Taxpayers Will Foot the Bill for Northern Virginia’s Data Center Crackdown

Few regions can match Northern Virginia’s record on data center development. By the General Assembly’s own count, the industry contributes $9.1 billion to Virginia’s economy annually and supports 74,000 jobs, making the region a model for economic development across the country.

That laudable track record is now in jeopardy. Loudoun County’s Board of Supervisors is considering a moratorium on new data center applications on September 15 and is weighing stripping protections from 17 projects already in the development pipeline. Prince William County follows on September 22 with a plan to shrink the overlay district where data centers have been allowed by right for a decade. Elsewhere in Virginia, localities are contemplating outright bans. For the sake of taxpayers across Loudoun County, Supervisors should think hard before following down this misguided path.

The law is certainly not on the side of proposed heavy-handed restrictions. Loudoun’s own county attorney told supervisors in July that a moratorium isn’t legal. Virginia is a Dillon Rule state, and its Supreme Court struck down a similar freeze in Fairfax County back in 1975. The grandfathering repeal doesn’t fare any better legally. Rather than vote on it, the board asked its lawyer whether it was legal and won’t have an answer until October 6, though it will very likely not pass muster. Board Chair Phyllis Randall spelled out the downside herself: lose in court, and the county pays the data center developers, and the projects will be built anyway—on the taxpayer’s dime. Loudoun County taxpayers have never had to fund a data center, but that would change with costly and unnecessary litigation.

The supervisors pushing these measures say that residents are suffering from unconstrained growth, and that the grid and the community are at a breaking point. Those are serious claims, but the numbers simply don’t back them up.

Take, for example, commonly cited concerns about water. Based on U.S. Geological Survey data, the Taxpayers Protection Alliance’s analysis puts data center water use at 1.4 percent of Virginia’s total water consumption in 2025. Risking billions of dollars in investment and tens of thousands of jobs over minimal water use that is decreasing by the day is a political decision dressed up as an environmental one.

But the question that matters for ratepayers isn’t how much power data centers use—it’s who pays for it. According to a 2024 review by the General Assembly’s Joint Legislative Audit and Review Commission, data centers in Virginia are currently paying their fair share of energy costs.

A major reason is that Virginia data center operators largely pay their own way for electricity consumption. Virginia utilizes large-load pricing mechanisms (e.g., on-site connection fees and the GS-5 tariff) that require data centers and significant energy users to pay the vast majority of contracted transmission and distribution demand. In particular, the GS-5 Large Load Rate Class takes effect in January and locks Virginia’s new large power users into 14-year contracts that bill them for at least 85 percent of contract demand for distribution capacity, whether they use it or not. Even now, Dominion Energy data indicates that Northern Virginia residential customers pay significantly less than the national average for transmission costs precisely because large-scale data center customers pick up a disproportionate share of the local grid infrastructure bill. This funding structure paves the way for private-sector investments that fuel power supply and bolster the grid. 

Then there’s the tax bill, which would rise considerably without data centers. As a 2026 report by the Northern Virginia Technology Council noted, without data centers, counties across Northern Virginia would have to raise property taxes. Loudoun County would have to increase its real estate tax rate from $0.805 to $1.537 per $100 of assessed value. Prince William County would have to raise their rates from $0.906 to $1.169, and Culpeper County from $0.430 to $0.577. Residents would pay the price for not having data center development.

Loudoun County’s supervisors should reject the moratorium on September 15 and leave the grandfathering resolution alone when it comes back into consideration in October. Additionally, Prince William County’s board should ensure projects already filed under its current rules get a fair shake on September 22. If a board believes future projects need stronger standards, the lawful place to codify them is through zoning and planning processes. Tearing up commitments already made is a recipe for lawlessness, higher taxes, and fewer opportunities for Northern Virginia residents.