Energy Crisis in the Data Center Capital: Henrico County Urges Schools to Cut Power

Henrico County, Virginia, has established itself as a primary epicenter for data center development. However, this industrial growth comes with a steep price tag. Local officials recently warned that electricity costs are projected to surge by $\approx 25\%$ in the coming year, prompting a directive for government staff and educators to minimize their energy footprint.

The Directive for Conservation

On June 26, County Manager John Vithoulkas issued a memorandum to thousands of county employees, including first responders and teachers, urging them to curb electricity usage to offset looming expenses.

“Beginning July 1st, the rate we pay for electricity used in all Henrico County government and school facilities will increase dramatically — by 25%, increasing costs by an estimated $5 million next fiscal year. We anticipate more rate increases for electricity in the years ahead.”

To combat these rising costs, Vithoulkas suggested several low-cost behavioral changes.

📋 Employee Energy Checklist

• Lighting: Switch off all lights when exiting a room or leaving for the day.
• Climate Control: Adjust window blinds to block solar heat gain.
• Phantom Loads: Unplug chargers and appliances when not in use.
• Heating: Strictly limit or avoid the use of space heaters.

Note: A single space heater can cost the county between $150 and$300 annually.

The Data Center Paradox

Henrico County, home to over 350,000 residents near Richmond, has seen a meteoric rise in data center construction due to its proximity to Washington, D.C.

This expansion is not without controversy. Some of the proposed sites involve the preservation conversion of hundreds of acres of historic Civil War battlefields into industrial server farms.

The Hidden Cost of "The Cloud"

While data centers bring investment, they often create a "power vacuum" that drives up costs for the surrounding community.

The Infrastructure Gap

Developers frequently promise to build the necessary power infrastructure to avoid burdening local taxpayers. However, because permanent grid upgrades are slow to implement, companies often turn to temporary, high-pollution alternatives:

• In Mississippi: An xAI facility utilizes 27 gas turbines that release significant pollutants.
• In Henrico: Officials noted that some new facilities might rely on over 300 diesel generators as a stopgap.

Despite these temporary measures, these facilities still rely on the local grid, leaving residents to pay the difference. One local woman reported that her electric bill doubled in January, despite her efforts to use a heat pump and solar panels.

Official Justification and Logistics

The Virginia state legislature previously approved rate hikes, including some measures intended to protect average citizens from the impact of data center growth. Nevertheless, the financial pressure remains.

A county representative defended the conservation email as an act of "good fiscal stewardship and good environmental stewardship."

How Rates are Determined

The county does not negotiate with the utility provider alone. Instead, it uses a mediator:

Henrico County $\rightarrow$ VEPGA $\rightarrow$ Dominion Energy

VEPGA (Virginia Energy Purchasing Governmental Association) manages contracts for over 170 local governments and school systems. According to the county, the 24.9% increase effective July 1st applies to all VEPGA members.

Written by Matthew Gault, who covers the intersection of technology and societal impact.