Virginia's Senate Finance Committee proposed a tiered fee of $35 to $45 per kilowatt on the diesel backup generators inside data centres around 16 June, the first US levy designed to tax installed fallback capacity rather than the electricity a campus draws 1. Finance chair L. Louise Lucas floated it as a compromise: operators keep the $1.9bn sales-tax exemption but pay a per-kilowatt charge on backup generation, projected to raise $582m in FY2027 and $1.2bn in FY2028. The committee has not voted the fee through, and the 22 June Senate session could let it lapse.
The charge falls on installed capacity a campus may never run. This is the behind-the-meter (BTM, on-site generation sited next to the load rather than drawn through the public grid) gas fleet the Department of Energy has switched off twice in 2026 under Section 202(c), the Federal Power Act's emergency-curtailment authority . Federal power can cut that gas off in a heat event; it cannot price it. A per-kilowatt fee reaches the part of the build that consumption billing never sees, because a generator sitting idle draws nothing to meter.
The 30 June fiscal deadline is forcing the pace. The House of Delegates cancelled its 18 June budget session, with Speaker Don Scott saying no agreement had been reached, and Governor Abigail Spanberger sided with The House the same day against any early end to the exemption. Virginia has already lost projects to this fight before any fee existed: Compass Datacenters abandoned two site searches over tax uncertainty , and Danville approved the Berry Hill campus only on condition that the exemption survives . The fee is a wager that a new revenue line can hold the budget together where ending the exemption outright cannot.
