The Virginia State Corporation Commission last week moved to issue an order that will require data center operators to cover the cost of transmission infrastructure built exclusively for their use.
Translation: data center operators eat the direct cost there, not us, by paying more on our power bills.
Of course, we’ll end up paying for these costs elsewhere – the companies that build and use massive data centers, like Amazon, Google, Microsoft – are going to factor the costs into what they charge us to access their services.
But at least we won’t see the extra costs in our power bills.
So, yay.
The governor’s office informed us of this development on Wednesday in a release touting the push from Gov. Abigail Spanberger to get the SCC on board with her thinking on the topic.
Spanberger came up with the idea as a compromise to get the state budget passed in late June.
State Sen. Louise Lucas had been beating the governor up politically over the billions of dollars in tax breaks that we give data center operators, and based on polling taken in the spring and early summer, the issue took a big chunk out of Spanberger’s job approval.
The verbiage in the release from the governor’s office suggests that they’re hoping this news about the SCC order will repair her reputation with voters.
“I am proud that after my administration urged state regulators to protect Virginia families and small businesses from shouldering the cost of new transmission infrastructure meant to serve data centers, the SCC listened,” Spanberger said, per the release. “This order — which is projected to save Virginians hundreds of millions of dollars — makes sure that data centers are paying the full cost of the transmission infrastructure their developments require.”
Though, again, the data center operators just pass those costs to us in other ways.
Which is to say, they’re not going to just eat the costs.
Businesses the size of Amazon, Google and Microsoft don’t get to be the size of Amazon, Google and Microsoft by eating costs.
More from Spanberger on the issue from today’s release:
“Particularly at a time when so many families are feeling the squeeze of rising prices due to the Trump administration’s reckless actions, we are taking real steps to address rising energy costs for Virginians. I will continue to work with the General Assembly and take action to make sure data centers pay their fair share, adhere to strict environmental standards, and listen to the concerns of local communities,” the governor said.
She was echoing there her “fair share” language from the victory lap that she took on the political compromise approved in June that created a new electricity consumption tax on data centers that is projected to generate $600 million a year, about a third of the $1.9 billion a year the state gives in tax exemptions for data center owners.
This, to Spanberger, is data center operators paying their “fair share.”
Having the new tax balance out the tax breaks dollar-for-dollar wouldn’t even have data centers pay their “fair share,” relative to the costs data center owners are passing on to the rest of us, in terms of the impact of their operations on power usage and the environment.
It’s all just a shell game, isn’t it?
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Chris Graham
