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WV — State Policy Updated January 2026

West Virginia

Statewide incentives and constraints, plus active policy discussion tied to 2025 legislation.

High Impact Data Center Certification Certified Microgrid Development Program Special Property Tax Valuation 90 MW minimum critical IT load Microgrid district acreage and export caps State preemption of local zoning Utility Regulation

Overview

West Virginia passed a sweeping data center incentive package in 2025 centered on projects with 90 MW or greater critical IT load. The state offers fast-track certification, special property tax rules, and a microgrid program that lets qualifying projects build on-site generation with minimal Public Service Commission oversight. In exchange, the state preempts county and municipal zoning, permitting, and land-use regulation for certified projects.

Incentives

High Impact Data Center Certification

The Department of Economic Development certifies qualifying data centers within 14 days of notification.[1] Certification unlocks access to the microgrid program and special property tax treatment.

Certified Microgrid Development Program

Certified microgrid districts can serve data centers with on-site or district-level generation and distribution. Key features include:

  • Reduced PSC oversight — microgrids are exempt from traditional rate regulation and certificates of convenience and necessity for generation and distribution within the district.[3]
  • Special contract path — the PSC can approve special contracts between microgrid customers and utilities, or set terms within 90 days if parties fail to agree after a 120-day negotiation period.[3]
  • Cost isolation — regulated utility customers outside the microgrid district cannot be charged for microgrid generation, transmission, or distribution costs. All costs must be borne by the microgrid generator or district customers.[3]

Special Property Tax Valuation

High impact data center property placed in service after July 1, 2025, is subject to a special valuation method and tax distribution framework. A portion of incremental property tax revenue flows to state and county funds, including the Personal Income Tax Reduction Fund and an Electric Grid Stabilization and Security Fund.[2] This framework sunsets on December 31, 2055.[4]

Requirements and Conditions

Minimum Thresholds

A high impact data center must have a critical IT load of 90 MW or more and be placed in service on or after July 1, 2025.[2]

Microgrid District Limits

Microgrid districts are capped at 2,250 acres, must be nearly contiguous, and can deliver no more than 10% of generated electricity outside the district (only to wholesale markets).[3] A district must attract at least two businesses, and the program is limited to two districts statewide unless more than 70% of microgrid power is consumed by high impact data centers.[3]

Prohibited Arrangements

The state bars payment-in-lieu-of-taxes (PILOT) agreements and tax increment financing (TIF) projects for both microgrid property and high impact data center property subject to the special valuation rules.[2][3]

Retained Local Obligations

Despite state preemption of zoning and permitting (see below), certified projects must still pay:

  • Municipal business and occupation tax
  • Local sales and use tax
  • Ad valorem property taxes (under the special valuation framework)
  • Municipal service fees
  • Utility charges based on cost of service[5]

Projects must also comply with the State Building Code (Rule 87 CSR 4).[5]

Utility and Grid Rules

Special Contract Mechanism

The PSC can approve special contracts between certified microgrid districts and incumbent utilities. If parties fail to reach agreement after a 120-day negotiation period, the PSC must set contract terms within 90 days.[3]

Cost Allocation Firewall

State law prohibits charging regulated utility customers outside a microgrid district for costs associated with microgrid generation, transmission, or distribution. This firewall is designed to prevent cost-shifting to residential and commercial ratepayers elsewhere in West Virginia.[3]

Local Zoning

State Preemption of Local Control

West Virginia preempts all county and municipal regulation of certified microgrid districts and certified high impact data centers. Preempted areas include:

  • Zoning
  • Land-use regulation
  • Noise and lighting ordinances
  • Building permitting and inspections
  • Local licensing requirements[5]

Counties and municipalities cannot require local consent for state or county actions tied to these projects, including approval of TIF districts.[5]

What to Watch

  • PSC implementation — watch for special contract filings or microgrid certification petitions since the July 2025 effective date.
  • Local government response — county commissions and planning bodies may seek legislative amendments to restore some local oversight or negotiating leverage.
  • 2026 legislative session — potential amendments to the Power Generation and Consumption Act (HB 2014) or related data center tax provisions.

Sources

[1] West Virginia Code, “§5B-2-21a. Data Centers,” West Virginia Legislature, 2025, https://code.wvlegislature.gov/5B-2-21a/ (accessed January 8, 2026).

[2] West Virginia Code, “§11-6N-2. Definitions” and “§11-6N-4. Special Rules for Tax Distribution of High Impact Data Centers,” West Virginia Legislature, 2025, https://code.wvlegislature.gov/11-6N-2/ and https://code.wvlegislature.gov/11-6N-4/ (accessed January 8, 2026).

[3] West Virginia Code, “§5B-2-21. Certified Microgrid Development Program,” West Virginia Legislature, 2025, https://code.wvlegislature.gov/5B-2-21/ (accessed January 8, 2026).

[4] West Virginia Code, “§11-6N-5. Termination,” West Virginia Legislature, 2025, https://code.wvlegislature.gov/11-6N-5/ (accessed January 8, 2026).

[5] West Virginia Code, “§5B-2-21b. Authority to assist certified microgrid district projects and certified high impact data center projects; legislative findings,” West Virginia Legislature, 2025, https://code.wvlegislature.gov/5B-2-21b/ (accessed January 8, 2026).

[6] Jericho Casper, “New West Va. Law Grants Sweeping Exemptions to Attract Data Centers,” Broadband Breakfast, May 2, 2025, https://broadbandbreakfast.com/new-west-va-law-grants-sweeping-exemptions-to-attract-data-centers/ (accessed January 8, 2026).

[7] West Virginia Legislature, “Enrolled Committee Substitute for House Bill 2014 (Power Generation and Consumption Act),” passed April 12, 2025 (effective July 11, 2025), https://code.wvlegislature.gov/signed_bills/2025/2025-RS-HB2014-SUB%20ENR_signed.pdf (accessed January 8, 2026).