Bill in Virginia House aims to limit utility cost burdens from data centers

The measure, sponsored by John Chilton McAuliff, is designed to prevent expenses associated with supplying very large data centers from being assigned to other utility ratepayers, according to the Virginia State House.

The proposal, filed as HB503 on Jan. 14, 2026, for the 2026 regular session, is officially described as: “Electric utilities; cost recovery, costs substantially related to serving data center customers.”

Below is our summary based on the bill text, with interpretations included to offer clarity on key points.

Essentially, the bill updates Virginia’s electric rate rules to prevent Phase I and Phase II utility providers from charging most costs, where those expenses are principally due to providing for very large data centers, to other customers. It stipulates that additional costs for fuel, generation and transmission—when only required because of data centers with peak demand of at least 100 megawatts—should be recovered solely or in substantial part from those specific customers. The bill also instructs the State Corporation Commission to assess the reliability impacts stemming from new generations and retirements using resource plans and to put in place rules needed for these requirements.

Rep. John Chilton McAuliff (Democrat-30th District), along with Rep. Gretchen M Bulova (Democrat-11th District) and Rep. JJ Singh (Democrat-26th District), are listed as sponsors of the bill.

At the current session’s outset, McAuliff has introduced eight other bills.

A 2014 graduate of the University of Richmond, McAuliff continues to have an active legislative portfolio.

After winning election in 2026, McAuliff began serving the 30th House District of Virginia, succeeding Geary Higgins in the state legislature.

In Virginia, the process for passing legislation requires introducing a bill in the House of Delegates or the Senate, after which the bill is referred to committees for review and amendment. If cleared by committee, it proceeds to debate and votes in both legislative chambers. Bills that pass both are sent to the governor, who may sign, veto, or allow them to become law by inaction. The Virginia General Assembly meets every year in a regular session starting the second Monday of January, when delegates submit hundreds of bills, though only some are eventually enacted.