Virginia Lawmakers Propose Federal Data Center Regulations

U.S. Representative Suhas Subramanyam and U.S. Senator Mark Warner introduced legislative proposals to establish federal oversight of the data center industry. The initiatives seek to create federal siting standards to protect residents and the environment, increase transparency regarding water and energy consumption, and enhance security against foreign cyber and physical attacks.

Subramanyam introduced the Data Center Fair Share Act and the Responsible Data Center Siting Act. The Fair Share Act would require states to implement tariffs on data centers to fund necessary energy infrastructure, with non-compliant states facing the loss of federal highway funds. Warner proposed conditioning federal tax benefits and bonus depreciation for AI data centers on the fulfillment of strict sustainability and efficiency standards.

These federal efforts follow similar regulatory actions by the Virginia General Assembly, which passed laws to tax energy consumption and restrict backup generators in a state that operates nearly 400 data centers. In Virginia, the State Corporation Commission previously ordered Dominion Energy to create a tariff for data centers to cover the costs of specific high-voltage transmission lines, leading to the creation of the GS5 rate class to separate data center infrastructure costs from other ratepayers.