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By Joe Edwards
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Henrico County employees, including school staff, have reportedly been asked to conserve electricity after the Virginia county, home to multiple data centers, said its power costs for government and school facilities would rise by nearly 25 percent starting July 1, adding an estimated $5 million in the next fiscal year.
County Manager John Vithoulkas told employees in a June 26 email that the rate paid for electricity “will increase dramatically” and that the county anticipates additional increases “in the years ahead,” according to 404 Media and the Henrico Citizen.
Henrico has become a data center hub in recent years. 404 Media reported that the county has 37 data centers and plans for 17 more, while the Henrico Citizen reported that Henrico’s eastern corridor is now home to at least 16 facilities, with more on the way. County officials have attributed at least part of the rate increase to rising fuel costs, but have not connected it to data centers, according to the Henrico Citizen.
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“To mitigate the impact of higher electric costs, I am asking that we, collectively, make slight adjustments to conserve electricity across our individual workspaces,” Vithoulkas wrote, according to copies of the email seen by the outlets. The email asked workers to turn off lights when leaving workspaces, shut down computers and laptops at the end of the day, adjust blinds to manage heat from sunlight, unplug unused appliances and chargers, and limit or avoid using space heaters.
Vithoulkas wrote that a typical space heater can cost the county between $150 and $300 per year in electricity costs, and that “each dollar we can save by conserving electricity is another dollar the county can reinvest into staff and the services we provide our residents.”
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The Henrico Citizen reported that the rate increase applies not only to Henrico but to about 170 members of the Virginia Energy Purchasing Governmental Association, which negotiates multi-year electricity contracts with Dominion Energy for government entities across the state. Other Metro Richmond members include Chesterfield, Charles City, Hanover, Goochland, New Kent and Powhatan counties, as well as Richmond, Hopewell and Ashland, it noted.
Henrico Communications Director Ben Sheppard said that Vithoulkas’s email represented “good fiscal stewardship and good environmental stewardship,” per the outlet*.*
Virginia Faces Rising Costs as Data Centers Expand
Virginia has the largest concentration of data centers in the world and is home to 35 percent of all known hyperscale data centers, according to the National Association of Counties (NACo), citing the Virginia Economic Development Partnership.
The state's Joint Legislative Audit and Review Commission (JLARC) reported in December 2024 that data-center-related costs could increase residential customers’ bills by up to $276 per year in 2030 and up to $444 per year in 2040, not adjusted for inflation, according to a Virginia Conservation Network summary of the report.
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JLARC’s report said that “current utility rate structures are not designed to account for sudden, large cost increases from new infrastructure construction to serve a relatively small number of very large customers.”
NACo also reported that Northern Virginia data centers consumed nearly 2 billion gallons of water in 2023, a 63 percent increase from 2019, with roughly 900 million gallons consumed in Loudoun County alone.
Loudoun County, which its economic development office calls the “Data Center Capital of the World,” says 53.3 million square feet of data centers are operating or under development there. The county also has an Employee Energy Conservation Committee that identifies ways for employees to save energy “at home and at work,” though Loudoun’s energy page does not say the program is tied to data centers.
The Brookings think tank said data centers can push up residential electricity prices because they require new generation and improvements to transmission and distribution infrastructure, including high-voltage lines and substations. Brookings also said electricity costs have risen 42 percent since 2019, compared with a 29 percent increase in the overall Consumer Price Index.
Contact Newsweek editors on this story: John Fitzpatrick and Sam Wilson.
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