Lawmakers pass bill authorizing independent “micro grids” to attract technology development in West Virginia

Senator Rupie Phillips (Logan - R) raised concerns about how the "micro grid" legislation could affect utility ratepayers, saying the focus should remain on improving the power grid rather than creating separate systems.

CHARLESTON On the final night before this year’s regular legislative session ended, the West Virginia Senate passed a bill aimed at supporting localized energy systems, particularly for data centers and other large-scale developments.

In a vote of 32 to 1, Senators passed House Bill 2014. The House of Delegates shortly after passed the Senate’s version, sending it to Governor Patrick Morrisey for his signature.

Senator Glenn Jeffries, a Republican representing Putnam County and chair of the Senate Economic Development Committee, said the proposal could lead to substantial private investment in West Virginia and increase tax revenue. The legislation establishes a Certified Microgrid Program and a High Impact Data Center Program to encourage development.

Harrison County Republican Senator Ben Queen argued that the bill gives West Virginia the tools to grow its power generation capabilities. He said power generation is “not just part of our economy, it is our economy.”

“For the first time, we’re creating a policy framework that welcomes new energy development and attracts the next generation of technology: data centers, AI infrastructure and computing power. That demands real electricity and real reliability. That’s West Virginia’s moment,” said Queen.

The Senate added a provision outlining how new property tax revenue would be distributed under the bill: 50 percent to the state’s Personal Income Tax Reduction Fund, 40 percent to the county where a data center is located, 5 percent distributed to all counties based on population, 3 percent to the Low Income Energy Assistance Program, and 2 percent to a new power grid stabilization fund.

The one and only vote against the bill came from Logan County Senator Rupie Phillips. He raised concerns about how the legislation could affect utility ratepayers, saying the focus should remain on improving the power grid rather than creating separate systems. While supporting tax cuts and data centers, he used the phrase, “Mamaw can’t afford it,” arguing that a large customer like a data center should be part of the main electrical grid. He said that having those centers connected to the same grid as residential customers would help to spread electrical costs across a greater base, resulting in lower utility costs.

“I’m all for getting rid of the personal income tax, I’m for it,” he said, “but these people that’s retired or on a government assisted check, they don’t care. They care about that monthly bill. They can’t afford it.”

The bill has received support from Governor Morrisey’s administration, which has promoted its potential to attract data centers – facilities that house servers and computing infrastructure. These centers use large amounts of electricity and are expected to consume even more energy as artificial intelligence and high-performance computing expand.

Although data centers often do not employ large numbers of people, they can bring in significant property tax revenue. They have become common in states like Virginia, though not without controversy due to concerns about noise and appearance.

Under the bill, the Department of Commerce would be able to designate certain areas as certified microgrid districts if doing so is projected to have a positive economic impact. To qualify for benefits under the program, a facility must represent new electricity demand within one of the certified areas.

PHOTO | Will Price