Power Hungry
Virginia can't yet meet Big Tech's energy demands
By Liz Trubeck and Alejandra Pacheco
Transmission lines run through the Blue Ridge Mountains in Lexington, Va. Photo by Liz Trubeck.
Big tech companies caught up in the AI race are charging ahead with plans to build more data centers in Virginia even though the state's utilities can't yet meet their voracious energy demands.
The tech companies are spending billions of dollars, doubling their yearly investments in some cases, to build data center facilities. And since power companies are not allowed to deny legitimate power requests, they are obligated to build the additional infrastructure to meet the data centers' energy demands.
Dominion Energy plans to invest $65 billion through 2030 to upgrade transmission lines and support accelerated energy requests from data centers in Northern Virginia, according to the utility's fourth-quarter earnings call that occurred in February 2026.
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Part of that investment will go toward the $1 billion Valley Link project, a joint venture between Dominion Energy and FirstEnergy, that will create a 765-kilovolt transmission line that will stretch about 115 miles through nine counties, from Campbell in the southern part of Virginia to Culpepper outside Washington.
The transmission line, known as Joshua Falls-Yeat, is the largest ever in the state. The project could affect hundreds of property owners because the line will go through their land.
"There's a cost to all these things," said Duane Adams, chair of the Board of Supervisors in Louisa County, where three data center campuses operate. "From what I've seen, costs are going to be passed along to ratepayers instead of high-end electricity users."
Proposed transmission line in Louisa County
Proposed Joshua Falls-Yeat 765-kilovolt transmission line cutting through Louisa County. Source: Valley Link.
Despite concerns of rising electric bills, utilities and local and state officials are pushing to meet the tech companies' demands for land and energy because of FOMO, fear of missing out.
"We now have companies that are reaching out to us, asking us if we can provide them with an amount of energy that is higher than we can even generate right now," said George Porter, communications director of Appalachian Power, one of the major utility companies in Virginia. "That has us working to try to find options where we can build new infrastructure because it's going to be really advantageous. They are here. They are coming. If we don't support them here, they are going to go to another utility or another state."
Environmental activists are sounding the alarm. "They continue to sign contracts for energy they don't have, and infrastructure they don't have," said Mike Doble, a spokesperson for the Piedmont Environmental Council, a nonprofit organization that focuses on protecting Virginia's Piedmont region. "The system is unable to handle what's coming without a lot of buildout of infrastructure."
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Betting billions on AI
Photo by the Associated Press.
Information technology companies make up more than 32% of the S&P 500, as of March 31, 2026. Of the top 10 companies, nine are involved in either data center development, chip manufacturing or AI technology.
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The 14 largest publicly owned data center operators said they are spending $750 billion in 2026, which is an increase over last year's $450 billion, according to research from BloombergNEF.
Big Tech's Capital Expenditures on Data Centers, 2020-2027
Data center-specific investments by the four largest data center operators. Graphic by Liz Trubeck.
Tech companies have made $14.8 billion in investments to fund data center projects across Virginia since 2008, according to the Virginia Economic Development Partnership, which was created by the state's General Assembly in 1995 to encourage, stimulate and support development in the state.
Amazon Web Services, a subsidiary of Amazon.com, Inc., has already invested $51.9 billion in the state, with an additional $35 billion investment planned to establish multiple data centers in Virginia by 2040, according to a news release.
Google spent $91.4 billion in fiscal year 2025, 40% of which was dedicated to data centers and networking equipment and 60% was spent on servers, Anat Ashkenazi, senior vice president and chief financial officer for Google and Alphabet, said in a 2025 fourth-quarter earnings call.
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The push for power
Transmission lines in Lexington, Va., transport electricity over long distances. Photo by Liz Trubeck.
Dominion Energy and Appalachian Power serve over 3 million energy consumers in the state, including high-energy users like data centers.
But it's only been in the past year that the power companies, the state and high-energy users have tried to create a structured process for data centers to connect to the power grid. High-energy users are usually industrial manufacturers and large commercial facilities, such as hospitals and data centers.
In November 2025, the State Corporation Commission–a state agency with regulatory authority over businesses–ordered Dominion Energy to come up with a plan for handling large-load requests from high-energy users.
The utility companies disagreed with the SCC about how to allow data centers to connect to the power grid in a timely manner. Right now, there's a backlog of data center requests of five to 10 years.
Dominion Energy says it needs 70 gigawatts of large-load power capacity to meet the demand from high-energy users, such as data centers. "That triples the peak amount of energy demand that has ever been seen in their area," said Michael Barber, senior energy infrastructure policy analyst at the Piedmont Environmental Council.
Last March, Dominion Energy filed a financial audit with the SCC as part of a routine review that happens every two years.
Dominion Energy asked to increase residential consumers' electricity bills by $14.73 in 2026 plus an additional $4.84 in 2027 to meet growing energy demands.
The utility company also proposed a plan to create a new rate class for high-load users, which Dominion Energy defines as entities that use more than 25 megawatts of energy. Under the plan, high-load users also would have to sign a 14-year contract to ensure all proposed energy costs are paid regardless of the amount of energy that is used.
After Dominion Energy filed the plan, high-energy users began to join the proceedings before the SCC. In the span of three months, Amazon, Google, Microsoft, CloudHQ LLC and the Data Center Coalition among others got involved.
In August 2025, Dominion Energy and the high-energy users filed a joint proposal modifying the utility company's original plan. The joint proposal would have raised the classification cutoff from 25 megawatts or more to 50 megawatts or more, which would've lowered the high-load users' costs.
The SCC rejected the joint proposal in November 2025 but accepted Dominion Energy's original plan, which defined high-load users at 25 megawatts or more. The agency also lowered Dominion Energy's request for an increase in residential consumers' electricity bills by $11.24 in 2026 and by an additional $2.36 in 2027.
This was the first statewide attempt by the utility and high-energy users to regulate how data centers access the power grid and how much energy they use.
Typically, a data center operator that wants to connect to the power grid will communicate with Dominion Energy or Appalachian Power. The power grid is managed by PJM Interconnection, a regional grid operator that serves 13 states, including Virginia.
PJM handles users who want 50 megawatts or more of energy. Anything below 50 megawatts is decided by the SCC.
The utilities and PJM must work together to build new transmission lines if the existing infrastructure can't support the energy request. But that buildout isn't free, leaving many ratepayers concerned about who will cover the costs.
In early March 2026, President Donald Trump invited AI company executives to a White House roundtable to address the energy costs of powering AI data centers. Seven companies, including Google, Microsoft and OpenAI, signed the "Ratepayer Protection Pledge," which is a promise with no guarantees.
"It's an executive order but there's no regulatory structure behind it," said Doble, the Piedmont Environmental Council's spokesman. "So, they made the pledge. Maybe they keep it. Maybe they don't."
OpenAI launched ChatGPT, a versatile AI-powered chatbot, in the fall of 2022. Photo by Liz Trubeck.
Since the 1970s, data centers have been used to store and share data. They are essential in supporting daily digital activities like email, social media, banking, photo storage and streaming.
OpenAI's launch of ChatGPT in November 2022 changed everything.
The AI-powered chatbot garnered 1 million users within five days of its launch, according to a 2022 post on X by Greg Brockman, OpenAI's chief executive officer at the time. ChatGPT's unprecedented success sparked the AI boom, creating a global race among the world's richest companies to beat each other in developing the new technology.
AI is driving a new phase of data center development in Virginia. AI data centers use more of everything: They require a larger footprint for the bigger, heavier servers and the equipment needed to cool them. They also need more electricity to train and deploy AI models.
Conventional data centers are designed to use central processing units (CPUs) that act as the primary decision-maker in a computer. CPUs don't store data. They retrieve, process and direct it.
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Server racks and networking equipment line the halls inside a traditional data center on Washington and Lee University's campus. Photo by John Little.
But AI facilities mostly use graphics processing units (GPUs), a type of accelerator chip designed to solve large, complex problems by breaking them down into smaller, independent tasks. GPUs are necessary to generate graphics, run simulations and engage with AI-powered applications.
Both traditional and AI data centers use CPUs. But AI data centers rely more on GPUs than CPUs, making them different not just in the chips they use, but in the power and cooling infrastructure needed to run them.
During training, the AI models are force-fed massive amounts of data from which they try to identify patterns and make predictions. The process causes rapid fluctuations in energy use during different phases of training.
AI data centers run 24/7. They need on-site diesel generators that kick on if the power goes out.
Virginia is leading the nation in data center development with over 660 active facilities and nearly 600 in the pipeline across the state, according to a 2025 report by the American Edge Project, a pro-tech advocacy group. There are over 150 data centers in Ashburn, which is known as "Data Center Alley," according to a Data Center Map.
AI is also driving development of "hyperscale" facilities, which often contain 5,000 or more servers and need more than 100 megawatts of power.
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Virginia has 150 hyperscale data centers, representing 35% of such facilities in the world, according to the Virginia Economic Development Partnership.
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In 2023, data centers used roughly 26% of Virginia’s total electricity supply, according to a 2024 report by the Electric Power Research Institute, an independent nonprofit organization.
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Search for alternative energy
A solar farm located along Route 11 in Fairfield, Va. Photo by Liz Trubeck.
Big Tech companies are exploring ways that they can provide the energy they need instead of relying solely on utilities like Dominion Energy and Appalachian Power. Google, Amazon, Microsoft and Meta are investing in alternative sources of energy like nuclear, wind and solar. Most of the tech companies are exploring use of smaller nuclear reactors, which can typically generate up to 300 megawatts of electricity.
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In 2024, Google signed the first purchase agreement with Kairos Power–a California-based nuclear energy developer–to bring online up to 500 megawatts by 2030. In 2024, Amazon invested $500 million in another small nuclear reactor developer and has plans to build four in Washington.
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Microsoft signed a 20-year deal in 2024 to restart an 835-megawatt nuclear facility in Middletown, Pennsylvania, known as Three Mile Island (TMI) that is now operated by the Crane Clean Energy Center. The worst nuclear disaster in U.S. history occurred at TMI Unit 2 in 1979, when the reactor suffered a partial meltdown.
The Microsoft deal would involve Unit 1, which remained in operation after the nuclear accident until it was retired in 2019. The project is expected to be online by 2028. But several power line plans that have been postponed for years could delay the Crane-Microsoft project unless nuclear regulators grant waivers to Crane to connect to the power grid.
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Major wind developments are also underway in Virginia, such as Dominion Energy's Coastal Virginia Offshore Wind project in Hampton Roads and the Rocky Forge Wind farm in Botetourt County.
In 2025, President Trump paused leases for all large-scale off-shore wind projects under construction because of what he described as national security issue. In January 2026, a federal judge allowed the Dominion Energy project and others to proceed.
Dominion Energy's 2,600-megawatt project–the largest offshore wind project in the country–is expected to power up to 660,000 homes.
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But developing alternative sources of energy takes time.
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Smaller nuclear reactors are projected to take three to four years to build. But in practice it's taking longer, according to a report by the Institute for Energy Economics and Financial Analysis, a global nonpartisan organization that studies energy markets. Larger wind and solar projects are also expected to take years.
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In the interim, data center operators must continue to rely on Virginia's utility providers to supply the power they need.