(The Center Square) – Virginia’s new data center accountability framework limits some state assistance and proposes shifting more infrastructure costs to the industry as reported tax benefits for data center operators rose nearly 50% to $1.9 billion in fiscal 2025.

Gov. Abigail Spanberger signed Executive Order 22 on Friday as part of the framework, which combines immediate executive action with proposals expected to go before the General Assembly in 2027.

A January report from the Virginia Department of Taxation and the Virginia Economic Development Partnership found operators reported about $1.9 billion in tax benefits in fiscal 2025, up from about $1.3 billion in fiscal 2024. The figures were self-reported and not independently validated by either agency. The report says the benefit reflects tax savings to operators and the corresponding state and local revenue impact.

Senate President Pro Tempore Louise Lucas said Friday the framework does not end what she described as nearly $2 billion in sales-tax exemptions for data centers and said she expects lawmakers to pursue additional legislation during the 2027 session.

The commonwealth also began imposing an electricity consumption tax July 1 at 1.1 cents per kilowatt-hour on every data center operator. The tax runs through June 30, 2028, with no more than $600 million deposited into the general fund each fiscal year. Collections above that amount, less State Corporation Commission administrative costs, are set aside for refunds to operators.

Spanberger’s framework proposes doubling that tax as a penalty for operators that receive priority grid access based on specified clean-energy and emissions commitments but later fail to meet them.

Other changes took effect Friday.

Executive Order 22 bars the Virginia Economic Development Partnership from providing assistance through the Virginia Business Ready Sites Program, expedited permitting programs or similar discretionary state programs to new data centers expected to demand at least 25 megawatts of electricity.

The order also prohibits executive agencies under the governor’s supervision from entering or requiring nondisclosure agreements that prevent public disclosure of material information about proposed commercial data centers, including public incentives and anticipated resource demands. Existing agreements are generally preserved.

The broader framework calls for utilities to allocate more transmission and generation costs to data centers and other large-load customers and for stronger upfront financial commitments from developers. The order also directs the administration to work with utilities, the commission and PJM Interconnection and advocate for ways to shield households from infrastructure costs driven by large data center loads.

Separate protections for Dominion Energy Virginia customers are scheduled to expand Jan. 1, when an SCC-approved GS-5 rate class takes effect for customers demanding at least 25 megawatts. Certain large users will face minimum payment requirements intended to limit cost shifting to other ratepayers.

Clean Virginia Executive Director Brennan Gilmore called the framework “a meaningful step forward” in a statement but said questions remain over “who pays, who bears risk.” The group supports pausing further data center development while those details are worked out.

The Data Center Coalition said in a response to The Center Square that it supports protecting ratepayers but is waiting for more details on how the framework will be implemented.

Nicole Riley, the coalition’s director of Virginia government affairs, said the industry maintains that data centers already pay the full cost of electric service without driving up residential bills and warned that abrupt policy changes without stakeholder involvement could jeopardize jobs and investment.

Lawmakers are separately reviewing the sales-tax exemption, other incentives and possible mechanisms for providing direct revenue to the Commonwealth. The Joint Subcommittee on Tax Policy must report recommendations by Dec. 15.

The governor’s office did not respond before publication Monday to questions about the current household-cost baseline or how much the framework is expected to reduce or avoid in costs for residential customers.