Virginia Governor Pushes Data Centers to Pay Transmission Costs

The administration of Abigail Spanberger and the Piedmont Environmental Council are petitioning the Virginia State Corporation Commission to change how electric transmission costs are allocated. The current system, known as Rider T-1, spreads the cost of infrastructure projects across all electricity consumers. Advocates are now proposing a "but-for" cost allocation method, which would require data centers to pay for high-voltage lines and substation upgrades that would not have been built if not for the industry's massive electricity demand.

Dominion Energy plans to increase annual transmission spending from approximately $800 million to $3 billion and is currently seeking to recover $1.5 billion in costs. While Dominion initially estimated a $2.90 monthly increase for typical households, revised calculations incorporating a new 85% transmission demand charge for high-load customers have lowered that estimate to 94 cents.

Major technology companies, including Microsoft and Amazon, oppose an immediate rule change. These operators argue that the three-month regulatory proceeding is too short to address the complexity of the issue and have suggested a voluntary payment system instead. The State Corporation Commission has not yet decided whether to modify the cost-sharing rules.