Updated on February 14th, 2025.

Gainesville Data Center in Prince William county. Photo by Hugh Kenny, Piedmont Environmental Council.

Virginia is home to the largest concentration of data centers in the world with significantly more slated for construction to meet the increasing demand for Artificial Intelligence (AI). This massive industry is continuing to grow rapidly, creating an unprecedented demand for energy to operate. Virginia must take a comprehensive approach to reform the data center industry in order to ensure there is transparency around resources required by this industry, state oversight where needed, protections for ratepayers around the costs of energy build out, and that the industry is incentivized to meet environmental and energy efficiency standards.

As localities make decisions about siting data centers, they need to have access to full information about impacts to Virginia’s Energy and water supplies. In 2023, Google data centers in Virginia accounted for about 284 million gallons of water used. One data center can consume over 100 MW of energy, the equivalent of the amount of power consumed by 80,000 households. Despite these facts, information about total energy use and water use by the data center industry is not automatically available to decision-makers who manage our water or energy usage. We must ensure that decision-makers for local governments and the public have full information as they consider future data center proposals and monitor existing data centers to enhance statewide planning.

The Commonwealth does not currently have any regulatory oversight of data center development. The state must start playing a larger role in planning for and mitigating the impacts of this explosive industry. Establishing a state-regulatory review process, in addition to existing local review, could help ensure that data center development is happening in a sustainable manner that is sustainable to the Commonwealth as a whole.

Without change, Virginia families and businesses will unfairly bear the costs of data center development. Data centers’ unprecedented energy demand will increase infrastructure costs, which will result in increased energy bills for all ratepayers. The Data Centers in Virginia JLARC report concluded that data centers will nearly triple electricity demand by 2040. We need to prevent households and businesses from shouldering industry risks and subsidizing the billions of dollars in costs associated with the data center industry’s energy infrastructure.

Existing state tax incentives attract development but fail to incentivize data center companies to mitigate environmental and community impacts. A revamped tax incentive could encourage data centers to meet higher clean energy and efficiency standards to incentivize best practices that reduce pollution.

You can take a deeper dive into mitigating the impacts of data centers in Our Common Agenda. To learn more, read our “Responsible Data Center Development” policy paper.

VCN and our Partners support the following bills that include measures to promote energy-efficient operations, protect local communities, and ensure transparency in the approval and development of new projects:

A few bills to ensure responsible data center development have crossed over and are on their way to becoming law.

Follow data center bills’ progress and learn more about ongoing efforts year-round on our Data Centers issue page.