Data center analysis leaves some big questions unanswered

CHARLOTTESVILLE, VA – Today the Joint Legislative Audit and Review Commission (JLARC) released its much-anticipated report on data centers in Virginia.  

Virginia is known as the data center capital of the world. The state is home to at least 300 data centers.  The 2024 Virginia General Assembly session saw many questions and concerns about impacts from the rapidly increasing number of data centers in the state, but the only action taken was a request for JLARC to study the costs and benefits of data centers and develop recommendations for addressing some of the challenges they present. The results of that study were released today and could heavily impact legislation introduced in the 2025 session that begins on January 8.  

Notably, the report found that building enough new power generation and power lines to serve new data centers will be “very difficult” under current projections—regardless of clean energy requirements. Even in a scenario in which data center growth is constrained by half, building enough new infrastructure will be “difficult”. If this growth comes to fruition, bills for non-data center utility customers would increase significantly, but even if the growth doesn’t come to fruition, customers could face higher bills—if a single big data center company changes its business practices, customers would be saddled with excess costs for an overbuilt electric system.  

“While we don’t agree with all the conclusions and recommendations, the report highlights some of the problems associated with this massive growth and JLARC deserves credit for their work on this complicated, cross-cutting issue. Our existing systems—at the local, state, and utility level—are simply not equipped to handle the speed and scale of data center growth in Virginia. We can’t afford delaying reforms, particularly as utilities continue to weaponize this industry as a means of collecting billions of dollars from their customers for fossil fuel projects—subverting the law while harming Virginians,” said Nate Benforado, senior attorney focused on energy policy.