Blog: The Rising Cost of Power

Virginia is home to the world’s largest data center market, with around 340 facilities operating across the state. But this explosive growth comes at a steep cost—one that could increase residential energy bills by up to $444 a year (not adjusted for inflation).

A recent report from Virginia’s Joint Legislative Audit and Review Commission (JLARC) reveals the profound impact data centers are having on Virginia’s power grid and electricity costs. The findings are clear: without legislative action, ratepayers will foot the bill for large tech companies’ energy demands.

Unprecedented energy demand

Data centers are among the most energy-intensive facilities in existence. A single data center campus can consume as much electricity as a mid-sized city. As more of these facilities come online, demand for power in Virginia is skyrocketing. In fact, data centers are projected to triple electric demand in Virginia by 2050.

Unlike homes and businesses, which have relatively stable energy use, data centers require enormous amounts of electricity and place a 24/7 strain on the grid. The rapid expansion of this industry is prompting utilities to spend billions of dollars on new energy generation and transmission infrastructure—costs that will ultimately be passed down to customers through their power bills.

higher power bills are coming

JLARC’s report delivers a stark warning: Virginia’s data center boom is going to cost residents and businesses significantly more on their monthly power bills. To keep up with demand, utilities like Dominion Energy are pouring money into expensive new infrastructure. Without oversight, those costs will be passed directly onto customers:

Within five years, the average Dominion residential customer could see their monthly bill increase by $23 just to cover these costs.
By 2040, that increase could rise to $37 per month—or $444 per year.*

For many Virginia families already struggling with high utility costs, this is an unsustainable financial burden. Small businesses, too, will face rising overhead costs, further straining local economies.

*Although JLARC used Dominion Energy as a case study in determining the potential impacts of data centers in Virginia, Appalachian Power Company (APCo) is also predicting future data center growth in its territory that could lead to similar cost increases for customers.

unfair cost distribution

As of this past fall, JLARC found non-data center customers are not directly subsidizing data center energy costs. But this won’t last. JLARC warns that Virginia’s cost allocation system is not equipped to handle the explosive growth of data center energy consumption.

Right now, the State Corporation Commission (SCC) reviews cost allocation factors every two years. But JLARC suggests this isn’t enough to keep up with the industry’s expansion. Virginia’s current system wasn’t designed for such large-scale energy consumption by a single sector—leaving customers vulnerable to unfair cost shifts in the future.

reliability is at risk

Beyond cost concerns, Virginia’s energy supply is already stretched thin. The Commonwealth imports more electricity than any other state. Without serious investments in clean energy, meeting the immense energy needs of data centers will only deepen our dependence on imported energy, leaving households and businesses vulnerable to price spikes, fuel shortages and supply disruptions.

Investing in clean resources like solar, wind, battery storage and energy efficiency is a key strategy to help Virginia meet skyrocketing demand. By expanding clean energy, we can strengthen grid reliability, lower bills and reduce toxic pollution.

legislators must rein in big tech

The solution is clear: Virginia lawmakers must act to ensure responsible data center growth. Nearly 50 bills were introduced in the 2025 legislative session to regulate the industry—including HB2101, SB960, HB2035, HB2027, HB1601, HB2578 and SB1196—but momentum stalled when almost none advanced.

Why? Because trillion-dollar tech giants continue to benefit from state incentives while dodging accountability.

Virginia’s leaders have a responsibility to protect their communities over corporate profits. Without legislative action, the state’s energy future will be dictated by the unchecked growth of a single industry—one that contributes to skyrocketing bills while avoiding its fair share of costs.

Although lawmakers failed to pass critical protections this year, Virginians must keep up the pressure.

the bottom line

Data centers aren’t going anywhere—but their unchecked energy consumption is creating serious financial risks for Virginia residents and businesses. As the industry expands, policies must be put in place to shield Virginians from the rising costs and instability it brings.

JLARC’s report is clear: without action from the General Assembly, Virginia’s families and businesses will pay the price for Big Tech’s energy demands. It’s time for state leaders to step up and put people first.