Fundamental Data's Microgrid Project Sparks Debate Over Environmental Impact and Economic Benefits in West Virginia

The state of West Virginia has put the best of its political, financial and regulatory power behind enthusiastic support for development of microgrids to attract data centers and other industries.

One of the state’s first proposed projects in the wake of the positive political tide, however, faces environmental challenges and uncertainty as it works from concept to construction.

West Virginia wants new industries bringing more jobs, but a debate is brewing statewide about the Fundamental Data Ridgeline microgrid planned in Tucker County. Not much is known about Virginia-based developer Fundamental Data, but environmental advocacy groups from Sierra Club to the West Virginia Highlands Conservancy are raising questions about the proposed 1.65-GW natural gas power plant to be built on 500 acres near the town of Davis.

Power Generation and Consumption Act is pro microgrid

The outlook for future microgrids is favorable due to deep political support through the passage of House Bill 2014, signed by Gov. Patrick Morrisey earlier this year, and House Bill 2002 passed with the intention to simplify both fossil and renewable energy projects in support of data center expansion in the Mountain State. Collectively, the bills were combined to create the Power Generation and Consumption Act.

“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 on the governor’s website after passage and signing earlier this year. “Combined with the one-stop shop permitting bill, companies will now be able to quickly build, expand, and increase job creation right here in West Virginia.”

West Virginia is one of the eastern U.S. states located atop the prolific Marcellus and Utica shale natural gas formations. As the rise of anticipated artificial intelligence (AI) and cloud-based computing grows, so does the predicted need for perhaps 125 GW of new electricity generation to energize the AI race.

Natural gas is the dominant fuel in the U.S. utility-scale power generation mix, and its emissions profile for CO2 is lower than coal-fired power. Yet the scope of the Ridgeline gas-fired impact is concerning to some West Virginia citizens and environmental advocates.

Nonetheless, the state’s Division of Air Quality approved preliminary construction permits for Fundamental Data’s Ridgeline. The project still requires additional approvals before construction begins.

Regulatory review positive early but . . . 

The regulatory entity also approved redactions of emissions data for the gas-fired microgrid. That doesn’t sit well with those who are uncertain about the project.

“West Virginians deserve transparency when it comes to industrial projects that could affect their air, health, and quality of life,” said West Virginia Highlands Conservancy President Marilyn Shoenfeld said in a statement. “We’re appealing because decisions about projects of this scale must be made in the open.”

Others in West Virginia, however, are excited about the promise of expanded economic development from data centers in their state, which borders data center-rich Virginia. The state Legislature’s microgrid bill sponsorship included a Democratic official with Republicans, and House Bill 2014 was passed in the state senate by a margin of 32-1.

Some support is centered around the idea that the cost of microgrids in these situations would be borne mainly by the co-located industrial customer and data centers, compared to utility projects which often increase rates for all customers whether they benefit or not.

“The (2025) amendment adds a new provision to the Act that prevents the customers of the state's regulated utilities from bearing any costs related to the generation and sale of power in a microgrid district or from any transmission facilities that would need to be built to accommodate such electric service; all of the costs must be borne by the industrial customer,” reads an online analysis by partner Chip Cannon of the Hogan Lovells law firm. Cannon’s article is not an endorsement of the project but rather an explanation of the laws which could help it develop.

“This provision reflects a general movement by legislatures and utility commissions in a number of states across the U.S. to ensure that retail ratepayers are not subsidizing the costs of generation and transmission infrastructure necessary to supply power to data centers,” he added.

Brief history of data center power in the Mountain State

The 2025 amendment also altered a 2022 bill which originally created microgrid districts. Those movements involved BHE Renewables and Fidelis New Energy, the latter of which announced plans to build the Mountaineer Gigasystem and Monarch Cloud Campus sites in West Virginia two years ago.

Fidelis New Energy also announced plans for a hydrogen hub to help produce carbon-free energy in the data center complex.

The Fundamental Data proposed gas-fired plant would be powered by combustion turbines combined with heat recovery steam generators. The permit application sent to the state’s Department of Environmental Quality stated that the use of combined cycle systems would eliminate duct burner firing emissions and be equipped with selective catalytic reduction and carbon monoxide catalyst systems.

Although the planned microgrid would primarily utilize gas-fired power, it also would be permitted to use diesel as a backup fuel, according to the West Virginia DEQ document.