Wires & Water May 2026 Update: Virginia's Data Center Debate is Expanding Across the Commonwealth

In this Post:

1. Transmission Infrastructure Is Expanding Into Rural Virginia

2. Regional Expansion Continues

3. New Focus on Air Quality, Water Use & Grid Reliability

4. Public Opinion Is Rapidly Changing

5. State Budget Negotiations Remain Stalled

6. What You Can Do

   
   

Virginia’s data center debate is no longer confined to Northern Virginia.

Over the past several months, concerns about energy demand, transmission infrastructure, water usage, air quality, tax incentives, and local land use have spread across communities throughout the state – including areas much closer to Nelson County.

Recent developments show a growing divide between rapid industry expansion and increasing public concern over who bears the long-term costs.

Photo credit: Data centers next to the W&OD Trail in Loudoun County. Photo by Hugh Kenny/PEC.

Transmission Infrastructure Is Expanding Into Rural Virginia

One of the largest projects currently under discussion is the proposed Joshua Falls – Yeat 765kV transmission line – a 115-mile high-voltage corridor stretching through Central Virginia.

Supporters describe the project as critical for future grid reliability as electricity demand surges, driven largely by data centers and AI-related infrastructure growth.

Opponents argue the project could transform thousands of acres of rural land into utility corridors while primarily serving energy demand generated elsewhere.

Communities in Goochland, Culpeper, Fluvanna, and other counties have already begun organizing against portions of the proposal.

• Data centers' energy demand drives grid construction in Central Virginia

  
  

Why This Matters for Nelson County

While no transmission line is currently proposed through Nelson County, nearby projects demonstrate how regional infrastructure pressures are steadily moving outward from Northern Virginia.

Regional Expansion Continues

Interest in attracting data centers is spreading beyond Northern Virginia.

Communities including Danville, Staunton, Hanover, Winchester, and others are actively discussing zoning changes, development proposals, or infrastructure planning tied to potential future projects.

Some local governments are proactively establishing development standards before projects formally arrive, while others are facing increasing public pressure over transparency and long-term planning impacts.

• Is a data center coming to Staunton Crossing?

• Danville sets ground rules for potential data center projects amid rising interest

  
  

Why This Matters for Nelson County

These examples show how quickly conversations around zoning, infrastructure, water use, and economic development can emerge in communities that previously had little direct involvement in data center discussions.

Even without a current proposal in Nelson County, understanding how other Virginia communities are responding may help residents and local leaders prepare early, participate in the conversation sooner, and avoid having to react under pressure later.

Public Opinion Is Rapidly Changing

A recent statewide poll found support for new data centers in local communities has dropped dramatically – from 69% support in 2023 to just 35% today.

Concerns cited by residents include:

• Rising electricity costs

• Transmission line expansion

• Water consumption

• Diesel generator pollution

• Noise

• Tax subsidies

• Impacts to rural land and historic resources

At the same time, Prince William County recently abandoned a controversial large-scale data center project after years of legal and public opposition.

• In this U.S. hot spot for data centers, voters have turned against them (Free with account activation)

  
  

Why This Matters for Nelson County

Questions that once seemed isolated to Northern Virginia are increasingly becoming statewide conversations affecting rural communities across Virginia.

New Focus on Air Quality, Water Use & Grid Reliability

After years of minimal regulation, Virginia has recently passed several laws aimed at increasing oversight of data center impacts, including water usage, noise, environmental transparency, and utility costs.

At the same time, state agencies and advocacy groups are paying increasing attention to the growing use of onsite gas turbines and diesel backup generators at large facilities, particularly in Northern Virginia.

The Virginia Department of Environmental Quality (DEQ) recently launched a new air monitoring initiative focused specifically on emissions associated with data centers.

• Piedmont Environmental Council Response to Department of Environmental Quality Air Quality Report 

• Data Centers, Diesel Generators and Air Quality – PEC Web Map

• Virginia Senate Bill SB253: Status: Awaiting Governor's Action

  
  

Why This Matters for Nelson County

As data center growth expands across Virginia, concerns once concentrated in Northern Virginia are increasingly becoming statewide issues tied to energy demand, air quality, water use, and public health.

The growing focus on emissions monitoring, backup power generation, and utility impacts suggests that communities may face broader environmental and infrastructure consequences long before a data center is ever formally proposed nearby.

State Budget Negotiations Remain Stalled

Virginia lawmakers have still not finalized the state budget, with one of the largest sticking points being the state’s data center tax incentives.

Current proposals range from ending the tax exemption entirely beginning in 2027 to keeping the incentives while adding stronger environmental and energy requirements. Estimates suggest the exemption currently reduces state revenues by between $1.6 and $1.9 billion annually. Good Jobs First estimates Virginia’s data center tax incentives reduced potential K through 12 funding by roughly $267 million in 2024 alone – about $212 per public school student statewide.

• The Hidden Costs of Virginia’s Data Center Subsidy and How They Undermine Public Schools

• Data center tax exemption changes still holding up Virginia budget

• $2B data center tax break fight pushes Virginia budget negotiations

• Why Virginia still doesn't have a budget

  
  

Why This Matters for Nelson County

State policy decisions could shape:

• Potential expansion of new transmission lines and energy infrastructure

• Rising electricity costs for residents and businesses

• Whether taxpayer dollars are used to support data center growth

• How much protection communities and natural resources receive as development expands

What You Can Do

Stay Informed

• Follow Friends of Nelson updates

• Monitor Nelson County Planning Commission and Board of Supervisors agendas

• Track Virginia State Corporation Commission (SCC) filings related to transmission and energy infrastructure

Learn More

• AI Now Institute Data Center Policy Training Series

• Potomac River named “Most Endangered River”: Learn and take action

Take Action

• Email or call your State legislators and let your voice be heard. 

• Let Your Legislators and the Governor Know: It’s Time to End the Big Tax Break for Data Centers (April 23rd call to action has passed but your message will still get delivered and it will take just 2minutes)

Friends of Nelson will continue monitoring developments related to data centers that may affect Nelson County and surrounding communities.

Summary & Research by Erin Palmquist for Friends of Nelson