Virginia slaps data centers with big new tax — but no…

Virginia slaps data centers with big new tax — but no…


It’s quite urgent to figure out a way to reduce the amount of emissions that these backup generators are putting into their nearby communities,” said Damian Pitt, the associate professor at the university who conducted the study.

To date, these backup generators have run far less than they are allowed to under Virginia law. 

The real big-picture concern is that the total amount of permitted emissions is 10 to 20 times greater than what is currently being emitted,” Pitt said.

That’s why Del. John McAulliff, a Democrat whose northern Virginia district is on the edge of so-called Data Center Alley, introduced a bill this year to require batteries as the first resort for backup power, limit diesel generator use to 500 hours per year, and permit only the lowest-polluting generators available.

Let’s bring relief as quickly as we can, and as clearly as we can, to the folks that live near these things,” he said. They are the ones who are most impacted.”

But only part of McAuliff’s measure, House Bill 507, made it into law — the portion directing brand-new data centers to use lower-emission Tier 4” generators rather than older, dirtier Tier 2” varieties.

Other environmental standards also remained elusive. The spending plan adopted Monday calls for new rules on water use and noise control, but includes no regulations on diesel generators, as in the original version of HB 507. It also lacks a mandate that tech companies develop solar farms, batteries, or other sources of clean energy — a scheme called bring your own clean energy” that’s being considered by lawmakers and regulators around the country.

That lawmakers chose a new tax over tough climate restrictions for data centers is especially galling to critics, who say $1.2 billion over two years amounts to a rounding error for one of the wealthiest industries in the world.

The new consumption tax is no substitute for real safeguards,” Connor Kish, director of the Sierra Club’s Virginia Chapter, said in a statement. It does not stop the harm this industry is causing to families, their health, and their wallets.”

The budget does direct a study panel to recommend data center reforms before the year’s end. For his part, McAuliff is determined to pursue more solutions in next year’s General Assembly session — including requirements on existing diesel generators.

I understand folks’ frustrations,” he said. But this is the first time we’ve ever done any data center regulatory work. I don’t think this is a one and done.’”



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