Virginia Plan Would Make AI Data Centers Fund New Clean Energy

For more than a year, Virginia residents have watched their utility bills climb as electricity-hungry data centers serving artificial intelligence have pushed demand sharply higher. Now the Spanberger administration has put forward a plan to reroute those costs, proposing that tech companies — not ordinary consumers — shoulder the bill for new carbon-free generation.

The proposal lays out four scenarios designed to keep Virginia in compliance with its Virginia Clean Economy Act. Taken together, the scenarios envision covering 85 percent of rising demand by adding 1.2 to 1.8 gigawatts of solar capacity each year alongside expanded distributed energy resources. Where New York has turned to a moratorium to manage pressure on its grid, Virginia’s approach tries to channel that same demand toward building out clean generation.

A separate mechanism would let data centers reduce their draw from the shared grid during peak hours by tapping on-site batteries or locally sourced clean energy. Dominion Energy estimates that the tech sector’s total financial contribution under such a framework could reach $265 billion by 2050, removing that burden from everyday ratepayers.

The stakes are high: Virginia is the largest data center market in the United States, and whatever rules take hold here will set a precedent. Critics have argued for stepping back from the clean-energy transition entirely, but plan authors calculate that path would generate $145 billion in pollution-related damages — making decarbonization the cheaper outcome over time. Regulators must now review utility applications against that revised math.

Source: Canary Media