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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchVirginia’s data-center expansion has not stopped, but delivering more facilities is getting harder. Electricity supply and delivery, groundwater concerns, local land-use review and community acceptance are all becoming more consequential. That matters beyond the industry: grid investment can affect household electricity costs, while the tax benefits of data centers vary widely by locality.
Why are data centers facing pushback in Virginia?
The central tension is that rapid growth brings economic activity and local tax revenue, but also raises questions about who pays for the infrastructure and bears the environmental and land-use effects. The available evidence points to mounting constraints—not a halt in construction or a single statewide ban.
Virginia’s advantages include power, fiber, land and proximity to customers, particularly in Northern Virginia. But access to those resources is not unlimited, and impacts are experienced locally even when economic effects extend statewide.
Is Virginia running out of power for data centers?
No source cited here establishes that Virginia has run out of electricity or that data centers are already facing a statewide supply failure. The concern is whether generation and transmission can be built quickly enough to serve forecast demand.
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The Joint Legislative Audit and Review Commission (JLARC), in its December 2024 study, found that statewide electricity demand had been essentially flat from 2006 through 2020. Its forecast then projects unconstrained demand to double within ten years, with data centers as the main driver. That is a forecast, not a doubling that has already occurred.
JLARC modeled the infrastructure challenge under different demand scenarios. Even meeting half of unconstrained demand would require difficult generation and transmission additions. In a scenario that meets half of unconstrained demand without Virginia Clean Economy Act constraints, the model would require new natural-gas capacity at roughly the pace of one large 1,500-megawatt plant every two years for 15 years. Scenarios that meet the act’s requirements instead depend on difficult additions of wind, battery storage and peaker plants. These are modeled pathways, not a construction schedule or a prediction that any particular plant will be built.
New capacity is arriving, but power delivery takes time
CBRE’s H2 2025 Northern Virginia market report offers a commercial real-estate snapshot, not a forecast for the entire state’s utility system. It reports that colocation vacancy fell to 0.5%, more than 1 gigawatt of capacity was delivered in Northern Virginia during 2025, and most capacity expected in 2026 was already committed. Preleasing extended into 2027 and beyond. CBRE also says Dominion’s batching system continued to lengthen power-delivery timelines for new projects.
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Those figures describe strong demand alongside ongoing delivery; they do not establish that the same conditions apply in every Virginia locality.
Could data-center growth raise household electricity costs?
JLARC found that current utility rates appropriately allocate current costs to customers, including data centers. Separately, it warned that higher demand is likely to increase system costs for all customers as new generation and transmission are built and energy becomes harder to supply.
For a typical Dominion residential customer, JLARC estimated that generation- and transmission-related costs could rise by $14 to $37 per month by 2040, in constant dollars. This is an estimate of those cost components, not a guaranteed bill increase; it does not mean every customer will see the same change.
Virginia’s 2026 budget also imposes an electricity-consumption tax of $0.011 per kilowatt-hour on covered data-center electricity consumption from July 1, 2026 through June 30, 2028. The provision has a defined two-year period; it should not be treated as a permanent tax or as a direct reduction in household bills.
How much water do Virginia data centers use?
The sources available here do not establish a comprehensive statewide total for data-center water use. Public water supply and groundwater are different sources, and cooling systems vary; those distinctions matter when interpreting claims about consumption.
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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesA study of eastern Virginia groundwater, reported in July 2026, warns that regional groundwater availability is constrained and projected to decline in the near future. It also notes that comprehensive public data on data-center groundwater withdrawals are lacking. The study does not attribute the aquifer outlook solely to data centers; its recommendations include stronger authority over withdrawal permits, examining alternative water sources and improving water-use planning.
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What Virginia’s 2026 water provisions change
- Water-efficient cooling for certain new projects: Under the 2026 budget provision, covered new data centers in the Eastern Virginia Groundwater Management Area with qualifying air-permit applications after January 1, 2027 must demonstrate minimized water use and use of best available water-efficient technology. Listed approaches include air cooling, closed-loop systems, recycled water, stormwater reuse and non-potable reclaimed water. The same provision directs the Department of Environmental Quality to develop a plan for retrofitting existing data centers in that management area.
- More water-use reporting: Separate 2026 session changes require covered reporting entities to break out potable and reclaimed water supplied to data centers. The Division of Legislative Services describes a delayed effective date of January 1, 2027. This is a reporting change, not proof that a comprehensive public, facility-by-facility dataset is already available.
How do local reviews affect where projects are built?
Virginia’s 2026 session summary describes local public-hearing and site-assessment requirements for certain large data-center siting or major-expansion applications. Local rules matter: Fairfax County says some data centers can be built by right in specified industrial districts if they meet applicable standards, while certain zoning changes require special-exception approval and public hearings.
That means proposals do not all follow the same approval path. The sources reviewed do not quantify how much public hearings or other local review add to project timelines, so it would be misleading to assign a standard delay.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Who benefits financially—and where do the costs land?
JLARC finds that data centers can provide substantial local tax revenue, chiefly through real and business personal property taxes. But the share depends on the size of the local market and local tax rates. Some localities lower equipment tax rates to attract operators, which reduces revenue per facility. In five localities with relatively mature data-center markets, the industry accounted for anywhere from less than 1% to 31% of total local revenue.
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The economic benefits are not evenly accessible across the state. JLARC says access to power and large, flat sites can prevent some distressed localities—particularly in Southwest Virginia—from attracting the industry.
Statewide economic-impact figures need attribution
A March 3, 2026 release from the Northern Virginia Technology Council (NVTC), describing a Mangum Economics study it commissioned, estimated that data centers generated nearly $40 billion in statewide economic activity in 2025, supported more than 112,000 jobs through direct, indirect and induced effects, and contributed over $1.5 billion in annual state tax revenue. These are estimates from a commissioned study presented by an industry association whose sponsors include utilities and data-center-related entities; they are not an uncontested government estimate.
Statewide activity and tax figures do not settle how the costs and benefits balance in a particular community. JLARC’s findings on grid investment and widely varying local revenue shares show why both the scale of the industry and the distribution of its effects matter.
What to examine when a data-center project is proposed
A proposal is easier to evaluate when its infrastructure needs and local terms are considered together. Useful questions include:
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- Power: What firm capacity is available, when can it be delivered, and what new generation or transmission would be needed?
- Cost allocation: Which customers or public entities pay for required grid upgrades, and how are costs assigned?
- Water and cooling: What cooling system and water source are proposed, what permits apply, and does the project fall within the Eastern Virginia Groundwater Management Area?
- Land and approvals: Is the site suitable under local zoning, and does the application require a public hearing or other assessment?
- Local finances: What property-tax revenue is expected, what rates or incentives apply, and how does the locality weigh that revenue against service and infrastructure needs?
- Connectivity: How close is the site to fiber and customers, and how do those advantages compare with the power and land constraints?
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