Will public backlash kill Virginia’s data center boom?
Public backlash against data centers is growing across Virginia, leading to increased scrutiny of tax breaks and infrastructure costs. Several localities are proposing or enacting moratoriums and stricter zoning regulations, while state-level policy changes regarding taxation and utility payments are underway. This opposition has already led to some data center projects being blocked or withdrawn.
Virginia's rapid data center expansion is facing significant public backlash and legislative scrutiny, as detailed by Erin Sanzero of Protect Stafford, who is opposing a large data center campus near her Stafford County property. This opposition has gained traction statewide, influencing local governments and state policy.
Notable successes for opposition include Balico withdrawing its $8.85 billion data center rezoning application in Pittsylvania County and the Prince William Digital Gateway complex being blocked after a circuit court judge invalidated its approval, leading developers to abandon the project. State-level debates have focused on data center tax exemptions, which are estimated to cost Virginia over $1 billion annually. While a full repeal was not enacted, a new power usage tax up to $600 million annually was passed for heavy electric users like data centers.
Governor Abigail Spanberger's administration, through Chief Energy Officer Josephus Allmond, has initiated efforts to require large electricity users to pay upfront for infrastructure, with the Virginia State Corporation Commission ordering Dominion Energy to draft a policy. Local governments are also taking action: Chesapeake City Council approved an eight-month moratorium on data center applications, Virginia Beach directed staff to draft a prohibition ordinance, and Loudoun County ended by-right data center development by requiring special exception permits. These moves reflect a statewide shift in attitude, despite arguments from some officials, like Mecklenburg County Administrator Alex Gottschalk, who highlight the significant tax revenue data centers provide for public services.