Northern Virginia: Dominion Energy and data center capacity issues

Dominion Energy, a Northern American utility company, has warned that it may be unable to serve new data center projects in Ashburn, Northern Virginia. According to reports, this could mean that projects, which have seen tens of millions of dollars worth of investment, are stalled and potentially further at risk. A knock-on effect of this, would be that tax revenue from the counties where these projects are based could take a hit. For example, Loudoun County received one-third of its tax income from data center equipment taxes.

A note from Wells Fargo analysts outlines that for projects that are between three and six months to completion, it's likely that they'll still have access to power, however, builds that have a later completion date may face "significant delays." The analyst has forecast, specifically, that projects planned for 2023/2024 could be faced with this kind of delay, which, according to experts, would potentially derail 90MW of hyperscale data center commitments, "along with more leases planned for years to come." Interestingly, the issue is not down to electricity generation, but rather a lack of lines to transport the energy.

The wider implications of the power transmission issues are that most of the world's internet traffic passes through the County's digital infrastructure. 

Buddy Rizer, Executive Director, Loudoun County Department of Economic Development, commented: "We've been working closely with the industry and the power company over the past couple of weeks to better understand the challenges around power delivery to our data center companies that Dominion has recently brought forward. The discussion is in its early stages, but we are monitoring the situation closely and are working to assess the impact this might have on our business community and how it might impact future growth."

That said, reports have also outlined that the situation could potentially benefit neighboring counties, for example, Prince William County, currently home to the densest concentration of data centers anywhere in the world. 

In a statement published in DCD, the team stated: "We would envision that Prince William County could be a major beneficiary of new deployments moving away from Ashburn. Multiple companies, including CloudHQ, Stack Infrastructure, and Iron Mountain, have meaningful exposure to Prince William County. This development could also be a boon for Quantum Loophole, a developer that is building a 1GW hyperscale campus in nearby Maryland."

Those from within the industry have also raised concern about the lack of communication on the part of Dominion. Data Center Coalition Josh Levi said: "While we are gathering additional information to help our members assess the impact on their businesses, the DCC is engaging proactively with Dominion and partners in state and local government to support the determination of the best path forward."