Data centers must pay for transmission infrastructure
The State Corporation Commission is ordering data centers to cover the cost of transmission infrastructure built exclusively to serve data centers.
That will save Virginia families, small businesses, and other ratepayers “hundreds of millions of dollars,” said Gov. Abigail Spanberger.
The governor’s office had submitted a filing with the SCC in response to Dominion Energy’s request for a rate hike for transmission infrastructure, arguing that data centers, not residential ratepayers, should cover those costs.
Related story: Community members speak out against a substation at Plaza 500
The final order from the SCC, issued on July 31, directs Dominion to develop a policy to assign the cost of high-voltage transmission lines and substations to data centers and other large-load users.
“It is hard to understate the importance of this decision from the SCC for Virginia families and businesses,” said Virginia’s Chief Energy Officer Josephus Allmond. “Instead of spreading transmission costs caused directly by data centers across all ratepayers, now data centers will pay for those costs directly.”
The SCC approved a transmission line last year for a future data center at the Plaza 500 site on Edsall Road, even though a substation for that project has not been approved. The Fairfax County Planning Commission will hold a hearing on the proposed substation on Sept. 24.
Spanberger pledged to work with state lawmakers to ensure data centers “pay their fair share, adhere to strict environmental standards, and listen to the concerns of local communities.”
Another reason for Fairfax County to deny the Edsall substation proposal at this time. Make Dominion rework the transmission line and substation proposals so the Plaza 500 data center developer has to pay all the costs associated with the transmission line extension. The SCC case for the Plaza 500 transmission line already established that “but for” the data center, the transmission line and substation would not be needed or built.
This is basically next to useless to enforce on the data centers as they will “work” with the necessary parties to skirt this — “built exclusively to serve data centers”. All they need to do is find some new residential or commercial development or a business that needs added capacity beyond existing transmission capability to hit this. Heck, any larger level 3 DC EV charging facility could exceed many existing transmission capacity. And then it’s no longer “exclusively to serve data centers”.
I scanned the order and to my non-lawyer eye there is certainly plenty of wiggle room that I’m sure there will be plenty of capacity expansion that still gets amortized to individual homes and non data center businesses. At least some cost will be born by data centers, but I’m sure the politicians and the SCC staff lawyers could have sharpened their pencils and gotten the language tighter (but campaign donations…probably)….
Ok, they’ll pay (at least partially) for the cost of infrastructure, but we’re still being saddled with the big jump in costs to pay for all the added electricity used, right?
Thank you Governor Spanberger and thank you Democrats in the VA house and senate!!