A roundup of the most important data center and energy bills Spanberger signed this year, or which will return to legislators on Wednesday with minor amendments.
When Gov. Abigail Spanberger finally weighed in on the last of the energy and data center bills last week, few of her moves were a surprise. She signed most of the legislation the General Assembly had sent her, vetoed none, made small tweaks to a few, and offered significant amendments to only one.
But that one seems to have caught its patrons by surprise and generated pushback from them and Dominion Energy, all of whom claimed it would actually undermine Spanberger’s affordability agenda.
Don’t believe it. The governor’s amendments to Senate Bill 253 and House Bill 1393, sponsored by Sen. Louise Lucas, D-Portsmouth, and Del. Destiny LeVere Bolling, D-Henrico, will save money for residential customers by restricting Dominion’s ability to spend ratepayer money on costly line undergrounding, capping Dominion’s return on equity at 9.3% (down from 9.8%) and requiring excess profits to be returned to ratepayers.
I could find no calculations for how much residential bills might fall as a result of these two provisions (perhaps the SCC is working on that), but the impact would unquestionably be huge. Dominion’s parent group reported operating earnings of $3.0 billion in 2025, and Virginia makes up 70% of Dominion’s customer base. Reductions in the company’s profit margin would translate directly into lower rates for customers.
As for the line undergrounding program, the SCC and ratepayers have criticized the economics of the program for years. Burying power lines is popular with the customers who benefit, but the costs are borne by all customers – and at the current allowed cost of $750,000 per mile of buried line, most of the projects cost more money than they can possibly save.
Residential customers currently pay an average of $4.88 per month for the undergrounding program. Lucas and Bolling’s bills would extend the program for ten years, increase the allowed expense to $900,000 per mile and permit costs to reach as high as 4% of the distribution rate base.
The governor’s amendment caps costs at 2% of the rate base, and even that much would now require SCC approval instead of being legislatively deemed “reasonable and prudent.”
However, the patrons’ criticism of the governor’s amendments is focused mainly on provisions unrelated to undergrounding or Dominion’s return on equity. Instead, it’s the governor’s treatment of costs associated with data centers that has drawn everyone’s attention.
In February, Lucas made waves by amending a bill about low-income programs and undergrounding to require the SCC to consider shifting some costs of serving data centers onto the data centers themselves. She announced that the move would save residents an average of $5.50 per month.
However, her bill never actually required the SCC to order these cost shifts. Instead, it requires the SCC to “consider the goal of mitigating any rate increases to the broad customer base.” The SCC can also consider “any other factors the Commission determines to be in the public interest” and “in its discretion, approve or deny” the suggested changes.
If the SCC doesn’t like the changes, in other words, that $5.50 goes poof.
Spanberger’s amendment removes the provision Lucas added, but it substitutes actionable language that is actually better for residential ratepayers.
The amendment instructs the SCC to “take all measures to reasonably ensure” that costs associated with data centers “are not being subsidized by other customers of the utility, and that such other customers’ approved rates are not being adversely impacted” by serving data centers.
It’s easy to understand why bill patrons wouldn’t like to have their legislative language tinkered with. Residential customers, on the other hand, should be pleased with the governor’s amendments. Tighter limits on utility profits and uneconomic undergrounding projects, along with explicit direction to the SCC to protect residential ratepayers from the costs of serving data centers, are fully in keeping with Spanberger’s focus on energy affordability.
The General Assembly will consider the governor’s amendments to this bill, along with numerous others, when legislators reconvene on April 22. Legislators will have to vote up or down on the governor’s amendments. If they reject them, the governor has a choice to approve the legislation as it first came to her or veto it outright, which would then require a two-thirds vote of the legislature to override.
Fortunately for everyone, this session’s other energy and data center bills survived Spanberger’s review with no surprises. Nearly all of the energy bills I highlighted back in February have now been signed into law; others just need the General Assembly’s approval of minor amendments. Indeed, these make up the strongest set of energy bills that we have seen at least since the Virginia Clean Economy Act was passed in 2020. Better yet, this year most of the initiatives drew bipartisan support.
By contrast, progress on regulating data centers remains a weak point. Bills that would have put established limits on siting, water use, and diesel generators all failed, along with requirements for clean energy and energy efficiency.
Still to be determined is whether Virginia’s budget will include a provision ending the costly tax exemption for data centers, as the Senate budget provides, or will continue to offer the exemption with conditions around clean energy, as the House favors.
Below is an abbreviated rundown of the most important data center and energy bills Spanberger signed this year, or which will return to legislators on Wednesday with minor amendments.
Data center bills
Apart from SB 253/HB 1393 and the proposed budget amendments, only a few bills impact data center development. Most important among these is one allowing utilities to delay providing service to customers when necessary for grid reliability or to avoid exceeding capacity constraints.
Other legislation requires utilities to develop demand flexibility programs for data centers, but such programs would be voluntary.
In an effort to limit the potential for overbuilding infrastructure, Dominion will now be required to provide information allowing the SCC to investigate the utility’s electric load forecasting. An amendment from the governor increases access to information used in making forecasts.
Residents impacted by data center development won very little in the way of protections.
Localities will now have to require data centers to conduct site assessments before they can get special use permits or in rezoning. The Department of Environmental Quality will now be prohibited from issuing air permits for diesel generators that don’t meet a Tier 4 equivalent standard for pollution controls, and beginning July 1, 2027, data centers will be required to report their water use. In addition, the Department of Energy will lead efforts to find ways to use the waste heat from data centers.
Renewable energy and storage
The General Assembly passed contentious solar siting legislation that raises standards while requiring localities that reject projects to report their reasons to the SCC. The governor’s minor amendments include a cross-reference to other legislation defining agrivoltaics.
The governor signed legislation significantly increasing the amount of storage Dominion and APCo are required to procure, and adding new targets for long-duration storage (over 10 hours). A separate bill requires Dominion to model economic dispatch scenarios for storage in its IRPs.
An energy storage facility that is co-located with a solar farm that already has an approved special exception will not be required to go through a new permitting process. One of Spanberger’s amendments limits the capacity of the storage facility to 100% of the nameplate capacity of the solar facility, a reasonable enough condition.
Shared solar, a/k/a community solar, is set to expand significantly under bills approved for Dominion and APC territories. While the existing program in Dominion territory has so far benefited only low-income customers, the legislation requires that the expanded program enroll nearly as many non-low-income customers.
Though most of the renewable energy action this year has been around solar, the governor also approved legislation establishing an offshore wind industry workforce program.
Distributed resources
The percentage of renewable energy certificates that Dominion must obtain from projects below 1 MW is set to increase. The 50-kW minimum for power purchase agreements (PPAs) will no longer apply, allowing residents and small commercial customers to use solar or wind PPAs.
Standby charges for net-metered solar can now be assessed only above 20 kW for residential projects in Dominion territory. (In 2020, the VCEA removed them entirely in Appalachian Power territory.)
Balcony solar, also called plug-in solar, will become legal, with no local permit or utility approval required. The legislation provides for a maximum output from the solar panels of 1200 kW. The SCC will develop a notification form that the customer must provide to the utility.
Localities can now require solar canopies to be included on some new parking lots.
Appalachian Power must develop a virtual power plant (VPP) program, following similar legislation last year for Dominion. Separate legislation authorizes VPP programs for electric cooperatives.
By July 1, 2028, localities must adopt streamlined permitting software for residential solar, which can be an existing platform like the national SolarAPP+ or a Virginia-specific platform to be developed by Virginia’s Department of Energy.
A consumer protection bill requires solar companies to provide a set of disclosures to residential customers in an effort to eliminate predatory practices.
A distributed energy resources task force will meet to discuss additional ways to support distributed solar and storage. The governor amended this bill mainly to specify that the task force will be chaired by the Chief Energy Officer. In March the governor appointed Southern Environmental Law Center attorney Josephus Allmond to this new cabinet position, a move applauded by distributed energy advocates.
Finance
Most proposed grant funds for renewable energy did not survive their voyages to the Finance and Appropriations committees, but two avoided the shoals and have now been approved by the governor. One is a new clean energy innovation bank and fund. The other is a one-year, $2 million grant fund to defray solar interconnection costs incurred by public bodies.
Utility regulation
The governor approved the General Assembly’s overhaul of the utility planning process. Among the changes, Appalachian Power will once again have to submit integrated resource plans (IRPs) to the State Corporation Commission, all IRPs will use a 20-year planning period instead of 15 years, and both utilities must align their IRPs more closely with the VCEA.
Also approved was a bill requiring the SCC to consider and make recommendations on proposals concerning performance-based regulation of utilities.
Dominion and APCo will now have to submit annual reports to the SCC disclosing their votes at regional transmission organization PJM and explaining how these votes are in the public interest. The utilities’ votes were previously secret.
Rising electricity rates due to data center demand and PJM’s failure to move on renewable energy projects awaiting interconnection have triggered suspicions that the utilities with voting power at PJM might be acting – ahem – other than in their customers’ best interests.
Grid optimization
The governor proposed a disappointing amendment to a bill requiring Dominion and APCo to assess their surplus interconnection capacities and establish pilot programs to add solar and storage at these connection points.
The General Assembly had set hard targets for the pilot programs, subject to SCC approval; the amendment loosens the targets with the addition of the phrase “up to” those amounts. This further weakens a bill that was already a skinny version of its original handsome self.
Finally, Dominion and APCo will need to report grid utilization metrics to the SCC, which will use that data to report on the potential for increased grid utilization using non-wires alternatives.