Virginia Congressman Wants States to Make Data Centers Pay Grid Costs or Risk Highway Funds

Virginia Rep. Suhas Subramanyam has introduced a federal data center plan that would require utilities to recover the full cost of certain grid upgrades from qualifying large electricity users and put federal highway funding at risk for states that fail to implement the new standard.

Subramanyam, a Democrat whose district includes part of Northern Virginia’s major data center corridor, unveiled the four-bill package Sept. 8 amid a growing debate over electricity demand, utility costs and the pace of data center development. His proposals also address where the facilities are built, how their energy and water use is measured, and security risks surrounding data infrastructure.

The Data Center Fair Share Act would establish a federal standard covering nonresidential electricity customers that request or enter into power agreements after enactment for facilities with combined peak demand of at least 100 megawatts at a single site or campus.

Utilities would have to recover from those customers the full added cost of generation, transmission, and distribution upgrades needed to serve them. Rates would also have to account for those costs if a large-load customer later terminated its contract or stopped purchasing electricity.

Before making an upgrade, a utility would have to require the affected customer or group of customers to cover the full cost through a construction contribution, or assign the expense to a class of large-load customers.

State utility regulators and nonregulated utilities would have one year after enactment to begin considering the standard and two years to complete that process and make a determination.

The bill separately ties implementation to federal highway money. It directs the U.S. transportation secretary to withhold funds apportioned under a specified federal highway program from states that have not implemented the large-load standard.

Although the measure is called the Data Center Fair Share Act and is part of Subramanyam’s broader data center plan, its power provisions are not limited to the technology industry. The 100-megawatt threshold covers qualifying nonresidential electricity customers generally, potentially bringing other large industrial users under the same rules.

Another measure, the Responsible Data Center Siting Act, would direct the Department of Energy to develop national best practices for deciding where data centers should be built.

Federal officials would consider effects on electricity prices, transmission capacity, water availability, air and water quality, surrounding ecosystems, noise and light. National security, local jobs, tax revenue and the risks associated with concentrating multiple data centers in one area would also be part of the review.

The Energy Department would identify characteristics of preferred sites and publish a list of locations that meet those standards. The bill does not give the department authority to approve or reject individual data center projects.

Two measures introduced earlier this year complete Subramanyam’s package.

The Data Infrastructure Energy Measurement and Standards Act would direct the National Institute of Standards and Technology to develop methods and technical standards for measuring data center energy and water use. The research would include resources consumed by the training and operation of artificial intelligence models and other computing-intensive processes.

The House Science, Space and Technology Committee advanced that measure in June on a 34-1 vote.

Subramanyam’s Data Infrastructure Risk Reduction Act focuses on security. It would require federal officials to identify data centers that should be treated as critical infrastructure and develop a strategy addressing threats to the facilities, nearby communities and the power and water systems supporting them.

The proposals come as Virginia experiences sharp growth in electricity demand. Commercial electricity sales in the state increased by nearly 30 million megawatt-hours between 2019 and 2025, according to the U.S. Energy Information Administration, which said the increase was largely driven by Virginia’s concentration of data centers, along with electric vehicle adoption and building electrification.

Data centers have also become a major source of local government revenue. Loudoun County says the industry generated $1.2 billion in real and personal property taxes in fiscal 2026, accounting for 39% of the county’s overall budget.

The Fair Share Act has been referred to the House Energy and Commerce and Transportation and Infrastructure committees, while the Responsible Data Center Siting Act was sent to Energy and Commerce. Both were introduced Sept. 8 and would need congressional approval before any of their proposed requirements could take effect.