Virginia Congressman’s Data Center Plan Could Cost States Federal Highway Funds
Virginia Rep. Suhas Subramanyam has introduced a four-bill federal plan that would make data centers and other large electricity users pay the full cost of power grid upgrades needed to serve them, while putting 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 package Sept. 8 amid growing concern over electricity demand, utility costs and the pace of new development. His proposals also address where data centers are built, how their energy and water use is measured, and security risks surrounding critical infrastructure.
The Data Center Fair Share Act would establish a federal standard covering nonresidential electricity customers with 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. A large customer could remain responsible even after terminating its electricity contract or stopping purchases, reducing the chance that infrastructure built to accommodate the project would later be financed by other ratepayers.
Before making an upgrade, utilities would also have to collect the full cost from the affected large-load customer or assign the expense to a class made up of large-load users.
The proposal gives states one year after enactment to begin considering the standard and two years to make a determination. States that fail to implement it would face a much larger consequence: the U.S. transportation secretary would be directed to withhold 100% of highway funds apportioned under the federal provision identified in the bill.
Despite its name and its place in Subramanyam’s data center package, the Fair Share Act reaches beyond the technology industry. Its 100-megawatt threshold applies to qualifying nonresidential electricity customers generally, potentially bringing other exceptionally large power 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 examine potential effects on electricity prices, transmission capacity, water availability, air and water quality, surrounding ecosystems, noise and light. National security, local employment, tax revenue and the risks associated with placing multiple data centers in the same area would also be considered.
The Energy Department would identify characteristics of preferred sites and publish a list of locations meeting those standards. State and local governments would retain authority over zoning, permitting and individual development approvals.
Two bills introduced earlier this year complete Subramanyam’s national plan.
The Data Infrastructure Energy Measurement and Standards Act would direct the National Institute of Standards and Technology to develop common methods for measuring data center energy and water use. The standards would include resources consumed by computing-intensive operations, including the training and operation of artificial intelligence models.
The House Science, Space and Technology Committee advanced the 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 faces sharply rising electricity demand tied in large part to data center growth. 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.
The facilities have also become a major source of local government revenue. Loudoun County says data centers 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. The proposals would have to clear Congress and be signed into law before the new federal standards could take effect.
