Summer Days

This year has been one of the busiest I can remember as a legislator. Budget discussions extended almost to the July 1 drop dead deadline as we tried to reach a resolution on data centers. Dominion Power, the electric utility for millions of Virginians, is subject to purchase by NextEra. Interim subcommittees have continued to meet throughout the year. The consequential midterm election for the United States Senate and the House of Representatives is just two months away. The months have just flown by, and it seems the 2027 General Assembly Session is just around the corner. 

Elections

The general election for critical races, including the U.S. Senate seat held by Senator Mark Warner and the 5th Congressional contest between former Congressman Tom Perriello, the Democratic nominee, and John McGuire, the Republican incumbent, is November 3. But early voting in Virginia begins in just two weeks on Friday, September 18. The President of the United States has made it a goal to try and interfere in elections across the country. The Supreme Court seems to be going along with some of his antics. He has pledged to stop voting by mail, even though he votes by mail.

Elections are not run by the federal government, and our laws offer significant protection for voters and to ensure the process is secure. Nonetheless, I am urging all my friends to take advantage of the 45 days of in-person early voting in Virginia. Do not wait for the Supreme Court to make a decision about mail-in voting, if you can help it. Check your registration, polling place, and other information here.

Consolidation

Earlier this year, I mentioned that the General Assembly was studying the consolidation of elections. In most states, local and state elections are held in even years alongside federal elections. Holding elections every year can result in voter fatigue, a dropoff in voters in the odd-year state cycle, and increased costs. Voting is the most fundamental part of our democratic republic, and we need as many people to participate as possible. In my view, we have an obligation to make participation as easy as possible, so I favor consolidating the vote. The members of the House of Delegates who were on the study committee, both democrats and republicans, opposed consolidation. The resolutions establishing the study required the affirmative vote of the majority of the appointed members from each body for it to move forward, so the study was for naught.

Energy & Data Centers

Shortly after the legislative session ended, Dominion and NextEra Energy proposed what they termed as a merger. In fact, NextEra, in a stock sale, is seeking to purchase Dominion Power. The desire to marry the two companies is easy to understand. There is incredible energy demand in Dominion territory, and in fact throughout Virginia, driven almost entirely by data centers. NextEra has the largest inventory of renewable energy in the country, and they have some of the biggest assets of electricity. They have the power, and Virginia has the demand.

The announcement sent shockwaves through Virginia, and I have heard from so many constituents who are concerned about this proposed acquisition. NextEra has tried to make purchases in the past that have not gone through in Hawaii and Texas. NextEra has also had some questionable political tactics in other states. People are concerned about those tactics coming to Virginia. This would also make NextEra, the largest utility in the country, the largest in the world. People question what the kind of consolidation of power would mean for consumers and for the future. 

Under a little noticed section of the law, § 56-90, the State Corporation Commission (SCC) has the responsibility for determining whether this utility purchase can go forward. In fact, regulators in Florida, North Carolina, and South Carolina, as well as federal regulators, have a role to play as well. The standard contained in Virginia law is only that the transaction cannot unfairly affect the ability of the utility to charge just and reasonable rates and does not include consideration of whether the transaction is in the public interest. The statute was written in 1940 and last amended in 1942. Nobody that I can recall has ever thought about an energy company or utility being purchased until now in Virginia.

The SCC has six months to rule in the case. Some have called for a special session to extend the six-month period for the SCC to make that decision. I am not sure that a special session at this point can effectively lengthen the time period for consideration because the proposal has already been submitted to the SCC. To date, the Governor has not called for a special session because there is no consensus in the legislature on this issue. I had advocated for including budget language to do this but was unsuccessful.

However, it is important to remember that the SCC could reject the transaction without prejudice and effectively require Dominion and NextEra to refile a proposal, which would start another six-month window. Or the SCC could include stipulations such that NextEra and Dominion decide not to go forward.

I have been trying to obtain as much objective information as I can about this transaction. I am as skeptical as anyone about the deal and have already submitted a letter to the SCC calling for in-person regional hearings. The Governor has intervened and said her objectives are that rates do not increase, Dominion employees be protected, and our energy future be unimpaired. And I agree these are important considerations.

Data center demand has driven up the cost of electricity throughout Virginia, and I am grateful that the SCC earlier this year determined that data centers have to pay for the infrastructure that supplies their electricity demands. The question is how that is defined. There is no question that much of the new energy talk and transmission line talk that is occurring in Virginia is occurring because of data center demand. This is an issue that will dominate the remainder of the year and likely the next legislative session.

 

2027 Session

The next legislative session, which is a “short” forty-six day session, begins on January 13, 2027. The Senate and House of Delegates both have strict bill limits, so there is a limited amount of legislation that will be considered. One of the primary areas of focus will be on the budget. The hang up in the first part of the year to adopting the budget was the insistence on the part of the Senate conferees, of which I am one, to repeal the data center sales and use tax exemption. The exemption has grown from $1.45 million in 2008 to $54 million in 2016 to $1.9 billion a year in 2025. The House of Delegates and the Governor rejected that position, and we fell back on a plan to impose an energy consumption tax. The tax essentially reduces the exemption by about 40 percent, or $1.2 billion over two years. It is only a two-year deal, so we must work right away on finding a long-term solution to ensure our budget is structurally sound and that the data centers pay their fair share. In other words, while a budget compromise was reached in June, the questions surrounding data centers will continue to dominate budget discussions through 2027. You can track legislation as it is filed here.

 

 

Looking Forward

All 140 seats of the General Assembly will be on the ballot next year, so we are getting ready for a long haul.

It continues to be my pleasure to represent you in Richmond. If I can be of service or answer any questions, do not hesitate to contact me at  434-296-5491 or  senatordeeds@senate.virginia.gov.

 

Sincerely,