RICH MEAGHER: All right, folks.

Why don't we get started again?

Welcome back to "What's on the Ballot."

Our last panel tonight is not about amendments.

Sad face for all you amendment fans out there, but it is about an issue that I think we can safely say has consumed the commonwealth.

Data centers are buildings that house computer servers.

They store the data that essentially powers our world, but they are becoming the center of Virginia's concerns about our economy, our environment, and our future.

Joining us to talk about it is Patrick Larsen, environment and energy reporter for VPM News, and Will Cockrell, an urban and environmental planner who, among many, many other roles, teaches at UVA School of Architecture and directs the Land Use Education Program at Virginia Commonwealth University.

Please join me in welcoming our panel.

(audience applauding) Patrick, what is a data center?

PATRICK LARSEN: I'm so glad you asked that, Rich.

Because I think a lot of us these days have a pretty specific vision of these huge buildings, but in fact, a data center can be much simpler.

It can just run IT for a private company, for instance.

It can be much, much larger, like an internet service provider could operate a data center, Amazon Web Services, something like that.

And then they can get even bigger, to something we call hyperscale.

We often associate them with artificial intelligence, Grok AI, whatever it might be, ChatGPT.

These are basically just massive, massive buildings filled with servers, computer equipment, lots of wires and pipes and racks, and they're kind of constantly running tons and tons of equations, basically, to try to come up with answers to questions or organizational problems, whatever it may be.

So wide range, but for our purposes, we're kind of thinking about these big scale things.

RICH MEAGHER: Yeah, and Will, if you have anything to add to that, feel free, but I also want you to address this question of why here?

What is it about Virginia that has attracted all of these data centers?

WILL COCKRELL: Oh yeah, and so that everyone's aware too, you might not know this, but you are in the capital of data centers in the world.

Virginia actually has, Virginia, the boundaries that define the commonwealth, we have more data centers here than any country on our planet, in Virginia.

And actually, when you look at some localities, especially Loudoun County in Northern Virginia, there's some localities up on that list as well.

So we are far and beyond the home of data centers across the globe.

When you think about bigger countries, like China as an example, Virginia is well past where they are as a country.

So this is the capital here.

And the reason, there's a lot of reasons behind this, but really, around DC, the nation's capital, we have a load of communications infrastructure, we have energy infrastructure.

The servers that Patrick was referring to, they run off of electrons, and you need a lot of electrons.

And with AI hyperscale, you need a lot of electrons as you're powering these, and we had that infrastructure here.

And what you find with data centers is once you start to get some located there, you start to get a center of them together, you get more infrastructure and investment and it feeds off of itself and becomes more of a center.

And that's what's happened here in Virginia.

They've been around for a long time, for many decades, but they're starting to get more attention these days because of the scale, because of the trends of what we're seeing.

RICH MEAGHER: Yeah, and so the why question is separate from the what it does for us, and there is an industry that makes money off of building data centers.

And not often, there's some companies that build them, there are some that lease them, and then there are the big tech giants that we've heard of, Amazon and Google, but they've argued that Virginians have done pretty well as being the home of data centers.

What are some of the benefits and arguments that they make for why it's been good for Virginia, Patrick, to have these data centers here?

PATRICK LARSEN: Well, I mean, for one thing, these are really big construction projects that take a lot of workers to put together, and we have a lot of them in the pipeline, and so that's a lot of well-paying jobs that will sort of be around for the foreseeable future.

So that's one benefit.

Another thing is the tax benefit.

And this is really seen at the local level, Loudoun County, which you mentioned earlier, sort of, the home of Data Center Alley is what it's called, the sort of tightest concentration of these facilities.

There are estimates that personal property taxes in that county are thousands of dollars less for individuals today than they would otherwise be without these facilities, although, of course, that's just for the people in Loudoun.

There are debates about how we should be taxing them as a state.

But then I think there's also just sort of the question of how does our world work today without this infrastructure?

Maybe we can all think back to last October, I think it was October 20th, 2025 when we all woke up and none of our emails were working.

We couldn't check our bank statements or flight details.

You couldn't get online and play "Fortnite" with your buds.

That's because there was an Amazon Web Services data center complex that had a little malfunction translating between human speak and computer speak.

And all of a sudden, all over the planet, some massive chunk of websites were just not functioning anymore.

And that was resolved quickly, but you can sort of imagine how if something like that really were to go away, it would be a major, major event.

RICH MEAGHER: Yeah, Will, and is that the sense here, that Virginia's just holding up the rest of the world by having these things in our backyard?

WILL COCKRELL: Yeah, I mean, there's something to be said for that, for the Virginia way, as they might say, there's certainly that part of it, and exactly, Patrick hit it right on the head here too, of if you think about everything you do in your daily life, you might not have ever seen a data center, at least not that you're aware of, but they're involved with so much of your life, you can feel their presence.

If you're watching this right now on YouTube, that is through a data center.

If you're watching Netflix or your favorite streaming show or off the PBS app or whatever that might be, if you're doing your online, I was going to say online dating, but yes, that as well.

If you're doing your online banking, if you're on social media, if you're doom scrolling right now, that is off of a data center, so it really is critical infrastructure and it really has been with us.

It's been in our communities for a long time, especially in Virginia.

But again, I think AI is kind of rewriting the conditions here of the intensity of AI processing is so much higher, and now, we're seeing just, as you said, these hyperscale data centers that have just much greater impacts is a big part of that.

And you asked about benefits too, I'll reference it a lot, but it's the JLARC report, and that's the General Assemblies Audit and Review Commission, and it's the General Assemblies group that does the research that leads into legislation, there's a 2024 report, December 2024.

If you can look it up, it's online, and it talks about data centers, and in there it mentioned, I believe for Loudoun County, it was $1.2 billion of tax revenue off of the data centers there.

Now, keep in mind, Loudoun has more data centers than any locality out there, so that's reason to think why that number's up there.

It also highlighted $9.1 billion in investment in Virginia, so that's about 1% of our GDP here in Virginia.

So it is a significant investment.

There are tax benefits to localities.

However, localities need to ask the question of not only what is the benefit on the dollar side, but also what is the cost, because there are costs involved in this as well and you always have to look at what are the two sides here.

RICH MEAGHER: You're queuing up my next question like I paid him to do that, and so let's talk about some of those costs, and particularly, the opposition that's arising to data centers across the commonwealth, it seems, from state legislators raising questions to residents, sort of grassroots groups rising up.

So what are some of the objections that you're seeing in your reporting, Patrick?

PATRICK LARSEN: Well, they really cover a wide range of concerns.

Sort of my focus on a lot of these stories is environmental concerns.

These are big infrastructure projects.

They don't always come with the same kinds of visible pollution that maybe other industrial uses do, but they take up a lot of land, which has big impacts on local water quality, other land uses, and that sort of thing.

They use a lot of water.

There's been a lot of conversation about how much water do they really use?

Do we really know that for sure?

And how they compare to other industries that already use a lot, like agriculture for instance.

But certainly on a case-by-case basis, that can be a real concern.

Another thing is the energy that these facilities are using.

I'll mention that JLARC report again, as well as many other reports by now, which are all sort of saying that we're looking at a doubling of peak electricity demand in Virginia over the next 10 years.

That's a lot of infrastructure that shows up in new natural gas plants, in renewable installations like solar and wind, in transmission lines.

I don't know if anybody here is familiar with the controversy around Valley Link, but these massive, biggest-in-the-state transmission lines that utilities want to build to sort of pipe all this electricity from different parts of different states up into Northern Virginia.

And so these problems really sort of compound, and I think for a lot of people, they sort of exist at the same time as a general distrust of big tech.

Like what is this AI stuff?

What is it really good for?

These people are so rich and they're coming into our town and making these decisions sort of without our input, or at least that's how we feel, which I'm sure you're able to talk more about the local representation concerns, so yeah, it's really, really myriad issues.

RICH MEAGHER: Yeah, do you want to pick that up, Will, the local representation?

WILL COCKRELL: I mean, that doubling of, I mean, Gosh.

PATRICK LARSEN: It blows my mind.

I still can't comprehend it.

WILL COCKRELL: When I read that, I think I was drinking water and I did a spit take.

I was like, "What?"

Well, and so we were talking about this earlier too, of the Virginia Energy Plan, there's comment period now in September and then they're gonna release it next month in October.

So we will see that there are the net zero goals for 2045.

So what do you do if you want net zero in your carbon emissions, and yet you're gonna double your energy demand, unconstrained, in the 10 years?

It's just unbelievable.

So that's a big one there.

The water usage for sure.

Again, if you're reading your local newspaper or following up on the news here with these folks, shameless nod or promotion here.

So if you see a public hearing for a data center, know that not all data centers are alike.

Some of them don't use any water.

Some of them do.

It depends on what type of data center and what it's doing.

Most importantly, it's how much energy it's using.

If you have a 100-megawatt facility, and that could be something like the equivalent of 80,000 homes in one data center facility, which is wild if you really think about it.

The other one, so you got to think locally, regionally, and beyond, locally too, its noise.

So if you've got these larger data centers, usually with hyperscale, bigger ones, you have a lot of servers and you got to cool them off.

Now, there's some really cool case studies, like in South Bend, Indiana, I think, they have greenhouses connected to the data center.

So they're using the waste heat from the servers there.

I'm sure you all have heard about the data centers in space idea, and so that's another way to deal with heat, I suppose.

But here, what's more likely, it's either air or water cooling.

The water-cooling ones are the ones that are using a lot of water.

There is some recycling systems that we're seeing now, obviously, but the main thing is the noise, and our local ordinances are adapted well for loud noises, because it goes beyond a certain decibel and we can go out and we can measure that.

They're not set up so well for a consistent hum.

If you just hear a low hum in your community, that's the concern that comes up with some types of data centers, not all.

And it's that cooling equipment or it could be the diesel backup generators that are part of that.

RICH MEAGHER: So with all the local opposition, with the questions raised by state legislators, the governor made a big announcement this past week to wade into this, and is going to establish some kind of framework.

What are some of the things that the governor proposed in her framework last week, Patrick?

PATRICK LARSEN: Well, it's really wide-ranging.

It covers a lot of different topics.

I'll say that it sort of only acts immediately on a smaller handful of those.

So for instance, she's taking this thing that former Governor Glenn Youngkin did, which, basically, he implemented a fast track permitting system, where if a data center or some other use wants to go on a business-ready site, like a piece of land that's all set up, ready to go, then it gets sort of pushed along through the permitting process more quickly.

Governor Spanberger wants to do away with that, and did with an executive order last week.

And beyond that, though, like I said, it's really comprehensive.

It's looking at these backup generators, which I forgot to mention earlier, but I'll just say now that because these facilities are critical infrastructure, you have to be prepared for the possibility of something happening on the electric grid, power outages, so the solution is to have backup power on site.

Most often, that takes the form of these diesel generators, which, of course, emit their own air pollutants, and noise, as you said.

RICH MEAGHER: And you have to test them every so often, right?

It's not like they're just sitting there.

They have to run them every so often to make sure they're working, right?

PATRICK LARSEN: Yes, yeah, and so one of the things that Governor Spanberger has included in this executive order is calling on the State Department of Environmental Quality to actually do a cumulative analysis of all of these backup generators that they have, so far, sort of permitted in a piecemeal approach, right?

So that'll be really interesting.

It also looks at water usage, establishing locations in the state where there are certain stricter restrictions on water use.

So for instance, east of Interstate 95, sort of east of the Fall Line, there's been a lot of conversation recently about dwindling groundwater supplies in that really broad region, which comes with a lot of environmental concerns.

If you use too much groundwater, starts to pull the ocean water in, and then, all of a sudden, your aquifer that everybody's getting their drinking water from is full of salt, which would be bad.

And so there are big parts of the state where it looks like data centers are just not going to be able to pull water from those sources.

They'll have to find surface water sources.

And so I think all these different things that the governor is seeking to accomplish, even down to how localities are looking at permitting these things, is really going to be left up to regulatory agencies and to the General Assembly.

Now, I will say, having covered this for some years now, you always see a lot of bills to do with data centers come up at the General Assembly, and every year, it's like one more passes.

So there's definitely people out there trying to have this conversation.

It's just not making its way into state law in some form or another.

I think public opinion on these facilities going the way it has gone in the past 12, 18 months, especially combined with this action by the governor does sort of imply that that could change at the upcoming legislative session in January, but of course, we'll have to wait and see what legislators put forward, what leadership is willing to accept, what the governor's willing to work with.

And yeah, I mean, it's gonna be something we'll be keeping an eye on for sure as all these various deadlines the governor has established come to pass.

RICH MEAGHER: Yeah, and so Will, do you have any thoughts about what we might see in the future?

You can be more reckless to predict as opposed to Patrick, the reporter?

WILL COCKRELL: Reckless abandon, I'm gonna throw predictions out there.

Yeah, I mean, I think great summary, and there's also an AI task force that she was establishing, and then there were some restrictions to NDAs and then there was restrictions of 25 megawatts on state lands, I believe.

But I think the Executive Order 22 that came out on September 18th also hits on that this is gonna continue to be a bigger issue when the General Assembly reconvenes for the short session in January.

The tricky thing is with the short session, we have fewer days.

We don't have 60, we have 30, and then bumps up to 46.

That's not as much time to work through really complicated issues.

And I can't think of anything more complicated than data centers, but I think it's gonna be something you're gonna hear a lot about here in Richmond at the General Assembly here.

I think also in there, I think it was 120 days, they have to have a local toolkit that localities can use.

PATRICK LARSEN: Right.

Yeah.

WILL COCKRELL: Yeah to help them with how to plan for these, and know that with data centers, we can kind of point to the folks who are building the data centers and the feds and the state, but this is a local land use decision.

It's localities that really can regulate these land uses because land use, especially in all states, including Virginia, happens on the local level.

And so really, helping localities be prepared, I would say as a urban planner or community planner, I'm fearful that our industry has completely failed our localities in this.

I think we all saw this coming, and I compare it to standing on a railroad track and there's a train slowly moving towards us, and for a number of years, we've been looking at it and saying, "Wow, that's coming towards us.

We should do something about that."

And unfortunately, I wish I could point to some localities and tell you this locality is doing a great job with data centers, but even the ones who are the frontline of this, I think they're struggling, and so many of them are just not prepared.

And if you don't have the regulatory structure in place, you don't have the policies in place, what you find is these facilities can come in and they can be built by right or they could be built with fewer standards in place, and then you don't have much control over them.

PATRICK LARSEN: I think I can just add, sort of on the local control aspect, that's been a really interesting thing to track at the General Assembly, going back to what you mentioned about the state's clean energy goals, there's sort of this simultaneous conversation happening about how are we actually gonna build out all that infrastructure?

There's a lot of thinking from Democrats and state government is that we need a lot of solar energy, which takes up acres and acres of space, and then you have to pair that with battery storage, as well as the transmission infrastructure to get the energy to the places that it needs to go to.

All of a sudden, you're looking at a lot of land use.

So you have this kind of interesting two sides of the coin thing where, on the one hand, localities are saying, "Hey, don't take away our rights to build these massive, energy-hungry facilities where we want them.

And at the same time, don't take away our rights to reject the energy infrastructure that could be powering those facilities."

And so that, that has resulted in an even, I guess you could say bigger energy problem, which we can get into.

But one other thing I wanted to note as well on the governor's executive order is that for months now, she's been facing growing calls to issue a sort of moratorium or a pause on new data center projects.

We've seen governors in other states do this.

We even saw Loudoun County do this just last week or the week before, and that was not included in this big executive order and sort of roadmap package that the governor has put forward.

There's no pause, so just thought I'd throw that out there.

RICH MEAGHER: Yeah, so we only have a minute or two left, and so I though I'd bring up a huge issue.

The Dominion-NextEra merger, and the reason I bring it up, not that we can do any justice to it here, but I do think it's linked, in many people's minds, to these data centers.

I mean, Will, how do these things work together?

What's going on with that merger?

How are data centers fueling the need for that merger, at least the argument for it?

WILL COCKRELL: Oh, sure, and then Patrick can talk maybe a little bit more about the details of the merger side, but I think point taken of localities, they're making decisions on the site side, of scale matters, design matters, and location matters for data centers, but many localities, they're taking this one application at a time.

They might have policies in place, they might be trying to look at the bigger picture, but it's really important to have that regional and state level to help track what does this mean on a bigger scale?

And that's one of the issues where, I feel like as localities, we need some help on the state side to help us look at that because a lot of the decisions we're making on the local level, these have massive effects on this larger energy network.

And of course, we have this merger issue that's come up and there's been a lot of questions about that.

RICH MEAGHER: Yeah, and really quick, Patrick, it really is, in part, the data centers in Virginia that are making Dominion such a tasty target for NextEra to merge with them.

Is that right?

PATRICK LARSEN: Yeah, the CEO of NextEra, John Ketchum, has said as much, The data centers are the draw.

And that's basically because Dominion, put very simply, makes money by spending money.

So they, under state law, are allowed to make a certain set profit margin.

It's around somewhere between nine and 10% of their investment.

You think about all the infrastructure that has to be built to serve these things, all of a sudden, that nine or 10% looks pretty good, if you're the one making the investments.

So I think that kind of speaks for itself, and again, the NextEra has said as much, that there's a big opportunity here.

RICH MEAGHER: Patrick Larsen, Will Cockrell, thank you so much.

(audience applauding) (light music)