The artificial intelligence (AI) boom is beginning to hit consumers’ wallets across the Washington region, with a new electricity auction expected to add $6.3 billion in future power costs. Further, officials in the District, Northern Virginia and Maryland struggle over where massive data centers should be built and who should pay for the infrastructure needed to keep them running.
PJM Interconnection, the operator of the nation’s largest electric grid serving 67 million people across 13 states and the District of Columbia, said electricity demand is rising faster than new power generation can be added to the system. The grid operator identified the rapid expansion of data centers as the primary force behind that growing imbalance.
“These auction results show that demand for electricity continues to grow faster than electricity supply,” PJM President and Chief Executive Officer David Mills said. “We are working with government and industry leaders on multiple fronts to restore that balance by bringing on new generation as fast as possible and managing the growth of new load on the grid.”
The industry’s rapid growth has also produced growing public opposition and increased skepticism toward data centers continues to grow. A Gallup survey recently found that 71% of Americans oppose building artificial intelligence data centers in their communities, including 48% who strongly oppose them. Respondents most often cited concerns about electricity consumption, water use, environmental damage and higher utility bills, while supporters pointed to economic development, tax revenue and job creation.
Those concerns have become especially visible in the D.C. metropolitan area, where the world’s largest concentration of data centers sits just outside the District in Northern Virginia.
The region has become indispensable to the nation’s digital economy. Data centers process cloud computing, artificial intelligence applications, financial transactions, federal government operations and internet traffic flowing between North America and Europe. Washington itself serves as one of the country’s major communications hubs, with commercial facilities supporting government agencies, defense contractors, financial institutions and thousands of enterprise customers.
That growth has fueled billions of dollars in new electric infrastructure and further discussions about its effect on residents.
“The AI boom has rapidly accelerated data center development, prompting more conversations about how they impact the communities and landscapes around them,” according to the Metropolitan Washington Council of Governments.
Energy Plans, Questions in Virginia
In Virginia, Gov. Abigail Spanberger’s administration has taken one of its strongest positions yet, arguing that the companies driving the surge in electricity demand should bear more of the cost rather than shifting expenses onto households and small businesses.
In comments filed with the State Corporation Commission, Chief Energy Officer Josephus Allmond urged regulators to require large-load customers, including data centers, to pay for transmission projects built specifically to serve them.
“It is a core policy of the administration of[Gov. Abigail Spanberger … to foster an affordable, reliable, and clean energy system,” Allmond wrote. “This includes strong support for proactive, right sized, and cost-effective transmission development.”
The filing argues that appropriate safeguards are necessary to prevent residential customers from subsidizing infrastructure built for large commercial users. It notes that recent adjustments shifted roughly $58 million in transmission costs away from households and onto large-load customers while reducing the projected monthly surcharge for a typical residential customer.
Virginia officials also questioned Dominion Energy’s growing investment plans.
According to the filing, the utility expects billions of dollars in future transmission spending, with more than three-quarters of those investments supporting data centers or mixed-use projects concentrated largely in Northern Virginia. The administration warned that building infrastructure for speculative projects could leave captive ratepayers paying for facilities that never reach full use.
In Loudoun County, already considered the data center capital of the world, hundreds of residents have pushed back against new high-voltage transmission lines proposed to support additional development.
Some homeowners object to towers that could approach the height of the Statue of Liberty and oppose routes cutting through established neighborhoods. Dominion Energy maintains the transmission projects are necessary to preserve electric reliability as demand continues to increase.
“At Dominion Energy, we are dedicated to providing the reliable, affordable, and increasingly clean energy that powers our customers every day,” the company wrote in an October 2024 letter to residents related to a new electric transmission withinWhite Oak Technology Park.
The Data Center Battle in Prince George’s County
The debate has also reached Maryland.
Prince George’s County recently approved a two-year moratorium on new hyperscale data center development, giving lawmakers time to determine where the facilities should be permitted and what regulations should govern them.
Council Chair Krystal Oriadha has said she would prefer a permanent ban, while Councilmember Wala Blegay has questioned whether county officials have enough information about how large facilities could affect water resources and surrounding communities before approving additional projects.
“Prince George’s County should absolutely pursue economic growth and new sources of revenue. But not every project is worth the cost. Data centers can have significant impacts on our environment, our energy grid, our water resources, our land use, and the quality of life in surrounding neighborhoods,” Blegay said in a press statement on July 9. “Before we move forward with any large-scale data center development, we must make sure we fully understand those consequences and put the right protections in place.”
Although most hyperscale campuses are located outside the District, Washington residents remain directly connected to the issue because the city shares PJM’s regional electric grid. Capacity auction prices established through PJM eventually become part of electricity rates paid by customers throughout its service territory, including the District of Columbia.
PJM says new data centers can be planned and built two to three times faster than many power plants needed to supply them. The organization has expanded efforts to speed new generation projects, improve transmission planning, streamline interconnection studies and develop new rules allowing large electricity users to reduce demand during periods of grid stress.
“The challenges facing the electric system will not be solved overnight,” PJM said in outlining its strategy. “But PJM is pursuing a range of near-term and long-term solutions aimed at maintaining reliability, supporting economic growth and enabling regulators to protect consumers.”
