Chesterfield County, central Virginia, has become a hub for data centers, particularly with the establishment of three Google campuses. However, there are growing concerns about an electricity shortfall that may compromise the region’s power grid capabilities.
PJM Interconnection, which manages electricity distribution for 67 million people across 13 states and Washington, D.C., oversees capacity auctions where energy providers, like Dominion Energy—serving Richmond—secure commitments for future electricity needs. These costs are ultimately reflected in consumers’ electricity bills.
Recent auctions indicate a troubling trend: the latest PJM auction for the 2028/29 distribution year fell short by nearly 6.8 gigawatts, primarily attributed to the increasing demand from data centers. PJM projects that from 2024 to 2030, demand may increase by 32 gigawatts, with 30 gigawatts stemming from data centers, notably in Virginia.
To address these challenges, PJM’s independent watchdog has suggested that data centers should be separated from capacity auctions to mitigate their impact on power generation costs. Dominion Energy acknowledges the need for additional infrastructure to meet this growing demand, caused not only by data centers but also by the retirement of older generation resources.
Dominion has proposed adjustments to rate structures to prevent residential customers from bearing the brunt of these rising costs, pledging that any impacts from data centers will not affect residential rates. As demand continues to grow, Dominion is focused on expanding its energy production capabilities, including renewable energy options.
Public sentiment is increasingly wary of data center expansion due to potential cost increases and environmental impacts. Despite this, local officials, including Governor Abigail Spanberger, argue that data centers play a crucial role in Virginia’s economy and community services.
As of now, the long waiting periods for connecting new facilities to Dominion’s grid—averaging seven years—also complicate the landscape for expanding data center operations, which may look to build their own power sources to alleviate some of these delays.
In conclusion, while Chesterfield is advancing as a data center hotspot, there are significant concerns about electricity supply and the associated costs that residents may face in the future.
