With Democrats in charge in Virginia, Spanberger targets lower energy bills — and higher costs for data centers

This story was originally published by Virginia Mercury.

Fresh off a decisive election night, Gov.-elect Abigail Spanberger is promising a sharp turn in Virginia’s energy policy, vowing to boost in-state power generation, lower costs, and force data centers to “pay their fair share.”

“We’re going to produce more energy and we’re going to lower energy costs. We are going to produce more energy here in Virginia and make sure that data centers pay their fair share,” Spanberger told a cheering crowd during her victory speech.

With Democrats securing a government trifecta — and picking up 13 seats in the House of Delegates to solidify their majority — energy policy is expected to shift away from the approach taken under Gov. Glenn Youngkin. 

The Republican governor was a frequent critic of the Virginia Clean Economy Act (VCEA) and vetoed multiple bills meant to expand renewable energy development. The political changeover also signals the possibility of tighter oversight of data center permitting and energy demand, an issue that has risen alongside soaring utility bills. 

“We’ve made some minimal progress over the course of the last four years. But with the change of administration, yes, I am hoping that we make more progress and faster progress,” Del. Rip Sullivan, D-Fairfax, said.

The state’s major utilities, Dominion Energy and Appalachian Power Company, are currently bound by VCEA requirements to reach carbon neutrality by 2050. During the 2025 regular legislative session, Youngkin vetoed legislation that would have increased requirements for  utility investment in solar- powered battery storage — technology that allows excess solar energy to be stored and deployed later. It is a developing technology that is slowly becoming more available. In his veto message, Youngkin argued that the bill would be too costly for ratepayers.

Utility-scale solar projects continue to run into resistance at the local level, particularly in rural areas where opponents cite land use and siting concerns. While solar is viewed as the fastest-to-deploy renewable energy source, many conservatives and utility officials argue that solar and wind cannot meet statewide demand on their own — and warn large solar farms could consume valuable agricultural land.

“The movement for utility-scale solar is all coming from our urban and suburban areas, and the burden is being imposed on our rural areas,” said Sen. Mark Obenshain, R-Harrisonburg. “Last year a fairly prescriptive bill was on its way out of the commission that would have removed a lot of power from local governments, (but) the Speaker spoke up and said, ‘Not on my watch.’ I hope that commitment continues.”

Spanberger has pledged to rejoin the Regional Greenhouse Gas Initiative (RGGI), the multi-state carbon credit program Youngkin withdrew from, calling it an unnecessary tax. Before the withdrawal, Dominion customers paid a little over $2 per bill for RGGI costs — money that flowed back to the state for energy efficiency programs and flood resiliency projects.

“I think the governor has to lead these conversations and bring resiliency efforts into everything that the state might prioritize. Road investments, bridge investments, new structures coming to Virginia, businesses that we are attracting, agriculture space efforts to make sure that we’re doing everything possible,” Spanberger said in an August interview with The Mercury.

Clean Virginia, a nonprofit and political action committee focused on utility regulation, noted that 57 members of the House of Delegates refused campaign contributions from the state’s largest utilities this election cycle. Executive Director Brennan Gilmore said the shift will play a major factor in future regulation.

“We have got to remove that block from the utilities and start harnessing every type of energy, clean energy technology that’s out there, and that includes strengthening our energy efficiency outlay as well,” Gilmore said.

Spanberger’s call for data centers to “pay their fair share” remains light of specifics, but Dominion’s pending rate case would create a separate class for data centers and other highload users. 

Under the proposal, those companies would be locked into 14-year contracts and face demand charges of 85% for transmission, 85% for distribution, and 60% for generation. The State Corporation Commission has not yet ruled.

“Data centers are an important part of Virginia and its future moving forward, but at the same time we need to be smart about growth,” said Nate Benforado, a senior attorney with the Southern Environmental Law Center. “We need to make sure communities are on board and that we can power this industry in a way that’s good for Virginians.”

Some lawmakers and advocacy groups want data center companies — not ratepayers — to shoulder more of the cost of the new transmission lines and power infrastructure needed to run them. 

During last month’s gubernatorial debate, Spanberger echoed Youngkin’s “all of the above” energy messaging, highlighting nuclear power as a long-term option. Small Modular Reactors (SMRs) are touted by some as a carbon-free, more reliable alternative to solar and wind, but none are currently operating in the U.S.

“The problem with nuclear power is that even Dominion … have pushed a timeline back for that and the timeline has been pushed back repeatedly in the past decade. They’re now looking at 2035 before even a model SMR could be put on the grid,” Gilmore said.

Utilities maintain that without nuclear or continued fossil fuel use, a reliable grid isn’t possible under current technology. 

Previous legislation to create a state review board to help localities evaluate energy project proposals failed to pass, though supporters expect a revised version to return.

Across party lines legislators agree the state must confront rising energy demand and growing utility costs — and that voters made affordability impossible to ignore.

“If there is anything the election told us, affordability is front and center,” Sen. Scott Surovell, D-Fairfax, said during a recent Commission on Electric Utility Regulation meeting.

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