Henrico County Struggles with Rising Electricity Costs Amid Data Center Expansion
Henrico County, Virginia, is urging its employees to conserve electricity as power costs for government and school facilities are projected to surge by nearly 25% starting July 1. This will add roughly $5 million to the budget in the upcoming fiscal year. County Manager John Vithoulkas warned employees in a June 26 email about the ‘dramatic’ increase in electricity rates and anticipated future hikes.
Henrico, now a hub for data centers, hosts 37 such facilities with plans for 17 more. This escalation contributes to electricity rate increases, although officials attribute it partly to rising fuel costs. Vithoulkas urged employees to conserve energy by taking simple actions like turning off lights, shutting down computers after work, using blinds to control sunlight, and unplugging unused appliances.
“A typical space heater costs the county between $150 and $300 annually in electricity. Every dollar saved helps reinvest in staff and services.” – John Vithoulkas
The rate increase affects about 170 members of the Virginia Energy Purchasing Governmental Association, which includes nearby counties and cities negotiating electricity contracts with Dominion Energy. Henrico Communications Director Ben Sheppard emphasized that this initiative reflects ‘good fiscal stewardship and good environmental stewardship.’
Virginia Faces Rising Costs Amid Data Center Growth
Virginia holds the largest concentration of data centers globally, harboring 35% of all recognized hyperscale data centers. In December 2024, the Joint Legislative Audit and Review Commission (JLARC) estimated significant potential cost increases for residential bills linked to data centers.
The Brookings think tank highlights that data centers hike residential electricity prices by necessitating new infrastructure development, including substations and transmission lines. According to Brookings, electricity costs have spiked 42% since 2019, surpassing the 29% rise in the Consumer Price Index.
Water Consumption and Energy Outreach
Northern Virginia’s data centers consumed nearly 2 billion gallons of water in 2023, marking a 63% increase from 2019. Loudoun County alone accounted for about 900 million gallons. The county, deemed the ‘Data Center Capital of the World,’ manages extensive facilities but does not explicitly link its energy conservation efforts to data centers.
Efforts to mitigate the impact of data centers include forming committees like Loudoun County’s Employee Energy Conservation Committee to promote conservation practices at home and in workplaces.