When a hyperscale AI data center powers up, it can pull 300 megawatts or more from the grid, roughly the electrical load of a city of 200,000 people. Somebody has to pay for the substations, transmission upgrades, and engineering work needed to deliver that power. In most of the country, those costs have quietly landed on the monthly bills of homes and small businesses. Lawmakers in Washington state and Virginia are now moving to change that.
Both states are advancing measures that would require data center operators to cover the full cost of connecting their facilities to the electric grid. The push reflects a broader reckoning: artificial intelligence workloads are driving electricity demand far beyond what utilities planned for, and the infrastructure bill is growing fast.
Washington targets ’emerging large energy use facilities’
Washington’s Second Substitute HB 2515, introduced during the 2025-26 biennium, creates a new legal category called “emerging large energy use facilities.” The label is aimed squarely at data centers and similar operations whose power appetite can strain transmission lines and substations built to serve existing communities.
Under the bill, those facilities would bear all interconnection-related costs, including the engineering studies utilities must complete before a hookup can proceed. Utilities could also demand upfront payments or financial guarantees before starting that work, a safeguard designed to protect ratepayers if a project stalls or shrinks after expensive grid studies are already underway.
The legislation amends several sections of the Revised Code of Washington, including provisions under RCW 19.285.030, to cap how much cost exposure other customers face during compliance periods. A comparison with the original version of the bill shows how definitions and timelines were tightened as the measure moved through committees. As of April 2026, HB 2515 is still working through the legislative process.
Virginia writes cost-sharing into utility code, and operators push back
Virginia has a more immediate reason to act. Loudoun County and the surrounding Northern Virginia corridor are widely considered the densest cluster of data centers on the planet, according to commercial real estate analyses from firms like CBRE. The sheer volume of facilities seeking grid connections has forced the state to formalize who pays.
Virginia’s Code section 56-596.6, housed in Title 56, Chapter 23, establishes a “distribution cost sharing program.” The provision was enacted as part of the Virginia Clean Economy Act framework and subsequent legislative updates to the state’s utility code. When a project in the distribution queue triggers grid upgrades, the developer funds those upgrades, not the utility’s broader customer base.
Unlike Washington’s pending bill, Virginia’s statute is already codified and available to regulators as new projects come online. It gives the State Corporation Commission a legal mechanism to tie grid investment directly to the companies creating the demand, rather than socializing it across all ratepayers.
The contrast between the two states is instructive. Washington is building a new regulatory category from scratch, defining what counts as an “emerging large energy use facility” and grafting cost-assignment rules onto existing energy statutes. Virginia started from the opposite direction, embedding a cost-sharing program inside its existing utility code so that the framework was ready before the next wave of projects hit the distribution queue. The shared goal is a firewall between data center interconnection costs and residential electric bills, but Virginia’s approach is already generating real-world compliance obligations while Washington’s is still being shaped by committee negotiations.
What utilities and operators have signaled
Dominion Energy, the dominant utility in Northern Virginia, told investors during its Q1 2025 earnings call that data center load growth in its service territory remained “unprecedented” and that the company was working with state regulators to ensure grid investment kept pace. The company did not specifically address Section 56-596.6 by name but acknowledged that cost-allocation mechanisms were part of ongoing regulatory discussions.
On the operator side, the Data Center Coalition, a trade group whose members include Amazon Web Services, Google, and Microsoft, has argued in public comments to Virginia regulators that interconnection cost frameworks must be predictable and consistently applied to avoid discouraging investment. The coalition has not opposed the principle of developer-funded upgrades outright but has pressed for clear timelines and dispute-resolution processes.
In Washington, Puget Sound Energy has not released public projections for data center interconnection costs under HB 2515. The utility’s most recent integrated resource plan, filed in 2023, flagged large-load growth as a planning challenge but predated the current bill.
Siting pressure and the risk of regulatory arbitrage
One open question is whether these rules will reshape where data centers get built. Operators might absorb interconnection costs as a manageable expense, especially in regions with reliable grids and favorable tax treatment. Or developers could steer investment toward states without similar mandates, creating uneven growth in AI infrastructure across the country. Neither state’s legislature has published fiscal projections showing how much money these frameworks will redirect, and no independent study has modeled the siting effects with hard data.
The federal layer adds complexity. The Federal Energy Regulatory Commission has been working on reforms to the interconnection process nationwide, and regional transmission organizations are struggling with backlogs. PJM Interconnection, which manages the grid across much of the mid-Atlantic including Virginia, reported an interconnection queue exceeding 2,600 projects as of late 2024, representing roughly 260 gigawatts of capacity. If federal or regional rules introduce broader cost-allocation frameworks for large loads, state statutes may need to be adjusted or harmonized.
Two states, one bet on who pays for the AI power surge
Washington and Virginia are running parallel experiments built on the same premise: the companies constructing the most power-hungry facilities in the country should not be able to pass the cost of plugging in to households already contending with rising utility bills. Virginia’s statute is already generating compliance obligations for developers in the distribution queue. Washington’s bill, if it clears the legislature in its current session, would extend the same logic to the Pacific Northwest. How regulators, utilities, and tech companies respond once the bills come due will determine whether these measures become a national template or a regional outlier.
Vince Coyner is a serial entrepreneur with an MBA from Florida State. Business, finance and entrepreneurship have never been far from his mind, from starting a financial education program for middle and high school students twenty years ago to writing about American business titans more recently. Beyond business he writes about politics, culture and history.
