Virginia SCC orders data centers to cover transmission costs

Virginia regulators have ordered data centers to pay for the new high-voltage transmission lines and substations built exclusively for their use, a move aimed at shielding homeowners and small businesses from rising electricity costs. The State Corporation Commission (SCC) issued the order, which Governor Abigail Spanberger's administration had advocated for, projecting it could save state residents hundreds of millions of dollars.

Previously, the cost of such dedicated infrastructure could be spread across all utility customers. Under the new directive, those expenses will be assigned directly to the large-load customers, like data centers, whose development necessitates the upgrades. Governor Spanberger stated the policy ensures data centers pay the full cost of the transmission infrastructure their projects require.

The decision comes amid rapid growth in Virginia, which hosts the nation's largest concentration of data centers, with at least 570 sites. A significant cluster, known as "Data Center Alley," is located in Northern Virginia. This expansion has driven massive power demand, contributing to broader concerns about electricity price hikes and grid strain. The regional...