000 jobs and generates $9.1 billion in GDP. “Data centers alone bring in billions in local revenue,” he said, emphasizing the need for Virginia to remain “the data center capital of the world.”

Despite their economic contributions, data centers have faced criticism for unchecked growth. Sen. Russet Perry, D-Loudoun, who is leading the legislative effort, described the industry as largely unregulated. “Today, we are here to present a framework for responsible growth, one that provides Virginia’s people, resources, and economy protection,” Perry said during a news conference at the state Capitol.

A Legislative Framework for Oversight

The proposed measures stem from a Joint Legislative Audit and Review Commission (JLARC) report that highlighted the strain data centers place on Virginia’s infrastructure, including increased energy demands, environmental risks, and questions about cost fairness.

Key bills in the package include House Bill 2101 and Senate Bill 960, which would require the State Corporation Commission (SCC) to investigate whether residential customers are subsidizing energy costs for data centers. If subsidies are found, new rules to address the imbalance would take effect by January 2026.

HB 2035, sponsored by Del. Shelly Simonds, D-Newport News, would require data centers to report quarterly on energy and water use starting in 2026. The Department of Environmental Quality (DEQ) would make this information public through an online platform, enhancing transparency and accountability.

“Increasingly over the last year, I’ve had constituents ask how much energy these data centers are really using,” Simonds said. “That’s really the crux of what we’re trying to do here.”

Energy and Environmental Standards

Del. Rip Sullivan, D-Fairfax, introduced HB 2578 to tie the state’s sales tax exemptions for data centers to stricter clean energy and efficiency standards. Under this bill, data centers would need to source a portion of their power from renewable energy by 2030 and meet tighter emissions standards for backup generators by 2027.

Sullivan also emphasized the need for innovation in energy use. “Backup generators, often as large as shipping containers, pose environmental concerns for nearby residents,” he said, noting the impact on air quality for children and families.

Other proposals aim to ensure responsible site selection and energy reliability. Del. Josh Thomas, D-Prince William, sponsored HB 1601, which mandates environmental assessments for new data centers, and HB 2027, requiring high-energy facilities to obtain operational certificates from the SCC.

“If we do not pass HB 2027, we could have rolling blackouts and a dire energy situation,” Thomas cautioned, citing findings from the JLARC report.

Striking a Balance

Proponents of the legislation argue that while data centers play a crucial role in Virginia’s economy, their growth must be managed carefully to protect the state’s resources and residents.

“Virginia is in a unique position to set a national example,” Perry said. “By adapting responsible policies, we can balance economic opportunity with resource stewardship and fairness.”

As Virginia lawmakers push for greater oversight, their efforts could reshape how the state navigates the delicate balance between fostering economic growth and safeguarding environmental and community well-being.