The Nickel Report

Virginia remains at the center of the rapidly growing data center industry, with Northern Virginia representing the world’s largest data center market and significant growth occurring elsewhere in the Commonwealth. Against that backdrop, data center regulation was a hot topic during the 2026 Virginia General Assembly session. While the legislature imposed relatively few new requirements directly on data center developers or operators, several measures direct state agencies to study data center impacts or develop additional environmental requirements. 

On June 18, the Federal Energy Regulatory Commission (FERC) took long-anticipated action to speed the interconnection of data centers, other large loads, and the generation resources necessary to power them to the interstate transmission grid. FERC has responded to a late 2025 proposal from the Department of Energy by issuing “Show Cause Orders” to each of the six Independent System Operators and Regional Transmission Organizations (ISOs/RTOs) subject to its jurisdiction. The Show Cause Orders find that ISO/RTO tariffs appear to be unjust, unreasonable, and/or unduly discriminatory because they do not clearly, consistently, or completely address key large load interconnection issues. Each ISO/RTO must file a response that explains why FERC’s concerns are invalid or describes reforms that FERC could impose under section 206 of the Federal Power Act.

The Virginia Department of Environmental Quality has recently published guidance that addresses data center backup power and what constitutes an “emergency” justifying the use of emergency generators.