Gov. Patrick Morrisey passed the Power Generation and Consumption Act, which creates a statewide certified microgrid program to lure data centers into the state.
West Virginia’s governor signed HB2014 into law, which is a bill to ease restrictions on microgrid development in hopes to attract more data centers to the state.
Microgrids use local energy sources to generate power for individual buildings or for a campus of buildings. Similar to virtual power plants (VPPs), microgrids can connect to the utility grid and relieve pressure through the energy they generate and store. However, microgrids can also operate autonomously from the larger power grid, using “island mode.” Microgrids can be particularly attractive to data centers because they can disconnect from the grid and operate independently during power outages.
(Read: Data center demands spark reevaluation of energy generation sources & Microgrids: A solution for modern-day energy challenges)
The bill was created at the governor’s request, with hope that the ability for companies to easily create their own independent energy grid will entice data centers to the state.
Under the bill, the Department of Commerce may identify and certify microgrid districts if they meet certain requirements. The electricity generated within the microgrid district may only be used within the district or delivered to the wholesale market. Companies seeking to make new capital investments within the microgrid district may not decrease the load of any existing facilities outside the microgrid district, nor are they required to connect with and use any public electric utility.
After a series of heavy amendments and concerns over the bill’s potential to increase electric rates, the bill’s final version stipulates that “regulated electric utility customers shall not bear any costs” associated with providing electrical service to microgrid districts. “Any costs of this nature are to be borne by the generator or electricity consumers situated within the microgrid district,” the bill states.
The law places data centers and microgrids in designated districts, which will have a new specialized tax structure. A 5% portion of the taxes collected on the state’s data centers and microgrids will be deposited in the newly created Electric Grid Stabilization and Security Fund for utilities to develop and maintain coal-fired and natural gas infrastructure and generation.
The bill bars counties and municipalities from adopting ordinances, regulations or rules that limit in any way the creation of microgrid districts and high-impact data center projects.
The bill was heavily opposed by many West Virginians.
A petition with more than 2,000 signatures addressed concerns over how the legislation strips them of their say in the development and operation of large-scale industrial projects tied to microgrids and data centers. “In essence, Charleston is allowing the fox to guard the henhouse,” the petition said.
“HB2014 opens the door for large-scale industrial facilities that would have lasting negative impacts on our mountains, rivers, and clean air,” the petition said. “Furthermore, it increases the burden on local infrastructure and emergency services, while driving the lion’s share of revenue away from our communities.”
(Read: Despite innovative action in microgrid policies, states have a long way to go)
Calling the legislation his “landmark policy proposal for the 2025 legislative session,” Gov. Morrisey said West Virginia “is now in a class of its own to attract new data centers and information technology companies.”
“The Power Generation and Consumption Act will make West Virginia the most attractive state in the country for data centers and help America better compete with China in the technology arms race of the future,” Morrisey said in a statement.
