Dillon-Anders Amendment: A Critical Threat to Data Centers
The Dillon-Anders Amendment could be a game-changer for data centers in West Virginia. Learn more about its implications!
West Virginia has quietly positioned itself as a serious contender in the data center development race — cheap land, available power, and a state government historically eager to attract industrial investment. Then came the Dillon-Anders Amendment, and suddenly that pitch became a lot more complicated.
The warning from developers was blunt: if this amendment passes, no data center developer will want to come to West Virginia. Such statements don't get made in a vacuum. They reflect genuine alarm from an industry that votes with its capital — and has plenty of other states to choose from.
Understanding the Dillon-Anders Amendment
The specifics of the Dillon-Anders Amendment center on regulatory conditions placed on data center development in West Virginia — the kind of provisions that, on the surface, might sound reasonable to a general audience but land very differently in a boardroom running site selection analysis.
What makes this amendment particularly dangerous for West Virginia isn't just what it requires — it's the signal it sends to developers scanning a map of potential sites across a dozen states.
Data center site selection is a long-horizon process. Companies like Amazon Web Services, Microsoft, and Google — along with the rapidly growing tier of hyperscale and colocation developers — evaluate regulatory risk as heavily as they evaluate power availability and fiber connectivity. A state legislature willing to impose restrictive amendments mid-cycle tells developers one thing clearly: the rules can change on you after you've already committed capital.
That uncertainty has a dollar value, and developers price it accordingly. Sometimes they price it by simply moving to the next state on the list.
Implications for Data Center Development
The data center industry is in the middle of an unprecedented build-out. Demand from AI workloads, cloud migration, and edge computing has pushed U.S. data center capacity requirements to historic levels — JLL estimated in 2024 that vacancy rates in primary data center markets dropped below 2%, forcing developers to aggressively pursue secondary and tertiary markets. West Virginia, in theory, is exactly the kind of market that should benefit from that pressure.
That opportunity doesn't materialize automatically. It requires a stable regulatory environment that lets developers move from land acquisition to permitting to construction without legislative wildcards disrupting the timeline.
Current projects — whether in planning, permitting, or early construction — face a chilling effect when amendments like Dillon-Anders create legal ambiguity around what the development framework actually looks like.
Developers aren't just worried about compliance costs. They're worried about timeline risk. A data center project that gets entangled in regulatory uncertainty can miss its commissioning window entirely, which in the current market means losing pre-signed lease commitments to competitors who moved faster in friendlier jurisdictions. Virginia, Ohio, Georgia, and Texas have all invested heavily in making their regulatory environments developer-friendly. West Virginia is competing against that track record.
Investment Risks and Opportunities
From an investor's perspective, the Dillon-Anders Amendment introduces a category of risk that infrastructure capital hates most: political risk in a market that was supposed to be low-drama.
Data center investments are structured around long-term predictability. The asset class appeals to institutional investors — pension funds, REITs, infrastructure funds — precisely because revenue is typically anchored in 10- to 15-year lease agreements with creditworthy tenants. Layer regulatory instability on top of that structure, and you create a mismatch between the asset's expected cash flow profile and its actual risk profile. That mismatch gets priced into cap rates, debt terms, and ultimately deal feasibility.
The opportunity cost here is significant. A mid-scale data center development — say, 50 to 100 MW of capacity — represents hundreds of millions of dollars in capital expenditure. That capital doesn't disappear if West Virginia becomes inhospitable; it flows to the next viable site. The state doesn't just lose a project; it loses the construction jobs, the permanent operations workforce, the property tax base, and the downstream economic activity that follows industrial-scale infrastructure investment.
For investors already holding land or early-stage development rights in West Virginia, the amendment creates an urgent strategic question: double down on advocacy and influence the outcome, or begin hedging by diversifying into adjacent states.
Neither choice is comfortable. Both are rational.
Community and Economic Effects
It's easy to frame this as a developer-versus-regulator story, but the people most exposed to the downside of the Dillon-Anders Amendment aren't the executives running development companies from offices in Austin or New York. They're the construction workers, electricians, and facility technicians in West Virginia who would have staffed these projects.
A single hyperscale data center facility supports hundreds of construction jobs during the build phase and typically 50 to 200 permanent, well-paying technical positions once operational. These aren't marginal jobs — data center operations roles frequently pay above local median wages and come with technical career pathways that are genuinely valuable in communities that have watched traditional industrial employment erode.
West Virginia's economic development story over the past two decades has been a difficult one. The state has been actively seeking to diversify beyond extractive industries, and data center development was beginning to look like a credible part of that diversification strategy. Regulatory moves that push developers toward neighboring states don't just delay economic growth — they reinforce the narrative that West Virginia is a difficult place to do business, which compounds the problem for every subsequent recruitment effort.
The irony is that amendments designed to protect community interests can end up harming the communities they're meant to serve by removing the investment that would have created jobs and tax revenue in the first place.
Local governments watching this closely should pay attention to the gap between legislative intent and economic outcome.
Moving Forward: What Developers and Investors Should Do Now
The most effective response to regulatory risk isn't to wait and see — it's to engage early and deliberately.
Developers with active or planned projects in West Virginia have a strong case to make, but they need to present it in terms that resonate with legislators, not just in terms that resonate with capital markets. That means translating megawatts and basis points into jobs, tax revenue, and community investment. It means showing up in committee hearings, building relationships with economic development offices, and coordinating with local chambers of commerce and workforce agencies that have aligned interests.
On the policy side, there's a constructive path forward if both sides are willing to pursue it. Amendments that address legitimate regulatory concerns — whether around power grid strain, water usage, or community impact — can often be restructured in ways that protect public interests without creating the kind of binary "build here or don't" deterrents that the Dillon-Anders Amendment apparently represents. Industry working groups have successfully negotiated workable frameworks in other states; the same approach is available here.
For investors evaluating West Virginia exposure, the near-term play is clarity. Understand exactly what the amendment does and doesn't affect, get legal analysis on how it interacts with existing entitlements, and model the scenarios before making capital decisions based on worst-case assumptions. The situation may resolve more favorably than the initial developer reaction suggests — legislative processes are rarely linear, and amendments get amended.
What doesn't change is the underlying logic of West Virginia's data center opportunity. The power infrastructure, land availability, and geographic positioning don't disappear because of a legislative fight. If the Dillon-Anders Amendment is defeated, revised, or successfully challenged, the state still has a compelling pitch — and developers have short memories when the fundamentals are right.
The question is whether West Virginia's political environment is willing to do the work to get to that outcome or whether it will let a genuinely promising infrastructure opportunity walk across the state line to a competitor that did.
Call to Action
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