The State Corporation Commission, Virginia’s independent state agency that regulates public utilities, has ordered data centers to pay for all the required transmission infrastructure that the project will use exclusively. According to Realtor.com, Governor Abigail Spanberger (D) has recently been pressing AI hyperscalers to reduce their impact on the power grid and utility prices.
Virginia currently has the greatest number of data centers across the U.S., with the state hosting at least 570 sites. Because of the massive power demand of these sites, the state has been experiencing issues with electricity price hikes, with one county even asking its employees, including schools, to conserve power. PJM Interconnection, which distributes power to the state, has increased prices by 76%, with Monitoring Analytics, the independent watchdog keeping an eye on the utility company, saying that this is mostly due to AI data centers.
The move requiring data centers to pay for their own upstream electrical infrastructure should, hopefully, ease the burden on the average Virginian. "We are taking real steps to address rising energy costs for Virginians," said Gov. 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.”
This is one of the first statewide announcements that will enforce President Donald Trump’s ratepayer protection pledge. Trump summoned the biggest AI hyperscalers to the White House in early March and made them promise that they will “pay their own way” when it comes to building the infrastructure they need. But despite this, the burden of more expensive electricity hasn’t eased for the average American. The administration expanded this promise in late July to include state governors, utility companies, and data center developers.
Many critics said that this pledge is nothing but a piece of paper, with some comparing it to a “pinky promise.” After all, this is just a commitment and not a regulation that would penalize companies that don’t comply. Nevertheless, it seems that it has spurred at least one state to make a move that should, hopefully, have a material impact on the average citizen.
Aside from Virginia, Oregon is the only other state, so far, that has raised electrical rates for large consumers, like data centers. According to the Oregon POWER Act, facilities that consume 20 MW or more are assigned to a higher rate class. Portland General Electric, the state’s largest power supplier, has already implemented this, resulting in a 30% rate increase for these big power users, while also cutting residential costs by 1.3%.
While the average consumer isn’t necessarily paying for the power that data centers consume, utility companies had to conduct massive grid upgrades to support the increased demand from these developments. The utility companies then equally passed on all the necessary capital expenditure to all consumers, instead of just the data centers. By requiring data centers to spend on their own grid upgrades, further increases in electricity prices could, hopefully, be prevented.
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