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Voters worried about rising electricity prices and the onslaught of power-hungry data centers helped Democrats earn a governing trifecta in Virginia last year.
Now, as state lawmakers prepare for a breakneck, 60-day legislative session that begins this Wednesday, clean energy is emerging as a key strategy for dealing with those challenges.
“Oftentimes, I go into a legislative session sort of just guessing what people are going to care about,” said Kendl Kobbervig, advocacy and communications director for the nonprofit Clean Virginia. Not this year, she said. “No. 1 is affordability, and second is data center reform.”
The concerns come as Virginia, the world’s data center capital, is at a crossroads on its quest for 100% clean energy. The commitment began in earnest in 2020, when the state enacted a measure requiring its two investor-owned utilities — Dominion Energy and Appalachian Power Co. — to convert to carbon-free electricity by midcentury. The law also prevents new construction of fossil fuel–burning plants, with some exceptions.
But the landscape has changed dramatically over the last five years, with Dominion now projecting enormous electricity demand from the 663 data centers in the state, and counting. The company has used those predictions to justify building a spate of new gas plants over the next decade, starting with a 944-megawatt complex in Chesterfield County, just southwest of Richmond. Though regulators are taking a second look at the controversial new plant, they’ve mostly blessed the company’s plans. At the same time, Dominion warns that President Donald Trump’s move to halt construction of its Coastal Virginia Offshore Wind Project, with a projected 2.6 gigawatts of capacity, could constrain supply.
These demand pressures are one reason Virginians face rising energy bills.
Dominion, the state’s largest utility, won approval last November for a roughly 9% increase in residential rates over the next two years in a ruling that advocates say didn’t do enough to ensure that data centers pay their fair share of costs. Customers of Appalachian Power, in the southwest corner of the state, have already seen a spike in their bills, driven in substantial part by the escalating price of gas and coal.
Republicans and even some Democrats have said the way to cost-effectively meet ballooning power needs is to back away from the clean energy transition and the 2020 law, the Virginia Clean Economy Act. But multiple Democratic lawmakers are pushing bills this year that do just the opposite in an effort to save consumers money and increase electricity generation.
“The name of the game this session is affordability,” Democrat Del. Phil Hernandez of Norfolk said at a news conference last week.
One proposal to lower costs, offered by Hernandez and Sen. Schuyler VanValkenburg of Henrico, is dubbed the Facilitating Access to Surplus Transmission, or FAST, Act.
The bill is made possible by a new rule at PJM Interconnection, the multistate entity that manages Virginia’s grid: Facing lengthy backlogs for new grid hookups, PJM said last year it could connect some sources on an expedited basis so long as they didn’t trigger meaningful upgrades to the transmission grid.
“There are miles and miles of our current transmission infrastructure that are not being used at nearly their full capacity,” said Jim Purekal, a director at Advanced Energy United who heads the organization’s legislative work in Virginia. “A traditional peaker plant only operates at various points around the year. The rest of the time, it’s essentially dormant.”
The FAST Act, Hernandez said, “will lay out a process to help get these new energy projects up and running.”
The PJM surplus interconnection rule is a permission structure, not a mandate. And utilities may be tempted to use the regulation to build expensive new fossil fuel plants. The bill would set up a study of how much headroom is on the grid and create a procedure to allow only the most cost-effective resources to utilize it.
“Let’s make sure that if you’re going to be using this capacity,” Purekal said, “you’re using the most affordable assets on the commercial market today: solar, onshore wind, and battery storage.”
Advanced Energy United expects 2 to 3 gigawatts of such resources could be colocated with existing power plants of all types within four years. That’s about two times faster than it has taken a project to get through PJM’s queue in recent years.
“We believe this could be one of the fastest, lowest-cost ways to add power to the grid,” Hernandez said.
A complementary effort, to be introduced by Sen. Lamont Bagby of Richmond and Del. Rip Sullivan of Fairfax, would increase grid battery targets in the 2020 law and help ensure energy storage projects are cost-effective for ratepayers.
With Hernandez, the lawmakers promoted it at last week’s press event behind a podium sign that read, “Energy Storage Keeps Electricity Affordable.” One reason that’s true, Sullivan noted at the conference, is that batteries can charge when electricity prices are low and supply is abundant — as on a mild, sunny afternoon — and discharge when demand is high and hourly prices go up. “We can store energy when it’s cheap,” he said, adding that “this is the best energy storage bill in the country.”
The storage and surplus interconnection bills aren’t the only pieces of legislation on Democrats’ affordability agenda.
Indeed, incoming Del. Lily Franklin of southwest Virginia is among those seeking to bring costs down for customers of Appalachian Power, in part by reining in transmission and fuel charges that typically get less scrutiny in rate cases.
Likewise, Sullivan and Sen. Scott Surovell of Fairfax will proffer legislation to lay the groundwork for a ratemaking scheme that would align utilities’ profits with their performance on clean energy, efficiency, and affordability. Among others, the measure was recommended last month by the influential Commission on Electric Utility Regulation, which Surovell chairs.
The stamp of approval may help the measure’s chances in the legislature this year, as should its lead patron. “Sen. Surovell is the Senate majority leader,” Kobbervig said. “So when he says yes to things, you think, ‘OK, this has legs!’”
The other thorny problem at the top of lawmakers’ energy agenda is the explosive growth of data centers in the state. According to Dominion, the facilities could account for an eyepopping 51% of its electricity sales by 2035, though such figures are notoriously slippery.
“There’s a lot of uncertainty in this market. There’s a lot of speculative load,” said Nate Benforado, senior attorney at the Southern Environmental Law Center. “At the same time, that is an astounding number.”
Environmental advocates’ plan to confront the challenges posed by data centers includes sticks such as increasing transparency on utility projections and ensuring that residential customers aren’t unfairly burdened with increased costs. But Sullivan and Sen. Creigh Deeds of Charlottesville also want to reform a sizable carrot: the generous tax incentives that lured Amazon, Google, and their ilk to the state in the first place.
“It’s by far Virginia’s largest tax break, and it’s going to some very large companies,” Benforado said. That’s part of why its conditions should include investments in renewables and efficiency.
“We want to only give a tax incentive to data centers that are accelerating the clean energy transition — and certainly not hurting that transition.”
Several of the measures Democrats plan in 2026 cleared the General Assembly last year, only to be vetoed by outgoing Gov. Glenn Youngkin, a Republican.
But on Jan. 17, Youngkin will be replaced by Gov.-elect Abigail Spanberger, a Democrat who campaigned on affordability and data center growth, and has already championed the bill to increase the state’s battery storage targets, among other measures.
“I recognize the complexity of our current challenges and threats posed by the future demands, but the answer is not to sit so our problems only get worse,” Spanberger said at a news conference last month about her energy agenda, according to the Virginia Mercury.
Still, Republicans have sought for years to weaken or repeal the 2020 Clean Economy Act, and the onslaught of data centers, community concern over large-scale solar farms, and the Trump administration’s anti-renewables stance are breathing new life into their arguments.
At the same time, powerful Democrats, including Surovell and House of Delegates Speaker Don Scott of Portsmouth, haven’t ruled out relaxing the law’s prohibitions on new gas plants, according to Inside Climate News. Dominion has asserted that such plants are needed to keep the lights on in the face of new demand.
Clean energy advocates plan to forcefully rebut those claims in the General Assembly and the public square.
“It is incumbent on us to be pushing back on the concepts that gas is clean, that gas is affordable, that it’s the only way to have a reliable grid,” said Benforado. “They are simply not true.”
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