CHARLESTON — The public comment period is now open for West Virginians to weigh in on proposed rules governing the certification of sites for the state’s new law aimed at luring data centers powered by their own microgrid power plants.

The Division of Economic Development within the state Department of Commerce filed its legislative rule and emergency rule for data center/microgrid district certification on Nov. 10, kicking off a 30-day written public comment period ending Dec. 10.

The rules are required by House Bill 2014, the Power Generation and Consumption Act, which went into effect on July 11. The bill – one of Gov. Patrick Morrisey’s priorities during the 2025 regular legislative session, was signed by the governor at the end of April.

“This emergency rule (and the companion legislative rule filed contemporaneously) is a next step in facilitating the goals of House Bill 2014,” wrote Garner Marks, general counsel for the Department of Commerce. “The rule sets out important definitions as well as the requirements and process for petitioning the Secretary for certification as a microgrid district and High Impact Data Center. In doing so, the rule helps enable and encourage these crucial investments in the state.”

HB 2014 is aimed at attracting high-impact industrial businesses and data centers to West Virginia along with microgrids to power the data centers using both fossil fuels and renewable energy generation. The new law streamlines development of data center and microgrid projects, offers regulatory exemptions within designated microgrid districts, establishes a special valuation for property taxes and a new tax distribution framework for high-impact data centers and creates a fund for electric grid stabilization.

HB 2014 makes changes to a law passed in 2022, Senate Bill 4001, that created the Certified Industrial Business Expansion Development Program that allowed for only two certified microgrid districts. The new law expands the number of microgrid districts, allows for microgrids for data centers if more than 70 percent of the electricity generated is consumed by or will be consumed by one or more data centers.

Microgrids within these new districts would be exempt from jurisdiction of the state Public Service Commission regarding rates, certificates of convenience, service conditions, complaints and net metering and interconnection standards. Projects in these districts would only be able to participate in the microgrid if they had not previously received electrical service from a utility and can show their new investment will not decrease load elsewhere.

The new law protects regulated utility customers from bearing any costs associated with electricity generation, transmission or distribution facilities serving a microgrid district, with those costs borne by the generator or consumers within the district.

“The economic impact of House Bill 2014, the impetus for this emergency rule, is potentially enormous,” Marks wrote. “Facilitating and certification and eventual development of Certified Microgrid Districts and High Impact Data Center Projects leverages our abundant natural resources and history of power generation to promote and facilitate transformative investments in energy and data infrastructure across the state.”

The rule defines “High Impact Data Center” as a facility with a critical IT load of 90 megawatts or more placed in service after July 1 of this year. The rule details the comprehensive petitioning process, including eligibility requirements, information submission mandates, timelines for approval, and post-certification annual reporting. The rule also has a sunset provision, terminating on Aug. 1, 2031.

The rule requires a company petitioning to be a certified Microgrid District to make good-faith efforts to negotiate for the supply of all or part of its electricity needs from the local distribution electric utility unless a microgrid district is also involved in producing at least 300 megawatts that will not be connected into local electric distribution.

The rule instructs microgrid companies to refrain from soliciting businesses that already receive electric service from a regulated utility in the state. Companies are required to commit to not delivering electricity to any entity outside the certified microgrid district, though a maximum of 10 percent of the electricity generated from the microgrid site can be sold on the wholesale market, such as to PJM, the 13-state regional transmission organization that West Virginia is a part of.

The law also allows for an existing merchant power plant that is already contractually obligated to provide 10 percent of its power on the wholesale market to convert to a microgrid power plant.

The secretary of the Department of Commerce has two months to approve or deny a letter of intent once it is received and can seek assistance from the Division of Economic Development, the Office of Energy, the Public Service Commission, and the Department of Environmental Protection when making a decision.

The certification process for High Impact Data Centers requires a petition be submitted to the cabinet secretary within 30 days once the petitioner believes its project qualifies as a High Impact Data Center, including information on proposed critical IT load, acreage, capital investment, and project milestones. The secretary then has 14 days to render a decision. Annual reporting is required for both High Impact Data Center districts and microgrid districts.

The Power Generation and Consumption Act prohibits counties and municipalities from enacting or enforcing ordinances, regulations or rules that would prohibit or hinder these data center/microgrid districts. Certified projects will still pay business and occupation tax, municipal sales and service tax, ad valorem real and personal property tax, municipal service fees and utility rates to the municipality.

However, instead of having data center property values assessed by the county, HB 2014 requires owners to file tax returns with the Board of Public Works annually, with tangible personal property tax collections distributed via a formula.

According to a formula in the bill, 50 percent of property tax collections from these projects would go to a personal income tax reduction fund, 30 percent would go to the county or counties where the data centers are, 10 percent would go to all 55 counties on a per capita basis and 5 percent would go to the state Economic Enhancement Grant Fund.

Another 5 percent would go to a new Electric Grid Stabilization and Security Fund administered by the Department of Commerce to support electric grid stabilization and security, including coal and natural gas electric generation and transmission resources.

State officials believe that the Power Generation and Consumption Act will encourage data center development in West Virginia, though the state remains well behind neighboring states. According to DataCenterMap.com, West Virginia only has seven data centers compared to Virginia, which has more than 650 data centers, with Northern Virginia considered the data center capital of the world.

Proposed data center/microgrid projects in Tucker and Mingo, pre-dating the passage of HB 2014 – have received criticism in those communities. Both projects have approved air quality permits for natural gas-fired microgrid power plants. The Tucker County air quality permit approval was appealed.