Data Center Moratorium Bills Stack Up Ahead of Virginia Legislative Session in January

Come January, state lawmakers will debate a slate of bills that would halt data center development, including one by Sen. Russett Perry, D-Loudoun, which recommends a three -year moratorium on building the high-powered digital warehouses.

Perry has filed Senate Bill 843 alongside Sen. Danica Roem, D-Prince William. It would block localities, the Department of Environmental Quality (DEQ) and the State Corporation Commission (SCC) from approving any data center building permits statewide from July 2027 until July 2030.

The bill would also prevent the advance of distribution lines, on-site power, or related projects that solely serve data centers during the same timeframe.

“The people of Virginia just continue to be saturated, and it’s not just with data centers,” Perry said Thursday. “In my district in particular, it’s these 765-kilovolt transmission lines. People forget it’s not just the data center that might move next door to you. But it’s all the other things that come out from that.”

Virginia is home to nearly 400 data centers in operation, with over 280 planned and more proposed each year, according to Pew Research Center.

The growing industry is tied to exploding energy demand as well as rising tensions in communities across all of the state over water use, noise levels, and concerns about siting and loss of character in rural areas.

Roem is also filing a separate moratorium bill that is more closely tied to the interconnection queue – the list of large-load customers, namely data centers, that have requested power from Dominion Energy, which the utility is obligated to serve.

Currently, Dominion has about 25,000 megawatts of power assigned to projects with an energized date, and an additional 75,000 MW will go to projects that don’t yet have power up dates. The utility says it will take about seven years for the customers in the queue to get power, a wait that starts when the facilities are added to the queue.

Roem’s bill would block new data centers from being approved statewide until that queue is energized and the necessary infrastructure is built to do so.

“Until the industry and Dominion Energy deal with the hundreds of data centers already awaiting power, they shouldn’t be siting more data centers or building more transmission lines that wouldn’t exist if not but for the data centers,” Roem said this week.

In the House, Del. Irene Shin, D-Fairfax, proposed a bill that was continued from the 2026 session that would block localities from approving zoning and permitting requests until “the fulfillment of all pending requests for interconnection to distribution service by an electric utility customer that is a data center” or July 2028, whichever comes first.

Across the aisle, Sen. Glen Sturtevant, R-Chesterfield, has been calling for a data center moratorium for months. He plans to file his own version to be debated during the session.

“I’m hearing it more and more from my constituency that they’ve checked their electric bill and their energy usage from last month versus the same month last year, and they are shocked at how much their electric bills have gone up,” Sturtevant said Thursday.

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“One of the major driving factors is the proliferation of the data centers, and the costs of their power generation in transmission being subsidized by Virginia ratepayers in their electric bills,” he added.

Lawmakers that represent areas of the state east of Interstate 95 — where a recent groundwater report showed that water availability would start to decline in the near future if the state doesn’t change course — have criticized how much water data centers’ non-closed loop cooling systems use.

The evaporative cooling systems can use hundreds of millions of gallons of water annually.

The groundwater report led Perry and Sen. Richard Stuart, R-King George, to call on Gov. Abigail Spanberger to initiate a special session to pass policies that address water concerns before the January regular session.

Spanberger denied their request.

Language in the budget lawmakers adopted earlier this year also directed DEQ to conduct a study and identify groundwater scarcity areas, especially in the eastern coastal regions of the commonwealth. The report, due this month, will also detail how non-closed loop systems can be retrofitted to be more water efficient.

However, the closed-loop systems still take an initial large batch of water and use more energy  than the evaporative systems.

The bills represent a possible shift in the legislature, which rejected most bills that would have taken major action on data centers, including a proposal by Sen. Louise Lucas, D-Newport News, to end sales and use tax exemption for the industry.

Debates over the measure delayed the budget for months, with lawmakers opting to preserve data centers’ tax break and add a new tax for the facilities that is expected to generate $1.2 billion over the biennium.

Sturtevant signaled that he hopes to reopen the debate about the sales and use tax exemption in the coming session.

Workers, data centers oppose moratorium bills

The International Brotherhood of Electrical Workers (IBEW), a prominent workers’ union that has staunchly advocated against legislation that would restrict data center growth, is already pushing back against the new bills.

Jobs in manufacturing, electrical, and construction have expanded in Virginia due to the data center industry, they said, and protecting them should take priority over shutting down data center development .

“I don’t think a moratorium is gonna pass because you’re taking out your tax base, you’re taking out your jobs,” said Don Slaiman, director of communications for IBEW Local 26. “(Lawmakers are) so proud of being number three in the CNBC poll. That would be eviscerated.”

The Data Center Coalition, a national group focused on advocating for policies on behalf of the industry, said data centers have invested $80.56 billion in Virginia and generated$5.34 billion in state and local taxes.

“Local or state moratoriums could deprive communities of the opportunity to compete for investment and jobs, jeopardize multibillion projects that are in development, and force jurisdictions to relinquish significant long-term economic investment, high-wage jobs, and critical tax revenue to neighboring states,” said Nicole Riley with the Data Center Coalition.

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The plans for these bills come weeks after Spanberger revealed her data center policy framework.

Much of her plan focuses on transparency in the permitting process by limiting nondisclosure agreements, assigning more transmission costs onto data centers, limiting on-site gas generation and other objectives. To be enacted, most of the measures must be translated into legislation that the General Assembly will have to pass.

“I think the vast majority of people here in Virginia want a comprehensive framework and guardrails put around data centers before we continue to just keep approving more of them,” Perry said. “We already have more data centers than anywhere else in the world. I don’t know how we can responsibly continue to just keep approving more.”

Like all legislation, lawmakers’ data center moratorium bills must win approval from both chambers and the governor to be made law.

The General Assembly’s regular session begins on Jan. 13.

By Shannon Heckt, Virginia Mercury

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