News Summary
Virginia is grappling with a surge in electricity demand as data centers proliferate in the region, prompting concerns about rising utility costs and grid reliability. Dominion Energy predicts a 5% annual increase in peak power demand, leading to proposed infrastructure developments, including a new natural gas ‘peaker’ plant. Political implications loom as community advocates warn about the financial burden on consumers ahead of the upcoming elections. Similar trends are observed in neighboring North Carolina and Ohio, where data center growth is reshaping energy strategies and tariff structures.
Virginia Faces Growing Electricity Demands Due to Data Center Expansion
Virginia is experiencing a significant increase in electricity demand driven primarily by the rapid growth of data centers in the region. As these facilities expand, existing electrical infrastructure is under increasing pressure, raising concerns among residents, local businesses, and regulators about rising utility costs and grid reliability.
Projected Demand Increase and Infrastructure Developments
Dominion Energy, the primary utility provider in Virginia, anticipates that peak power demand will increase by approximately 5% annually over the next 15 years. This forecast aligns with the state’s goals to transition towards cleaner energy sources, as outlined in the Virginia Clean Economy Act (VCEA), which mandates a transition to carbon-free energy by 2045.
In response to growing demand, Dominion Energy has proposed building a 944-megawatt natural gas “peaker” plant. This type of plant is designed to provide additional power during periods of high electricity use but has faced opposition from environmental and clean energy advocates. Critics argue that investments in natural gas infrastructure may conflict with the state’s clean energy goals and prefer alternative solutions such as increased renewable energy deployment and energy efficiency programs.
Utility Costs and Political Implications
The expansion of data centers and the development of new power plants have sparked concerns about escalating electricity bills for residents. Local residents and consumer advocates warn that the increased costs may become a financial burden, especially during upcoming political elections in November 2025. The timing of these developments raises questions about how utility rates will be affected and whether grid upgrades will be sufficient to support both the expanding data centers and the needs of the broader community.
North Carolina’s Growing Energy Needs and Responses
In North Carolina, the situation mirrors that of Virginia, with data center growth significantly impacting the state’s electricity demand. Duke Energy, the main utility provider, estimates that an additional 6 gigawatts (GW) of capacity will be needed to meet future demand primarily driven by data center operations. This increase poses challenges to balancing the state’s clean-energy commitments with the infrastructural requirements of booming data infrastructure.
Policy and Planning Challenges
Stakeholders in North Carolina are engaging in debates over the best approach to balancing energy needs and environmental goals. While expanding capacity is vital, there is a keen focus on ensuring that increased energy production aligns with the state’s clean energy policies. The debate involves whether to prioritize renewable sources or continue investments in natural gas and other fossil fuels.
Ohio Implements New Pricing Strategies for Data Centers
Ohio’s Public Utilities Commission has introduced a new tariff structure aimed at large data centers. This new policy requires these facilities to pay a base fee representing 85% of their projected usage. The goal is to ensure that data centers bear the costs of upgrading electrical infrastructure, rather than passing those expenses onto residential customers.
This approach aims to create a more equitable system and encourage data center operators to contribute fairly to the costs associated with their expanding energy needs. It reflects the broader trend of reshaping utility tariffs to address the economic realities of data center growth and the infrastructure investments needed to support them.
Impact on Wholesale Electricity Prices and the Broader Economy
The expansion of data centers and the corresponding infrastructure upgrades have had a measurable impact on electricity prices. According to the PJM Interconnection, which manages the regional transmission grid, wholesale electricity prices are projected to rise by 22% in 2025. This increase is primarily driven by the demand generated by data centers and the necessary capacity upgrades across multiple states.
Economic forecasts indicate that overall electricity demand in the United States will grow at an average of 2.5% annually through 2035, largely fueled by the data center sector. This growth presents both opportunities for economic development and challenges in maintaining affordable and reliable energy supplies.
Concerns Over Cost Redistribution and Environmental Goals
Residents and consumer advocates have voiced concerns that the rising utility costs represent a shift of financial burdens from large corporate data center operators to average residential customers. This potential redistribution of costs raises questions about fairness and affordability for everyday consumers.
Industry Expansion and Technological Solutions
Major technology firms such as Amazon and Microsoft are actively planning and constructing new data centers across regions experiencing high energy demand. As these companies expand their operations, they are also exploring innovative solutions to alleviate grid pressures. One such approach involves developing microgrid technology—localized energy systems that can operate independently or in conjunction with the main grid.
Additionally, new legislative measures are being introduced to support the development of microgrids and other smart grid technologies. These initiatives aim to improve grid resilience, reduce costs, and enhance the integration of renewable energy sources, which are vital for achieving long-term sustainability goals in the face of rapid data center growth.
Conclusion
Across Virginia, North Carolina, and Ohio, the expansion of data centers is reshaping the energy landscape. While these facilities contribute to economic growth and technological development, they also raise significant challenges related to infrastructure capacity, electricity costs, and environmental commitments. Policymakers, utilities, and stakeholders continue to seek balanced solutions that support industry needs while safeguarding affordability and sustainability for residents.
Deeper Dive: News & Info About This Topic
HERE Resources
Construction Activity Sees Moderation, Growth Persists
Nevada Job Market Declines Amid Employment Stabilization
Federal Reserve Cuts Interest Rates, Impacting Raleigh Market
Raleigh City Council Plans Safety Improvements for Pedestrians and Bicyclists
Norfolk Delays Vote on School Consolidation Plan Amid Opposition
USDA Announces $18 Million for Farm-to-School Grants
Tarboro Rejects $6.4 Billion Data Center Proposal Amid Public Opposition
Norfolk Outlines School Consolidation Strategy Amid Enrollment Decline
Long-term Economic Impact of School Closures During Pandemic
Raleigh Launches Program to Boost Small Businesses Growth
Additional Resources
- JD Supra: The Rise of Data Centers and Their Impact
- JD Supra: The Site Report on Construction Law
- Business Insider: Electric Bills Rise in 13 States Due to Data Centers
- Quartz: Americans’ Electricity Bills Rise Due to Data Centers
- New York Times: AI Data Centers and Electricity Costs
- Wikipedia: Data Center
- Google Search: Data Centers Electricity Impacts
- Google Scholar: Data Centers Energy Demand
- Encyclopedia Britannica: Data Center
- Google News: Data Centers Electricity Costs
Author: STAFF HERE RALEIGH WRITER
RALEIGH STAFF WRITER The RALEIGH STAFF WRITER represents the experienced team at HERERaleigh.com, your go-to source for actionable local news and information in Raleigh, Wake County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the North Carolina State Fair, Raleigh Arts Festival, and the Hopscotch Music Festival. Our coverage extends to key organizations like the Greater Raleigh Chamber of Commerce and Visit Raleigh, plus leading businesses in technology and education that power the local economy such as Red Hat and NC State University. As part of the broader HERE network, including HEREAsheville.com, HERECharlotte.com, HEREGreensboro.com, and HEREOBX.com, we provide comprehensive, credible insights into North Carolina's dynamic landscape.
