The late country singer David Allan Coe once recorded a song about a train wreck in Tennessee in 1918. “The Great Nashville Railroad Disaster” tells the true story of a routing mishap that went like this:
A young man in a milk truck out near Dutchman’s grade
Said oh my God, two trains one track
Then he closed his eyes and he prayed
A sister from the orphan’s home made a cross upon her chest
‘Cause a one iron beast was coming from the east
And another one was coming from the west
That feels a lot like Virginia politics right now, except with more trains and more tracks, but all converging on the same place, which for our purposes is Capitol Square.
Consider the following:
Two Roanoke Valley Republicans — state Sen. David Suetterlein and Del. Joe McNamara — have kicked off what has become a bipartisan call for a special session to take up the proposed merger between Dominion Energy and the Florida-based NextEra. (Disclosure: Dominion is one of our donors but donors have no say in news decisions; see our policy.) Lt. Gov. Ghazala Hashmi, a Democrat, has indicated that she’d also be open to a special session. These are not politicians usually found on the same side of an issue.
Two other state senators from different sides of the aisle — Democrat Russet Perry of Loudoun County and Richard Stuart of Westmoreland County — have called for a special session to take up a state report on groundwater in eastern Virginia, in the context of water-hungry data centers. “The report, the most comprehensive study ever conducted of our coastal aquifer, makes clear that Virginia’s groundwater is under serious and immediate strain,” Perry and Stuart wrote in a July 30 letter to the governor. “There is virtually no capacity in the Coastal Plain aquifer system to support major new withdrawals … Water levels in the Potomac aquifer are entering a renewed decline, the land is sinking, saltwater intrusion is a growing threat, and the Commonwealth’s regulatory framework has significant weaknesses.”
Yet another state senator — Republican Glen Sturtevant of Chesterfield County — has called for the governor to enact a moratorium on data center development on the grounds that their growth is “reshaping the Commonwealth’s electric grid, water resources, land use, and the cost of electricity” and that “these statewide consequences cannot be adequately addressed through a series of isolated local decisions.”
Three different issues — a utility merger, water use and data centers — but they all overlap like a giant Venn diagram. The common theme that runs through them is Virginia’s world-high concentration of data centers (one reason NextEra wants to get involved with Dominion is that Dominion is the utility serving most of those data centers). It’s impossible to talk about data centers without also talking about energy — and some relevant laws and developments at play.
Virginia’s energy demand is rising at the same time that state law — the Clean Economy Act — mandates the state’s two largest utilities transition to a carbon-free electric grid, Dominion by 2045, Appalachian Power by 2050. Either one of those things, rising demand from data centers and the Clean Economy Act, would set in motion more energy development; both of them happening at the same time certainly have. In practice, that has led to a wave of solar development across rural Virginia, but we’re now bumping up against the political limits of solar power, as some counties feel they’ve done enough already and others don’t want it all. They view solar as an industrial use of rural land; if you hear someone talk about “industrial solar,” that almost certainly means they’re against it, at least anywhere outside an industrial park — and solar in an industrial park doesn’t make sense because industrial parks are for businesses that create jobs. Solar doesn’t, not in that sense anyway.
We’re also seeing new proposals for gas plants. Those are carbon-based, but the Clean Economy Act gives an “out” to them if they’re needed for grid reliability. Since solar is only a part-time energy source (the sun doesn’t shine at night) and battery storage that could store up solar energy and distribute it at night is often as controversial as solar, we’re seeing more carbon-based energy, even with the Clean Economy Act.
A new state law requires localities to tell the state why they’re rejecting solar applications. Some rural localities fear that’s simply creating a record that will ultimately be used to justify state intervention on siting decisions — and they’re probably not wrong. Here’s the tension point on solar: The Clean Economy Act was passed by a legislature run by Democrats from metro areas, but it requires rural, Republican-voting counties to implement solar on the ground — and their worldview is quite different. Set aside the natural liberal/conservative disagreements over what type of energy is preferred; local governments feel themselves responsible for local land-use decisions, not state energy policy. Those two things are now often in conflict.
Solar represents state policy that local governments aren’t sold on carrying out; data centers represent local government decisions that are having an impact on the state. Some in Northern Virginia may be quite fed up with data centers, but some rural governments actively seek them for the tax revenues they provide. Once again we see a conflict: Local governments aren’t responsible for what happens on the state’s energy grid, but they are responsible for creating job opportunities and keeping tax low.
Keith Boswell is president of Virginia Gateway Region, the economic development group that covers a swath of eastern Southside, from Colonial Heights and Petersburg down to Emporia and Greensville County. “You’re talking down in my neck of the woods, a lot of communities are struggling to get by,” he told Cardinal recently. These communities see a data center not as a problem to be regulated or refused but an opportunity to be secured. “That is something all nine communities in the Gateway Region have said: ‘If you can go out and bring us a data center, we want it.’” For some of these counties, the tax revenue from a single data center might double the county’s budget. The debate over data centers, like many other things, reveals the difference between the haves and the have-nots — as well as those concerned about the environment and the energy grid and those concerned about jobs and tax revenues. There are lots of competing interests here.
In Botetourt County, some of my neighbors are consistent: They want neither the Google data center headed to the county’s business park nor “industrial solar,” as their signs call it. Other communities, though, have often approved energy-sucking data centers while blocking energy-producing solar facilities. At some point, the state may step in and say if you take one, you have to do the other. (Disclosure: Google is one of our donors through its Google News Initiative that has supported our New River Valley explain; same rules apply as above.)
This is where Sturtevant’s call for a moratorium becomes so politically fascinating — but also economically challenging. Until now, calls for a moratorium have come from the left: Bernie Sanders wants a moratorium, Alexandria Ocasio-Cortez wants a moratorium. Now a Virginia Republican wants one. This reflects a changing political landscape, which the recent Virginia Commonwealth University poll revealed: Conservatives are now turning against data centers just as much as liberals have.
However, it’s two things that conservatives usually revere — the free market and the Trump administration — that are driving data center growth with a breakneck adoption of artificial intelligence. Even if the administration weren’t so keen on AI, the marketplace sure is. Stanford University says we’re adopting AI faster than any other technology in human history; all that requires data centers somewhere. Nobody is quite sure where AI is headed — Sen. Mark Warner, D-Va., is one of the leading voices in Washington for more regulation. He says we have months, not years, to get in front of the issue, but government is not known for speedy responses. On the contrary, our founders intentionally built a system to guard against fast-acting governments.
There are yet more complications, especially as data center push out of Northern Virginia and into rural Virginia. The 2,500 jobs that Stack Development has committed to bring to Pittsylvania County in a data center complex would be the single biggest jobs announcement in that part of the state in at least four decades, and perhaps longer (but the records only go back four decades). Those jobs would also pay significantly higher than the county’s current median household income. Must Pittsylvania be denied the economic opportunities that Prince William County has already had, and has come to think it has too much of? Conversely, should Pittsylvania be required to take into account the impact of its economic development on grid reliability and electric rates elsewhere? If so, that’s a lot more than we’ve expected of local governments in the past.
Both Democrats and Republicans have long said they want to see a renaissance of manufacturing. We’re now seeing a burst of manufacturing jobs, but many of them are part of the data center supply chain, and often in rural areas that have struggled to attract jobs. Employment at the Munters plant in Botetourt County has tripled; the Hitachi transformer plant in Halifax County is more than doubling. The New York Times reported last week that the AI-driven data center boom has led to an unprecedented demand for … electricians. A technology that will eliminate some white-collar jobs is creating blue-collar jobs.
This is not the industrial renaissance some foresaw but it’s the industrial renaissance that’s happening. The Financial Times recently wrote that how the nation responds to this represents “a crucial test of U.S. industrial resolve.” On the other hand, the Richmond Times-Dispatch also reported that the PJM grid can’t keep up with the energy demand from data centers. There’s much interest in the new fusion technology that Commonwealth Fusion Systems promises to bring online at a new plant in Chesterfield County. However, to keep up with grid demand, we don’t need just one of those plants, we need 17, the Times-Dispatch reports.
Do nothing and the grid might fail while those new manufacturing jobs boom. Do something and the grid might stabilize while that job growth is curtailed. If there are good options here, they seem hard to find. Every action — and inaction — has consequences, some intended, some unintended. Google recently announced that it would reduce water cooling at its Botetourt site; that will reduce the water usage but increase electricity use. Google is planning to buy renewable power but it also will be drawing from the Appalachian Power grid, which is 65% coal-based. Is it better or worse to use water or coal? Some might say we shouldn’t do either, but that’s not an option — not as long as we’re using email, swiping credit cards, posting on social media, streaming music and movies and doing all the other things we now do in our digital-based lives. There are environmental consequences we don’t see to all those.
We have built an economy that is requiring difficult choices. Virginia has, to its astonishment, created a world-leading cluster of data centers, only to find that this now means we need more power — and power lines across rural Virginia to move the electrons there. Not surprisingly, those power lines are controversial. Nobody wants a power line near them, just as they don’t want a power plant near them, either, yet we all want the lights to come on, and we expect the conveniences of our modern society to work without having to think too much about the infrastructure that powers them. Maybe in the future we can require on-site power generation, but nobody’s going to plop down a natural gas plant — or a nuclear plant — near existing data centers in Loudoun County. So how do we supply that power and get it to the source?
These are not issues that can be solved by a simple executive order or a single General Assembly session, special or otherwise, yet these are the problems before us.
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