A report from a state watchdog agency released Monday confirmed what many in the capital already knew: The rapid expansion of data centers in Virginia may be lucrative, but its costs are predicted to be astronomical.
“Well, we don’t have enough electricity in the future to provide all of our needs," said Delegate Tony Wilt, a Harrisonburg-based Republican who has one data center nestled in his district.
He made the comment shortly after the Joint Legislative Audit & Review Commission, or JLARC, presented the findings of a long-awaited report on the impact data centers have on the Commonwealth.
The good news is they are money printing machines with billions added to Virginia’s economy. Much of it goes to localities. In Loudoun County, Virginia’s data center hub, the over $700 million in tax revenue the facilities contribute makes up 31% of the locality’s annual budget.
But the bad news comes from their energy consumption. Current projections of new data center construction suggest Virginia’s power demand will increase by nearly 200% by 2040. JLARC gave two options for meeting that demand, one marked “very difficult” for that 200% increase, and another labeled “difficult” for a projection that limits data center expansion and reduces some of that power demand.
How difficult? To meet the 200% demand projection, Virginia would have to double its current annual solar production, go beyond current offshore wind availability, create a handful of currently only-theoretical small modular nuclear reactors, and build a new large-capacity natural gas power plant every year-and-a-half for the next 15 years.
Then there’s the connecting lines and grid improvements that would be required to move the power. And none of this is free nor are data centers bound to cover expanded infrastructure costs. The report notes that unconstrained data center growth could lead to almost $40 more every month on your power bill to help cover costs.
Senator Danica Roem’s Northern Virginia district has been coined the "digital gateway" for its rapid data center growth. It's lead to numerous complaints from her and her constituents, but she said Monday's report suggests it's a problem for all Virginians.
“If you’re in the greater Richmond area for example, and you say, ‘why should I care about data center growth in Prince William County?’ Your energy bill is going up because of it,” she said.
Roem, who has numerous other concerns about data centers, plans to file a number of new limits for data centers during the 2025 legislative session, but she said she won't be the only one.
Governor Glenn Youngkin, who has long praised the economic impact of data centers, appeared unphased by the concerns raised in the JLARC report. He told Radio IQ that Virginia has a choice: "embrace all of the above and deliver affordable, reliable, and, yes, increasingly clean baseload power to support future economic growth, while taking advantage of the billions of dollars in capital investment, high-paying jobs, and local and state tax revenues that come from data centers; or bend the knee to a green energy agenda and give away Virginia’s leadership position."
"Let’s get serious, embrace common sense, growth, and opportunity, and keep Virginia winning," he added. Questions about added infrastructure costs added to ratepayer bills were not returned.
Notably environmentalists said JLARC failed to properly asses data centers' impacts. While the report suggested the facilities' increased water demand and exhaust from emergency generators were both manageable, Piedmont Environmental Council President Chris Miller said more limits were needed.
"We support legislative solutions for a more transparent, responsible and sustainable plan for future data center development,” Miller said in a statement. “We look forward to working with legislators and state agencies to build a smarter digital future.”
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.