Axios Live: Virginia's data center surge presents challenges, climate figures say

RICHMOND, Virginia — How the state deals with its uniquely large proliferation of data centers plays a significant role in its economy going forward, according to three environmental professionals at a Feb. 12 Axios Live event.

Why it matters: Virginia, particularly the northern part of the state, has become known as the world's "data center capital," with estimates that the area processes up to 70% of global digital traffic.

Axios' Chuck McCutcheon and Sabrina Moreno spoke with Southern Environmental Law Center attorney Josephus Allmond; Glenn Davis, principal at Davis Energy & Infrastructure Strategy Group; and Virginia Mercury energy columnist Ivy Main.

Zoom in: Making it too easy for data centers to set up shop in Virginia could increase residential electricity bills and negatively affect lower-income communities. Making it too difficult potentially eliminates jobs and the tax revenue the centers could contribute to local communities.

By the numbers: Virginia has "localities where 40% of their property taxes come from data centers," said Davis, the former Virginia director of energy.

• "Imagine a locality in southwest Virginia or central Virginia, where … one data center would change quality of life overnight — new schools, new roads, what it would do."

Yes, but: "We want to make sure that these data centers come here and that they're benefiting the grid and that they're benefiting the local communities, not harming them," Allmond told McCutcheon.

Friction point: Virginia Gov. Abigail Spanberger has moved to reinstate the Regional Greenhouse Gas Initiative (RGGI). However, Secretary of Energy Chris Wright contends tax credits for it and other clean energy programs should end, in favor of traditional energy sources to support technological growth like data centers.

What's next: "Gov. Spanberger's got a Democratic majority for two years," Main told McCutcheon, "so it is reasonable for her to look at the first year as, 'Let's do the things that are achievable without great pain and see how far we can get.'"

Content from the sponsor's segment:

In a View from the Top conversation, Shell Energy Solutions' David Black told Axios Live moderator Eugene Scott that Virginia faces a clear dilemma.

• "You have this massive opportunity of growth, and that growth can bring tax dollars. It can bring jobs." However, he added, "if you don't get this right, you will crowd out investment."