Piedmont Environmental Council: The governor and General Assembly’s data center budget 'solution' doesn’t fix anything
The Piedmont Environmental Council criticizes Virginia's recently passed state budget compromise regarding data center taxation, arguing it fails to address the environmental impacts and high energy consumption of data centers. They contend that the new "electricity consumption tax" is insufficient and does not provide incentives for data centers to reduce energy use, costing the state billions in lost revenue and impacting residents. The council highlights the lack of comprehensive state-level planning for data center impacts, contrasting Virginia with other states considering moratoriums.
The Piedmont Environmental Council (PEC) has criticized Virginia's recently passed state budget compromise, arguing that its "solution" for data center taxation falls short of addressing the industry's environmental and economic impacts. The PEC states that the compromise budget failed to eliminate a nearly $2 billion annual sales tax exemption for data centers, instead enacting an "electricity consumption tax" capped at $600 million. This, they argue, is a mere fraction of the lost revenue and provides no incentive for data centers, which are among the wealthiest tech companies, to reduce their substantial energy consumption.
Chris Miller, president of the Piedmont Environmental Council, highlighted concerns that the budget ignores the rising energy costs for Virginians, air quality issues, and water use impacts caused by data centers. He noted that while other states like Michigan, Georgia, New York, Pennsylvania, South Carolina, Vermont, and New Jersey are exploring or implementing moratoriums and innovative solutions, Virginia's leaders have failed to assess the aggregate impacts of data centers on communities, land, and the environment. The PEC itself commissioned an air quality study, and the Interstate Commission on the Potomac River Basin projected severe depletion if data center growth continues, leading American Rivers to designate the Potomac as the nation’s Most Endangered River.
The PEC further contends that Virginia's lack of coordinated state-level planning pushes data center transmission and generation costs onto residents and other businesses. Despite statements from the President of the United States about protecting citizens from these costs, Virginia has yet to enact clear policies, instead relying on the State Corporation Commission. The council asserts that the electricity consumption tax is a "red herring" that distracts from the need for a comprehensive approach to manage data center impacts on air quality, water supply, natural resources, and residents' quality of life. The PEC urged the state government to adopt best practices, particularly given Virginia's position as a global data center hub.