Graphic courtesy of Pixabay
A bill approved overwhelmingly by the U.S. House of Representatives last week is putting a new focus on who should pay for the electricity infrastructure needed to serve large data centers, including the proposed Google campus in Botetourt County.
The House voted 417-3 on Sept. 16 to approve the Ratepayer Protection Act, which would require state utility regulators to consider standards requiring large data centers to pay for the power and transmission infrastructure needed to serve them. The bill now moves to the U.S. Senate.
For Botetourt County, the issue has a direct local connection.
Appalachian Power (APCo) has proposed the Daleville Area Transmission Improvements Project, which includes upgrades to substations and transmission facilities as well as infrastructure associated with the proposed Google campus. The project is subject to review by the Virginia State Corporation Commission (SCC).
The SCC has been developing safeguards intended to prevent large-load customers, including data centers, from shifting costs to other electric customers. The commission says it is reviewing additional safeguards for APCo and electric cooperatives.
According to Botetourt County, however, the basic principle behind the federal legislation is already reflected in the arrangements for the proposed Google project.
“For Project Raspberry, the county’s understanding is that the underlying principle of the legislation is already reflected in the project’s electric-infrastructure arrangements,” the county said. “Infrastructure required specifically to serve the Google campus is to be paid for by Google.”
The county said Google will pay for 100% of electrical infrastructure required specifically to serve its data center project.
That includes, according to the county’s public project information, new substations, transmission lines and distribution improvements specifically required for the data center.
The county said it does not currently anticipate that passage of the federal legislation would change the existing arrangements for the project.
Any questions concerning utility rates or cost recovery, the county said, would ultimately be matters for the SCC and the applicable utility proceedings.
Del. Terry Austin similarly said large-load customers should pay an appropriate share of the costs associated with serving them.
“The large-load customer creating the need for new infrastructure should pay the appropriate share of the costs associated with serving that customer,” Austin said.
Austin said APCo has stated that infrastructure specifically required to serve the Google project is the developer’s responsibility, while the SCC will review the project and its cost allocation.
The distinction, Austin said, is that not every transmission improvement in a growing area is necessarily caused by a data center.
“Some improvements can strengthen reliability and increase capacity for homes, businesses and future economic development,” he said. “The SCC’s role is to determine how those costs should appropriately be allocated.”
The county likewise said it expects the SCC’s review of Appalachian Power’s Daleville project to address the proposed infrastructure and related regulatory and cost-recovery issues.
The county said Google has agreed to pay for the utility infrastructure required specifically to serve the campus, while the SCC – rather than the county – has authority over Appalachian Power’s cost recovery.
Virginia’s regulatory framework is also continuing to evolve as data-center electricity demand grows.
Austin said he supported legislation during the most recent General Assembly session aimed at protecting existing customers from cost shifting. He also pointed to additional SCC safeguards being developed for Appalachian Power and electric cooperatives.
The issue received additional attention Friday when Gov. Abigail Spanberger signed Executive Order 22, which directs the Commonwealth to pursue more equitable allocation of electric transmission and generation costs associated with large-load customers and stronger financial commitments from data center developers.
Austin said the state should continue working to ensure that customers driving new investments bear the costs they create while recognizing that some infrastructure can provide broader benefits to the electric system.
“I welcome efforts at both the state and federal level to ensure everyday ratepayers are not left footing the bill for infrastructure built primarily to serve large industrial users,” Austin said.
The Ratepayer Protection Act has not become law. Its consideration by the Senate would be the next step in the federal legislative process.
~ Fincastle Herald staff report
