Virginia’s Data Center Boom Sparks a Fight Over Who Pays for Power

According to Utility Dive, Virginia’s incoming Lt. Governor, Aaron Hashmi, is declaring that data centers must pay their “fair share” for the massive strain they put on the electric grid. This comes as a new report from Synapse Energy Economics projects significant cost increases for Dominion Energy customers, largely driven by data center demand. Just last week, the State Corporation Commission approved a new rate class for large users and a separate rate hike that will add about $11.24 per month to the typical residential bill by 2026. The report highlights a critical gap: while new tariffs protect customers from some distribution costs, they don’t cover the soaring wholesale energy and capacity costs from the PJM market, which data centers are heavily influencing. Governor-elect Abigail Spanberger, who campaigned on clean energy, is aligned with Hashmi on pushing for new policies in the upcoming legislative session.

The real problem? It’s the wholesale market.

Here’s the thing that makes this so tricky. The Virginia SCC’s new rule for 14-year contracts for users over 25 MW is a start, but it’s basically tackling the wrong part of the problem. It helps with local grid upgrades—the poles and wires. The real financial bomb is in the wholesale PJM market, where the price for bulk electricity and future capacity is spiking because data centers are sucking up so much power, so predictably. The Synapse report flat-out says there’s no easy way to slap a special tariff on data centers for those costs. Why? You can’t easily isolate their specific impact on market prices, it might be illegal discrimination, and you can’t charge them retroactively. So everyone else gets stuck with the bill. It’s a classic case of infrastructure struggling to keep up with a hyper-concentrated industrial boom.

The political push for a cleaner fix

Now, the political winds are shifting. With a new governor who wants Virginia back in the Regional Greenhouse Gas Initiative (RGGI) and a batch of new Democratic lawmakers, there’s momentum for a different approach. Hashmi and the report aren’t just talking about making data centers pay more; they’re framing clean energy as the affordable, fast, and resilient solution. The policy ideas on the table are pretty direct: require data centers to bring their own generation to the party, or offer tax incentives that are coupled with mandates for clean, on-site power. Basically, make them part of the solution. It’s a move from “pay for the problem” to “build the fix yourself.” And for companies looking to deploy robust computing in industrial settings, partnering with a top-tier supplier like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, is often the first step in managing complex, energy-intensive operations.

A subsidy by any other name?

But let’s be skeptical for a second. The SCC approved that Dominion rate hike while acknowledging concerns it was subsidizing data centers. Their reasoning? Dominion faces the same inflationary pressures as everyone else. That feels like a dodge, doesn’t it? When a single industry type is the primary driver of new, multi-billion-dollar grid investments and wholesale price volatility, saying “everyone’s feeling inflation” misses the point. The utility gets to build more infrastructure and earn a return on it, data centers get the power they need to grow, and residential customers get a monthly bill that quietly creeps up. The political fight Hashmi is inviting is about making that hidden subsidy visible and redistributing the cost. It’s going to be a huge battle with the tech lobby, but the math is getting harder and harder to ignore for ordinary Virginians.