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Governor Morrisey Looks To Data Centers To Fund West Virginia’s Future

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200 megawatt gas-fired power plant

An example of a 200 megawatt gas-fired electric generation facility (photo courtesy MAN Energy Solutions).

“The single biggest economic development bill in the state in a very long time,” said Governor Patrick Morrisey earlier today about HB 2014, legislation that sets up a new regulatory, energy, and tax framework to attract data centers to the Mountain State. 

Data centers are facilities that house computer systems and related supprt components such as cooling systems, power supplies, and security controls. Data centers dot the landscape in nearby Loudoun County, Virginia, which has almost 200 data centers and more than 100 in the pipeline. 

Driven by the growth in artificial intelligence and other computing needs, data center demand is expected to stay high. This creates an opportunity for West Virginia to compete to become the “state that is the easiest to operate a data center in,” according to Morrisey. HB 2014, which passed the House of Delegates on April 1 and is awaiting action in the Senate, is the Governor’s answer to how West Virginia can compete to become a data center hub. However, some provisions in the bill are causing concern among local government officials and residents.  

HB 2014’s key provisions include:  

  • “Certified Microgrids” Exempt from Usual Regulations. Data centers use a great deal of energy, so HB 2014 streamlines new power production serving a new data center by exemption such production from the usual Public Service Commission requirements and rates. 

  • New “Data Economy Liaison” for Data Centers. A new Charleston office under the Department of Commerce will act as the “single point of contact” for data center and associated energy facilities to help coordinate and expedite siting, permitting, licensing, and similar activities. 

  • Ban on Local Government Exercise of Powers. Section 5B-2-21b prohibits county and municipal governments from exercising their usual authorities when it comes to data centers in this program and related energy installations called “microgrids.” For example, section 5B-2-21b(c) prohibits local governments “whether by ordinance, resolution, administrative act, or otherwise, from enacting, adopting, implementing, or enforcing ordinances, regulations, or rules which limit, in any way, the creation of, and acquisition, construction, equipping, development, expansion, and operation of any certified microgrid district or certified high impact data center project[.]” Other sections explicitly ban local governments from taking action on zoning, land use, horticultural, noise, viewshed, lighting, and building code inspections and enforcement.  

  • State to Take Incremental Property Tax Revenues. HB 2014 would pull into Charleston – instead of the county or municipality in which the data center facility is located – the incremental property taxes generated by such new developments. Such tax revenues can be substantial. For example, in Loudon County, data center property taxes fund a majority of that county government’s operating budget. Under HB 2014, the new tax revenues would be allocated among six state funds, including 55% to a new Personal Income Tax Reduction Fund; 10% to a new Economic Development fund; and 10% to a new Electric Grid Stabilization and Security Fund. 

The Governor has not made it clear how using local data center property taxes to help fund state income tax reduction will help West Virginia attract data centers and employees.

HB 2014 was referred to the Senate Economic Development Committee on April 2.

Update: WV Senate Committee Amends Tax Split in Data Center Bill (Observer, 2025, Apr 8)

Update (2024 Apr 9): HB 2014 is scheduled for a 2nd reading on April 10 in WV Senate. The Senate may accept amendments during this reading.

Update (2024 Apr 10): HB 2014 is scheuled for a 3rd reading (with a right to amend) on April 11 in the WV Senate. Senator Jeffries (District 8) has introduced an amendment to direct 5% of the incremental tax revenue to a new Electric Grid Stablization Fund (this amendment corrects a transcription error in the bill text as reported out of the Senate Economic Development committee, which incorrectly specified 5% to the Economic Enhancement Grant Fund administered by the Water Development Authority).

Update (2024 Apr 11): The Senate passed HB 2014 by a vote of 32 for, 1 against, 1 not voting. The bill now returns to the House for a final vote. Prior to passage in the Senate, the bill was amended to adjust the distribution of tax revenues generated from the certified microgrid districts as follows:

  • 50% to a new Personal Income Tax Reduction Fund (established by this bill)
  • 40% to the County in which the microgrid district is located
  • 5% to all Counties, allocated on a per capita basis
  • 3% to the Low Income Energy Assistance Fund (administered by the Department of Human Services
  • 2% to a new Electronic Grid Stabilization Fund (established by this bill)

During the Senate floor debate on April 11, Senator Tarr (District 4) proposed two amendments that were rejected. The first amendment would have exempted projects begun before February 1 2025 from the special tax distribution (above). The second amendment would have removed any restriction on existing two coal-fired generating facilities from serving both a microgrid and the existing public power grid.

Senator Phillips (District 7) spoke against the passage of HB 2014, highlighting the concern that the ability of microgrid generating facilities to sell even 10% of their capacity to the public grid could lead to reduced utilization of exisiting generating facilities and drive up costs for residential ratepayers across the state. Phillips said “I want the jobs, but I want [these facilities) to be on the grid.”

Senator Jeffries (District 8) spoke for the passage of HB 2014, remarking that this legislation is “opening up the door for our state to grow.”

Updates & Reference Links

Additional coverage on this topic.

Video

  • Governor Morrisey discusses HB 2014 during an April 7 press conference (video).
  • The Observer discusses HB 2024 at a forum in Middleway on April 7 (video).

Related Stories & Links

Legislation

Data Center & Microgrid Districts

Published 2025 Apr 7. Updated 2025 Apr 8 (video links). Updated 2025 Apr 8 (related stories). Updated 2025 Apr 10 (bill status). Updated 2025 Apr 11 (bill status). Updated 2025 Apr 12 (related stories).

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