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New data center funding comes with new power demands

Mallory Noe-Payne
Radio IQ

Included in Virginia’s 2023 budget is about $140 million in grants for a “data center operator” as part of the state’s newly created Cloud Computing Cluster Infrastructure Grant Fund. The massive facilities are a controversial investment in some parts of the state, but others welcome the idea.

The specifics of the general assembly’s data center funding were detailed under a Major Economic Investment Project which requires both new jobs and capital investments over the next 20 years. But fights over such projects, mostly in the DC exurbs over sound and density issues, may push future investment to other parts of the state.

“A lot of areas don’t want data centers but in rural Virginia we welcome them," Kilgore said during this week's budget special session in Richmond. "We have the power, we have the broadband capacity. That’s going to help recruitment to other areas in the commonwealth. We need them for the tax base. I think it's going to be a positive force.”

But Kilgore’s hopes for power availability won’t come easy. At a recent Culpeper County Board of Supervisors meeting Dominion Energy’s Steve Precker said anticipated growth of the data center industry is expected to increase power demand in the northern Virginia area by over 200% over the next 7 years.

And in Central and Southside Virginia? “We’re looking at a total of 570% growth as the economic development and the industry comes into play there,” Precker told the board at a meeting Tuesday morning.

The promise of additional funding may convince localities to take the plunge despite the power draw, though. Amazon announced plans to invest $35 billion in Virginia data centers earlier this year.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.

Brad Kutner is Radio IQ's reporter in Richmond.