(The Center Square) – Virginia’s new energy plan proposes requiring utilities to share fuel costs that exceed approved forecasts and making data centers pay the electricity infrastructure costs they create.

Gov. Abigail Spanberger released the plan Thursday as the commonwealth prepares for rising power demand. The proposals target how utilities recover costs from customers, finance investments and acquire new generation.

The plan does not set electric rates or approve projects. Implementation would move through legislative, regulatory and local processes, according to the governor’s office.

One recommendation would authorize the State Corporation Commission to require utilities to absorb a portion of fuel and purchased-power costs exceeding approved forecasts. The framework could use escalating cost-sharing tiers rather than placing the full burden on customers.

It also calls for reviewing whether utilities could use more debt and less shareholder equity to finance investments, potentially reducing costs recovered through electric bills.

For data centers, the plan recommends assigning the additional generation, transmission and distribution costs they create to those customers. For large data centers seeking new grid connections, it proposes requiring them to demonstrate that they can reduce demand during grid emergencies.

Chief Energy Officer Josephus Allmond described one approach being seen in other states: Data center developers could help finance batteries in nearby homes and contract with those batteries to reduce demand on the grid during peak hours.

Another recommendation would explore a state-led renewable energy procurement process comparing utility-owned and third-party projects on cost and risk.

“This is about competition,” Spanberger said when asked how the administration would carry out the plan while working with utilities.

The Virginia Department of Energy’s modeling estimates about $422 billion in electricity system costs from 2026 through 2050 under current policies and a moderate-demand forecast.

Another modeled scenario expanding distributed energy resources, adding data center demand flexibility and allowing certain non-combustion gas resources estimates about $385 billion.

The roughly $37 billion difference is not a guaranteed household bill reduction. The estimates exclude added utility return on equity, available federal tax credits and the full transmission costs needed to serve new demand and deliver generation. Virginia Energy cautions that modeled system costs should not be interpreted as costs borne by existing customers.

House Republican Leader Terry Kilgore, R-Scott, said the plan’s modeling makes the case for repealing the Virginia Clean Economy Act and withdrawing from the Regional Greenhouse Gas Initiative.

Kilgore wrote, “Today’s energy plan is the strongest argument we’ve seen yet for repealing the Virginia Clean Economy Act and getting Virginia out of RGGI. By their own math, meeting Virginia’s power needs will be more than $100 billion cheaper if we took that common sense step. The governor’s plan only becomes the ‘affordable’ option when it includes ‘social costs,’ something that doesn’t show up on power bills.”

Under the same moderate-demand forecast, the plan estimates $295 billion in direct system costs without those policy requirements, compared with $422 billion under current policies. Including modeled climate and health damages brings those totals to $725 billion and $510 billion, respectively.

Spanberger said she favors the three modeled pathways incorporating demand flexibility while retaining options as technology and supply chains change.

She said the administration has begun developing legislative proposals based on the plan’s research.