<p class=ldtitle>A BILL to amend and reenact § 56-585.1 of the Code of Virginia, relating to electric utilities; cost recovery; electric distribution infrastructure serving data centers.</p>
Summary
SB 466 would amend Virginia’s electric utility ratemaking statute, § 56-585.1, to add a specific prohibition on shifting the costs of electric distribution infrastructure that primarily serves data centers onto other customers. In practical terms, the bill says that if a utility builds or extends distribution infrastructure mainly for a data center load, including associated land acquisition, those costs may not be allocated to or recovered from any other customer. The bill is framed as a targeted cost-recovery change within the broader framework governing investor-owned incumbent utilities, rate adjustment clauses, and Commission review of utility earnings and investments.
The bill leaves the rest of the utility ratemaking structure largely intact, but it operates within a very detailed section of the Code that already governs how utilities recover costs for generation, transmission, distribution, grid transformation, energy efficiency, renewable projects, and other investments. By carving out data-center-serving infrastructure, the bill would limit cross-subsidization and likely require utilities to assign those costs directly to the benefiting load or otherwise exclude them from general customer recovery. It also sits alongside existing provisions that already restrict recovery of certain costs from specific customer classes and that require Commission review of prudence and reasonableness.
Impact
The bill would amend § 56-585.1 of the Code of Virginia to create an explicit statutory rule that electric distribution infrastructure primarily serving data centers, including land acquisition costs, cannot be recovered from other customers. This would affect utility accounting, rate design, and Commission review by narrowing the pool of costs that can be placed into base rates or rate adjustment clauses for general recovery. The change would primarily affect investor-owned electric utilities, large data center customers, and other retail customers who might otherwise bear part of those infrastructure costs through broader rates.
Sentiment
The available voting history suggests the bill had at least some support in committee, but not enough to advance during the session: it was continued to the next session in Commerce and Labor on a 14-0 vote. With no transcript excerpts provided, there is no recorded committee debate to indicate strong opposition or support in the discussion record. The unanimous vote to continue suggests the committee was not ready to dispose of the bill, but the absence of dissent indicates no visible split at that stage.
Contention
The central policy issue is who should pay for utility infrastructure built to serve data centers. Supporters of the bill would likely favor protecting ordinary ratepayers from subsidizing large, load-specific investments, while opponents could argue that data centers bring economic development and that utilities need flexibility to recover infrastructure costs needed to serve new load. The bill’s narrow carveout also raises implementation questions about how to determine when infrastructure “primarily serves” a data center and how to allocate mixed-use or shared-system costs. Because the bill was continued rather than passed, those questions appear to have remained unresolved in committee.