Thousands of Henrico County employees opened an email from the top of the org chart with an unusual request: turn off the lights. Shut down your computer at the end of the day. Close the blinds against the afternoon sun. Unplug the phone charger. And go easy on the space heater — one of those, the county's manager noted, can quietly run up as much as $300 a year on the electric bill.
The memo went to the people who run Henrico's libraries, its parks, its courthouses and, notably, its public schools. Teachers were asked to police their classrooms for phantom load. The reason: on July 1, the electricity rate for county and school buildings is set to jump about 25%, adding roughly $5 million to the annual bill.
Here is the part that turns a routine belt-tightening memo into a national story. Henrico County — a suburban stretch of central Virginia wrapped around Richmond — is home to 37 data centers, humming warehouses of servers that never sleep, with plans on the table for 17 more. The county that helped build one of the densest concentrations of computing on the East Coast is now asking its second-graders' teachers to unplug the pencil sharpener.
The memo that went viral
The message came from County Manager John Vithoulkas, sent to staff on June 26 ahead of the new fiscal year. Its conservation checklist reads like a 1970s energy-crisis pamphlet updated for the laptop era: switch off lights when you leave a room, power down computers and laptops overnight, adjust blinds to cut heat gain, unplug idle appliances and chargers, and limit space heaters, which the county pegged at $150 to $300 apiece per year.
Henrico buys its power from Dominion Energy through the Virginia Energy Purchasing Governmental Association, a co-op that negotiates electricity contracts on behalf of local governments across the state. When those contract rates reset, the county estimated the increase would cost about $5 million in the coming fiscal year across government and school facilities alike — real money for a school system that has to find it somewhere, whether in thermostats or textbooks.
County officials did not blame the data centers outright for this particular increase. But Virginia's own regulators have repeatedly tied Dominion's rising costs to one force above all others: the explosion of electricity demand from data centers.
From tobacco country to server farm
Henrico's transformation happened fast. The catalyst was the 2017 opening of a major internet exchange at White Oak Technology Park, in the county's eastern Varina district, where undersea fiber-optic cables landing from Spain, Brazil and France converge along the Interstate 64 corridor. That kind of connectivity is catnip for data center operators, and they came.
To seal the deal, Henrico made itself irresistibly cheap. In 2017 the Board of Supervisors slashed the tax rate on data center equipment from $3.50 to just 40 cents per $100 of assessed value — the lowest in Virginia at the time. Meta broke ground on a roughly 130-acre campus that same year and has since contributed some $4 million to local schools and nonprofits. Others followed until, by the county's own planning-staff count, 37 facilities were up and running.
The county has since recalibrated. This year it raised the data center tax rate to $2.60 per $100 of assessed value, and it is steering some of that revenue into a new affordable-housing fund seeded with tens of millions of dollars. Even so, the biggest of Henrico's tenants wants to grow: data center operator QTS is pushing plans to add as many as 17 buildings across about 1,100 additional acres in Varina, an expansion that would swell its campus toward 8 million square feet. Residents have started showing up at meetings to push back, and county leadership sounds like it has had enough, too.
"We are letting the industry know: Look, we are good. We have as many as we can possibly sustain." — John Vithoulkas, Henrico County Manager
Why the classroom and the server rack share a meter
To understand why flipping off a teacher's desk lamp barely moves the needle, it helps to grasp the scale mismatch. A single large "hyperscale" data center can draw more than 100 megawatts — enough electricity to power tens of thousands of homes, running flat out around the clock, every day of the year. A space heater draws roughly 1.5 kilowatts, and only when someone happens to be cold.
Data centers generally pay their own power bills, and the largest negotiate their own supply contracts. So how does their appetite end up on everyone else's statement? The answer is the regional grid. Henrico sits inside PJM Interconnection, the operator that keeps the lights on across 13 states and Washington, D.C. Every year PJM runs a "capacity auction" to guarantee enough generation will exist to meet future peak demand. As data centers pile onto the forecast, that auction has gone haywire: prices for the 2025–2026 delivery year climbed more than 800% over the prior period, a jump that flows through utilities and, eventually, onto ratepayers.
New demand also means new wires, substations and power plants — fixed infrastructure that would not otherwise get built. Under the traditional way utilities recover those costs, the tab gets spread across the entire customer base. Which is how a warehouse full of AI accelerators can nudge up the price of keeping the lights on in a fourth-grade classroom two towns over.
Who pays — and Virginia's scramble to change that
Virginia has spent the past two years waking up to that math, and lawmakers and regulators are now racing to redraw who pays for what.
| Response | What it does | When | Who it aims to protect |
|---|---|---|---|
| New large-load rate class (Virginia SCC) | Requires big customers such as AI data centers to pay for at least 85% of contracted transmission/distribution and 60% of generation demand | Approved Nov. 2025; effective Jan. 2027 | Other ratepayers |
| General Assembly cost-shift bill | Would let Dominion pass more total cost to large-load customers | 2026 session | Residential (~4%, about $5.50/month lower) |
| JLARC study recommendations | Create a separate data center class, revise cost allocation, reset rates more often | Dec. 2024 report | Non-data-center customers |
The centerpiece is that new "rate class" the State Corporation Commission approved in November 2025 at Dominion's own request. Starting in 2027, the utility's largest customers — explicitly including AI data centers — will have to commit to paying for at least 85% of their contracted transmission and distribution capacity and 60% of their generation demand, whether they end up drawing that much power or not. The idea is to stop ordinary customers from quietly subsidizing infrastructure built for server halls. Whether it works will depend on the fine print and on how fast the buildout outruns the rules.
The much bigger bill coming due
Henrico's $5 million squeeze is a rounding error next to what Virginia's own analysts say is on the way. A December 2024 report from the Joint Legislative Audit and Review Commission — the legislature's nonpartisan research arm — found that unconstrained data center growth could push the state's total power demand to double within a decade, with data centers as the primary driver.
The same study attached a price tag. Building the generation and transmission needed to keep up could raise costs by as much as $18 billion by 2040, and under current rules residential and other ordinary customers would shoulder much of it. In plain terms for a single household:
A typical Dominion residential customer could see generation- and transmission-related costs rise an estimated $14 to $37 a month, in constant dollars, by 2040 — largely to serve demand that data centers create. — JLARC, December 2024
There is an environmental footprint layered on top of the financial one. Each facility uses an average of roughly 6.7 million gallons of water a year for cooling, according to local reporting — a strain on the very communities now being asked to conserve. Little wonder that residents like activist Aileen Rivera have begun urging officials to weigh the long-term legacy of each new campus before signing off on the next one.
What conservation can and can't do
None of this makes the county's memo pointless. Institutional energy waste is real, and $5 million spread across hundreds of buildings genuinely can be trimmed at the margins by darkened hallways and powered-down PCs. Utilities across the country lean on exactly this kind of demand response when summer heat pushes the grid toward its limits, and Henrico's request landed as peak cooling season set in.
The trouble is proportion. A county workforce diligently unplugging chargers might claw back a sliver of a percent of the load that a single new hyperscale building adds the day it powers on. Conservation asks the smallest consumers on the grid to absorb the consequences of decisions made about the largest ones. It is a fair request and an awkward one at the same time — which is precisely why the story struck a nerve well beyond Virginia.
The symbolism of a light switch
Henrico is less an outlier than a preview. Localities across the country are courting data centers for the tax revenue and the prestige of hosting the infrastructure behind the AI boom, then discovering that the electricity, the water and the grid upgrades arrive attached to the deal. Henrico, to its credit, is trying to slow the intake and plow the proceeds into things like housing — a more thoughtful posture than many towns racing to sign the next lease.
But the memo sitting in every employee's inbox tells the more honest story. You can ask a teacher to unplug a charger. You cannot ask a 100-megawatt server hall to feel guilty about a heat wave. The light switch is a gesture — a real one, worth a few million dollars a year — but it is aimed at the wrong end of the meter. The servers, after all, are the ones that never turn off.