Environmentalists urge Virginia lawmakers to get rid of data center tax incentive

Virginia lawmakers in Richmond are currently stalled on agreeing to a state budget, with a central point of contention being a 15-year-old tax exemption for data centers. Environmental activists are advocating for the removal of this incentive, arguing that it encourages data center expansion, which subsequently strains Virginia's power grids and contributes to pollution, making the state's 2050 zero-carbon climate goals difficult to achieve. Cale Jaffe, a professor at UVA Law specializing in environmental law, highlighted the tension between promoting data center growth through tax incentives and the state's climate objectives. He noted that a single data center campus can consume as much as 300 megawatts, equivalent to powering 300,000 people. Christopher Miller, President of the Piedmont Environmental Council (PEC), expressed concerns that Virginia, already home to more data centers than any other state, lacks a proper understanding of the scale and environmental impact of this growth. Miller pointed out that the data center tax exemption represents about 6% of total state tax revenue, amounting to approximately $2 billion. He questioned the wisdom of providing such a large incentive to "the 5 or 6 largest corporations in the world" to encourage them to buy equipment, stating it's a "bad choice" for the state.