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RICHMOND, Va. — May 10, 2026 — Virginia has spent most of the past two years wrestling with a two-headed problem: utility bills that keep rising and electricity demand that keeps rising even faster, driven by the boom in AI data centers. The state, often described as the data center capital of the world, sits at the center of a national fight over economic growth, electric reliability, and climate policy. Now a clean energy plan from Democratic Gov. Abigail Spanberger argues that those priorities don't have to collide.
The blueprint, released Oct. 1, 2025, frames data center growth as an asset rather than an obstacle. Instead of slowing construction of the massive warehouses, it aims to harness their electricity appetite to help finance a carbon-free grid. The plan also tries to shift much of the cost burden away from ordinary ratepayers and onto the tech companies that are driving the demand spike.
Virginia's energy debate has largely been split between two camps. Republican lawmakers and conservative critics say the state's landmark clean energy mandate is driving up costs and should be weakened or repealed. Environmental advocates, in contrast, have called for a moratorium on new data centers — a step already taken by governors in red Texas and blue New York.
Spanberger's plan tries to split the difference. It doubles down on the Virginia Clean Economy Act, the 2020 law requiring utilities to deliver 100 percent carbon-free electricity by 2050, and on the state's participation in the Regional Greenhouse Gas Initiative, a multistate program that charges polluters for carbon emissions. At the same time, it gives utilities like Dominion Energy and Appalachian Power an on-ramp to feed data centers with clean power while making the industry shoulder a larger share of the infrastructure bill.
Josephus Allmond, the governor's chief energy officer, put it directly at the news conference announcing the plan. "There's been a lot of speculation that our clean energy laws are too ambitious or out of reach," he said. "This modeling should put that notion to bed."
Virginia law requires the governor to update the state energy plan every four years. This version is different: it uses advanced planning software to model multiple energy supply futures rather than simply listing goals. According to energy experts, that move is rare for any governor's office.
Brandon Smithwood, a vice president at renewable developer Dimension Energy, said the level of technical detail stands out. "I can't think of other governors' energy plans — high-level policy documents — where they've actually done their homework to show that the math works, the engineering works," he said.
The document models five possible futures. Four of them keep the state on track to meet the 2050 clean energy target. A fifth looks at what happens if Virginia abandons its clean energy policies. Each path that meets the target assumes what the plan calls "moderate" demand growth of 85 percent between now and 2050 — a forecast that expects most, but not all, proposed data centers to be built.
All four clean energy scenarios involve an aggressive expansion of solar power, with new solar farms coming online at a rate of 1.2 to 1.8 gigawatts per year. They also call for steady growth in distributed energy resources, such as rooftop solar and battery storage located close to customers.
One scenario simply continues current policy. The other three add a stronger emphasis on what energy planners call demand flexibility. That means data centers would agree to reduce their use of the grid during periods of peak demand. Instead of drawing power at the worst possible moments, they could rely on batteries, on-site clean energy, or other backup resources. The idea is to avoid building massive amounts of new grid infrastructure just to serve a handful of large customers — and to prevent everyday residents and businesses from paying for it.
Jim Purekal, Virginia director at Advanced Energy United, praised both the specificity of the plan and its attention to distributed energy. "Setting energy goals is one thing, but showing the path to achieving them is a step up," he said.
The fifth scenario gives critics a talking point. It models what would happen if Virginia scrapped the Virginia Clean Economy Act and exited the Regional Greenhouse Gas Initiative. The result: carbon emissions nearly double, air pollution increases, and the state faces $145 billion in associated health impacts. The flip side is that repealing the policies would save at least $90 billion in electricity system costs.
Republican critics seized on that $90 billion figure, arguing that the governor's own modeling makes the case for abandoning the clean energy mandate. The plan pushes back, though. It argues that the total cost of meeting Virginia's future energy needs — as much as $422 billion through 2050 — does not have to fall on residential ratepayers.
Based on data supplied by Dominion Energy, the plan's authors estimate that the tech industry could contribute as much as $265 billion of that total through 2050. The key, they say, is cost allocation.
"These costs appear high because the scale of growth Virginia faces is enormous, but the modeling shows that the problem is solvable," the plan states. "Further, these results suggest that with proper cost allocation, Virginia can serve new data center growth with clean energy solutions."
In plain terms: data centers get reliable power, the grid goes carbon-free, and the companies that create the demand pay for most of the upgrades.
The energy plan is not a statute. It does not require action by Dominion, Appalachian Power, or the State Corporation Commission. But it could shape the decisions that matter in the coming years, especially when utilities propose new gas plants or when lawmakers consider data center reforms.
Del. Rip Sullivan, the Fairfax County Democrat who sponsored the Virginia Clean Economy Act in 2020, said the modeling matches the intent of that law. "The plan is detailed, it is innovative, and it is the first of its kind to actually model how we can meet the goals of the Clean Economy Act," he told reporters. "It is consistent with what we were thinking."
Even some environmental groups that remain skeptical of unchecked data center growth welcomed the blueprint. The Virginia League of Conservation Voters has said a pause on the massive warehouses is urgent, but it still sees value in the plan's overall direction — especially compared with the approach of Spanberger's predecessor, Republican Glenn Youngkin.
"The previous administration threw up its hands on the VCEA," said Lee Francis, the group's chief program and communications officer. "There is devil in the details, but the broad goals of getting to 100 percent clean are good."
What makes the plan noteworthy is not just its modeling. It is the political space it tries to carve out. Rather than siding with either the tech industry or its critics, Spanberger's team is asking both to agree on a basic proposition: data center growth and clean energy targets can coexist if the costs are assigned fairly.
That approach could give regulators cover to demand more from data centers when evaluating future rate proposals. It could also give utilities a reason to invest in storage and grid flexibility instead of falling back on new fossil-fuel plants. And it offers environmentalists a constructive alternative to an all-out moratorium, even if many still believe one is needed.
The plan does not resolve every conflict. Questions about who pays for backup capacity, how quickly solar can be built, and whether data centers will genuinely shift their electricity use remain open. But for now, Virginia has something it lacked a year ago: a roadmap that shows the destination and the route.
