Sunday, July 31, 2022

Overdrawn at the Energy Bank

Loudoun County has courted data and cloud companies and making development and land use decisions that has resulted in Loudoun County having the highest concentration of data centers in the world. These data centers provide a very significant amount of revenue to the county through real estate and business personal property taxes. 

The computer equipment in the existing data centers provides significant personal property tax revenues to the County’s budget. However, the value of those assets depreciates each year. Unless that equipment is constantly replaced the revenue will diminish over time.

In recent years, Prince William County has copied Loudoun County’s approach and undercut Loudoun County’s rate for the data centers of the personal property taxes on the computer servers. Data center growth in Prince William County has increased significantly and is poised to take off.  The proposed PW Digital Gateway is large enough to accommodate 33.4 million square feet of data centers. Which exceeds that data center square feet currently existing in Loudoun County.

Now, Dominion Energy has informed Loudoun County that it will not be able to provide power to new data center projects in Ashburn at this time. They lack  adequate transmission capacity and building it could delay new data centers coming online by a year or more.

Dominion Energy is required to provide power to customers. They do not have the option. However, infrastructure has to be built to meet the demand.  According to the PMJ  Data Center Alley… is experiencing unprecedented load growth driven by increases in data center load that started in 2018 and is expected to continue growing post 2027.” From 2018 to date, Dominion has had 44 requests to serve 2,050 MWs of load increase through the summer of 2025. These projects have to be integrated into the grid and so the PMJ, the regional transmission organization, has to be involved.

Once the PJM load forecast was updated, the system showed a need for reinforcements through additional source(s) to serve the load increase from the 500 and 230 kV transmission system nearby. PJM identified the need for additional transmission reinforcements in the area. Because the area is constrained on all 230 kV inlet transmission segments to serve the size of load and data center load has a flat profile throughout the day, power flow control or non-wires solutions can not solve the problem in this area. There is no work around. Dominion needs to run more 230 kV transmission wire, and the next fight will be about where they were going to route this power. The Data Centers required tower after tower of 500 and 230 kV  transmission wires.

After driving the 40% increase in power usage in Virginia the data centers have reached the limit of what Dominion Energy can supply on their existing infrastructure. I personally object to paying for the construction of infrastructure to supply the power to Data Centers. That expense is added to the Dominion cost basis and all our electric rates.  PMJ says will have to build more transmission for the data centers to assure system reliability. Using an old rule of thumb (that may be out of date), the current forecast looks like it will require about 25 more overhead lines to deliver the current projected power need. The data centers are turning Northern Virginia into New Jersey with the industrial blight of running power transmission lines to feed the data centers and massive industrial buildings. 

Though Dominion Energy has made significant investments in new infrastructure to meet the growing demand for electricity from the Data Center industry, it has not kept up with the surging growth of data center demand for power. According to Dominion Energy, "…the transmission constraints in a pocket of eastern Loudoun County that will impact new connections for large customers. This will not impact residential or small business customers." 

There has been some speculation that this development will benefit Prince William County data center development; however, looking at the transmission maps that Dominion has published for various public hearings it appears that that the same constraints will have to be addressed here. Also, the transmission lines will run through our communities. 

Historic Prince William has posted 266 Pictures of Prince William County taken from a helicopter on Friday, March 29, 2019 between 2pm and 3pm.  Take a look at the county here

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