by James A. Bacon

Virginia is the biggest importer of electricity in the United States, according to a U.S. Energy Information Administration report released last month. The Old Dominion has surpassed California as the biggest consumer of electricity from other states. Imports into the Land of Nuts and Fruits declined due to heavy investment in rooftop solar and energy efficiency, says the report. By contrast, imports into Virginia have soared between 2019 and 2023 due to growing commercial-sector demand, mainly data centers.

The increase in demand is highly concentrated in Data Center Alley in Loudoun and Prince William counties. I’m all in favor of making Virginia the data-center capital of the world — but not if it means a tax bonanza for Loudoun and Prince William paid for by higher electricity rates for everyone else.

The average retail price of electricity in Virginia in 2023 was 10.8 cents per kilowatt hour. Those weren’t the cheapest electrons in the country, but electric rates were lower than the national average of 12.7 cents per kWh. Lower rates make Virginia more economically competitive for manufacturing and give the commonwealth a cost-of-living advantage.

Surely it is possible to design an electric tariff that meets the energy demands of the data centers without penalizing all Virginians with higher rates. The issues will be complex, so the legislature needs to get moving pronto.

Will Virginia be able to work out a compromise that suits everyone? I’m not sure.

Greenies are sure to oppose anything that encourages investment in data centers in Virginia. Their priority is maintaining Virginia’s net-zero electricity mandate, which will be impossible if data-center consumption continues on its growth path. This is a fool’s errand. A data center not built here will be built in a friendlier state — perhaps one that burns more fossil fuels and emits more CO2. In such a scenario, we lose tax base and employment with no benefit to the environment.

If only the greenies applied their energy and ingenuity to harnessing the power of data center-enabled Artificial Intelligence. The potential to devise new forms of energy conservation and energy efficiency is limitless. The data-center boom could be a win-win for everyone.

Dwayne Yancey has more thoughts on Virginia’s electricity imports over at Cardinal News.