Loudoun County is in the process of building 117 data centers, but the Board of Supervisors of the county are considering major changes to the way the county regulates this booming industry because of the growing concerns of residents.
The issue was moved forward by a board vote last week. A second vote is expected to be held in March, which will deal with the expectations of pending data centers.
Michael Turner, Vice Chair of the Loudoun County Board, cited as a report by Kimley-Horn from September 2024. He said that there were 199 data centers on the ground and 117 more in the pipeline. Of the 198 data centers, 84 already have site plans.
Turner also noted that residents and county officials have been concerned by the proliferation of data centers, as they are being built “in inappropriate places,” such as right next to residential areas. The rapid growth of data centers prompted county officials “to assess where data centres are, where they can be, and where we do not want them.”
According to an presentation by County Administrator Tim Hemstreet the data center industry generates now 38% of the county’s total general fund revenue. Opponents often complain that despite their financial benefits, data centers are a strain on the electric grid in the state, they generate too much noise, and the buildings themselves are an eyesore.
Additional oversight
The board approved changes to the comprehensive plan of the county and its zoning ordinance on Wednesday night. In places where data centers are a current core or complementary use, the comprehensive plan amendment changes them to a “conditional” use. All future data centers must meet certain requirements to be built.
The amendment to the zoning ordinance designates data centers as a use that is a “special exemption” in counties where they are permitted by right. Turner explained that “by-right” applications can be approved administratively whereas “special exemption” requires applicants go through a hearing process and receive approval from the board. The board will vote on the proposed amendments at its meeting of March 18.
Before the board voted, there was an 80-minute hearing in which several mayors and local residents asked the supervisors for approval of the amendments. They said that the amendments allowed data centers to evaluated on a per-case basis, and they ensured supervisors could minimize the impact of the centers. Many were against adding provisions that grandfathered in data centers with applications pending.
Middleburg Mayor Trowbridge Littleton said: “If we are to avoid future harms, then these regulations should be applied universally, today, and without grandfathering clauses.”
Data centers are a source of high-paying employment and support for the local economy, according to members of the business community. Many argued for the addition of a grandfathering provision to accommodate existing investments. Daniel Galindo of the Planning Director’s Office stated that there were 36 by-right applications active as of December 1, 2024.
The majority of supervisors voted to move the matter forward to the 18th March meeting. Supervisors Caleb Kershner, and Kristen C. Umstattd were the only two supervisors to vote against the decision. Matthew Letourneau, the supervisor in question, was absent. Umstattd was concerned that the new regulations would damage Loudoun’s reputation as an area where business can be done.
She said: “I am increasingly uncomfortable that we single out and target one industry in order to place limits on that industry. We don’t do this with any other industries or even residential development.”
Koran Saines, the supervisor of the county, accused his colleagues of “fear mongering”, implying that data centers may avoid the county due to proposed zoning amendments. Laura TeKrony, Supervisor of the County of Los Angeles, said that by-right development doesn’t provide the oversight or voice the public wants.
TeKrony stated that “a special exception ensures transparence and gives the community an opportunity to voice their support or concerns.”
County staff will provide supervisors with several options before the meeting on March 18. These options would grandfather data centers with pending applications. Galindo stated that if the board votes to grandfather some data centers on March 18, the vote will also take place on this resolution.
Turner told Virginia Business the county will change its data center regulations in two phases. The first phase will conclude with a vote in March.
He said that in the second phase, “we’ll implement comprehensive performance standards for all data centers moving forward. Things like setbacks and power usage, as well as noise levels, emission controls, and emission standards.”
Energy concerns
A report from the Joint Legislative Audit and Review Commission on Dec. 9, acknowledged the challenges of the state’s ability to provide infrastructure that can keep up with data center demands. The report concluded that new transmission and power generation infrastructure is needed to meet the unconstrained energy demands or even half. Last , the Virginia General Assembly forwarded to this year all data center bills so that lawmakers could take JLARC study into consideration.
Turner predicts that the challenges of data centers and electricity will result in three different scenarios.
Turner explained: “First, the utilities will limit the amount of power that data centers can use to protect the grid. “They will not call it that but they will.”
He said that the second option is for the industry to develop organically ways of processing data with much less energy.
He said: “And thirdly, the industry will grow tired of being held captive by the limitations of grids and will develop its own on-site energy with microgrids so that they have their on-site source of power.”
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