General Assembly session ends with little progress on data center regulation

CHARLOTTESVILLE, Va. (WVIR) - Efforts to regulate data center growth in Virginia at the state level will likely have to wait a bit longer.

The Commonwealth is home to more data centers than any other place in the world, yet there is no established state oversight over these warehouses.

Legislators from both sides of the aisle introduced dozens of bills this session, aiming to install guardrails. Only a small fraction of those passed the General Assembly and graduated to the governor’s desk.

“The reason we’re not seeing immediate action is because we’re being proactive,” said Julie Bolthouse, Director of Land Use with the Piedmont Environmental Council. “Although we have not seen that critical impact that’s going to get people to act, it’s coming, and we don’t need to wait until that happens.”

Bolthouse says bills regulating data center growth in Virginia could have prevented problems before they materialized.

“As the session wore on, it was a little disheartening to see them get killed,” said Bolthouse.

Data centers are key sources of investment and economic growth for localities; at the State of the Commonwealth Address, Governor Glenn Youngkin lauded the warehouses for their financial potential and encouraged their development in Virginia.

But there’s also a lengthy list of concerns, including larger bills for ratepayers, an overwhelmed energy grid, and environmental damage.

Right now, there is no specific state oversight.

“It is all the localities' consideration,” said Bolthouse.

Albemarle County does not have any regulations in place but is working on establishing a few guidelines for data center growth.

Abbey Stumpf, Director of Communications for Albemarle County, explained the two-phased approach to the zoning update in an email to 29News.

“The first amendment would allow Data Centers over a specified size by special use permit in certain districts while establishing limited performance standards,” the email reads. “The second phase will involve in-depth research on Data Center impacts and best practices, with opportunities for public engagement, including workshops, informational meetings, and Planning Commission work sessions.”

Some of the proposed rules include a special use permit requirement for larger data centers and rules regarding water usage and noise.

The proposed ordinance went before the Planning Commission on February 25th and will be considered by the Board of Supervisors on April 2nd.

“You can think what you will about the data centers,” said State Senator Creigh Deeds, who represents Virginia’s 11th District. “The reality is that they are here...and there will be more. I just don’t want ratepayers to have to pay for the infrastructure.”

In December 2024, the Joint Legislative Audit and Review Commission released a study that revealed that data centers are likely to drive an “immense” increase in energy demand. The cost of building the infrastructure to meet that demand, it continues, could increase rates by up to $37 per month.

Senator Deeds walked into session with two bills to establish some ground rules for data center operators.

SB1197, which would allow rural co-ops to establish subsidiaries to buy power and provide it to data centers, passed.

SB1196, which would have required data center operators to meet certain energy efficiency standards to be eligible for the sales and use tax exemption, failed.

Though the session is over, Deeds says his efforts to help regulate the industry are not.

“Legislative work is a process,” said Deeds. “I don’t like where we are right now with respect to data centers. I think we have things to do, but I’m confident we can get those things done over the long haul.”

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