This post is part of a series of interviews for our Winter 2025 Ridge & Valley Newsletter. Check out this article for full context and to read our other data center interviews.
Data Centers: Oversight, Growth, and Reform
To better understand what localities need to know when considering data center projects—and the growing push for stronger state-level policy and greater industry transparency—we spoke with our partner Julie Bolthouse, Director of Land Use at Piedmont Environmental Council (PEC). PEC has been a leading voice in advocating for more openness within the data center industry and for a clearer understanding of long-term impacts these facilities have across the Commonwealth.
Julie Bolthouse
Director of Land Use
Piedmont Environmental Council (PEC)
Julie: Northern Virginia has long been a global hub for internet infrastructure. Starting in the 1990s, major players like AOL and Equinix fueled the region’s rise as a data center powerhouse. Over time, its strong fiber network, affordable power, and pro-business environment—with incentives such as sales tax exemptions—cemented its position as the “data center capital of the world.”
But as facilities expanded, tensions grew. Early data centers were smaller and located in industrial zones, but recent years have seen proposals encroach on agricultural and residential lands. The result: mounting local conflicts over land use, environmental impacts, and community compatibility.
Lack of Oversight: Currently, there is no statewide system guiding where or how data centers are sited. Each locality makes decisions independently, without accounting for the cumulative effect across Virginia. While the Department of Environmental Quality monitors air and water permits, the broader picture—energy use, emissions, and total impacts– remains unaddressed. To date, roughly 9,000 diesel generators are permitted statewide, nearly half in Loudoun County alone.
Policy Reform Efforts: PEC and others have worked for many years now to try to get data center reform legislation into the General Assembly. In 2024, legislation was proposed but was either dropped during the General Assembly or vetoed.
PEC has led calls for reform. Our proposed framework for smarter data center policy is based on four key goals:
- Transparency: Public access to data on energy energy use, water consumption, and emissions.
- State-Level Review: A formal regulatory process through the State Corporation Commission to evaluate the regional impacts.
- Fair Costs: Ensuring that residents and small businesses don’t subsidize energy infrastructure for the data center industry.
- Pollution Mitigation: Incentives and requirements for cleaner, more efficient operations.
Currently, the State Corporation Commission is weighing a Dominion Energy proposal to create a new rate class for high-load customers like data centers, in order to protect ratepayers from bearing disproportionate costs.
Revenue & Risk: Loudoun County’s data center tax base has generated hundreds of millions of dollars, funding schools, roads, and parks. Yet reliance on this single industry poses risks. A downturn in the AI or cloud computing markets could create major shortfalls. Some data centers, particularly those serving banks or defense contracts, have also claimed tax exemption, complicating local fiscal planning.
Smart Local Decisions: Local officials and community leaders play a critical role. Before approving projects, they should ask the right questions – see list of suggested questions. Transparency and context also matter. Smaller data center projects located near existing infrastructure and away from residential areas may fit well, but only if the community can see and evaluate the full details.
